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DICTIONAEY OF POLITICAL ECONOMY
i
MACMILLAN AND CO., Limited
LONDON • BOMBAY • CALCUTTA ^
MELBOURNE
THE MACMILLAN COMPANY
NEW YORK • BOSTON • CHICAGO
DALLAS • SAN FRANCISCO
THE MACMILLAN CO. OF CANADA, Ltd
TORONTO
^5^;
^^
'"^^ — A
NOV 7 1940
DICTIONAKY
OF
POLITICAL ECONOMY
EDITED BY
Sir ROBERT HARRY INGLIS PALGRAVE, RR.S.
Omnia mutantur : nihil interit.
VOL. I.
A— E
MACMILLAN AND CO., LIMITED
ST. MARTIN'S STREET, LONDON
1915
Ore trahit quodcumque potest atque addit acervo.
COPYRIGHT
Printed xZ()i,
Reprinted pages 1-256 with Corrections, 1901, 1909
Reprinted with Corrections 19 15
TO THE DEAR MEMORY OF
Sir JFrancis ^^algrafae, It.Jg., anti lElijaietl), ILatig ^algrabe
HIS PARENTS, TEACHERS, FRIENDS
THIS WORK IS DEDICATED BY
R. H. INGLIS PALGRAVE
INTEODUCTION TO VOLUME I.
The complete preface to a book naturally cannot be written till the work itself is
finished ; but with the first volume some remarks by way of introduction will be
useful, to explain the object for which this work has been written, and the method
on which it is arranged.
The primary object of the Dictionary of Political Economy is to provide the
student with such assistance as may enable him to understand the position of
economic thought at the present time, and to pursue such branches of inquiry as
may be necessary for that end.
The table of the contents of the work shows how large is the range of
investigation which the student must follow at the present time.
During recent years the course of economic study has extended so widely
that it was obviously impossible to restrict the work to the old and formerly well-
recognised boundaries. The development of the historical school has opened out
new and fertile fields, while the wants of those who follow the mathematical method
of study have also to be considered. These two main lines of treatment are here
but mentioned as examples. They are far from exhausting the countless ramifi-
cations of inquiry now rightly thought necessary for the complete investigation of
a study bounded only by the requirements of human life in every social relation.
In making the selection necessitated by the limits of space, the requirements
of different classes of students have throughout been borne in mind. On the
one side purely business matters, such as banking, the foreign exchanges, and the
operations of the mint come in ; on the other, subjects of a philosophical character
have been dealt with, such as questions of ethics and methods of definition,
analysis, and reasoning ; — and the ways in which diagrams and mathematical pro-
cesses may lend assistance to economic inquiry have also been discussed. Again,
those interested in historical studies require an explanation of words found in
early works, and those derived from classical and mediaeval times ; also of legal
phrases, now archaic, together with the modern correlative terms, for only thus
can it be understood how ancient usage has influenced present habit. Life in the
present day, even in the most modern settlements in the United States, in our
British colonies, in the new countries coming into existence in different parts
of the world, is influenced largely by the past. The stream of existence, if the
vi INTKODUCTION
simile may be permitted, reaches us deeply coloured by the soil of the fields
through which it has flowed, by the varied strata of the cliffs — some of them
undermined by it — that have bounded its long and devious course.
Considerations of space have necessarily confined the scope of the work mainly
to the developments of economic study in England, the United States, and our
English-speaking colonies — and, in regard to these, an endeavour has been made
to present under all the subjects treated an account of the best and most recent
authorities ; whilst the opinions held in other countries have also, as far as the
required limits allowed, been considered and mentioned.
The biographies introduced have been selected with the same end. They
show what has actually been written in former times, and hence will enable the
reader to trace the progress of economic thought. Much attention has been
given to the less-known writers. It is difficult for the student under ordinary
circumstances to trace out when such authors lived, the surroundings which
influenced their lives, and the opinions they held. While the oversights in science
are sometimes as remarkable as the discoveries, these earlier labourers have not
unfrequently been the precursors of other and better-known men, and have some-
times anticipated opinions that have held sway for long periods after them.
The different economic schools in the principal countries of the world are
also described. Thus this volume contains notices of the American, Austrian,
Dutch and English schools, and the French, German, Italian, and Spanish schools
will follow in due course.
A work extending over so wide a range of subjects is, necessarily, the pro-
duction of many minds, of writers whose pursuits, occupations, and studies are
very diverse and varied. I desire to record my warm thanks to the contri-
butors to the book, which is, I think, in itself an almost unique example of
economic co-operation. Where all have assisted so heartily, it is less easy to
select individual names ; but I wish to be allowed to express my special thanks
to Professor Dunbar, Dr. Keynes, Professor Marshall, Professor Montague, Pro-
fessor Nicholson, Signor M. Pantaleoni, Mr. L. R. Phelps, Mr. L. L. Price, Mr. R
Schuster, Professor H. Sidgwick, and General Walker for valuable assistance in
different directions, and particularly to Dr. Bonar, Professor Edgeworth, Mr.
Henry Higgs, and Mr, H. R. Tedder, who have kindly helped in the more
arduous labour of the preparation of the work for the press.
This is but an act of justice, that readers may know to whom they are specially
indebted.
R. H. INGLIS PALGRAVE
Belton, near Great Yarmouth,
Christmas 189S.
(Henstead Hall, Wrentham, Suffolk,
Midsummer 1914.)
TABLE OF CONTENTS
The nunibers immediatdy following the headings of the Articles are those of tlie pages on which
the Articles will he found. Biographies in small capitals.
Abatemeat or Rebate, 1
Abbot, C, Lord Colchester, 1
Abeille, L. p., 1
Abolitionist, 1
About, E., 2
Abrasion, 2
Abroad {see Jurisdiction), 3
Absentee, 3
Abstinence, 4
Abstract of Title, 5
Abstract Political Economy, 5
Abundance, 5
'V.cceptance, 6
Acceptilation, 6
Acceptor, 6
Accessio, 6
Accession, Deed of {see Bank-
ruptcy, Scotch), 6
Accommodation Bill, 6
Account, 6
Account Duty {see Death Duties),
7
Accounts, Merchants' {see Pre-
scription, Scotch), 7
Accretion, 7
Accrue, 7
Accumulation, 7
ACHBNWALL, G., 7
ACKERSDYK, J., 8
Acknowledgment, 8
AcLAND, Rev. J., 8
Acquittance, 8
Act of Bankruptcy {see Bank-
ruptcy, Scotch), 8
Actor Seqiiitur Forum Rei {see
Jurisdiction), 8
Actuary, 8
Actus, 9
Adams, C. F., 9
Addison, J., 9
Ademption of Legacy, 9
Adjustment, Average, 9
Administration, 10
Administration, Letters of, 14
Administrator, 15
Adulteration, 15
Ad Valorem Duty, 16
[ Advances, 16
Adventurers, Merchants, 16
Advice, 18
African Companies, Early, 18
African Companies, Recent, 19
I
Agazzini, M., 20
Agency, Law of, 21
Agents of Production, 21
Agio, 22
Agiotage or Agio, 22
Agnati (Adnati), 22
Agricultural Community, 22
Agricultural Gangs {see Gangs), 26
Agricultural Holdings Acts, 26
Agricultural Systems, 27
Agriculture in England, 27
AicKiN, Rev. J., 30
Aid, Auxilium, 30
Aid , Rate in {see Local Taxation), 3 0
Aides, Cour des, 30
AiKiN, J., 30
AlSLABIE, J., 30
Alba Firma, 30
Alcavala, 30
Alcock, Rev. T., 31
Aleatory, 31
Ale-taster, 31
Algarotti, F., 31
Alienl Juris, 31
Aliens, 31
Alison, Sir A., 32
Alison, W. P., 32
Allmend {see Agricultural Com-
munity), 32
Allonge, 32
Allotment, 32
Allowance, Tare, 33
Allowance System, 33
Alloy, 34
Alod, Alodial Land, 35
Alternative Standard, 35
Althusitjs, J., 36
Altruism, 37
Amana Society, The, 37
Amercements, 37
American School of Political
Economy, 37
Amortisation, 88
Amsterdam, Bank of {see Banks,
Early European), 38
Analytical Method, 38
Anarchism, 38
Anatocismus, 39
Anderson, A., 39
Anderson, J,, 39
Anderson, J. (No. 2), 40
Angarie, Droit d', 40
Angel, 40
Anna, 40
Annates, 40
Annealing, 40
Annual Rent, Scotch, 40
Annuity, 40
Ansell, C, 42
Antedate, 42
Antichresis, 42
Anti- Corn-Law League, 42
Anti-Rent Agitations, 42
Antoninus, St., 43
A Posteriori reasoning, 43
Appanage, 43
Appleton, N., 43
Applied Economics, 44
Apportionment (No. 1), 44
Apportionment (No. 2), 44
Appraisers, 45
Appreciation of Standard, 45
Apprenticeship, 45
Apprenticeship, Statute of, 46
Appropriation, 47
Approved Bill, 47
A Priori reasoning, 47
Aquinas, St. Thomas, 48
Arable Land, Conversion to
Pasture in Great Britain, 49
Arbitrage (Stock Ex.), 50
Arbitrage (General Business), 50
Arbitrage (Exchange), 50
Arbitration between Employers
and Employed, 51
Arbitration, Scotch, 52
Arbuthnot, J., 52
Arbuthnot, J., of Mitcham,
52
Arco, G. G., DEI CoNTi d'Arco, 52
Argenson, R. L. de Voter db
Paulmy, Marquis de, 52
Argentarii, 52
Aristocracy, 52
Aristotle, 53
Arithmetic, Political, 55
Arithmetic, Political, History
of, 56
Arithmetical Ratio, 67
Aries or An-hes, 57
Armed Neutrality, 57
Armstrong, C, 57
Arnd, K., 68
Arnould, a. M., 68
VIU
TABLE OF CONTENTS
Arrangement with Creditors {see
Bankruptcy), 58
Arrangement, Deed of, 58
Arrears, 58
Arrest, 68
Arrestment (Scots Law), 58
Arrestment Jurisdictionis Fun-
dan dse causa {see Jurisdiction,
Scotch), 58
Arbivabene, G., Count, 58
Art of Political Economy, 58
Art^l, 59
Articles of Apprenticeship, 59
Articles of Association, 59
Articles of Roup (Scotch), 60
Artisan, 60
Arts and Crafts {see Corporations
of Arts and Trades), 60
As, 60
ASGILL, J,, 60
ASHBURTON, A. B., 60
Ashley, J., 60
Assay, 60
Assessed Taxes, 61
Assessment, 61
Assets, 62
Assiento Treaty, 62
Assignat. 62
AssignatioL- (Scots Law Term), 64
Assignee, 64
Assigment, 64
Assignment, Deed of, 64
Assignor, 64
Assize of Bread and Beer, 64
Assize of Weights and Measures,
64
Assumption, Deed of (Scots Law
Term), 65
Assurance {see Insurance), 65
Assythment (Scots Law), 65
Ateliers Nationaux, 66
Atkinson, W., 66
Attachment, 6Q
Attestation, 67
Attorney, Power of, 67
Attornment, 67
Attwood, T., 67
Attwood, T., and Birmingham
School, 67
Aubaine, Droit d', 68
Auckland, W. E., Lord, 68
Auction, 68
AuDiFFBET, C. L. Gr., Marquis d',
68
AUDIQANNE, A., 69
Audit, 69
Audit (Scots Law), 71
Audit Office, 71
Auditor of Court of Session, 72
Augmentations, Court of, 72
AUGUSTINIS, M. DE, 72
Aulnager, 72
Auncel, or Handsal Weight, 73
Austrian School of Economists,
73
Authorities, Economic {see Politi-
cal Economy, Authorities on),
73
Autumnal Drain, 73
AUXIBON, C. F. J. d', 74
Average, 74
Average (Maritime), 74
Award, 75
AzuNi, D. A.,. 75
Babbagb, C, 75
Babeuf, F. N., 77
Back-Bond (Scots law term), 78
Backwardation, 78
Bacon, F. (Viscount St. Albans),
78
Badger, 78
Bagehot, W., 79
Bailee, 82
Bailey, S., 82
Bailey, S., on Value, 82
Baily, F., 83
Baines, E., 83
Bainbs, SirE., 83
Baines, T., 84
Bairn's part of Gear {see Legitim),
84
Bakounin, M., 84
Balance of Trade, 84
Balance of Trade, History of
the Theory, 85
Balance Sheet, 88
Balance Sheet (2nd Statement),
88
Balbi, a., 89
Baldwin, L., 90
Balsamo, p., 90
Bamford, S., 90
Ban, 90
Banalites, 90
Banco, 90
Bandini, S. a., 91
Banfield, T. C, 91
Banking, 91 —
Bank of England, 92
Banks, England and Wales, 93
do. Scotland, 95
do. Ireland, 96
do. India and Colonies, 97
Bank of France, 97
French banks, 98
Bank of Germany, 98
German banks, 99
Chartered Banks in Scotland,
100
Banks in Canada, 100
Banks, National, United States,
America, 102
Early European Banks —
Amsterdam, 104
Genoa, 104
Hamburgh, 105
Middleburgh, 106
Rotterdam, 106
Sweden, 104
Venice, 103
Land Banks, 106
do. Germany, 106
Popular Banks, Germany, 109
do. Italy, 109
Savings Banks, 110
Bank Note, 111
Bank Note, Laws in different
Countries, 112
Bank Note, United States ol
America, 113
Bankruptcy in Scotland, 114
Bankruptcy Law and Administra-
tion (England), 116
Banvin, droit de, 118
Barbary Co. {see Turkey Co.), 119
Babbon, N., 119
Baring, Sir F., Bart,, 121
Babnabd, Sir J., 121
Barrator, 121
Babbington, Bishop S., 121
Barter, 121
Barter and Exchange, 122
Barton, J., 122
BASTLA.T, F., 123
Bastiat as a Theorist, 124
Batbie, a. p., 124
Bate's Case, or the Case of Im-
positions, 126
Baudeau, N., Abb6, 126
Baudi, C. di v., 126
Baumstabk, R, 125
Baxter, R. D., 126
Bazaar, 126
Bazard, Saint- a., 127
Bear, 127
Bearer (Securities), 127
Beccaria, C. B. (Marquis), 127
Becheb, J. J., 128
Beckmann, J., 128
Bede (Manor), 128
Beeke, Rev. H., 129
Beldam, 129
Bell, W., 129
Bellebs, J., 129
Bellitti, G., 129
Belloni, G., 129
Benefice (1), 130
Benefice (2), 130
Beneficium Cedendarum Acti-
onum (Scots law Term), 130
Beneficium Competentiae, 130
Beneficium Divisionis (Scots law),
130
Beneficium Excussionis, 130
Beneficium Inventarii, 130
Benevolences, 130
Bbntham, J., 131
Bequest, Powe^ of, 133
Bebkeley, G., Bishop of Cloyne,
134
Berlin Decrees {see Continental
System), 135
Bernabd, Sir T., 135
Bebnhaedi, T. von, 135
Bbsold, C, 135
Betterment, 136
Bettemess, 138
Bezants, 139
bla.nchini, l., 139
Biblia, F., 139
BiDDLE, N., 139
BiEL, G., 140
BiGBLOw, E. B., LL.D., 140
TABLE OF CONTENTS
BUI Broking, 140
Bill of Exchange, 142
Bill of Exchange, Law of, 143
Bill of Lading, 145
Bill of Sale, 145
Billon, 146
Bi-Metallism, 146
Birth-rate, 150
BiUNDi, G., 151
Black, D., 151
Black Death, The, 151
Blackleg, 153
Blairie, Droit de, 153
Blakb, W., 153
Blanc, J. J. L., 153
Bland Act, 154
Blank Credit, 155
Blank Endorsement, 155
Blank Transfer, 155
Blanqui, J. A., 155
Blench (Scots law term), 155
Blockade, 156
Board, 156
Board of Agriculture (1793), 156
Board of Agriculture and Fish'
eries, 157
Board of Trade, 158
Boarding-out System, 159
BoccHi, K, 160
BocKH, A., 160
Bocland, 160
BODIN, J., 160
Body Corporate, Covi)oration, 161
BCECLER, J. H., 161
BOILEAU (or BOYLEAU), E., 161
BOISGUILLEBERT, P., 162
BOLLES, J. A., 162
BOLLMAN, J. E., M.D., 162
Bon, 162
Bona fide, 162
Bona notabilia, 163
Bona vacantia, 163
Bonce RF, P. F., 163
Bond, 163
Bond of Caution (Scots Law Term,
— see Caution), 163
Bond of Corroboration (Scots
law), 163
Bond and Disposition in Security,
163
Bond of Belief (Scots law term),
163
Bonded Warehouses, 163
Bonnet, V., 164
Bonorum Possessio, 164
Bonus, 164
Book account credit, 164
Book-keeping, 164
Do. Logismography, 165
Book of Rates, 167
Boom, 168
Booty, 168
BORNITZ, J., 168
Borough, 168
Borough English, 168
BOSANQUET, C, 168
BOSBLLINI, C, 169
Boston Port Bill, 169
BoTERO, G., 169
Bottomry, Loan on, 169
BOULAINVILLIERS, H. DE, 170
Bounties, 171
Bounties, Abstract Theory of, 172
Bounties on Sugar, 173
Bourgeois, 174
Bourse, 174
Bourse du Travail, 174
BowEN, F., 175
BoxHORN, M. Z., 175
Boycotting, 175
Bradlaugh, C, 175
Brands and other Certificates of
Quality, Government, 175
Brassage, 176
Brassey, T., 176
Bray, C, 176
Bray, J. F., 177
Breach of Trust (Scots criminal
law term), 177
Breach of Trust, 177
Breck, S., 177
Brehon law, 178
Brevi Manu Traditio, 178
Brewster, Sir F,, 178
Briganti, F., 179
Bright, J., 179
Brindley, J., 179
Briscoe, J., 179
Brissot de Warville, J. p., 179
Broqgla, a., 180
Broker, General, 180
Broker, Stock, 181
Brokerage, 181
Brougham, H,, Lord, 181
Brown, J., 181
Brydges, Sir E., 181
Bubble Act, 182
Bubbles, History of, 182
Buchanan, D., 183
BucHEZ, P. J. B., 184
Buckle, T. H., 184
Budget, The, 185
Building Societies, 188
BuLAU, F. von, 190
Bull, 190
Bull of Borgia, 190
Bullion, 191
Bullion Committee, Report of,
191
Buonarroti, P., 192
BuQUOY, G. F., Count, 192
Bureau of Labour, 192
Bureau of Labour in U.S., 193
Bureaucracy, 193
Buret, A. E., 194
Burgh, 194
Burgher {see Citizen), 194
buridan, j., 194
Burke, E., 194
burlamaqui, j. j., 195
Burton, J. Hill {see Hill Bur-
ton, J.), 195
BuscH, J. G., 195
BtJscHiNQ, A. F.J 196
Butel-Dumont, G. M., 196
Butlerage, 196
Buying in, 196
By-law, Byelaw, 196
By-product, 197
By-products, Theory of Value o5
197
Caret, E., 197
Cable Transfer, 199
Cadastral Survey, 199
Cadet, F., 200
Cagnazzi, L. S., 200
Cairnes, J. E., 201
Caisse, 203
Call, 203
Calonne, C. a. de, 204
Calvin, J., 204
Cambage, Droit de, 206
Cambist {see Exchange Broker)^
206
Cambon, p. J., 206
Cambreleng, C. C, 207
Canieralistic Science, 207
Camerarius, J,, 208
Campanella, T., 208
Campomanes, p. R., 208
Canals, 208
Canard, N. F., 209
Cancel, Cancellation, 209
Cancrin, G., 210
Candareen, 210
Canning, G., 210
Canon Law, 211
Cantalupo, D., 214
Cantillon, p., 214
Cantillon, R., 214
Capello, p. a., 217
Capitainerie, 217
Capital, 217—
History of the Word, 221
Legal ruling that Capital need
not be replaced from Profits,
221
Rarely permanent, 222
Capitation (in France), 223
Capitation Taxes, 223
Caraccioli, D., 224.
Carafa, D., 224
Carbonari, 225
Cardozo, I. N., 225
Carey, H. C, 225
Carey. M., 227
Carli, G. R., 227
Carlyle, T., 227
Carolus (English), 228
Carolus Dollar, 228
Carrier, Common, 228
Carrying Over, 228
Carrying Trade, 228
Cartel, 229
Cartograra, 229
Carucage, 229
Gary, J., 230
Casaregis, J. L. M. DE, 230
Case of Need {see BiU of Ex-
change), 230
Cash, Money, 230
Cash (or Li), 230
Cash Account, 231
TABLE OF CONTENTS
Cash Credit, 231
Cash, Sale for, 231
Cashier, 231
Caste, 231
Casuel, 233
Casus, 233
Catallactics, 233
Catasto, 233
Cattanbo, C, 234
Cattle Plague Orders, 234
Caution (Scots Law Term), 234
Caution, 234
Caveat, 234
Caveat Emptor, 234
Cavour, Count C. B. Di, 234
Caylet, E., 237
Cedula, 237
Cens, 237
Census, 238
Census, United States, 243
Cent, Centesimo, or Centavo, 250
Cent, Dutch, 250
Centesimi, Centimes, Centimos.
250
Centralisation, 250
Certainty, 251
Certificate, Share, 251
Cbsare, C. de, 252
Cess, 252
Cessio Bonorum {see Bankruptcy,
Scotch), 252
Cessionary (Scots law terra), 252
Ceva, G., 252
Chadwick, Sir E., 252
Chaffer, 254
Chalmers, G., 254
Chalmers, T., 255
Chamberlayne, E., 256
Chamberlen, H., 257
Chambers of Agriculture, 257
Chambers of Commerce, 258
Chambre Ardente, 260
Chamillart, M. de, 260
Champart, 260
Champion and Severalty, 260
Change, Abbreviation for Ex-
change, 261
Change (Agents de), 261
Chapman, 262
Charging Order, 262
Charitable Foundations, 262
Charitable Institutions, 264
Charity, 265
Charity Organisation, 266
Charity, State, 268
Charter, 271
Charter Party, 271
Chartism, 271
The Points of the Charter,
272
Chastbllux, F. J., Marquis de,
273
Chattel or Chattel Personal, 273
Checks on Population, 273
Cheques, Law of, 273
Chbrbulibz, a. E., 274
Chevage, 274
Chevalier, M., 276
Chickebinq, J., M.D., 277
Chief Kent {see Eent Charge),
277
Child, Sir J., 277
Childrens' Labour (Factory Acts),
277
Chiminage, '279
Chitti, L., 279
Chorogram, 279
Choses in Action, 279
Choses in Possession, 279
Chrematistic (or Money-making),
279
Christian Socialism, 280
Christianity and Economics —
Church, the Mediaeval, Econ-
omic Influence of, 280
Koman Catholic School of
Economics, 283
Influence of Protestant Thought
on Economic Opinion and
Practice, 285
Chronogram and Hexogram, 287
Church Seed, 287
Cibrario, G. A. L., Count, 287
Cinque Ports, 287
Ciompi, 288
Circulating Medium, 288
Citation {see Jurisdiction, Scotch),
288
Citation, 288
Cite Ouvriere, 288
Citizen, 289
City-
Ancient, 290
Mediaeval, 292
Modern, 295
City of London, Companies of
{see Companies, City of Lon-
don), 297
Civil Law, 297
Civil List, 300
Civilisation, 302
Clarkson, T., 303
Classical Economists, 303
Classification, 303
Clay, H., 304
Clayton, D., 305
Clearing System —
Clearing Houses, 305
London Bankers' Clearing
House, 306
Provincial Clearing Houses,
307
Foreign Clearing Houses, 307
Statistics, 309
Other Classes of Clearings, 310
Stock Exchange Clearing, 310
Beetroot Sugar Association, 310
London Produce Clearing, 311
Railway Clearing, 311
Cotton Clearing, 311
Clement, A., 312
Clement, P., 312
Clement, S., 312
Clergy, Benefit of, 313
Client, 313
Client, Stockbroker's, 313
Clipfe Leslie {see Leslie, T. E.
C), 313
Clipped Money, 313
Cloff or Clough, 313
Coalitions {see Trade Unions),
313
Coasting Trade, 313
Cobbett, W., 314
COBDEN, R, 316
Cochut, p. a., 317
Code Napoleon, 317
Codicil, 318
Coinage, The Right of, 318
Coinage, Decimal {see Deoimal
System), 318
Coke, R., 318
Colbert, J. B., 319
Collateral Security {see Caution),
320
Collation {see Succession, Scot-
land), 320
Collect, 320
Collective Goods, 320
Collectivism, 320
Collegium, 320
Colonies —
Colonies, description of, 321
Colonial Policy, 322
Colonial Lands, 323
Public Debts of Colonies
324
Trade and the Flag, 324
Methods of Government, 326
Currency in British Colonies,
326
Denominational Currency in,
328
Government of, by Companies,
329
Systems of Colonisation, 333
Colquhoun, Patrick, 334
COLTON, Rev. Calvin, 335
CoLWELL, Stephen, 335
Combination —
Production, 335
Distribution, 336
Production and Distribution,
336
Distribution and Consumption,
336
Combination Laws, 336
Comfort, Standard of, 337
Commandite, Society en, 338
Commerce, 338
Commerce British (History of),
341
Commercial Instrument, 346
Commercial Law, 346
Commercial Routes (History of),
347
Commercial Science, 351
Commercial System, 351
Commercial Treaties, 354
Commissary {see Succession, Scot-
land), 355
Commission Agent, 355
Commissions of Enquiry, 355
Commissions, Judicial, 356
TABLE OF CONTENTS
Commissioner {see Factor), 357
Commissioners of Sequestrated
Estate {see Bankruptcy, Scot-
land), 357
Committee (Lunacy), 357
Committee of Inspection, 357
Commodatum, 357
Commodity, 357
Common Assurance, 358
Common Employment, Doctrine
of, 358
Common Good (Scotland), 358
Commons, 358
Commonty (Scotch), 360
Commune, 360
Commune of Paris (1871), 361
Communication, Means of, 361
Communio, 362
Communism, 362
Compagnonnages, 367
Companies —
Companies, English and Scotch
Law, 368
Increase of, 369
Influence on Business, 370
Companies, City of London, 371
Companies, Staple, 373
Companies, Trading (see Foreign
Trade, Regulation of), 375
Compensation, 375
Competition and Custom, 376
Competition and Eegulation,
378
Complementary Goods, 380
Composition {see Bankruptcy),
880
Compound Interest, 380
Compromise (Scots law), 380
Comptes, Chambre des, 380
Compulsory Pilotage, 380
Compulsory Preference, 381
Compulsory Taking of Land, 381
COMTE, AUQUSTE, 381
CoMTE, Aug. , and English Politi-
cal Economy, 382
COMTB, Chas., 383
Concession, 384
Conciliation, Boards of, 384
Concourse (Scots Law), 385
Concurrence (Scotland), 385
CoNDiLLAC, E. B. de, 385
Conditioning, 385
CONDORCET, M. C, Marquis de,
386
CONDUITT, J., 387
Confident Person {see Bankruptcy,
Scotland), 387
Confirmation of Executor (Scots
Law), 387
Conflict of Laws (Foreign), 387 ;
(Domestic), 387
Confusio, 387
Conjunctur, 387
Conquest, 388
CONRINQ, H., 388
Conscription, 388
Conseils de Prud'hommes, 389
Consideration, 389
Consignee, 389
Consolidated Fund, 389
Consolidatio, 390
Consols, 390
Conspiracy, Common-Law Doc-
trine of, 390
Constitutum debiti, 391
Constitutum possessorium, 391
Consul, 391
Consular Reports, 391
Consumables {see Consumptibles),
392
Consumers' Goods (or Consump-
tion Goods), 392
Consumers' Rent, 392
Consuniptibles. A term em-
ployed by the Schoolmen, 393
Consumptibles (Modern Economic
Term), 393
Consumption, 393
Consumption, Taxes on, 395
Continuation or Contango, 396
Continental System, 396
Contraband, 398
Contract, 399
Contract, Law of, 401
Contract Note, 402
Contractors, 402
Contractus Trinus {see Eck,
Johann), 402
Contribution, Contributory {see
Company), 402
Convention of Royal Burghs of
Scotland, 403
Conventional Tariff", 403
Conventional Value, 404
Conversion of British National
Debt, 404
Conversion, Colonial and Foreign
Stocks, 405
Conversion of Aralile Land into
Pasture in England, 406
Convertibility of Bank Notes, 407
Conveyance, 408
Coolie System, 408
Cooper, T. (1759-1840), 408
Cooper, T. (1805-1892), 408
Co-operation, 409
Co-operative Associations, 409
Co-operative Farming, 413
Co-operative Workshops, 415
Co - operation. Partial (Oldham
Cotton Spinning Companies),
417
Co-operation, Social Aspects of,
418
Coparceners, 420
Copernicus, Nicolaus, 420
COPLESTON, E. (Bishop of Llan-
daff), 420
Copper Money (England), 421
Copper Money (Sweden), 421
Copyhold, 422
Copyright, 422
Literary Copyright, 422
Dramatic Copyright, 422
Works of Art; 422
Designs, 422
Copyright in Foreign Countries,
422
International Copyright, 422
Basis of Copyright, 423
coquelin, c, 423
Corbet, T., 423
corbetta, e., 423
Corn Laws, 423
Corn Rents, 426
Corn Returns, 426
Cornage, 426
Corner on Stock Exchange, 427
CORNIANI, G., 427
Corporation, Municipal, 427
Corporation, Aggregate, 428
Corporation, Sole, 428
Corporations of Arts and Trades —
England, 428
France, 430
Germany, 431
CORTI, A., 432
CORVAIA, Baron, 432
Corvee, 432
CoRVETTO, L,-E., Comte de, 433
Coshery, 434
Cost (Comparative and Relative),
434
Cost, in the Sense of Price, 434
Cost Book, 434
Cost of Collection of Taxes, 435
Cost of Labour (see Cost of Pro-
duction), 437
Cost of Production, 437
Cost, Relative {see Cost, Compara-
tive), 439
Cottiers, 439
Cotton Famine (1861-65), 439
Cotton Lists, 441
Cotton, Sir R B., 441
Coulisse, 441
Council Bills (India Council
Drawings), 442
Countervailing Duty, 443
County Borough, 443
County Council, 443
County Rate, 444
Coupon, 444
CouRCY, A. de, 444
CouRNOT, A. A., 445
Court, P. de la, 447
Court Rolls, Manorial Accounts
and Extents, 447
Courten, Sir W., 1572-1636 {see
Interlopers), 448
Courtier, Broker {see Change,
Agents de), 448
Courts of Law (England), 448
Courts (Ireland), 449
Courts (Scotland), 449
Coverture, 450
COWELL, J. W., 450
Cowrie, 450
CoxE, T., 450
Cradocke, F., 451
Craft Guilds {see Corporations of
Arts and Trades), 451
Craig, John, 451
Credit, 451
^u
TABLE OF CONTENTS
Credit, Influence on Prices, 452
Credit Foncier of France, 454
Credit, Letter of, 455
Criminal Prosecution, 455
Crises, Commercial and Financial,
455
Crises (1857-1866-1890), 462
Crises, Periodicity of, 466
Crombib, a., 467
Crome, a. F. W., 467
Cross Drawing, 468
Crossed Cheque, 468
Crown Debts, 468
Crown, English (Gold Coin), 468 ;
Silver Coin, 468
Crown (Scandinavian), 468
Crown Lands, 469
Crumpe, S., 469
Crusade, 469
Crusades, Economic Effects of, 469
Culpa, 470
CULPEPER, Sir T. (the elder), 470
CuLPBPEB, Sir T. (the younger),
470
Culture, Large and Small, 470
Cum Dividend, 472
Curator Bonis, 472
Currency, 472
Currency Doctrine or Principle,
472
Curves, 473
CusTODi, P., 474
Custodia, 474
Custom, Customs Duties, 474
Custom, Habit, 476
Dairb, K, 477
Dalbiac, General Sir J. C, 478
Dalrymplb, Sir J, , 478
Damages, 478
Damages, Measure of, 479
Dameth, H., 479
Damnum Emergens, 479
Damnum Fatale (Scot), 480
Danegeld, 480
Dangeul, Marquis de Plum art,
480
Darg, 481
Daric, 481
Darien Company, 481
Darwinism, 481
Date of Drawing, 482
Davach, 482
Davanzati, B,, 482
Davbnant, C, 483
Davies, David, D.D., 484
Davila, el Padre Bautista, 485
Davila y Lugo, Don Francisco,
485
Day, Day Work, and Diet, 485
Days of Grace, 485
Dead Freight, 486
Deadly, Warrandice against All
(Scot.), 486
Dead Eent, 486
Dead's Part (Scot.), 486
Deadweight Annuity, 486
Dealer (Stock Exchange), 486
Dearness, Artificial, 487
Dearth (see Famine), 490
Death Duties, 490
Death-rate —
Analysis, Definition of Subject,
493
Death -rate as Factor in in-
crease of Population, 493
Causes of variation in Death-
rate, 494
Death-rate, as indicating Na-
tional Prosperity, 497
In relation to Insurance, 497
Debasement of Coin, History of
the, 498
Debenture, 501
Debenture Stock, 502
Debit, 503
Debitum Fundi (Scot.), 503
Debouches Theorie des, 503
Db BROUCKiiRB, C, 503
Debt-
Debt, 503
Imprisonment for, 504
Debtor and Creditor, Law of,
505
Debtor's Summons, 506
Debts, Public, 506
Debt, Public, Statement of, 509
Debts, Public, Local, Great
Britain and Ireland, 509
De Cardenas di Maqueda,
D. R., 513
Decentralisation, 513
Decimal System (Coinage, Weights
and Measures), 514
Decime, 518
Decimes, 518
Decker, Sir M., 518
Declaration of Paris, 520
Declaration of War, 521
Declared and Real Values, 521
Decreasing Returns {see Diminish-
ing Returns), 522
Decree of Registration (Scot.),
522
Deductive Method, 523
Deed (Scot.), 526
Deed of Arrangement, 527
Deed Poll, 529
Defalcation, 529
Defence, 529
Defence, Cost of, 529
Deferred Payments, 532
Deferred Stock, 532
Deficiency Advances, 533
Deficiency Bills, 533
Deficit, 533
Definitions, 534
Defoe, D., 535
Degree of Utility, 536
Db la Court {see Court, Pieter
de la), 537
De LajonchIcre, 537
De la Mare, N., 537
Del Credere, 537
Delegation, 537
Delfico, M., 537
Delictum, 538
Delivery (of Bills of Exchange),
538
Delivery (of Deeds, — see Deed),
538
Delivery (of Chattels), 538
Delivery, Good, 539
De Luca, G. B., 539
Demand, 539
Demand Curves, 542
Demand Schedules {see Demand),
544
Demesne, 544
De Metz-Noblat, A., 544
Demise, 544
Demography, 544
Demoivre, a., 545
Demology {see Demography), 546
Demonetisation, 546
Demonstrative Legacy, 546
Demurrage, 546
Denarius, 546
Denarius Dei, 547
Denier (Coin), 547
Denier (Tax), 547
Denier (as denoting Price),
547
Deniers de Calais, 547
Denizen, 548
Denny, W., 548
Denominational Currency {see
Colonial Currency), 548
Denominations of Bank Notes,
548
Denominator, Common, 549
Deodand, 549
Deparcieux, a., 549
De Parieu {see Parieu, Esquirol
de), 550
Department, 550
Department (France), 551
Depopulation (Term), 551
Depopulation (in Relation to Eco
nomic History), 551
Depopulation (Causes), 552
Deposit (Sales of Land), 559
Deposit (Deposits, Banking), 559
Deposition, 560
Depositum, 560
Dep6ts et Consignations (Caisse
des), 560
Depreciation, 561
Depreciation of Monetary Stand-
ard, 562
Depression, Agricultural, 563
Depression of Trade, 565
Deputy, 568
Db Quincby, T., 568
Derelict, 570
Derelictio, 570
De Sanctis, M. A., 570
Descent of Property, 570
Designs, Copyright in, 571-
Desmarets, N., 571
Destutt db Tracy, A. L. C,
572
Destutt de Tracy and Ricardo,
572
TABLE OF CONTENTS
xiii
Detraction, Droit de, 572
Development, 572
De Vio, F. T., 573
Devise, 573
Dew, T. K., 573
Diagrams, 574
Dialogus de Scaccario, 576
Dica, 576
Dickinson, J., 576
Dickson, Kbv. A., 577
BiDEROT, D., in his relation to
Economics, 577
DiETERici, K. F. W., 579
Differential Duties {see Discrim-
inating Duties), 579
DiflBculty of Attainment, 579
DiflFusion Theory of Taxation, 582
DiGGES, Sir D., 582
Diligence (Scot. ), 582
Diligentia, 582
Dime, 582
Dime Roy ale, 583
Dimensions of Economic Quan-
tities, 583
Diminishing Returns, 585
Diminishing Utility (see Utility),
586
Dinar (Ancient), 586
Dinar (Modern), 586
DiODATi, D., 586
DiODATi, L., 586
Direct Taxation, 586
Directors, Legal Duty of, 587
DiROM, Major A, , 587
Disabilities of Aliens, 587
Disabilities of Infants, 587
Disabilities of Lunatics and
Drunkards, 588
Disabilities of Married Women,
588
Discharge (Scot.), 588
Discharge in Bankruptcy, 589
Disclaimer, 589
Discommodity, 589
Discount, 589
Discount, French Stock Exchange,
590
Discount (London Stock Ex-
change), 590
Discount Houses {see Bill Brok-
ing), 591
Discoveries, Geographical (Influ-
ence on Trade of), 591
Discoveries of Precious Metals
{see Gold — Silver, Discoveries
of), 591
Discovery in Actions, 591
Discriminating or Differential
Duties, 591
Discussion (Scot.), 592
Dishonour of a Bill, 592
Disposition (Scot.), 592
Distance in Time as an Element
of Value, 592
Distress, 594
Distress (Legal Term), 594
Distribution (or in full The Dis
tribution of Wealth), 595
Distribution, Ethics of, 596
Distribution, Law of, 599
Distribution (uses of the Term),
602
Distribution, Cost of {see Produc-
tion and Distribution), 603
Distribution, Statutes of, 603
Distribution of the Precious
Metals, 603
Distributive Justice, 606
Distringas, 606
Disutility {see Discommodity),
606
D'lVERNOis, Sir F. {see Ivernois,
Sir F. de), 606
Dividend (on Stock and Shares),
606
Dividend (Mediaeval), 607
Dividend (in Bankruptcy), 607
Dividend Warraut, 607
Divisibility of Money. Divisions
of Money, 608
Division of Labour, 608
Dizain, 611
DOBBS, A., 611
Dock, 611
Development of the Modern
Dock System, 611
London Docks, 611
Provincial Dock Development,
613
Dock Warrants, 615
Etfect of Economic Changes
upon Docks, 615
List of Mercantile Docks in the
United Kingdom, 616
Competition in relation to
Docks, 621
Incidence of Dock Charges,
621
Dock Finance, 621
Dock Ownership, 621
Public Ownership, 621
(1) Management, 621
(2) Public Convenience,
621
(3) Finance, 621
Dock Labour, 622
Dock Warrant, 623
Docquet, 623
Doctrinaire, 623
Doctrine of Population — Malthus
{see Malthus, Rev. T. R. ;
Population), 624
Dogma, 624
Doitkin, 625
Dole Fish, 625
Doles, 625
Dollar, 626
History of, 626
Of Accounts, 627
Hard (Stock Exchange use of
word), 627
Hard (Spanish), 627
United States, 627
Trade (United States), 627
Maria Theresa or Levantiner
Thaler, 628
Mexican, or Peso, 628
South and Central American
Republics, and British Hon-
duras, 628
Spanish {see Hard Dollar),
628
Dolus, 628
Domaine, 628
DOMBASLES, A. M. de, 628
Domesday Book, 629
Domestic System of Industry,
630
Domicil or Domicile, 631
Domicile (Scotland), 632
Domiciled Bill, 632
Dominium, 632
Domus Conversomm {see Jews in
England), 632
Donatio Mortis Causa, 632
Donation (Scotland), 632
DoNATO, N., 632
Don Gratuit, 632
DoRiA, P. M., 633
Dormant (or Sleeping) Partner,
633
Dormer, D. J., 633
Dos, 633
Doses (of Capital), 633
Douane (Fr. Customs), 633
Double Entry {see Book-keeping).
634
DOUBl.EDAT, T., 634
Double-Florin, 634
Double Standard {see Bimetal-
lism ; Standard of Value), 634
Doubloon, History of, 634
Doubloon, 635
Douglass, W., 635
Dove, P, E., 635
Dower, 636
Drachma, 637
Drafts on Demand {see Cheques;
Law of), 637
Dragonetti, G., 637
Dragonetti, L., 637
Drain of Bullion, 637
Drake, J., 639
Drajner's Letters, 639
Drawbacks, 640
Drawer of a Bill of Exchange, 640
Drawing, 640
Drengage, 641
Drinks, Taxes on {see Taxes),
641
Drofland, or Dryfland, 641
Droit, Annuel {see Paulette),
641
Droits of Admiralty, 641
Droits d'Aubaine {see Aubaine),
641
Droz, J., 641
Drummond, H., 641
Drunkards, Legislation respect-
ing, 642
Dry Exchange {CamMum siccum),
643
Dry Rent {Rent sec.), 643
DUBOS, Abb^ J. B., 648
xiv
TABLE OF CONTENTS
Ducat, History of, 643
Ducat (Modern), 644
DuoHATEL, Comte T., 644
DucPETiAUX, E., 645
Due [gerihta, rectitudo, rectum).
645
Due Date (Bill of Exchange)
648
DUFAU, F. P., 648
Ddhamel du Monceau, H. L.
648
DuMOULm {see Molinaeus), 648
DONCAN, H., D.D., 648
Duncan, John, 650
Duncan, Jonathan, 650
Dundas, H., 650
Dunning, E., 650
Dunoyer, C, 650
Duodecimal System, 651
DupiN, Baron C, 651
DupiN, Claude, 652
DUPONT (Du Pont), P. S. de
Nemours, 652
Dupont-Whitb, C, 653
DuPRE DE Saint-Maur, N. F.
654
DUPUIT, A. J. E., 654
Duquesnot, a. C, 655
Duration of Life (as an element
of well-being), 655
DussARD, H., 655
Dutch Auction {see Auction), 655
Dutch School of Economists,
656
DuTENS, J. M., 660
DuTOT, 660
Duty, Customs {see Customs)
660
Duty, Export {see Exports, Duties
on), 660
Duty, Import {see Imports, Duties
on), 660
Duty, Legacy, Probate, Succes-
sion {see Death Duties), 660
Du Vernet {see Paris Du
Vemey), 660
DUVILLARD DE DURAND, E.
660
Dwellings, Industrial, 660
Dwellings, Model, of Working
Classes in France, 664
Dwellings (Regulation by the
State in England), 665
Eagle, 667
Earnest Money, 667
Earnings and Interest Fund, 667
Earnings of Management, 667
Easement, 668
EasterUngs, 668
East India Company, 669
Eastland Company, 672
Eaton, D. L, 673
Ebaudy db Fresne, 673
Eok, J., 673
Economic Freedom, 674
Economic Goods {see Goods,
Economic), 674
Economic Hannony, 674 |
Economic History, 675
Economic Law, 676
Economic Man, 676
Economics {see Political Economy),
677
Economic Science and Economics,
677
Economistes, 679
Ecu, 679
Eden, Sir F. M., 679
Edgeworth, M., 680
Edmonds, T. K, 681
Education, Economic Aspects of,
681
Edwards, B., 681
Edwards, G., M.D., 682
Effects, 682
Effectual Demand {see Demand
Effectual), 682
Efficiency of Labour, 682
Efficiency of Money, 685
Egoism, 685
Egron, a. C, 687
Eight-Piece, 687
Eight Hours Movement, 687
Einert, C, 690
ElSDELL, J. S., 690
Eiselen, J. F. G., 690
Eject, Ejectment, Ejection, 690
Elasticity, 691
Elasticity of Demand {see De-
. mand), 691
Elder, W., 691
Election, 691
Elegit (Writ of), 692
Elevator, 692
Elibank, p. M., 692
Eliot, F. P., 692
Elizabethan Legislation {see Legis-
lation), 693
Elking, H., 693
Elliott, E., 693
Ellis, W. (1758), 693
Ellis, W. (1800-81), 693
Ellman, J., 694
^lus, 694
Emancipation, 694
Embargo, 695
Embezzlement, 696
Emblements, 696
Emerson, Gouverneur, M.D.,
696
Emigration, its Effect on the
Country of Origin, 696
Eminent Domain, 702
Emmery db Sept Fontaines, H.
C, 703
Empanel, 703
Emphyteusis, 703
Empiricism, 703 -
Employers and Employed, 704
Employers' Liability Act, 706
Employing Class, 707
Employment, 707
Employment of Women and
Children in Agriculture {see
Female Labour), 708
Employments {see Occupations),
708
Emption, 708
Emptio-Venditio, 708
Emulation, Effects of, on Society,
708
Encabezamiento, 709
Enclosures, 709
Encomienda, 712
Encroachment {see Trespass), 712
Encyclical, Papal, on Labour
(1891), 712
Endorsement {see Bill of Ex-
change), 713
Endowments, 713
Enemy Goods, 714
Enfaced Paper or Rupee Paper, 715
Enfacement, 715
Enfantin, p., 715
Enfranchisement, 716
Enfranchisement of Land from
Copyhold and similar Tenures,
History of, 717
English Early Economic History,
719
English School of Political
Economy, before Adam Smith,
730
English School of Political
Economy, Modern Economics,
" 733
Engrossing {see Forestallers and
Regrators), 737
Enregistrement, 737
Ensenada, Z., Marquis, 737
Entail, Law of, 738
Entail (Scotland), 740
Entrep&ts, 741
Entrepreneur, 741
Entry, Bill of, 742
Entry, Right of, 742
Enumerated Commodities, 743
!^phemerides, 743
Bpices, 747
Equalisation of International De-
mand, 747
Equality, 748
Equation of Supply and Demand
{see Demand), 749
Equilibrium, 749
Equitable Assets, 749
Equitable Estate, 749
Equitable Execution, 749
Equitable Mortgage, 749
Equitable Waste, 750
Equity, 750
Equity of Redemption, 751
Equity to a Settlement, 751
Error Excepted, 751
Error, Law of, 751
Escheat (historical), 753
Escheat (modern law), 754
Escudo, 754
Escusado, 754
Essart, Exart, or Assart, 754
Estate, 754
Estate Duty {see Death Duties)
755
TABLE OF CONTENTS
EsTCouRT, T., 755
ESTERNO, P., 755
Estimo, 755
Estoppel, 756
Estovers, 756
Etats Generaux, The, or States
General of France, 756
Ethel {see Alod), 756
Evans, D. M. , 756
Evans, T., 757
Evelyn, J. (1620-1706), 757
Evelyn, J. (1830), 757
Everett, A. H., 757
Everett, G., 757
Evolution {see Development), 758
Eviction, 758
Ex. All, 758
Examples, 758
Excambion, 758
Exchange, 758
Exchange, Value in, 759
Exchange, Value in. History of
Growth of Theory, 762
Exchange, Usury {see Usury),
767
Exchange, as Bourse, 767
Exchange, Stock, 768
Exchange, Stock, Provincial, in
Great Britain and Ireland, 770
Exchange, Foreign, 770
Exchange, Foreign, practical work-
ing of, 772
Exchange between Holland aud
Dutch India, 773
Exchange between Great Britain
and British India, 776
Exchange, Internal, 777
Exchange of Notes, 778
Exchange Broker, 778
Exchanger, Royal, 778
Exchequer, Early History of, 779
Exchequer, Present Constitution
of, 781
Exchequer (Scotland), 784
Exchequer Bill, 784
Exchequer Bill, History of, 784
Exchequer Bond, 785
Exchequer Bond, History of, 785
Exchequer, Closing of the, 786
Excise, The, 786
Excise Scheme of Sir R. Walpole,
788
Ex. Dividend, 789
Ex. Drawing, 789
Execution, 789
Executor, 789
Executry (Scottish), 790
Exercitor (Scottish), 790
Exhereditatio, 790
Ex. New, 790
Expectation of Life, 790
Expeditation, 790
Expenditure or Spending, 790
Expenses of Production {see Pro«
ductiou), 790
Experience, 790
Experimental Methods in Econo-
mics, 791
Expert, 792
Expertise (French), 793
Exploit, 793
Exports and Imports {see Imports
and Exports), 794
Exports, Duties on, 794
Expropriation, 797
Extensive Cultivation {see Inten-
sive), 798
Extents {see Court Rolls, Manorial
Accounts, and Extents), 798
Extraneus, 798
Eyton, R. W., 798
The great art therefore of political oeconomy is, first to adapt the different
operations of it to the spirit, manners, habits, and customs of the people ;
and afterwards to model these circumstances so, as to be able to introduce a
set of new and more useful institutions.
The principal object of this science is to secure a certain fund of subsist-
ence for all the inhabitants, to obviate every circumstance which may render
it precarious ; to provide everything necessary for supplying the wants of
the society, and to employ the inhabitants (supposing them to be free men)
in such a manner as naturally to create reciprocal relations and dependencies
between them, so as to make their several interests lead them to supply one
another with their reciprocal wants. — Sir James Steuart, Iiiquiry into the
Principles of Political (Economy.
The more extended our research becomes, the more we find that know-
ledge is a thing of slow progression, that the very notions which appear to
ourselves new have arisen, though perhaps in a very indirect manner, from
successive modifications of traditional opinions. Each word we utter, each
thought we think, has in it the vestiges, is in itself the impress, of antecedent
words and thoughts. — Sir W. R. Grove, Correlation of Physical Forces.
DICTIONAEY OF POLITICAL ECONOMY
ABATEMENT— ABOLITIONIST
ABATEMENT or Rebate. A deduction,
drawback, or decrease made. A proportionate
reduction of a payment allowed for special
reasons — e.g. for prompt payment. E. s.
ABBOT, Charles, afterwards Lord Colchester
(bom 1757, died 1829), entered parliament in
1795, and became chairman of Pitt's finance
committee 1797. He carried in 1800 a bill for
charging public paymasters with the payment
of interest on sums in hand. He was also the
Initiator of the commission of inquiry into the
public records in the same year. But perhaps
his chief title to fame is his introduction, in
1800, of the motion for a complete census of
Great Britain. In spite of some opposition tlie
Population Act, as it was called, was duly passed,
and its provisions carried into force in the next
year (see Census). As speaker (elected 1802)
he gave his casting vote against Lord ]\IelviUe
in 1805. On his retirement from the House of
Commons in 1817 he was made a peer, and
received a pension of £i000 a year. He d&-
vx)ted his later years to foreign travel, and to
the improvement of roads in the Scottish high-
lands. J. B.
ABEILLE, Louis Paul (born 1719, died
1807), became secretary of the Agiicultural
Society of Brittany, established through
Gournay's influence in 1757. He was an
ardent physiocrat, and argued (1763) for free
trade in corn, along with Quesnay, Morellet,
and the elder Mirabeau. Writing later on the
same subject (1768) he fell into the fallacy that
high corn prices make high wages. Dupont
speaks of his style as "cold and heavy" but
clear." He wrote occasionally in the Journal
d' Agriculture of Paris, when Dupont became
■its editor in 1765 ; but he seems never to have
'been on very good tei-ms Avith that economist.
I When he was chosen inspector-general of manu-
factures (1768) his ardour seems to have cooled
down, and he is not to be reckoned among the
few who upheld the physiocratic cause after
Tuegot's death in 1781. His writings include
(besides the Corps d' Observations of the Breton
Agricultm-al Society) the following : —
Lettre d'un negociant sur la nature du commerce
des Grains, Paris, 1763. — Rejiexions sur la police
des Grains en Angleterre et en France, Paris,
1764. — Effets d'un privilege exclusif sur les droits
de propriete, Paris, 1764. — Principes sur la liberty
du commerce des Grains, Paris, 1768. — Fails qui
ont influx sur la cherti des Grains en France et en
Angleterre, Paris, 1768. — Mimoire presents par
la SociHS Roycde d' Agriculture sur V usage des
domaines congeables, Paris, 1791. — Memoire en
faveur d'Argant, the inventor of the " Argand "
lamp, Geneva, 1785. — Memoire d consulter {on the
subject of the French Fast India Company), Paris,
1768. — [See Schelle's Dupont de Nemours et V6cole
Physiocratique [\^%^) passim, Daire's Physiocrates,
1846 {e.g. p. 38).] j. b.
ABOLITIONIST. A term applied specially
to the social reformers headed by Thomas
Clarkson, who advocated and carried the aboli-
tion of the slave-trade in the British dominions ;
and applied generally to all who have aimed at
abolishing either the trade in slaves or the
institution of Slavery, whether in the British
dominions or elsewhere.
The causes which contributed to abolition in
the first sense are arranged by Clarkson (q.v.),
the historian of the movement, in four divisions,
quaintly illusti'ated by four confluent streams
(History of the A bolition of Slave- Trade, 1 8 0 8, p.
259). The four classes of abolitionists may be
summarily described as (1) miscellaneous, mostly
literary (Pope, Thomson, etc.) ; (2) Quakers in
England ; (3) Quakers in America ; (4) Clarkson
himself, with his fellow- workers. In 1787 the
first committee for the abolition of this trade was
formed by Clarkson and his associates. At first
their efforts were devoted to the abolition only of
the trade in slaves, as theabolitionof slavery itself
seemed hopeless. In 1 789 Wilberforce introduced
a measure into parliament, founded upon Clark-
son's materials, but it was not till 1807 that
the bill for the abolition of the slave-trade
passed the House of Commons, and not till
1883 that British colonial slavery was abolished
by act of parliament. The abolition of slavery
in the British dominions gave prominence to
two points of economic interest — the inefiiciency
VOL. L
^
ABOUT— ABRASION
of slave labour, and the right to compensation
in case of expropriation, even when the kind of
property has received the most severe public
moral condemnation.
The movement towards liberty, initiated by
England, has been continued by most of the
continental nations at varying rates down to
the present time. Denmark, indeed, has the
honour of anticipating the action of England.
In 1792 it was ordered that slave-trade should
cease in Danish dominions after 1802. In the
United States the movement in favour of aboli-
tion is coeval with the union. Before the end
of last century, or early in the beginning of the
present one, slavery was abolished in many of
the original states. The admission of new states
has more than once raised the question, within
what limits should slavery be tolerated ? Thus,
on the admission of Missouri, the boundaries
within which slavery was permitted or pro-
hibited were carefully defined by the "Mis-
souri compromise" (1820). That arrangement
was at a later period (in the case of Dred Scott,
1856-57) interpreted unfavourably to the cause
of abolition. The indignation of abolitionists
was roused by the cruel administration of the
fugitive slave law and other iniquities. Slavery
was a cause, and abolition a result, of the Civil
War 1861-65.
The economic questions connected with
American slavery have been well treated by
Cairnes in his work on the Slave Power (see
Slavery). See also, with reference to America,
H. Greeley, The American Conflict, 1865.
Clarkson published in 1808 a History of the
Abolition of the Slave-Trade (2 vols.)
J. S. N.
ABOUT, Edmond (member of the Acadimie
Frangaise), born at Dieuze (Lorraine), 1828,
died at Paris, 1885. It was especially as a
novelist that About made his reputation, and
it is to be regretted that politics, after 1871,
reduced this inimitable romance writer, who
had produced such works as the Hoi des Mon-
tagnes and the Mariages de Paris, to the posi-
tion of a mere editor of a journal (the XIX.
Si^cle). The works which should be noticed in
this place were written between the purely
literary period and the more militant period of
About's animated life. In Maitre Pierre (1858)
and the Lettres d'un bon jeune homvfie (I860)
About, as a passionate admirer of the wonders
of human industry, and the conscientious de-
fender of the principles of laissez faire laissez
passer, still writes as a novelist and a story-
teller. But genuine didactic works followed.
We may cite le Progrhs (1864) and VA B C du
travailleur (1868), l' Assurance (1865) and le
Capital pour tous (1869). In these last-named
works the author limits himself to setting forth
the principles which others had formulated
before him, while he denounces certain errors of
interpretation. Though About may be described
as only a populariser, he yet deserves con-
sideration from the students of economic science,
to which, for ten years, he devoted all the
resources of his humour, imagination, and in-
comparable style. A. DE F.
ABRASION. The abrasion or loss by wear
and tear of the coins in use is an important
factor in the cost of a metallic circulation. This
differs between one country and another accord-
ing to the hardness of the coin which results
from the description of Alloy employed, to the
surface of the coin exposed to wear in propor-
tion to its bulk, to the greater or less employ-
ment of coin in circulation. At the present
time the wear of the principal gold coin of the
British empire (Sovereign) is very consider-
able. The investigation set on foot by Jevons
in 1868 shows that the sovereign in ordinary
use loses on an average '043 of a grain annu-
ally. In other words, the wear and tear of an
English sovereign appears to be at the rate
o^ loEUoo parts, or something less than one-
tenth of a penny per annum (J. B. Martin,
"Media of Exchange," Journal of Statistical
Society, 1884, p. 489). The standard weight is
123-274 grains, and the lowest weight of legal
currency 122-5 grains, so that the sovereign loses
the '774 grains, which reduces it below legal
tender, on an average in about 1 5 • 7 years. In the
case of the Half-Sovereign, the difference be-
tween standard weight and the lowest current
weight is -512 grains ; and as the yearly loss of the
half-sovereign averages -069 grains, these coins
are reduced below legal tender weight generally
in the short period of seven and a half years.
The wear of the English coinage cannot, how-
ever, be taken as the criterion of the wear of
all coinages everywhere, as varying rapidity of
circulation, use of small paper representatives
of money, etc., cause great differences between
one country and another. The estimates of the
actual amount differ very greatly from each
other ; one made by Jacob, which includes the
wear both of gold and silver coins, is of "one
part in three hundred and sixty annually"
(Jacob on the Precious Metals, vol. ii. p. 186).
[For detailed information see An Historical In-
quiry into the Production and Consumption of the
Precious Metals,^ . Jacob, London, 1831 (2 vols.)
— •' Paper on the Condition of the Gold Coinage of
the United Kingdom," W. S. Jevons, Journal of the
Statistical Society of London, reprinted with much
similar information in Jevons's Investigations in
Currency and Finance. — See also paper by John
B. Martin, " Our Gold Coinage," Journal of the
Institute of Bankers, June 1882. — Paper by R. H.
Inglis Palgrave, " The Deficiency in Weight of our
Gold Coinage, with a Proposal for its Reform,"
March 1883 ; " The Gold Coinage," December 1884
(both in Journal, Institute of Bankers). — Reports
of Deputy Master of Mint, particularly those for
1883, 1884, 1885, trnd^ passim, — and Evidence and
Reports Royal Commission on Recent Changes in
the Relative Values of the Precious Metals, which
ABROAD— ABSENTEE
3
includes a translation of A. Soetbeer's Materials
for the Illustration and Criticism of the Economic
Relations of the Precious Metals, and of the Cur-
rency Question. — Evidence and Reports Royal
Commission on Depression of Trade and Industry,
1886.]
ABROAD. See Jurisdiction.
ABSENTEE. An absentee may be variously
defined (1) as a landed i)roprietor who resides
away from his estate, or (2) from his country ;
or more generally (3) any unproductive con-
sumer who lives out of the country from which
he derives his income.
Examples of these species are (1) a seigneur
under the an/;ien regime living in Paris at a
distance from his estates ; (2) an Irish landlord
resident abroad ; (3) an Anglo-Indian ex-official
resident in England and drawing a pension
from India. In writing briefly on the evils of
absenteeism it is difficult to use general terms
appropriate to all the definitions ; but considera-
tions primarily relating to some one definition
may easily be adapted to another by the reader.
It is useful to consider separately the effects
of the absentee proprietor's consumption upon
the wealth of his countrymen ; and the moral,
as well as economical effects of other circum-
stances.
I. The more abstract question turns upon
the fact that the income of an absentee is mostly
remitted by means of exports. "The tribute,
subsidy, or remittance is always in goods
. . . unless the country possesses mines of the
precious metals " (Mill). So far as the pro-
prietor, if resident at home, would consume
foreign produce, his absence, not increasing ex-
ports, does not affect local industry. So far as
the proprietor's absence causes manufactures to
be exported, his countrymen are not prejudiced.
For they may have as profitable employment
in manufacturing those exports as, if the pro-
prietor had resided at home, they would have
had in supplying manufactured commodities or
services for his use. But if the proprietor by
his absence causes raw materials to be exported,
while if present he would have used native
manufactures and services, his absence tends
to deprive his countrymen of employment, to
diminish their prosperity, and perhaps their
numbers. This reasoning is based on Senior's
Lectures on the Rate of Wages (Lecture II.),
and Political Economy (pp. 155-161). Senior's
position is in a just mean between two extremes,
— the popular fallacy and the paradox of
M 'CuLLOOH. On the one hand it is asserted that
between the payment of a debt to an absentee
and a resident there is the same difference as
between the payment and non-payment of a
tribute to a foreign country. On the other
hand it is denied that there is any difference
at all. The grosser form of the vulgar error,
the conception that the income of the absentee
is drawn from the tributary country in specie,
is exemplified in Thomas Prior's List of Absen-
tees {1^2^). M'CuUoch's arguments are stated
in the essay on "Absenteeism" in his Treatises,
and Essays on Money, etc., and in the evidence
given by him before some of the parliamentary
commissions which are referred to below. Asked
"Do you see any difference between raw pro-
duce and manufactured goods," M'Culloch re-
plies, " I do not think it makes any difference "
(compare Treatises and Essays, p. 232). He
appeals to observation, and finds that the tenants
of absentee landlords are "subjected to less
fleecing and extortion than those of residents."
J. S. Mill attributes to absenteeism a tendency
to lower the level of prices in the country from
which the absentee draws an income ; with the
consequence that the inhabitants of that country
obtain their imports at an increased cost of
effort and sacrifice (Unsettled Questions, essay i.
p. 43). Mill's meaning may be made clearer
by a study of the rest of the essay which has
been cited, and of the parallel passage in his
Political Economy (bk. v. ch. iv. § 6), where
he argues that an inequality between exports
and imports results in an "efflux of money"
from one country to another.
Upon less distinct grounds Quesnay connects
absenteeism with a development of trade and
industry in an unhealthy direction ((Euvres, ed.
Oncken, p. 189). Among recondite considera-
tions which may bear on the subject should
be mentioned Cantillon's theory concern-
ing the effect of the consumption of the rich on
the gi-owth of population (Essai, pt. i. ch. xv.)
II. Other economical advantages lost by ab-
senteeism are those which spring from the
interest which a resident is apt to take in the
things and persons about him. Thus he may
be prompted to invest capital in local improve-
ments, or to act as an employer of workmen.
"It is not the simple amount of the rental
being remitted to another country," says Arthur
Young, * ' but the damp on all sorts of improve-
ments." d'Argenson in his Considerations sur
le gouvernement ancien et present de la France
(1765, p. 183), attributes gi-eat importance to
the master's eye.
The good feeling which is apt to grow up
between a resident landlord and his tenantry
has material as well as moral results, which
are generally beneficial. The absentee is less
likely to take account of circumstances (e.g.
tenant's improvements), which render rack-
renting unjust. He is less likely to make
allowance for calamities which render punctual
payment difficult. " Miseries of which he can
see nothing, and probably hear as little of, can
make no impression," A. Young. He is glad
to get rid of responsibility by dealing with a
" middleman," or intermediate tenant — an
additional wheel in the machinery of exaction,
calculated to grind relentlessly those placed
underneath it. Without the softening influence
ABSENTEE— ABSTINENCE
of personal communication between the owner
and the cultivator of the soil, the " cash nexus "
is liable to be strained beyond the limit of
human patience, and to burst violently. There
can be little doubt but that absenteeism has
been one potent cause of the misery and dis-
turbances in Ireland. The same cause has
produced like effects in cases widely different
in other respects. The cruellest oppressors of
the French peasantry before the Revolution
were the fermiers, who purchased for an annual
sum the right to collect the dues of absentee
seigneurs. The violence of the Granger
Railway legislation in the western states of
America is attributed to the fact that the
shareholders damnified were absentee proprie-
tors (Seligman, Journal of Political Science,
1888).
There are also the moral advantages due to
the influence and example of a cultivated upper
class. The extent of this benefit will vary
according to the character of the proprietors
and the people. In some cases it may be, as
Adam Smith says, that "the inhabitants of a
large village, after having made considerable
progress in manufactures, have become idle in
consequence of a great lord having taken up
his residence in their neighbourhood." The op-
posite view, presented by Miss Edgewoeth in
her Absentee, may be true in other states of
civilisation. Perhaps the safest generalisation
is that' made by Senior that "in general the
presence of men of large fortune is morally
detrimental, and that of men of moderate
fortime morally beneficial, to their immediate
neighbourhood. "
[The references cited below are to be added to
those which have been already made. They fall
under two heads : {a) the unfortunately large class
relating specially to Ireland, and (6) Miscellaneous,
(a) The Act 3 Richard II. and 28 Henry VIII.,
inflicting on absentees forfeiture of two-thirds of
the yearly profits from their lands. These and
other acts relatiug to absentees are cited in Tracts
and Treatises Illustrative of . . . Ireland (reprinted
by Thorn), 1840. The index to this work, under the
heading "Absentees" gives some other useful refer-
ences. Swift, Seventh Drapier's Letter (vol. viL
p. 40, ed. Walter Scott). —Thomas Prior, List of
Absentees, 1727 (cited above), and continuations in
subsequent years. — Lecky, History of England in
18th Century, vol. ii. 2d ed. ch. vii. p. 237 et seq. ;
Id., vol. iv. ch. xvi. p. Bl7 etseq. — Arthur Young,
Tour in Ireland, 1780, ii. p. 59 (a terrific "general
picture" of the evils of absenteeism). — Edward
Wakefield, Account of Ireland, 1812 (passages re-
ferred to in index). — Westminster Review 1827.
— John Wiggin's (a land agent) Letter to . . .
Absentee Landlords, 1822 (anonymous at first),
(recommends absentee landlord to employ a con-
fidential friend to visit the estate occasionally). —
Minutes of evidence taken before the select com-
mittee of the House of Lords . . . Ireland, Parlia-
mentary Papers, 1825, ix. — Minutes of evidence
taken before the Select Committee of the House of
Commons . . . Ireland, Parliamentary Papers,
1825, viii. — Quarterly Journal, March 1826. —
London Magazine, April 1826. — Westminstei
Review, January 1829. — De Beaumont, L'Irlande,
1829. — Bicheno, Ireland and its Economy, 1830,
ch. viii. (sensible remarks on the paradox of " the
economists"). — Select committee on state of the
poor inlrelund, Parliaynentary Papers,1830,vu. —
Debate in the House of Commons, 1833, Hansard,
xix. p. 583 (cp. xvi. p. 727). — Westminster Review,
October 1833. — Von Raumer (a writer quoted with
approbation by Mill), England in 1835, letter Ixii.
(very forcible). — Westminster Review, October
1835. — G. Cornewall Lewis, Disturbances in Ire-
land, 1836, p. 451. — Report of the Devon Com-
mission, Parliamentary Papers, 1845, xix.-xxii.
(Answers referred to under the head of Estate
Management nearly, but not quite, unanimous that
the estates of absentees are badly managed. ) Digest
of the same (ch. xxiv., on estate management). —
Dublin University Magazine, 1850. — Lavergne,
Economic ruraledeVAngleterre, 1858, pp. 378,383
(referring to M'Cdlloch's paradox says, "En ce qui
concerne ITrlande la question me parait tranch^e
par les faits"). — Caienes, Political Essays, 1873
(Fragments on Ireland), p. 168.
(6) Montchretibn. Traict6 de Vcekonomie poli-
tique, . . . 1615, edited by T. FunckrBreutano,
Paris, 1881, p. 41 (early appearance of absenteeism
in France). — AUam Smith, bk. v. ch. ii. (Tax on ab-
sentees)— A. TocQUEViLLB (Clerel de), VAncien
Rigime, 1857, ch. xii. (Absenteisme de coeur of
the small resident proprietors). — H. Taine, Ancien
Regime, 1876, liv. i. ch. iii. pp. 52-77 ; and
numerous authorities there cited. — H. Carey,
Ledures on Wages ... 1835, p. 46 (criticises
Senior's theory). — E. Levasseur, La PopvIMion
Frangaise, 1889, ch. xi. p. 237. — Hadley, Rail-
way Transportation, 1886, p. 133 (absentee share-
holders), and p. 21). — Journal des Economistes,
1885, November and December, summarising the
results of the recent Italian Commission. — Brod-
rick, English Land and Landlords (passages
referred to in index under heading " Absentee ").
Reference in Lavergne, Economic rurale de la
France (medium properties, as in England, lead
to absenteeism less than large properties). ]
ABSTINENCE. This weU-chosen expression
of Senior's, to use J. S. Mill's well-known
description, has been unfortunate in giving rise
to much controversy. It was intended to refer to
that element in profits which might be considered
as the " natural " reward of the capitalist for ab-
staining from immediate consumption. It was
thus closely connected with the effective desire
of accumulation and the theory of a "minimum
rate of profits." It has also been much used in
the establishment of economic harmonies in the
style of Bastiat with the view of showing that
"natural" economic laws are in fundamental
accord with "common -sense" morality. As
might have been expected from the ambiguity
of the terms "natural" and "common -sense,"
and from the vagueness of the conception ab-
stinence itself, this economic harmony has been
severely criticised in the first place by the
ABSTRACT OF TITLE— ABUNDANCE
f
Socialists (e.g. Lassalle in Schulze-Delitsch,
Karl Marx in Das Capital). It was easy to point
out that the virtue of abstinence could in many-
cases be reduced merely to desire for money as
such and to a positive reluctance to spend.
This criticism does not, however, seem capable
of general extension. More recently another
line of criticism has been developed and atten-
tion has been drawn to the positive effort
required to convert wealth into capital for use
in production corresponding in the main to the
management or superintendence required after
the capital has been formed (compare Bagehot,
Economic Studies, and Schonberg's Handbuch,
art. "Capital"). (See Capital.) j. s. n.
ABSTRACT OF TITLE. An epitome of the
evidence of ownership showing the soundness
of one's right to an estate. In the absence of
any agi-eement to the contrary the purchaser
of a freehold estate is entitled to have such
evidence for a period of forty years, but in the
case of advowsons the period is one hundred
years. The abstract is sufficient if it shows
that the vendor is either himself competent to
convey or can otherwise procure to be vested in
the piu"chaser the legal and equitable estates free
from incumbrances. [Dart's Vendors and Pur-
chasers, London, 1888.] j. e. c. m.
ABSTRACT POLITICAL ECONOMY.
Political economy is sometimes described as a
wholly abstract science, dealing with an unreal
and imaginary subject, that is to say, not with
the entire real man as we know him in fact,
but with a simpler being who is supposed to
be engrossed with one desire only, namely, the
desire of wealth. Thus, according to the
doctrine laid down by J. S. Mill in his Un-
settled Questions of Political Economy ^ the science
makes entire abstraction of every human
passion and motive, other than the pursuit of
wealth, and the perpetually antagonising prin-
ciples to that pursuit, namely, aversion to
labour, and desire of the present enjoyment of
costly indulgences. In other words, the
economist is described as always working on the
hypothesis that the acquisition of wealth is the
sole end and aim of human action. In opposi-
tion to this view is that of the so-called " realis-
tic " school, some of whom practically deny the
utility of any abstract or hypothetical treatment
of political economy at all. It is maintained
by CoMTE and others that any attempt to separ-
ate economic science from social philosophy in
general must necessarily end in failure. The
truth seems to lie between these two extreme
doctrines ; and it may be pointed out that
writers who, like Mill and Bagehot, describe
political economy as in its complete form a purely
abstract science, nevertheless do not treat it as
such in their own writings. It is true that they -
employ an abstract method in many of their
reasonings, but it is also true that, taking their
doctrines as a whole, they do not hold themselves
aloof from the concrete realities of actual life to
anything like the extent that their description of
the science would lead one to anticipate. They
begin with abstractions, but do not end with
them ; and herein is the true method of the
science roughly set forth. We ought accordingly
to recognise two stages in economic doctrine,
which may be called the abstract and the con-
crete stage respectively. It may not be possible
to draw a hard and fast line between the two,
but this does not destroy the value of the dis-
tinction. Abstract political economy concerns
itself entirely with certain broad general prin-
ciples, irrespective of particular economic con-
ditions ; or, as Jevons puts it, with "those
general laws which are so simple in nature, and
so deeply grounded in the constitution of man
and the outer world, that they remain the same
throughout all those ages which are within
our consideration " {Fortnightly Review, Nov.
1876, p. 625). It may thus be of universal
validity, but this is after aU only in virtue of its
hypothetical character. It may remain remote
from the actual concrete facts. Concrete political
economy comes in, therefore, as a supplement.
It takes account of special conditions that the
pure theory avowedly neglects, and especially
concerns itself with the qualifications and limita-
tions, with which the abstract doctrines need to
be interpreted. It puts forth no claim to uni-
versality, but is content if it can interpret and
explain the actual economic phenomena, charac-
teristic of a given period or a given state of
society.
[Compare Mill, Unsettled Questions of Political
Economy, Essay v. ; — Bagehot, Economic Studies,
Essays i. ii. ; — Jevons, The Future of Political
Economy ; — Fortnightly Review, Nov, 1876 ; —
Keynes, Scope and Method of Political Economy,
eh. iv., note A.] j. n. k.
ABUNDANCE. In economical, as in popular,
discussions, abundance is usually the correla-
tive of scarcity and the synonym of plenty.
If there is a distinction plenty is taken to
mean a sufficient, and abundance a more than
sufficient, provision for wants. Abundance
taken absolutely, in the sense of an overflowing
plenty, of all and every sort of goods is cer-
tainly one ultimate aim of economic effort ; and
Bastiat in the cause of free trade has done
good service by his assertion and illustration of
this axiom. As an overflowing plenty it implies
the possibility of leisure ; it is a provision
secured without cost of labour. Though this
is an unrealisable ideal, the economical progress
of any society may nevertheless be measured by
its approximation to it. In the introduction
to the Wealth of Nations " the abundance or
scantiness of the annual supply of the necessaries
and conveniences of life " is made synonymous
with wealth and poverty. In ordinary language,
however, abundance does not, like wealth or
riches, suggest a contrast of more fortunate with
6
ACCEPTANCE —ACCOUNT
less fortunate men, but rather a relation of the
wants of individual men to their means of satis-
faction, without any idea of contrast with their
neighbours.
Taken in a narrower sense, abundance, not
of all and sundry, but of particular classes 'of
goods, is less clearly a benefit than general
abundance. To the seller, abundance (which
lowers the value of his wares) is an evil. The
paradox of Quesnay and other physiocrats,
"Disette et cherte est misere ; abondance et
cherts est opulence " {e.g. Daire's Fhysiocrates,
p. 98, cf. 391 ft.), meant, for example, that
the agriculturist could only prosper if he had
a good market for his crops as well as a large
harvest of them. It is bad policy, they said,
to create an abundance of necessaries in prefer-
ence to an abundance of other goods, damaging
one class of producers in order to benefit the
rest. So it is a fact of common experience
that abundance, when confined to one kind of
goods, means an "over-production" or "glut"
of them. The remedy (as Say pointed out) is
not to decrease the abundance of the one kind but
to increase the abundance of the others, and so
bring the community nearer its ideal of general
abundance (see also Glut ; Over-production ;
Physiocrats ; J. B. Say ; Value ; and
Wealth). j. b.
ACCEPTANCE. In relation to contracts
generally, the term "acceptance" means the
signification of assent by one person to a pro-
posal made by another.
In relation to contracts of sale the term has
two significations which must be distinguished.
There is an acceptance in performance of the
contract when the buyer intimates to the seller
that he has accepted the goods, or when he
does any act in relation to them inconsistent
with the ownership of the seller ; but for the
purposes of the 17th section of the Statute of
Frauds, it is sufficient if he does any act which
recognises a pre-existing contract of sale, even
though he may not be precluded from after-
wards rejecting the goods (see Sale).
In relation to bills of exchange the term
primarily means the acceptance by the drawee
of a bill of exchange duly written thereon and
signed ; but as the main object of the drawer of
a bill is to get it accepted, the term "accept-
ance" is frequently used to denote the bill
itself, and is then synonymous with "bill of
exchange " (see Bill of Exchange).
M. D. c.
ACCEPTILATION (Scots and civil law).
Extinction of a debt by discharge granted
gratuitously or for trifling payment. A. D.
ACCEPTOR. The person on whom a bill of
exchange is drawn, namely, the drawee, becomes
the acceptor by signifying his assent to the
document in writing (see Bill of Exchange).
The validity of an acceptance sometimes turns
on very intricate points of law.
For details on this, see The Practice of Bank-
ing, by John Hutchison, especially vols. i. and iii.
ACCESSIO. A term of Roman law used
to express the acquisition of property by an
addition to former property, due to an acci-
dental circumstance. If, for instance, a plot
of land on the bank of a river was increased by
the gradual deposit of earth on the bank, the
property in the new piece of land was said to
be acquired by "accessio." e. s.
ACCESSION, Deed of. See Bankruptcy
in Scotland.
ACCOMMODATION BILL. An accommo-
dation bill may be described as a bill given
without receipt of value, in order that the
person to whom it is given may raise money
and obtain credit by means of it. Ordinarily,
the person who lends his name accepts a biU
drawn on him by the person he wishes to
accommodate, but sometimes a bill is drawn,
accepted, and indorsed by different persons, in
order to accommodate some person who is not
a party to the bill at aU. Perhaps the strict
legal definition of an accommodation bill would
be a bill whereon the principal debtpr, accord-
ing to the terms of the instrument, is in sub-
stance a mere surety for some other person,
whether that person be a party to the bill or
not. When an accommodation bill gets into
the hands of a holder for value he may enforce
payment of it precisely in the same way as if
the bill had been given for value. When, how-
ever, an accommodation bill is dishonoured,
some special considerations come into play. In
the first place a drawer or indorser for whose
accommodation the bill was accepted cannot set
up as a defence either absence of notice of dis-
honour or informality in presentment for pay-
ment, for he was the party primarily liable to
meet the bill. Secondly, if the bill be held by
a person who knows the real relationship of the
parties, the ordinary rule of the law of principal
and surety then attaches, and a discharge of.
or binding agreement to give time to, the prin-
cipal debtor may discharge the surety. Fot
instance, suppose the holder of a bill knows
that it was accepted to accommodate the drawer.
If it is dishonoured, he may sue either the ac-
ceptor or the drawer, or both ; but if, for some
fresh consideration, he agrees with the drawer
not to press him for (say) three months, he
thereby discharges the acceptor. So if a joint
and several note is made by three persons, two
of whom sign to accommodate the third, and
the holder accepts a non-statutory composition
from such third person, the two co-makers who
signed to accommodate him would ordinarily
be discharged. m. d. c.
ACCOUNT. On the stock exchange there
are settlements, bi-monthly in general securi-
ties, and monthly in British consols and India
Government sterling stocks. The account begins
after one settlement and ends at the date of the
ACCOUNT DUTY— ACHENWALL
next. Transactions are said to be "for the
account," and prices are quoted for the account,
to distinguish these transactions from bargains
done "for cash," meaning for ready money.
Practically, all the speculation that goes on in
the stock exchange is done by buying or selling
"for the account" (see Carrying Over;
Backwardation). a. e.
ACCOUNT DUTY. See Death Duties.
ACCOUNTS, Merchants'. See Prescrip-
tion, Scotch.
ACCRETION (Scots law term). Referring
back an after- acquired title so as to complete a
right originally defective or imperfect, a. d.
ACCRUE. To arise or spring as a natural
growth or result. Accrued interest is the in-
terest due for the period which, at a given
moment, has elapsed since the last payment of
interest, as for the time being it increases the
principal debt. The word is not always free
from ambiguity ; if, for instance, property ac-
cruing after a certain date is spoken of, it is not
quite clear whether property in which a future
interest was acquired before the period named,
but which only came into possession afterwards,
is included. E. s.
ACCUMULATION. Without entering into
the difficulties involved in the definitions of
Capital ; Wealth {q.v.), and simply assuming
that accumulation refers to wealth set aside from
present consumption for future uses, the rate of
accumulation in any country at any time is held
to depend upon two groups of causes: (I.)
causes affecting the fund from which savings
can be made ; (II.) causes which induce people
to save rather than to consume their wealth.
Under the first group of causes may be enu-
merated— (1) natural resources, e.g. minerals,
climate, harbours, rivers, etc. ; (2) efficiency of
labour and capital, including industrial skill
and organisation (see Efficiency of Labour) ;
(3) the amount taken by government for public
purposes either directly by taxation or indirectly
by exacting services, as in conscription for mili-
tary purposes. The indirect effects and methods
of expending it must always be taken into
account (see Taxation) ; (4) foreign trade,
under which we must take into account the
various elements of international indebtedness
(see Foreign Exchanges), e.g. earnings for
freight and returns on foreign investments ;
(5) credit, which indirectly and directly saves
both labour and capital. Division of labour in
the modem sense would hardly be possible
without credit, and it is largely owing to credit
that saving in the economic sense has taken the
place of hoarding (see Credit) ; (6) means of
communication, e.g. roads, canals, and railways,
play an important part in the production of
wealth, for the act of production is not complete
till the commodity is in the hands of the con-
sumer. To summarise in a sentence, the amount
of the fund from which savings can be made
depends upon the efficiency of the three great
agents of production — natural agents, labour,
and capital, as compared with the total expenses
of all kinds, both of individuals and govern-
ments, which are necessary to preserve what is
called the Stationary State {q.v.)
Secondly we must consider the motives which
induce people to save rather than to consume
this real net produce. The following are held
to be the most important factors : (1) security
that what is saved will be preserved to or en-
joyed by the owner. Even slaves, out of their
small peculium have been known to save if they
were sure of their savings. Security, as Mill
points out, must be given not only by the
government but against the government (com-
pare Turkey at present or the old Roman pro-
vinces). Security of life owing to climatic or
other natural causes may also be mentioned ;
(2) effective desire of accumulation ; this con-
sists really of a group of motives. It may be
weak from intellectual deficiency, mere want
of power to look forward (compare American
Indians and Chinese), or from moral deficiency,
no interest in others, no sufficient care to avoid
pauperism in old age, or to provide for a family,
etc. ; (3) desire to rise in the social scale — the
importance attached to the mere possession of
wealth apart from its uses — a point too often
overlooked ; (4) facilities for investment ; this
is specially illustrated by the case of labourers
and savings facilitated by growth of savings
banks, building societies, etc. , and by insurance
companies for all classes ; (5) the difference of
the classes among which the national wealth
is distributed, as certain classes tend to save
more than others (compare France before and
after the Revolution, the waste of the aristocracy
and the saving of the peasants) ; (6) the rate of
interest, which operates in two ways. If the
return is high there is a greater inducement to
invest, though Adam Smith, in speaking of the
high profits of the monopoly of the colonial
trade, thinks it tends to promote extravagance.
If the return is low, however, there is need to
save more to make a certain provision against
old age, sickness, etc.
[The subject of accumulation is treated at length
in all the principal text-books. Special attention,
however, may be called to the criticism by Jones
{Political Economy, edited by Whewell) of
previous writers, and to the practical example in
Sir R. Giflfen's paper entitled " Recent Accumula-
tion of Capital," Essays in Finance, 1878, and by
the same author The Growth of Capital, 1889
(see Capital). ] J. s. n.
ACHENWALL, Gottfried, economist and
statistician, born in 1719 at Elbing in West
Prussia, died in 1772 at Gottingen, where he
was a professor in the university. He was
author of StaatsHicgheit nach ihren ersten
Grundsdtzen, 1761, a work in which, as Roscher
remarks, description greatly preponderates ever
ACKERSDYK— ACTUARY
criticism. He belongs to the same school as
Jttsti, namely, that of the moderate mercantil-
ists. It is in the history of statistics more than
in connection with economics that he holds a
really high place ; the Germans indeed some-
times call him the Father of Statistics, strangely
ignoring the claims of Petty and other earlier
writers. The work by which he is known in
this department is his Staatsverfassung der
heutigen vornehrristen Europdischen Reiche, 1752.
There is prefixed to this treatise an introduc-
tion on statistics in general, in which he seeks
to determine accurately the province of the
study, and to distinguish it clearly from other
kindred branches of research. In the body of
the work he gives a view of the constitutions
of the several states of Europe, and describes
the condition of their agriculture, manufactures,
and commerce, often supplying numerical details
in relation to these subjects. He seems to have
been the first to use the German word Statistik ;
the Latin adjective Statisticus is found in the
title of a book by a German publicist, known as
Helenus Politanus (Microscopium Statisticum,
qico status imperii Romano- Germanici repraesen-
tatur) published in 1672 (Roscher, Gesch. der
Nat. Oek. in Deutschland, p. 466). J. K. i.
ACKERSDYK, John, born at Bois-le-duc,
20th Oct. ] 790, studied law at Utrecht, and
graduated there in 1810. He died 1861. First
a lawyer, afterwards a judge, he was appointed
in 1825 a professor at the University of Liege,
and in 1830, after the Belgian revolution, a
professor at Utrecht. Here from 1849 till 1860
he taught economics.
During his long and frequent travels Ackers-
dyk collected a vast mass of information which
he availed himself of to enrich his lectures.
His writings are not very numerous, being
principally short essays in periodicals. The
following are specially deserving of notice :
Bedenkingen over de Korenwetten (Remarks on
the Corn Laws), 1835 ; — Nederlands financien —
Nationale Schuld (Financial condition of
Holland — National debt), 1843 ; — Nederlands
Muntweze7i (The Dutch Currency), 1845 ; — Over
helastingen en Bezuinigingen (On Taxes and
Savings), 1849. A. f. v. l.
ACKNOWLEDGMENT. The formal ad-
mission of some fact — e.g. acknowledgement of
indebtedness. The "acknowledgement of an
account " in commercial language is equivalent
to the "account stated" of legal language, which
is an admission by one party who is in account
with another that there is a balance due from
him. Such an admission in our law imports a
promise to pay upon request. "Acknowledge-
ment of married women " is the technical ex-
pression for the particular method which must be
adopted whenever a married woman alienates real
property which is not included in her separate
estate. The deed conveying the property must
be acknowledged by the woman on being exa-
mined by a judge or commissioner apart from
her husband. As the sphere of the separate
estate has been considerably enlarged by the
Married Women's Property Acts, the oppor-
tunities for adopting this procedure are less
frequent. E. s.
ACLAND, Rev. John, born in 1699, was
the second son of John Acland, M.P., of Woodly,
Yorkshire. He graduated M.A. at Oxford
(Exeter Coll.) in 1725, was instituted vicar of
Broad Clyst, Devonshire, in 1753, and was led
by the failure of friendly society legislation in
that county to publish — A Plan for rendering
the Poor independent on Public Contribution
founded on the basis of Friendly Societies com-
monly called Clubs, to which is added a letter
from Dr. Price, Exeter, 1786, 8vo. Acland's
proposal was that Parliament should establish
throughout England a general club for the poor
in sickness, old age, or when out of work ; to
this every adult wage-earner should contribute
as well as the general community (see Insur-
ance, Articles on). This plan was criticised in
a pamphlet (1788) by the Rev. John Howlett
(q.v.) An abstract of it may be seen in Eden's
State of the Poor, i. 373-380. Acland also
wrote An AnMoer to a Pamphlet published by
K King, in which he attempts to Prove the Public
Utility of the National Debt, and a True Statement
of the Real Cause of the present high price of Pro-
visions, 1796, 8vo (a tractate on the evils of
the National Debt). h. r. t.
ACQUITTANCE. (1) Release, discharge.
(2) A receipt in full, which bars a further de-
mand. E. s.
ACT OF BANKRUPTCY. For Scotch
equivalent (Notour bankruptcy) see Bank-
ruptcy IN Scotland. a. d.
ACTOR SEQUITUR FORUM REI. See
Jurisdiction.
ACTUARY. The officer of a life insurance
company wbose duty it is to advise upon all
questions relating to their tariffs, rates of
premium, and periodical valuations of assets
and liabilities, in which the calculations are
based upon mathematical science, the laws
of probability, and the statistics of death
and of survivorship, in combination with all
the scientific formulae connected with interest
of money and with commercial finance. In
this sense the designation defines a distinct
class of professional men, and, as such, it has
long been used in the legislative enactments
relating to life assurances and annuities, and to
friendly societies. In the year 1884 the
united members of this profession received a
charter of incorporation from the crown, em-
powering the existing members of two societies
theretofore known as the Actuaries Club and the
Institute of Actuaries to combine under specified
regulations, by the title of that institute, and
the present and future members to allix the
ACTUS— ADJUSTMENT, AVEKAGE
denoting letters of F.I. A. to their names. The
Jom-nal of the Institute of Actuaries is pub-
lished quarterly, and its twenty-eighth volume
has already been reached. The earlier volumes
bore the title of The Assurance Magazine. Its
contents may with confidence be recommended
to students, as embracing papers of the highest
importance in connection with the doctrine,
history, and practice of life assurance, and vital
and other statistics bearing thereon and upon
annuities, marine and fire insurance. The
designation of actuary has also been long
applied to certain oflBcers invested with duties,
more or less like the above, in savings banks
and in government offices such as those of the
commissioners for the reduction of the national
debt, the war office, etc. It has also been
applied in the last two centuries to the clerk to
the convocation of clergy, but the name is in
this case derived from his being the recording
officer of the acts arising but of the deliberations
of that ancient body, in the same way that the
"actuar," a functionary of the courts of justice
in Germany, has to record and to see to the
promulgation of their decrees. An account of
the designation of actuaries in the case of public
officers of other kinds in ancient Greece and
Rome, may be read in Sir George Cornwall
Lewis's Methods of reasoning in matters of
Politics (see Insurance). f. h.
ACTUS. An expression of Roman law used
to indicate the right of an adjoining owner to
drive cattle and take carts over his neighbour's
land. E. s.
ADAMS, Charles Francis, born in Boston
1807 ; died 1886 ; was a lawyer and diplomat-
ist, and during the civil war minister to
England. In the period 1835-40 he gave
considerable attention to the subject of cur-
rency, and diff'ered from the Whig party's posi-
tion. Adams wrote, in 1837, Reflections upon
the present state of the currency in the United
States, Boston, pp. 34, also Further reflections
upon the state of the currency in the United
States, Boston, pp. 41. He asserted that the
financial disturbance of 1837 was due to over-
banking, and not to over-trading ^^-ith foreign
countries, and that it would be impossible to
secure a uniform currency until it was taken in
hand by the national government. Adams was
opposed to the sub-treasury system, and favoured
a national bank. He must not be confounded
with his son, Charles Francis Adams the
younger, the well-known writer on the railway
question. d. r. d.
ADDISON, Joseph, born 1672, died 1719.
Addison's brilliant literary career has drawn
away general attention from his official position
in the government of his time, and his occupa-
tion as one of the lords commissioners of trade
(see Board of Trade). His remarks (No. 69
of the Spectator) on the importance of the traffic
of the merchant in reference to the general
prosperity of the country may still be read with
interest as embodying those facts on which the
principles of free trade rest.
ADEMPTION OF LEGACY occurs where a
legacy does not take effect owing to some act on
the part of a testator not affecting the validity
of the will ; (1) Where the testator alienates
the subject matter during his lifetime the legacy
fails ; (2) Where a parent or a person in loco
parentis gives a legacy to a child, and after-
wards advances to such child a portion on
marriage, or on preferment in life, if the por-
tion be equal to or greater than the legacy, it
operates as a total ademption of such legacy ; if
of lesser amount it adeems the legacy p^-o tanto.
[See Williams on Executors, 1879, pp. 1327-
1345.] J. E. c. M.
ADJUSTMENT, Average. A Rhodian law
provided that if, in order to save a vessel, a
portion of the cargo was thrown overboard, the
owners of the rest of the cargo should contri-
bute to the loss. This principle has been
followed by modern nations, and in the Eng-
lish law it has been expressed in the following
terms : — "All loss which arises in consequence
of extraordinary sacrifices made or expenses
incurred for the preservation of the ship and
cargo comes within general average, and must
be borne proportionally by all who are inter-
ested " {hoyf^'DiL^ow General Average, 4th ed.,
London, 1888, p. 21). The calculation of the
losses incurred and the adjustment of the
amount to be contributed by the ship, the
cargo, and the freight respectively, is ellected
by a class of arbitrators called ** average
adjusters," whose duty it is to give their
decision in accordance with legal principles.
In computing the amount to be made good the
following are the chief rules. (1) Disburse-
ments are estimated at the amount expended
plus the costs of raising funds. (2) Cargo
sacrificed is valued at such a sum as would
place the owner in the same position at the
time and place of adjustment as if not his
goods but those of some other person had been
sacrificed. (3) Ship's materials sacrificed are
valued at the cost of repair, less a deduction of
one-third in respect of the advantage derived
by the owner from the fresh repairs.
To the amount of loss so ascertained contri-
bution has to be made (1) by the ship in pro-
portion to its actual value to the owner at the
time of adjustment ; (2) by the cargo in pro-
portion to its net market value at the date of
delivery or at the time and place of adjustment,
deducting the expenses the merchant incurs in
case of delivery ; (3) by the freight less the
expense of earning it which would have been
saved had the ship been lost (see Average,
Maritime).
[^The Law of General Average, English and
Foreign, by Richard Lowndes, 4th ed., London,
1888.] J. B. c. M.
10
ADMINISTRATION
ADMINISTRATION. The term adminis-
tration is not easy to define. It is oftenest
used to describe the executive business of the
state. The functions of the state are usually
classified as legislative, judicial, and executive,
and this classification, while open to many
objections, is as good as any other that has
been suggested. If we adoi)t it and take
administration as equivalent to the execu-
tive function, administration will practically
comprehend all the activities of the state with
two important exceptions, the function of
making laws — the legislative function — and the
function of interpreting laws — the judicial
function. Administration in this sense includes
an immense number of subordinate functions,
which demand separate treatment. In a general
view of administration it is only necessary to
discuss the following topics : (I) The sphere of
administration as defined (a) by theoretical
writers, (b) in concrete historical instances. (II)
The organisation of administration. (Ill) The
relation of the administrative organisation to
(a) the sovereign person or body of persons, (&)
the individual citizen. (IV) The economic
aspects of administration.
I. Sphere of Administration (a) as defined
by theoretical writers. The innumerable
theories on this subject may be reduced
to three types, the laissez-faire type, the
socialist type, and the empirical type. The
Laissez-Faire theory may be stated thus :
Individual liberty is the one indispensable con-
dition of goodness and happiness. Constraint
is put upon the individual by any and every
action of the state. The action of the state
is therefore an evil to be reduced within the
narrowest limits. The state, therefore, should
undertake only those functions which cannot
possibly be discharged by private persons,
singly or associated. Therefore administration
should be restricted to protecting the individual
from interference, either by lawbreakers at
home or by enemies from abroad. The only
useful departments of administration are the
army, navy, and police. The socialist theory
may be stated thus — The co-operation of all
for the good of all is the one indispensable con-
dition of goodness and happiness. This co-
operation can be effected by the state and by
the state alone. The action of the state is
therefore a blessing to be extended as much as
possible. Every human being should be an
official either in training, on service, or pen-
sioned off". Administration should be co-
extensive with social life, and there should be
as many administrative departments as there
are branches of industry.
The empirical theory may be stated thus —
Individual liberty and compulsory co-operation
are not ends in themselves, but only means to
human well-being. Some wants of society can
be provided for only by individuals, other Avants
only by the state ; but there are many other
wants of society respecting the satisfaction of
which no general rule can be laid down.
Experience must in each case decide what the
state should and what it should not attempt.
Different maxims will apply to different cases.
What should be done by administration in any
country will depend on the circumstances of
that country. This theory being elastic, its
professors differ greatly among themselves,
some inclining to laissez-faire and some to
socialism.
(b) The sphere of administration, as seen in
concrete historical instances, has varied widely,
although it has never corresponded to the re-
quirements of extreme socialism or extreme
laissez-faire. So long as society remains a
collection of self-governing families, the sphere
of administration, like that of legislation, is
restricted. So long as population continues
sparse, wealth restricted, and wants few, there
is little work for administration. There is
hardly a circumstance in the condition of a
people which does not contribute to determine
the sphere of administrative action.
II. The Organisation of Administration. —
Administrative organisation takes innumer-
able forms. But the character of an adminis-
trative system depends mainly on the question
whether it is carried on by paid officials (in
which case it is popularly called a bureau-
cracy), or whether it is carried on by unpaid
citizens (in which case it is popularly called
self-government). With this distinction is
connected the distinction between a centralised
and a localised administration. A central-
ised administration must, necessarily, be con-
ducted by paid officials, since private persons
cannot regularly travel long distances to take
part in administrative work, most of which lies
outside their knowledge or interest. A localised
administration might be whoUy conducted by
paid officials of the local authority. But in
practice it is usually in great measure conducted
by private persons, who make up for the want
of professional skill by the knowledge of their
own wants, and give their unpaid service
because they obtain an indirect return in
power, consideration, and the satisfaction of
managing their own affairs.
BuKEAUCEACY and self-government must not,
however, be regarded as mutually exclusive
systems of administration. In all civilised
states they supplement one another, although
their relative importance is hardly ever in two
instances the same. It is a mistake to suppose
that there is no self-government in Prussia, in
France, or even in Russia. It is a mistake to
suppose that bureaucracy does not play a great
part in England. In fact the administration
of a civilised state is so serious a task as to
demand all the power of bureaucracy and self-
government combined. The paid official has,
ADMINISTRATION
11
or should have, the advantage in professional
knowledge, professional skill, professional disci-
pline, whilst the unpaid citizen has, or should
have, the advantage in familiarity with local
requirements, in local patriotism, and in free-
dom from technical prejudice and routine. An
ideal system would make the unpaid citizen do as
much work for the public as could be got out of
him, and ensure his doing it properly by provid-
ing official information, supervision, and audit.
A certain independence is necessary to make
unpaid work attractive to able and honest men.
On the other hand some duties can never be
efficiently discharged by unpaid officers, because
they need a special training and a sjjecial skill.
Administrative organisation admits of in-
numerable variations in detail. A certain simi-
larity may nevertheless be noted in the adminis-
trative systems of states which are similar in
extent and civilisation. In very small states
the administrative system must necessarily have
rather a municipal than an imperial character.
Thus in the states of ancient Greece and of
ancient and mediseval Italy, we find admini-
strative organisations suited to the wants of a
single town (see City — Ancient, Medieval).
When the state expanded beyond these dimen-
sions a municipal had to be transformed into
an imperial administration. The most striking
instance of this process is afforded by the
history of Rome. But in very large states the
imperial and the municipal organisations are
distinct from the first. The central administra-
tion is from the first contrasted with the local
administration. Both, however, are servants
and representatives of the state. Both exist in
order to carry out its laws. Their separation
is due to the necessities of public business. It
is qualified by the superior power of the central
as compared with that of the local authority,
and of the sovereign as compared Avith both.
Yet it is so important that each must be con-
sidered by itself.
Central Administration in modern Europe
has had its root in the power of the monarch
and has grown with the growth of that power.
Thus in France the development of the central
administration is almost co-extensive with the
political history of the nation. In England,
before the Conquest, there was hardly anything
which could be called a central administration,
although the local administration was tolerably
•complete. After the Conquest the nucleus of
strong administration was created by the
Norman kings, who had to maintain their
authority at once against a recently conquered
people and a lawless feudal nobility. By the
Domesday survey the central government was,
for the first time, informed of the population
and resources of the kingdom. The taxes were,
much augmented and the exchequer was organ-
ised for the business of collection and manage-
ment. The circuits of the itinerant justices, at
first designed as much for financial as for
judicial business, began under Henry I. and
were systematised by Henry 11. By means
of these circuits the central administrative
authority was placed in direct contact with the
local administrative authorities. Great works
of architecture were executed at the royal
expense. Mercenary armies were frequently
employed. But the administration as yet con-
cerned itself with a few comparatively simple
matters. It was still indissolubly blended with
the economy of the king's household. Through-
out the Middle Ages public health, public com-
munications, and police in so far as provided
for, were in the hands of the local authorities.
The local authorities enforced the many regula-
tions respecting agriculture, manufactures, and
trade, which were enacted either by themselves
or by parliament. Education and the Relief
of the poor were for the most part left to the care
of the church. From the accession of the house
of Tudor down to our own time the strength
and activity of the central administration have
constantly grown, but so gradually and irregu-
larly that a summary account of the change is
almost impossible. The following are the chief
points which call for attention. During the
16 th century the central administration is in
the hands of the monarch and his privy
council, whose power is seen rather in particular
arbitrary acts than in a minute official inter-
ference with ordinary life. By the political
revolution of the 17th century a prime minister
depending on the House of Commons and a
cabinet are substituted for the king and privy
council as heads of the administration. The
distinction between the Civil List {q.v.) and
the rest of the public expenditure prc])ares the
way for the ultimate total separation between
the royal household and the central adminis-
tration. At the same time the establishment,
first of a regular navy, then of a regular army,
and the growth of commerce and of colonies,
involves the creation of new administrative
departments. But every addition was made
piecemeal, so that the central administration
in the last century presented a scene of extra-
ordinary confusion. In the 19th century,
especially since the passing of the Reform Act
of 1832, the central administration has been
almost completely transformed. At the acces-
sion of William lY. the civil list was so arranged
as to complete the separation between the
personal income of the monarch and the other
public charges. The Poor Law Amendment
Act of 1834 established the poor law board,
since developed into the local government
board, a body which supervises and controls
the great majority of local authorities. The
modem legislation on public health, beginning
with the act of 1848 and consolidated by the
Public Health Act, 1875, is also enforced by
the local government board. The Committee
12
ADMINISTRATION
of Council of Education, established in 1839,
became in virtue of the Education Act of 1870
an education department controlling the public
elementary education of England. The military
and naval departments have undergone, and are
still undergoing, various modifications.
Local Administration. — The character of a
system of local administration depends chiefly
upon (a) the mode in which the country is
distributed into administrative areas ; (&) the
constitution of the administrative authorities ;
(c) the functions entrusted to them ; and (d)
their relation to the central administrative
authority, (a) In modern states it has gener-
ally been found advisable to divide the territory
into at least three species of administrative areas,
the smallest being the Township, Parish, or
Commune, the intermediate being the hundred
or Union or arrondissement, and the largest, the
County, province, or Department. The whole
territory is thus divided into three systems of
areas. But certain parts of the territory,
especially towns and cities, differ so much from
the rest in requirements and resources that they
are usually constituted into special administra-
tive areas. The space covered by these areas
may or may not be withdrawn from the general
subdivision. Thus many of the larger English
cities and towns possess all the attributes of
counties, but they are distributed into parishes.
Again, the larger areas may be formed by
grouping the smaller areas, or they may have
no reference to them. Thus in England the
union area has always been made up by grouping
a number of poor-law parishes ; but these
parishes may be in more than one county, so
that the boundaries of the union often intersect
those of the county. Again, the union area
and the area of a municipal borough may coin-
cide, but generally they have been traced with-
out reference to each other, and a municipal
area may contain fragments of two or three
poor-law areas. Besides these, many other
administrative areas have been created at differ-
ent times and have not been harmonised with
one another. This confusion of areas is, how-
ever, almost confined to England, and is being
gradually mitigated. In England and elsewhere
different methods of division have prevailed in
different periods. The county has always
remained the largest administrative area ; but
the Hundred has almost disappeared, whilst the
Poor Law union is quite modern ; and in the
lowest range the township has in many instances
been succeeded by the Manor, and this again
by the parish, civil or ecclesiastical.
(&) The constitution of the local authority
in each area admits of much variety, but is
generally reducible to one of four types ; an
assembly of all householders in the area, an
assembly of elected representatives, a compara-
tively small ruling body recruited either by
co-optation or by the selection of the supreme
government, and a staff of officials paid by,
and immediately controlled by, that government.
Thus the Anglo-Saxon township and the town-
ship of New England had as their authority the
assembly of householders, and the same type of
authority appears modified by feudal influence
in the courts of the mediaeval manor, and
modified by ecclesiastical influence in the
general vestry of the modern parish. Some-
thing similar is seen in the village council of
eastern Europe and of Asia. But this type of
authority is suitable only to the smallest area.
The second type of authority, the elective
assembly, is seen in the English select vestry,
board of guardians, and modern municipal and
county councils, and generally in the urban
communities of the civilised world. Unlike
the popular assembly, it is compatible with an
extensive area and with multifarious adminis-
trative duties, and as it harmonises with demo-
cratic sentiment, it is coming into more general
employment. The third type of authority, the
exclusive body, was seen in many English
municipal corporations before the act of 1835,
and in the English county authorities before the
act of 1888. Some of the municipal bodies of
this class renewed themselves by co-optation.
The Quarter Sessions were recruited by the
appointment of the crown from a list presented
by the lord-lieutenant, and composed of
persons having a certain property qualification.
The fourth type of authority, the staflf of
government officials, is almost unknown in
England and is not common anywhere. But in
many countries the head of the administrative
body, and the possessor of all real administra-
tive power, the prefect or mayor, is a govern-
ment official, and his elective colleagues exist
chiefly in order to disguise the fact that there
is no real self-government.
(c) As regards the functions of the local
authority, these have undergone many changes.
In England they originally comprised, besides
certain legislative and judicial duties, the duty
of maintaining a police, the duty of keeping up
public communications, the duty of taking
certain precautions for the public health by
removal of nuisances, etc., and the duty of
enforcing a multitude of regulations as to
weights and measures, the quality of goods
offered for sale, especially provisions, and other
matters connected with manufactures and com-
merce. A series of statutes culminating in the
poor law of Elizabeth passed in 1601 added
the function of relieving the poor, formerly left
to ecclesiastical or to private charity. The
duty of providing for the public health, which
had been little more than nominal, has become
in our time a great branch of local administra-
tion. The duty of providing for elementary
education is still more recent. Besides these
functions local authorities have acquired, under
a number of general or special acts, power to
ADMINISTRATION
13
provide almost everything which can minister
to the health, decency, comfort, or amusement
of a dense population — gas and water works,
markets, museums, galleries of art, libraries,
parks, gardens, baths, lodging-houses, and
burial grounds.
(d) Relation to the central authority. This
relation differs widely not only in different
states but in the same state at different times,
or with respect to different classes of local
authority. Thus in England the control of the
central authority has usually been less strict
than in France. In England tliere was hardly
any effective control of local administrative
bodies by a central authority, until the Poor
Law Amendment Act of 1834. The poor law
commission first, and afterwards the local
government board, have exercised over the
union authorities a pretty complete control. It
has been said that the only question with respect
to which a board of guardians has any real
discretion is that of granting or refusing applica-
tions for relief. The municipal corporations on
the other hand, especially those of the largest
boroughs, have retained a real independence.
The central administrative authority may
influence the local administration in one or
more of the following ways : (a) By collecting,
preserving, and circulating statistical and other
information useful for administrative purposes ;
(6) by enacting rules to guide the local
authority ; (c) by periodical inspection or
constant supervision to ensure the observance
of these rules ; {d) by periodical audit of the
accounts of the local authority. The means of
enforcing this control are various. The extreme
penalty for disobedience is the dissolution of the
offending local authority. In England a board
of guardians may be dissolved by order of the
local government board, but a municipal cor-
poration cannot be dissolved by any merely
administrative authority. A lighter penalty is
the withliolding either altogether or in part of
grants of money, ordinarily made by the central
to the local authority. Thus a school board in
England obtains the government grant only in
so far as the education given by it satisfies the
education department.
III. Relation of the Administrative Organisa-
tion to (a) the sovereign person or body of
persons ; (6) the individual citizen. The
sovereign in each state will necessarily control
the administration, but this will be effected in
diflferent ways. Under the older form of con-
stitutional monarchy the monarch made laws
by the advice of his parliament and carried on
the administration by the help of his council.
The ministers were his ministers, and through
them he controlled every branch of the adminis-
tration. At the same time he depended on his.
parliament for the necessary funds, and his
ministers were liable to parliamentary impeach-
ment. Under the later form of constitutional
monarchy, the prime minister takes the place
of the king and the cabinet takes the place of
the privy council. The prime minister and
cabinet owe their power to the support of the
majority in the more popular house of the
legislature. Thus that house which is virtually
sovereign has a direct control over the adminis-
tration. Most modern republics are organised
on the model of constitutional monarch3\ In
the United States the president is perliaps more
influential in the administration than was
formerly the king of England. The ministers
are his niinisters and do not even sit in congress.
In France the president takes tlic place of a
modern king of England, the prime minister is
the real ruler of the state, and he and liis cabinet
hold oflSce at the pleasure of the majority in the
chamber of deputies. In despotic monarchies
the monarch has sole control of the administra-
tion, unchecked either by a power of withholding
supplies or by a power of impeachment residing
in a representative body.
The relation of the administrative system
to the individual citizen differs in different
countries according to the nature of the authority
empowered to decide upon tlieir respective rights
and duties. In many des2)otic states of a rude
type administrative and judicial functions are
united in the hands of tlie monarch and the
provincial governors. Under this system there
can be little protection for the individual citizen.
In the despotic states of civilised Europe the
administrative and judicial organisations were
usually kept distinct, but acts done in the
course of administration were })laced under a
special law administered by special tribunals,
and in many cases action could not be taken
before these tribunals witliout the previous sanc-
tion of the government. In Fi-ance this system
survived many revolutions and has but recently
been modified. It is also found more or less
developed in many other continental states.
In England a special administrative law and
special administrative tribunals are unknown.
Every branch of the public service has its own
regulations and discipline, but these affect only
its members. Every administrative autliority
stands in the position of a private person em-
powered by law to discharge certain special
functions. Acts done in the course of admini-
stration are on the footing of all other acts.
If a policeman uses excessive violence in taking
a prisoner to the police station, or if a collector
of taxes exceeds his lawful powers, redress is
afforded by the ordinary courts of justice apply-
ing the same laws and observing the same
procedure as in any other case of assault or of
extortion. So too the rights and duties of any
government department or local authority are
determined like those of any private individual.
IV. Economic Aspects of Administration. —
These are numerous and complicated. In the
first place administration includes the business
14
ADMINISTRATION— ADMINISTRATION, LETTERS OF
of raising the public Revenue. It thus in-
cludes the whole of public finance. In this light
thequestions as to the safe limits of Taxation, as
to the best kinds of taxes, as to the most economi-
cal methods of levying them, as to the least
harmful ways of raising and the least oppresgive
modes of liquidating public loans, are all
administrative questions, although they are so
extensive that they cannot be treated in this
article. In the second place administration
includes the business of spending the public
revenue. That business suggests the inquiry
as to the proper functions of the state. What
should the state attempt to do itself? what
should it attempt to regulate ? what should it
leave entirely out of view? These questions
raise other than economical issues ; but they
raise economical issues too. Thus experience
shows that in countries where capital and
knowledge are rare many of the requisites of
production such as Railways, Canals, aque-
ducts, Docks, drainage, and irrigation works, can
be provided only by administrative efifort. By
providing these the state does not lessen indi-
vidual energy or narrow its field of action.
On the contrary, by facilitating production
these administrative undertakings have often
strengthened the spirit of individual enterprise
and accumulation, A notable illustration of
the service which may thus be rendered by an
efiicient administration is seen in the growing
prosperity of British India. In a later stage
of economic development more can be done by
private effort and less needs to be done by
administration. But the growing complexity
of life and industry, the gathering of multitudes
into large cities, the concentration of industries
in huge factories, the production of the neces-
saries of life, not by domestic labour, but by
scientific processes on a vast scale, the new
combinations of labour and of capital, the
increased attention given to health, the more
exacting demand for enjoyment, and education,
the dissolution of old customs and beliefs,
all these changes bring with them difficulties
which compel interference here and interference
there and a vast process of administrative regu-
lation. No general rule can be laid down
respecting the effect of such regulation ; the
eftect can be known in each case only by experi-
ence. All that can be said is that before
regulating any branch of industry the fullest
information possible should be procured, and
that all new regulation should be tentative.
In the third place we have to consider the
economic effect of efficiency or inefficiency in
administration irrespective of its objects. The
industry, the integrity, and the intelligence of
the administration are great economic forces.
Compare the administrative staff in Turkey
with the administrative staff in Prussia and
consider their influence on the economic con-
dition of their respective countries. If the
administrator is an official, his efficiency will
depend greatly upon the spirit, education, and
traditions of the service of which he is a mem-
ber ; if he is a private citizen, his efficiency will
depend greatly upon the spirit, education, and
traditions of the class from which he comes.
In the fourth place the magnitude of the ad-
ministrative staff is a circumstance of economic
importance. An overgrown civil service means a
great number of idlers and a waste of productive
power, especially power of mind. It also means
a heavier taxation of the productive classes (see
Bureaucracy ; Civil List ; Government).
[For a general view of the modern state and its
organs, see Bluntschli, Theory of the State ; for
the history of the English administrative system
consult Stubbs's and Gneist's Constitutional His-
tories of England ; for its present state consult
the volumes on Central Government, Local Oovem-
inent, The National Income and Expenditure, The
State in Relation to Labour, and The State in Rela-
tion to Trade in the English Citizen Series, and
the statutes and other authorities to which they
refer.] F, c. m.
ADMINISTRATION, Letters of. When
a person dies intestate his real estate passes
immediately to his heir, i.e. to the person
designated by law as entitled to its enjoyment.
His persona? estate, however, has to be ad-
ministered for the benefit of (1) his creditors
(2) of the next of kin entitled to enjoy the
surplus after payment of his debts. The ad-
ministrator is a person who takes out letters of
administration, i.e. procures himself to be
nominated by the Probate Division of the
High Court to the administration of the estate.
Letters of administration are granted usually
to some of the next of kin ; failing them, to a
creditor, and, if there be no creditor, to any
person whom the Court thinks suitable. Once
appointed, the administrator very closely re-
sembles an executor appointed by will. Like
the executor the administrator, as such, has no
beneficial interest in the estate, and no liability
for anything beyond the assets which he receives.
He is bound to realise the personal estate of the
intestate to pay the funeral expenses and debts,
and to distribute the balance, if any, among
the persons entitled under the Statutes of Dis-
tribution (22 & 23 Car. II. c. 10, and acts
explaining or amending). He may himself
happen to be one of these persons.
It may happen that although the deceased
has made a will he has named no Executor, or
that the executor named refuses to act, or be-
comes incapable, or dies before the testator.
In any of these cases an administrator must be
appointed, and his administration is said to be
"cum testamento annexe," since it is his duty
to give effect to the provisions of the will.
Should the sole executor or the administrator
be an infant, his guardian will obtain letters of
administration "durante minori aetate," thai
is, until the infant attains his majority.
ADMINISTRATOR— AD VALOREM DUTY
15
Should the administrator die before he has
fully administered the estate, a new adminis-
trator must be appointed. For the office of
administrator does not pass like the office of
executor to the personal representatives of the
person who held it. The new administrator
has administration "de bonis non adminis-
tratis" (often termed " de bonis non") i.e. of
goods not administered by his predecessor.
What would be the best law of intestate
succession is a question which has been much
discussed, and involves complicated economical
considerations. But, whatever the nature of
that law, the office of administrator of the
estate of the intestate appears equally necessary.
[See Williams's Personal Property.] F. c. M.
ADMINISTRATOR. The personal repre-
sentative of a deceased intestate or of a testator
whose will does not appoint any executors, or
whose executors are unable or unwilling to act.
The nearest relative who is willing to act is
appointed administrator, and in default of
relatives administration may be granted to a
creditor. The instrument certifying the gi-ant
is called "letters of administration." The
personal estate of the intestate or testator
(and since 1882 such real estate as was held by
him in a fiduciary capacity) becomes vested in
the administrator, who has to pay all debts
chargeable to the estate, and to distribute the
residue according to law, viz. in case of intestacy
in accordance with the Statutes of Distribution
and the modifying enactments (22 & 23 Car.
II. c. 10 ; 1 Jac. II. c. 17), and, where there
is a valid will in accordance with the directions
contained in the same. In the latter case the
grant is made "with the will annexed " (cum
testamento annexo). e. s.
ADULTERATION. The alteration of an
article into something inferior, but not readily
distinguishable in appearance, by the addition of
cheaper materials. Legislation has endeavoured
to provide, in many instances, but not always
successfully, that the articles thus deteriorated
should be marked out so distinctly that the
unwary may be always able to escape the pit-
fall. Against this endeavour the maxims of
Caveat Emptor and, with less ground, of
Laissez Faire, are sometimes invoked. Occa-
sionally even the spirit of class opposition (as
when legislation against adulteration is promoted
by producers whose interests are individually
aflfected) is called up to hinder the prevention
of the sale of something which, though con-
fessedly not what it professes to be, is claimed
to be a cheaper and as useful an article as that
for which it is substituted. Professor Marshall
observed {Inaugural Address, Co-operative Con-
gress, Ipswich, 1889), in speaking of adulteration,
"That term is often used so as to include open
and undisguised changes in the character of
goods to suit the wants and the tastes of con-
sumers. But you seem to me to have a clear
duty : it is to explain to consumers what
things are cheap and what things only appear
to be cheap ; to give them for their money
as high class goods as you can affi)rd, and as
much truthful information about them as you
AD VALOREM DUTY. A duty levied on
a commodity in proportion to the value, in
contrast to a specific charge on the quantity.
At first sight this form of taxation appears the
more equitable one. In practice, however,
customs duties ad valorem have been found to
work out with great inequality, and also to be
inconvenient to levy for various reasons, among
which are the following : (1) the difficulty of
ascertaining correctly the values of the goods
charged with the duty; (2) the opening to fraud ;
(3) the delay and hindrances caused to importers
and others. In theory it might be supposed
that ad valorem taxes on all commodities would
not affect their relative values, but it has been
maintained that, owing to the different propor-
tions in which fixed and circulating capitals enter
into their cost of production, this would not be
so. Thus J. S. Mill remarks {Principles of Pol.
Econ. bk. v. ch. iv. § 1) that in case of an ad
valorem duty on all commodities exactly in
proportion to their value there would be a
disturbance of values owing to . . . " the
different durability of the capital employed in
different occupations." An ad valorem duty
was levied at an early date in this country.
There existed temp. Edward I. an ad valorem
duty of 3d. upon every lihrate or twenty solidi
of lead and tin {Customs Revenue of England,
Hubert Hall, vol. i. p. 66). At the present
date ad valorem duties, as such, are practically
unknown to the British fiscal system ; the
wine duties levied differently on different classes
of wine approach them (see Taxation).
CouRNO'j' arrives by mathematical reasoning
at the conclusion that the effect of an ad
valorem tax of so much per cent will be the
increase of the expenses of production (includ-
ing transmission into the consumer's hands) by
a larger percentage. Let n be that fraction of
the value which constitutes the tax. Then the
effect is as if the expenses of production had
been increased in the ratio \-n:l. Whence
it follows that, other things being equal, a tax
will be heavier as the expense of production is
greater, that is "as in the price of the com-
modity a smaller part represents the profit " of
the seller. The theorem is true both in a
rigime of monopoly and of competition.
[See James Mill, Elements of Pol. Econ. —J. S.
mil, Principles of Pol. Econ.— J. R. M'Culloch,
Principles of Pol. Econ., Taxation and the Fund-
ing Systevi, p. ii. ch. iii. — S. Buxton, Finance
and Politics, an Historical Study, 1786-1885. —
Paul Leroy-Beaulieu, Traiti de la Science des
Finances, vol. i. ed. 1877, p. 566. — Dictionnaire
des Finances, 1889, vol. i., "Droits ad valorem."
16
ADVANCES— ADVENTURERS, MERCHANTS
Recherches sur les prindpes Malh^iatiques de
la Theorie des Richesses, arts. 41 and 53. The
passages referred to contain some other abstract
theorems relating to an ad valorem tax.]
ADVANCES. In the writings of the French
Physiocrats "advances" are an outlay of wealth
with a view to some future return, as opposed
to an outlay for immediate consumption. This
notion was wide enough to include the advances
of food made by a parent to his infant child
(Daire, Fhysiocrates, ed. 1846, p. 391), and
might include the means of preparing a feast
or making a toy. But more commonly the
word was used almost as we now use "capital."
"The weapons made by the first hunter were
a great augmentation of his capital or his
advances" (Daire, ib.) The physiocrats dis-
tinguished three sorts of advances in agricul-
ture : — (1) Tlie ground expenses or avances
fondhres which are laid out once for all, e.g,
on clearing, draining, etc. ; (2) The original
advances or avances pr'imitives, needing occa-
sional repair or renewal, e.g. on ploughs, carts,
oxen, and manure ; (3) the annual expenses,
or dApenses annuelles, which need regular and
continual renewal, e.g. wages of labourers and
food of cattle (Daire, ih., p. 3'44). Turgot
applies similar distinctions even to manufac-
ture {Form, et Distrib. des Rich. § 52 seq.)
The distinction drawn by Adam Smith between
fixed and circulating capital rests not on this
difference of durability but on the retention or
non-retention of the capital in the hands of
the investor. Ricardo adopts the criterion of
durability while preserving the twofold instead
of the physiocratic threefold division. Later
economists have followed Ricardo, though most
of them admit with him that such a distinc-
tion, being one of mere degree, cannot be
closely pressed. The "advances necessary to
produce a commodity " are sometimes described
as synonymous with the capital necessary to
produce it {e.g. Malthus, Pol. JScon., 1st ed.,
p. 293) ; and sometimes we hear of the "ad-
vance of capital" (Senior, Fol. Econ., p. 194) ;
but it is specially in relation to wages and the
wages fund that the word "advances" has
been most frequently employed (see Capital ;
W. N. Senior ; Wages Fund). The financial
sense of the word (e.g. advances to government
by the bank) calls for no special consideration
here. j. b.
ADVENTURERS, Merchants. English
companies for the conduct and extension of foreign
commerce have been of two diflferent kinds — (1)
Regulated, and (2) Joint -stock companies.
" When they do not trade upon a joint stock,"
says Adam Smith (bk. v. ch. i.), "but are
obliged to admit any person, properly qualified,
upon paying a certain fine and agi^eeing to
submit to the regulations of tlie company, each
member trading upon his own stock and at his
own risk, they are called regulated companies.
When they trade upon a joint stock, each
member sharing in the common profit and loss
in proportion to his share in the stock, they
are called joint-stock companies." The oldest
and most celebrated of the former class was the
company of Merchants Adventurers. To under-
stand its history, we must advert to the system
of the Staple, established temp. Henry III.
Certain places on the continent were fixed by
royal authority as the sole marts for English
wares, where goods were to be " collected, tried,
and assessed." During the 13th and 14th
centuries the five great exports of England were
wool, woolfells, leather, tin, and lead, the first
by far the most important. Bruges in Flanders
was most commonly the seat of the Staple, but
the English kings frequently transferred it to
other continental towns, as, for example, to
Bergen, Dort, and Calais, usually for political
rather than commercial reasons. When the
English cloth manufacture began to assume
importance, the company of Merchants Adven-
turers came into existence, and from the first
it was most closely, though not exclusively,
associated with the export of cloth. "Wheeler,
secretary of the company, says of it {Treatise oj
Commerce, 1^01) : "It consisteth of a great
number of wealthy and well experimented
merchants, dwelling in diverse great cities,
maritime towns, and other parts of the realm,
to wit, London, York, Norwich, Exeter, Ipswich,
Newcastle, Hull, etc. These men, of old time, •
linked and bound themselves together in
company for the exercise of merchandise and
seafare, trading in cloth, kersie, and all other,
as well English as foreign, commodities vend-
ible abroad." The origin of the company is
obscure, and the date of its incorporation cannot
be determined with certainty. But privileges
were granted to it in the 14th century by the
Count of Flanders for trading in his dominions,
and Edward III. fixed Bruges as the place to
which its commodities should be carried. In
1407 Henry IV. gave its members the right of
appointing their own governor. About the
middle of the 15 th century they came into
conflict with the Merchants of the Staple. The
latter alleged that the Merchants Adventurers
had no right to exact the regular contribution to
their society from all persons exporting cloth to
the Low Countries. The quarrel came to a head
temp. Henry VII., who favoured the claims of
the Merchants Adventurers, because they had
given him valuable help during his diplomatic
differences with Margaret of Burgundy arising
out of the assistance she gave to Perkin War-
beck. They had prevented distress and dis-
content among the artisans by "taking up the
commodities of the kingdom, though they lay
dead upon their hands for want of vent" (Bacon,
Hist, of Henry VII.) The amount which the
company could exact for membership was limited
by act of parliament, but its right to control
ADVENTURERS, MERCHANTS
17
the cloth -trade to the Netherlands was recog-
nised. It received, in 1501, a charter author-
ising its members to elect a president and
twenty-four assessors, to make their own decrees
for the management of the trade, and to punish
transgressors. The Star Chamber, in 1505, de-
cided that the merchants of either of the con-
tending companies who wished to share in the
trade of the other must pay the ordinary contri-
bution. From tliis time the extension of English
commerce was principally the work of the Mer-
chants Adventurers. Henry VH. had obtained
from the government of the Netherlands in 1496
a treaty known as the Intercuhsus Magnus,
which secured mutual freedom of trade ; the mer-
chants of both countries were allowed proper
houses for residence and for the storing of their
merchandise. The English traders were also
permitted (1499) to sell their woollen cloths in
other towns of the Netherlands besides Bruges
and Antwerp. The further right to sell by retail
was afterwards obtained by pressure exercised
on the Archduke Philip, when driven by a storm
on the coast of England in 1506 ; but this con-
cession was strongly protested against by the
Flemings, who called the agreement the Inter-
cuRsus JMalus, and it was before long revoked.
Antwerp had drawn away from Bruges the
greater part of the English trade by offering
special advantages, and though the return of
the Merchants Adventurers to Bruges had been
agitated from time to time, it now soon ceased
to be thought of, and Antwerp became the
great market for English cloth. About the
same time (1516), the Xing of Portugal removed
to Antwerp the staple for oriental wares, and
the Portuguese merchants thenceforth purchased
there the English cloth which they sold in the
eastern countries and in Brazil.
The second great struggle of the Merchants
Adventurers was with the Hanseatic traders in
England. In the 14th century the Hanseatio
League {q.v.) had been a great power, but
towards the end of the 15th it began to decline.
It had established itself {temp. Henry III.)
strongly in England. Its merchants assisted
the English kings financially and were there-
fore favoured. Having first settled in some
of the towns on the east coast, they finally
concentrated themselves in the Steelyard at
London, where they had an establishment
imposing by its magnitude and strong defences.
A rigorous discipline was maintained amongst the
Easterlings, as they were called, the jealous
hostility of the city population requiring them
to be perpetually on their guard. The Merchants
Adventurers, when they had successfully asserted
their claims against their English rivals, were
eager to get into their hands the whole export
trade, at least that in woollen cloth. They
were jealous of the comparative immunity from
customs enjoyed by the cloths exported through
the Hanse traders. The treaty of Utrecht,
VOL. I.
1474, had provided that Englishmen should
possess the same privileges in Hanseatic towns
abroad as the Germans did in England. But
the English merchants complained that this
reciprocity was not accorded to them. Efforts
were made in consequence by Henry VII. to
obtain such compacts with Denmark, and such
a footing in Livonia, as would to some extent
make English traders independent of the Hanse.
But political motives led the king to recede
from the attitude thus taken up, and to con-
firm to the Hanseatic traders the privileges they
enjoyed in London. Henry VIII. also, unwill-
ing to provoke the enmity of the League, con-
tinued to protect the rights of the ' ' ^Merchants
of the Steelyard."
Meantime the Merchants Adventurers had
been pushing with great energy their trade
with the Low Countries. "Wolsey, dissatisfied
with the treatment of English traders in the
Netherlands, sought to remove the staple for
cloth to Calais, and Thomas Cromwell wished
to establish it in England. But both these
projects failed. The latter proposal was revived
in the reign of Elizabeth, and was strongly
advocated by Cecil ; but the Merchants Adven-
turers preferred to continue trading to Antwerp,
probably because the new arrangement would
have necessitated the granting to foreigners in
England an equality with the native traders.
The Duke of Alva, when sent to the Netherlands
by Philip II., seized the property of the English
merchants at Antwerp, and they in consequence
withdrew in 1578 to Hamburg, where special
inducements were offered them. Antwerp,
as a commercial centre, was ruined by the
civil war ; many of the Netherland merchants
also removed to England, and a great number
of artisans did the same, thus introducing
branches of the cloth manufacture which had
not previously been practised there. Already
in 1552 the English merchants had obtained
from the Privy Council a decree abolishing the
privileges of the Steelyard, and reducing the
Hanse traders in England to the position of
other foreigners. Their privileges were, how-
ever, partially restored under Mary, and in the
early part of Elizabeth's reign ; but, failing to
recover their old position, they procured the
expulsion from Hamburg of the English mer-
chants who had been invited thither. After
various measures of retaliation on both sides,
the English were, in 1597, expelled from all the
dominions of the Empire. Elizabeth forthwith
directed the civic authorities of London to close
the Steelyard, and ordered the German merchants
to leave England, thus bringing to an end the
history of the Hanseatic league in this country.
After this period, we find the ** foreign
residence or comptoir " of the Merchants Adven-
turers fixed successively at Groningen, Delft,
and Dort. In 1649 they are invited to return
to Bruges, but decline to do so. They are then
18
ADVENTURERS, MERCHANTS— AFRICAN COMPANIES, EARLY
finally established at Hamburg, and come to
be commonly known as the Hamburg Company.
The general model of the Merchants Adven-
turers' Association was followed in the regu-
lated companies which are the great feature of
English commerce from the middle of the 16th
century. 1 o encourage the trade with Rlissia
opened by Chancellor, Queen Mary incorporated
the Muscovy Company, and English factors
settled at Novgorod ; the charter of the com-
pany gave it the exclusive right of trading to
Russia. Th e Eastland or Baltic Company was
incorporated 1579, the Tuekey Company 1581,
the Mauritania Company 1585, and the Guinea
Company 1588. (See Companies, Staple.)
Mercantile companies, with special powers
entrusted to them by the government for the
protection of trade, may, Adam Smith remarks,
"have been useful for the first introduction of
some branches of commerce, by making at their
own expense an experiment which the state
might not think it prudent to make." And
the trade of England was certainly in its early
stages greatly furthered by the action of the
Merchants Adventurers. The abuse to which
such corporations are liable is the restriction of
the greater part of the trade to the directors
of the company and their particular friends,
and the enforcement of burdensome regulations
with a view to that end. The Merchants
Adventurers were not always free from this evil ;
but by the interference of parliament, as we
have seen, the terms of admission were reduced,
and, Anderson tells us, from the middle of
the 17th century no complaint was made
against them. Smith admits that the Russia
and Eastland Companies were not, in his time,
oppressive. The Turkey trade, he says, not-
withstanding recent legislation to open the
corresponding company fully, was still con-
sidered by many people as very far from being
altogether free. He does not believe the
Afkican Company, though accused of "re-
straining the trade, and establishing some sort
of improper monopoly," really open to that
charge. But he censures it on the ground
that it did not fulfil its duty of properly main-
taining forts and garrisons. And, where such
maintenance is necessary from the trade being
with barbarous or semi-civilised communities,
he holds that regulated companies are less
likely to attend to it than joint-stock com-
panies, first, because the directors of the former
have no interest in the prosperity of the
general trade of their company, and may even
be gainers by its limitation ; and, secondly,
because they have no adequate fund at their
disposal, the company possessing no common
stock, and being dependent for their outlay on
the casual revenue from admission fines and
corporation dues. While Smith appears scarcely
to allow the regulated companies due credit for
the part which most competent authorities
assign them in the extension of English com-
merce, it is, doubtless, true that, when he
wrote, the services which such corporations were
fitted to render were substantially exhausted,
and, as he says, the highest eulogy that could
be bestowed on them was that of being merely
[J. Wheeler, Treatise of Commerce, 1601. — A.
Anderson, Historical and Chronological Deduc-
tion of the Origin of Commerce, 1764. — G. Schanz,
Englische llandelspolitik gegen Ende des Mittd-
alters, 1881. — W. Cunningham, Growth of English
Industry and Covimerce, 1890. — In the present
article we are much indebted to Foreign Comm^ce
of England under the Tudors (Stanhope Essay
for 1883, by John Bruce Williamson), an excellent
abstract of Schanz, with information from other
sources.] J. k. i.
ADVICE. Primarily, an order given by
one person to another to perform some act of
business, such as the payment of a bill of
exchange, for him — ^used also in the sense of
giving information on business matters more
generally.
AFRICAN COMPANIES, Early. The cir-
cumstances of trade with Africa, or rather with
Africa excluding the Mediterranean coast, were
of such a nature as to favour particularly the
formation and maintenance of privileged trading
companies. The trade was sufficiently danger-
ous to suggest the need of special privileges,
and not sufficiently profitable to permit of being
carried on without them. England, however,
was not the first country to enter into trading
relations with the west coast of Africa. Por-
tugal held that position, and practically en-
joyed a monopoly till 1536. In that year we
hear of English adventurers and of their success.
Benin on the Guinea coast was the attraction of
the traders. The venture was probably repeated
more than once ; without leading immediately
to the formation of a company. That result,
however, soon ensued, and the first charter was
granted, the precursor of many others.
(1) 1588 ; Elizabeth granted to certain mer-
chants of Devonshire, Exeter, and London a
charter giving exclusive trading privileges for
ten years to the rivers of Senegal, Gambia, and
the neighbouring district. This company, called
The Guinea Company, was in reality the fore-
runner of the African companies, among which
it may itself be numbered. They were all
companies formed to trade with the west coast.
Under the auspices of this company several
voyages were made, the chief goods brought
back being pepper, ivory, palm oil, cotton cloth.
It seems to have been very unsuccessful, owing
in part to the action of "interlopers " or inde-
pendent traders.
(2) 1618 ; a new exclusive charter to Sir
Robert Rich and other Londoners. It too was
unsuccessful, first through the action of private
traders and secondly owing to the very small
profit gained by those engaged in this trade
AFRICAN COMPANIES, EARLY— AFRICAN COMPANIES, RECENT 19
before the development of the slave trade
between the west coast and the English planta-
tions in America.
(3) 1631 ; a new company was formed, the
charter gi-anted to Sir Richard Young, Sir
Kenelm Digby, and others for thirty-one years,
the limits assigned extending from Cape Blanco
to the Cape of Good Hope. Similar causes to
those before enumerated appear to have led to
its dissolution.
(4) 1662 ; a fourth company formed this time
with the definite object of conveying 3000 slaves
a year to the American settlements. Its
development was interfered with by wars with
the Dutch, and it gave way to —
(5) 1672 ; i)xQ Royal African Company, which
really bought out the rights of the proprietors
of the foregoing. These, like other trading
companies of the time, were based on grants of
exclusive privileges to certain persons made by
royal charter. As such they were doomed by
the act passed after the Revolution of 1688,
whereby all exclusive privileges except those
authorised or granted by parliament were with-
drawn. The African trade was thus thrown
open though it must be remembered that the
company was not destroyed. Its exclusive
rights were taken away ; but (1698) some part
of these rights were restored by statute (9 & 10
Will. III.) in regard of the settlements and forts
which had to be supported. Traders other than
those belonging to the company were burdened
with differential duties. From this time onwards
disputes continually arose as to the expediency of
restriction. But despite the attention devoted
to the trade, it continued to be most unprofit-
able. At one time its stock dropped to 4^,
and though it rose above this low figure it
seems never to have approached par except at
the time of the South Sea Bubrle. In conse-
quence of the low credit it stood in, and of the
increased liabilities incurred by the company, it
was resolved to transfer its property to a new
company composed of the proprietors of the old
company and its creditors, and —
(6) 1750 ; a new African company was estab-
lished. It was of course without exclusive
rights. In 1752 the property of the former
company was finally transferred to its hands.
[Anderson, History of Commerce. — Macpherson,
Annals of Comvierce. — Rymer, Foedera. — Lans-
down MSS. in Brit. Mus.] e. c. k. g.
(7) 1791 ; the Sierra LeoTie Company may be
classed with the early African companies in the
sense that the acts of parliament establishing
and determining it both precede the act de-
termining the old African companies.
The Sierra Leone Company originated in the
philanthropic schemes of certain gentlemen who
(1787) formed themselves into a committee and
raised a fund for assisting destitute blacks,
most of whom had been the victims of the
slave trade, to settle in Sierra Leone. The
project very quickly took the form of a regular
company, and in 1791 an act was passed
incorporating the Sierra Leone Company. In
1800 letters patent were issued definitely
granting the peninsula of Sierra Leone, so far
as was in the power of the crown, to the
company. But the French war very adversely
aff"ected the fortunes of the company, and heavy
subsidies were granted from imperial funds to
sustain it, so that in 1807 an act was passed
providing for the extinction in seven years'
time of the Sierra Leone Company and its
rights over the colony. In 1809 a charter
was granted to the company providing for the
" Colony of Sierra Leone," and after the powers
given to the company had expired, this charter
was (in 1821) regranted direct to the colonists,
who were then placed directly under the crown
of Great Britain. c. a. h.
AFRICAN COMPANIES, Recent. It would
appear from a review of historical facts that
in periods when a number of difi"erent civilised
nations have been actively competing for the
possession or settlement of an unallotted region,
the favourite method of occupation has been the
quasi-national company. The recent allotment of
a great portion of the African continent amongst
chartered companies is on a par with the early
settlementof North America and the "West Indies.
Putting aside the Congo Free State, which
in some respects is analogous to a chartered
company, we have in order of time the Eoyal
Niger Company (chartered as the National
African Company in 1886) dominating the
basin of the river Niger on the west, the Im-
perial British East African Company (1888)
on the Somali coast to the east, and the British
South African Company (1889) between the
Zambesi and the British colonies to the south.
All these are British companies, and all hold
a royal charter. A German South- West African
Company has been at work for some years
with indilierent success, and does not seem to
enjoy any privileged position. The German
East African Company, which is chartered, was
formed in 1888 by a coalition of the private
Commandite Company and Karl Peters and
Co., to compete with the British company in
the Somali and Zanzibar districts.
An amalgamation of powerful houses in
West Africa is at this time moving to obtain
a charter as the Oil Rivers Company. The
African Lakes Company is unchartered and is
likely to become merged with the British South
African Company. The Congo Company is an
ordinary one, with its seat of operations in the
Congo Free State. The ** United African
Company" of 1879 was the parent of the
^^ National African Company," now the Royal
Niger Company ; it successfully competed with
'and eventually absorbed two French companies
which received considerable support from their
government.
20
AFRICAN COMPANIES, RECENT— AGAZZINI
The new Britisli companies differ from the last
of the old ones — the Sierra Leone Company
(see African Companies, early) — in being
avowedly commercial. As explained in the
article on Colonies, Government by Companies
{c[.v.) — they are similar in conception ^ and
aim to the old Royal African and Guinea
Companies. Governments, however strong,
have usually shrunk from the responsibility of
administering a large unknown tract of terri-
tory, but have been willing to encourage the
hazards aad adopt the successes of a company.
In the first blush of African development
Bechuanaland was annexed as a protectorate
under the immediate care of the British crown,
but this policy was too severely criticised by
the timid to encourage its repetition in dealing
with African territories. When the movement
went on and in various parts of Africa a number
of ordinary commercial companies had secured
valuable concessions or established the nucleus
of a trade, their present security and the future
establishment of a colonial dependency was
assured by their consolidation into large asso-
ciations under boards of directors of recognised
substance, with wide powers over considerable
extents of territory, and enjoying the prestige
of a royal charter.
The charters of the existing companies are
all very similar. That of the South African
Company has a special colouring, in that two or
three of its provisions (Glauses 10, 17, 18)
appear to contemplate the future transfer of its
powers to a crown colony ; for instance it
may make " ordinances " subject to confirmation
by the secretary of state. All through the
charters modern caution and modern philan-
thropy are conspicuous. The control of the
orown through one of the secretaries of state
is secured at every point, especially as regards
any foreign relations. In the case of the Royal
Niger and Imperial British East African Com-
panies this control is exercised through the
foreign office ; in the case of the British South
African Company through the colonial office.
The difference of the controlling department
was determined solely by the fact that in the
case of the first two companies their immediate
contact was with foreign states, in that of the
British South African Company it was with
British colonies and protectorates. The stipu-
lations in respect of the slave trade and liquor
traffic with the natives are the offspring of a
humanitarian age. Subject to these limitations
the companies have wide powers, not only of
carrying on commerce and industries on their
own account, but of granting concessions and
powers to individuals for every sort of under-
taking. They have all the attributes of large
joint-stock companies with some of those of
independent states. But they cannot enjoy or
create any monopoly of trade.
The Imperial British East African Company
has at present (1892) less individuality than the
others ; part of its sphere is within the territory
of the sultan of Zanzibar and there it is bound
to use the sultan's flag and conform to the
sultan's trade restrictions. Herein the diff"erent
genius of the British and German companies (see
Colonies, Government by Companies) was well
illustrated. Both had their sphere of operations
in the territory of the sultan ; the British
company, as just mentioned, was carefully kept
by. the British government subservient to their
ally ; the German company everywhere hoisted
the German flag and displayed its nationality ;
it was, in fact, the German government working
through the company for paramount influence.
The sphere of influence dominated by Germany
through its East African Company lies between
those of the Imperial British East African
Company and the British South African Com-
pany, stretching from the east coast inland to
Lake Tanganyika and the Congo Free State.
It thus covers some of the richest country in
the Continent, the objectof considerable jealousy
to English traders.
The commercial success of the Royal Niger
Company has, on the whole, been considerable ;
that of the South African Company is described
in its AnnuM Reports.
[The charters of the three companies are to be
found in the London Gazette of 13th July 1886
(Niger),— 7th Sept. 1888 (East African),— 20th
Dec. 1889 (South African), — and an account of the
first and last in the Colonial Office List for 1890.
The Royal Niger Company and British South
African Companyhsiwe printed interesting accounts
of their development for private circulation. For
history since 1892 see Annual Reports of the British
South African Company, — of the Administrator of
East Africa, — and on Northern and Southern
Nigeria ; also Precis of Information concerning
the British East Africa Protectorate.'] c. a. H.
AGAZZINI, MiCHELE (an Italian economist
of the commencement of the 19th century),
published a system of political economy not
destitute of original ideas, or, at least, of an
original manner of presenting old ones. He
had a clear idea of what was later called by
Senior and Carey the cost of reproduction, and
makes it the centre of his theory of value.
Every producer, according to Agazzini, obtains
for his produce a price determined by the cost
(in labour and abstinence) which the consumer
saves ; this same law holds good for the price
of commodities, of labour, and of capital. The
law of supply and demand (he says) regulates
current prices, and the cost of reproduction
normal value. All this is, however, explained
in a language totally lacking technical pre-
cision. His most important work was first
written and published by him in French under
the title :
La science de Viconomie politique, ou principes
de la formation, du progris et de la decadence de
la richesse, et a2)plication de ces principes d Vad-
AGENCY, LAW OF— AGENTS OF PRODUCTION
21
f
ministration, 1822. Paris et Londres, Bossange
pere. It was published at Venice in Italian in
1827. Later, in 1834, Agazzini published a criti-
cal essay on Smith, Say, and Malthus, in which
only the history of the doctrines concerning value
are noteworthy. He is particularly successful in
the correct exposition of the doctrines of the
mediseval canonists. Sconvenevolezza delle teoriche
del valore insegnate da Smith, dai professori
Malthus e Say e dagli scrittori piU celebri di pvh-
blica economia, Milano, Fontana, 1834. M. p.
AGENCY, Law of. An agent is a person
authorised by another (called the principal) to
act on his behalf. An agent authorised to act
for a special purpose only is called a particular
agent ; if there is a general authority to act
within a given sphere, the agent is called a
general agent. A partnership is an instance of
general agency in the widest sense, each partner
being, as a rule, considered the agent of his co-
partners for all purposes coming within the
scope of the partnership business. An agent
may not, according to Englisli law, derive any
concealed profit from his agency, and he may
not, as a general rule, delegate his authority to
another person. An agent may in his dealings
with third parties act as principal, or he may
state the fact of the agency without disclosing
the name of the principal, or he may deal on
behalf of a named principal. The rules of law
concerning the liabilities and mutual relations
of the various parties in all these cases are too
complicated to be stated here, and the general
rules are often modified by the customs of
particular localities or particular trades. The
authority of an agent acting on belialf of a
corporate body cannot extend beyond the limits
imposed upon the sphere of action of the cor-
poration either by Act of Parliament, or by the
charter of incorporation or by the memorandum
of association (see Ultra Vires). e. s.
AGENTS OF PRODUCTION. The causes
or requisites of production, often called " agents
of production," may be divided into two
classes : human action and external nature ;
commonly distinguished as "labour," and
** natural agents." The first category comprises
mental as well as muscular exertion ; the second,
force as well as matter. To the second factor is
sometimes applied the term land : in a technical
sense, denoting not only the "brute earth,"
but also all other physical elements with their
properties. But this term is more frequently
employed in another classification, according to
which the agents of production are divided into
three classes — land, labour, and capital. Of
the two classifications which have been stated
the former appears the more fundamental and
philosophical. That "all production is the
result of two and only two elementary agents
of production, nature and labour," is particularly
well argued by Bohm-Bawerk in his Kapital
und Kapitalzins, pt. ii. p. 83. "There is no
room for a third elementery aource," he main-
tains. This view is countenanced by high
authorities, of whom some are cited below.
Even J. S. MiLL,whois disposed to make capital
nearly as important as the other members of
the tripartite division, yet admits that ' * labour
and natural agents" are "the primary and
universal requisites of production " {Pol. Econ.,
bk. i. ch. iv. § 1). Prof. Marshall, dividing the
subject more closely, thinks "it is perhaps best
to say that there are three factors of production,
land, labour, and the sacrifice involved in
waiting " {Principles of Economics, p. 614, note).
For fui'ther remarks on the third species of
agent see Capital.
In the case where both labour and natural
agents are required, the most frequent and
important case, the question may be raised
whether nature or man contributes more to the
result. According to Quesnay {Maximes,
Edn. Oncken, p. 331) land is the sole source of
riches. According to Adam Smi'J'H, in manu-
factures "nature does nothing, man does all"
{Wealth of Nations, bk. ii. ch. v.) The better
view appears to be that the division of industries
into those in which labour does most and
those in which nature does most is not signi-
ficant. It is like attempting " to decide which
half of a pair of scissors has most to do in the
act of cutting" (Mill, Pol. Econ., bk. i. ch. i.
§3).
Agents of production may be subdivided into
those which are limited, and those which
are practically unlimited. This distinction
applies principally to natural agents. For
labour may in general be regarded as an
article of which the supply is limited. The
ownership or use of those agents of production
which are limited and capable of being appro-
priated acquires a value in exchange. Hence
rent of land and wages of labour take their
origin.
To account for the difierence in the rents
paid for different lands, it has been usual, after
RiCARDO, to arrange the lands in a sort of scale
of fertility : No. 1, No. 2, and so on. Upon
this classification it is to be remarked that
productivity, the real basis of the differences in
question, does not vary according to any one
attribute, such as the indestructible powers of
the soil, or proximity to the centres of industry ;
but upon a number of attributes (compare B.
'Pbiue., Practical Pol. Econ., chapter on "Rent").
Moreover a scale in which lands, or other
natural agents, were arranged according to their
productive power, would hold good only so
long as the other factor of production, human
action, might remain constant. A light sandy
soil may be more productive than a heavy clay,
so long as the doses of labour ap^jlied to each
are small. But the order of fertility may be
reversed when the cultivation is higher. As
Prof. Sidgwick remarks " these material advan-
tages" [afforded by natural agents] "donotremain
AGIO— AGRICULTUKAL COMMUNITY
the same in all stages of industrial development :
but vary with the varying amounts of labour
applied, and the varying eflaciency of instru-
ments and processes " {Pol. Econ., bk. i. eh. iv.
§ 3). Compare Prof. Marshall, Principles of
Economics, bk. iv. eh. iii. § 4.
A similar difficulty attends the attempt to
arrange the other agent of production, human
labour, in a scale of excellence ; whereby to
determine what has been called Rent of Ability
{q.v.). Prof. Macvane has noticed this difficulty
in an article on "Business Profits" in the
Quarterly Journal of Economics (Harvard) for
Oct. 1887. Prof. Walker, in a reply to Prof.
Macvane in the same journal, April 1888,
admits and very happily illustrates the difficulty
(p. 227).
[On this subject as many references might be
given as there are treatises on political economy.
The twofold classification above indicated is
illustrated by the following : — Hobbes, Leviathan,
beginning of ch. xxiv. ("The plenty of matter"
consists of "those commodities which from the
two breasts of our common mother, land and sea,
God usually either freely giveth, or for labour
selleth to mankind "). — Petty, Treatises on Taxes
(3d ed. 1685), ch. viii. p. 57 (labour the father,
land the mother, of wealth). — Berkeley, Querist,
Query 4. (" Whether the four elements and man's
labour therein be not the true source of wealth.")
— Cantillon, Essay, pt. i. ch. i. (land the matter
and labour the form of riches). — Courcelle-Seneuil
Traiti theoriqtie, bk. i. ch. iii. — Hearn, Plutology,
ch. ii.] F. y.e.
AGIO. An Italian word, the original mean-
ing of which is "ease, convenience." It was
introduced into general mercantile language to
express the additional sum payable by a person
who wished to exchange one kind of money
against another kind, the kind taken in ex-
change being in greater demand than the kind
given in exchange ; the person effecting the
exchange paid the premium for his convenience.
The expression when now used is employed in
countries where a premium is payable on me-
tallic money, and where paper money with a
forced currency is the regular medium of ex-
change. E. s.
AGIOTAGE, OR AGIO, was a term first used
in Venetian finance to denote the difference in
exchange between depreciated currency and
metal of full value. Such depreciated currency
formerly consisted mainly of debased or worn
coins, but more recently paper money, whether
bank notes or government notes, have afforded
illustrations under this head. The banks estab-
lished at Venice, Hamburg, Genoa, Amsterdam
and elsewhere, were bound by law to receive
deposits and make payments according to cer-
tain standards, and the premiums charged upon
such money as compared with the general cir-
culation represented the agio payable to the
banks in question. These banks were used
in making international payments for the
reason that their standard was a fixed, not
a varying quantity, and served greatly to in-
troduce the system of economising coinage by
exchanging bills and promises to pay instead of
actual metal. See Banks, early European.
AGNATI (Adgnati). The members of a
Roman family having a common legitimate male
ancestor in the male line, either natiu-ally or
by fiction of law (adoption or marriage with in
manum conventio). Cognati, on the other hand,
are relatives in the modern sense. e. s.
AGRICULTURAL COMMUNITY. In giving
an account of agricultural communities it seems
best to follow the plan adopted by Mr. Seehohm
in his standard work on the English Villagp.
Community, and to proceed from known and
undisputed facts, open to present observation,
back through historical evidence which step
by step decreases in authority and increases in
difficulty of interpretation until we anive at
the tribal organisations, clans, and kindred
settlements of prehistoric times ; that is to
say, the comparative method may be first
applied to existing communities, and to the
traces and survivals of the past, and then an
explanation may be attempted by the historical
method.
Communities in which land is practically
owned and cultivated in a collective manner,
according to customary rules of great antiquity,
and in which the rights and powers of any
individual are strictly limited, still exist over
large areas and among vast populations. In
Central Asia the tribes of pastoral nomads are
made up of groups, each under the authority
of the head of a family, and nothing is the
subject of separate ownership except clothes
and weapons (Le Play, Ouvriers Europeens).
When a group becomes too large a division is
made by the head in a manner suggestive of
the division made between Abraham and Lot.
More interest, however, attaches to the com-
munities which have a settled system of agri-
culture in a fixed area. The most important
at present is the Russian Mir, which may be
described as ''the aggregation of inhabitants
of a village possessing in common the land
attached to it. " Each male inhabitant of full
age is entitled to an equal share of the land.
The period of distribution at present varies in
different districts, nine years being the average,
and the limits from three to fifteen. The
arrangements for the partition are decided by
the peasants under the presidency of the
stavosta (headman or mayor). All the arable
land is divided into three concentric zones
which extend round the village, and these
zones are again divided into three fields to
admit of the three-field system of cultivation.
These fields again are divided into long narrow
strips, in length from one to four furlongs, and
in breadth from one to two rods. The division
of the parcels is arranged so that every man hofc
AGRICULTURAL COMMUNITY
23
at least one parcel in each of the great fields.
The bundle of parcels is arranged before the
lots are drawn. As a rule there is not much
difference in the fertility of the land, but in
some cases the measuring rods are of different
lengths according to the fertility. Formerly a
certain amount of forest, pasture, and meadow
was attached to each village, the inhabitants
paying a kind of labour rent, but by the Act
of Emancipation of 1861 this part of the land
was made over to the lord. The cultivation is
carried on in a strictly routine manner, the
time of sowing, reaping, etc., being fixed by
the village assembly, and there being no
division between the parcels of land, and no
separate approach. The dwelling-house, izha,
with its enclosed garden ground, is, however,
private property, although even in this case
the owner cannot sell it to a stranger without
the consent of the mir^ which has always the
right of pre-emption. Before the abolition of
serfdom the lord of the manor (to give the
nearest English equivalent) granted about half
the arable land to the Serfs, and cultivated the
remainder with their forced labour of about
three days a week. On the emancipation a
rent (redeemable — the money being in many
cases advanced by government) was fixed, and
a minimum amount of land assigned to each
serf. Power was given to the mirs by a two-
thirds majority to abandon the system of collec-
tivism in favour of individual ownership, but on
the whole the mir has been rather strengthened,
and is taken by the government as the basis of
taxation. From the economic standpoint the
most striking objections to the mir, which also
seem to render its long continuance imder
modern conditions doubtful, are (1) the natural
growth of population under the system of equal
division. Hitherto this increase has been slow,
owing partly to the large mortality of the
children, and partly to the women being much
older than their husbands, and to the preval-
ence of immorality. But the infant mortality
might readily be lessened, and the system of
unequal marriages, which rests on the conveni-
ence of the head of the family in obtaining
women-servants by the marriage of his boys,
seems to be falling into disfavour. (2) The
second objection lies in the constraint placed
upon individual enterprise by the compulsory
cultivation according to fixed methods, in the
impossibility of highly extensive cultivation
with the periodic divisions of the land, and the
absence of enclosures, and in causes similar to
those which in England in the 15 th century
secured the victory of several (enclosed, indivi-
dual) over champion (non-enclosed, common)
cultivation (compare E. deLAVELEYE, Primitive
Property, ch. iii. "Economic Results of the
Russian Mir ").
Next to Russia, India is the most important
example of the present existence of village com-
munities, although in the manner described by
Sir H. Maine {Village Communities, Lect. IV.)
their primitive simplicity and essential features
were sacrificed for a time at least to alien
English and Mohammedan law, the Zemindar
or official collector of customary taxes having
been converted into a kind of manorial pro-
prietor. In recent years, however, the tendency
has been to protect these communities, and over
large districts to regard them as the agricul-
tural and fiscal unit. The general features —
allowance being made for differences in climate —
are not unlike those of the Russian mir and the
early Teutonic settlements described below.
There is the division into strips, and the cul-
tivation according to minute customary rules of
the arable portion, and there is a certain por-
tion of waste enjoyed as pasture by the different
members. The village consists of households,
each under a despotic head, the family life
being characterised by extraordinary secrecy
and isolation. In many communities the
customs are declared and interi)reted not by
a council of elders but by the headman alone,
his office being sometimes hereditary and some-
times nominally elective. The various trades
or crafts necessary to a self-supjiorting village
are also often hereditary, e.g. the blacksmith,
the harness maker, etc.
In Java a system prevails closely analogous
to that of India. The village is jointly re-
sponsible for the payment of taxes, and there is
common use of the waste. The rice fields are
periodically divided amongst the village families
and the houses and gardens are private property.
Irrigation is conducted according to communal
rules and plans (cp. De Laveleye, Primitive Pro-
perty, ch. iv.) The Allmends of Switzerland
furnish another example of common cultivation.
These are lands belonging to the communes, the
right of use, however, being hereditary in certain
families only, and most residents even of long
standing and although having political rights,
are excluded. The Allmend furnishes wood
for fire and building, pasture for cattle on the
alp, and a certain portion bf arable land. In
some cases there is still periodical division of
the land, in others the land is let and the pro-
ceeds devoted to the expenses of the commune.
In Scotland, in the crofting parishes, we find
as a rule that the tenants have a certain amount
of hill ground on which they have the right to
pasture so many sheep or cattle, the number
varying in difi'erent cases according to the
holding. As soon as the crops are gathered the
ground is thrown open in the same way. There
are, however, no periodical divisions, and the
village had no rights not derived from the feudal
proprietor until the recent legislation giving
effect to presumed custom established fixity
of tenure at a " fair rent," and made provisions
for consolidating holdings.
In England there still survive a number of
24
AGRICULTUEAL COMMUNITY
Commons and Lammas-Lands in which certain
members of a village have definite rights, and
there are abundant traces of the old agricultural
communities. In most of the countries of
Europe where private property has become the
rule there are also survivals which point to the
wide prevalence of customary cultivation in
common. On the historical development and
gi-adual decay of the village community, the
reader should consult Mr. Seebohm's remark-
able work, which, on its broad outlines has
been mainly followed in the rest of this article.
Although nominally this work is confined to
England, the search for a rational explanation
led the writer to make a wide survey of many
other countries at different times. Before Mr.
Seebohm's work appeared many writers had called
attention to the wide prevalence of common
cultivation in England in recent times. A
passage is quoted by Sir Henry Maine ( Village
Communities, p. 90) from Marshall's Treatise
on Landed Property (1804), in which the writer
from personal observation of "provincial prac-
tice" attempts to construct a picture of the
ancient agricultural state of England. He
notices the division of the arable land into three
great unenclosed fields adapted for the regular
triennial succession of fallow, wheat (or rye), and
spring crops (oats, beans, peas, etc.) He de-
scribes also the division of these fields into strips
and the mode in which the meadows and the
waste were used. He gives also statistics on
the extent to which in his day these open and
common fields existed, which have been sum-
marised by E. Nasse, The Common Field System
for England in the Middle Ages. Mr. Seebohm
points out (p. 14) that taking the whole
of England with roughly speaking its 10,000
parishes, nearly 4000 Enclosure Acts were
passed between 1760 and 1844, the object of
these acts being expressly to get rid of the old
common unenclosed fields. But in spite of the
Enclosure Acts the old system has left many
indelible traces on the surface of the land itself
and the nature of the holdings in the size
and shape of the fields (compare also Canon
Taylor's paper in Domesday Studies on " Domes-
day Survivals "). The open fields were nominally
divided into long acre strips a furlong (i.e. a
furrow-long) in length and four rods in width.
Originally these strips were separated by green
balks of unploughed turf, and these balks can
still be traced. A bundle of these long acre
strips a furlong in width made a " shot " (Anglo-
Saxon) "quarentena" (Latin) "furlong" (old
English), and these furlongs were divided by
broader balks generally overgrown with bushes.
The roads by which access was obtained to the
strips usually lay along the side of the furlong
and at the end of the strips, and these roads,
often at right angles to one another, still
survive. There are further traces on the land
itself of the old "head -lands" (Scotch head-
rig), the "linches," "butts," "gored acres"
and pieces of "no man's land " (Seebohm, p. 6).
Canon Taylor in the paper cited above gives
some very remarkable examples of the eff"ects of
the same method of ploughing in these open
fields having been practised for many generations.
But not only on the surface of the land, but
in the present distribution of the fields and
"closes" constituting a farm, the effect of its
common open fields may be traced. Taking
any manor as a centre we find the farms of which
it is composed not consisting only of solid blocks
(as in the newly-settled land of the United
States), but of a number of little fields scattered
about in the most "admired disorder," and at
a considerable distance from one another. Of
the present inconvenience and want of economy
involved in the an-angement of farming land
there can be no doubt from the modern agricul-
tural standpoint, and if a tabula rasa could
be made of the land such a wasteful method
of distribution would never be adopted. The
inference is plain that this irregukr straggling
scattered ownership and occupation of the land
must be a survival from a past custom of which
the inner meaning has been lost. The great merit
of Mr. Seebohm's work is that he provides a key
for the explanation of this peculiarity, and
whatever modifications may be found necessary
with further research this explanation is cer-
tainly at any rate a most valuable working hypo-
thesis. Evidence of the full existence of the
open-field system is easily perceived as far back
as the 16th, 15th, and 14th centuries. We
have the literary remains of the great agricul-
tural controversy, in the two former centuries,
on "champion" and "several" already alluded
to, and for the 14th century we have the graphic
touches of Piers Plowman in describing his " fair
felde " full of all sorts of folk. Then through
a series of documents such as the Winslow Manor
Rolls (reign of Edward III.), the Hundred Rolls
(Edward I.), the records of various abbeys, the
Boldon Book (1183 a.d.), we are taken back to
the gi-eat Domesday Survey (1086 a.d.) So
far the result of the evidence is certainly to
show that the further we go back the more
clearly do we discover the wide prevalence of
the open-field system and cultivation in common.
Up to the time of Domesday at any rate, Mr.
Seebohm may be admitted to have proved his case,
and it will be convenient in this short summary
at this point to abandon the retrogressive chrono-
logical method and to notice the principal
features of the system at the time of the Con-
quest and the processes and causes of its decay.
At the completion of the Conquest there were
certainly manors everywhere, some belonging to
the king, others to great barons and prelates,
and others to the mesne tenants of these greater
lords (cp. Madox, Exchequer). Some lords held
many manors and were represented by a steward
or Reeve (villicus). The typical Manor was a
AGKICULTURAL COMMUNITY
25
manorial lord's estate with a village or town-
ship upon it under his jurisdiction and held in
the peculiar system of serfdom known as villen-
age.
Passing now to the internal economic con-
stitution of one of these manors and leaving the
legal difficulties on one side, we observe that
the arable land was divided into the lord's
demesne and the land in villenage. The whole
of the arable land was in three great open fields,
and the demesne land was interspersed with
the villein's land. For the present purpose
the liberi homines may be omitted, and we may
observe that there were three classes of tenants
in villenage, namely villani (proper), cotarii or
bordarii (cottagers), and servi (slaves). The
chief interest attaches to the villeins. The
typical villeiij holding was a virgate or yard-
land, and a Virgate normally consists of thirty
acres, namely ten of the long-acre strips in
each of the three great open fields. It has
been calculated (Seebohm, p. 102) that about
5,000,000 acres were under the plough in
the counties named in the survey, about half
being held by the villeins.
The normal virgate was an indivisible bundle
of strips of land passing with the homestead
by regrant from the lord to a single successor.
There were also rights to certain use of meadow
and waste. The virgates with their homesteads
were sometimes called for generations by the
family name of the holder. The central idea
of the system was to keep up the services ol
various kinds due to the lord of the manor, and
the virgate was a typical family holding. The
services consisted of so much Week Work, gener-
ally three days, an uncertain quantity of boon-
work {adprecem., precarious) at the will of the lord,
and certain payments, occasionally of money but
more frequently in kind. There were also re-
strictions upon the personal freedom of the
villeins, e.g. the lord's licence must be obtained
on the marriage of a daughter, or the sale of
an ox, etc., and no one could leave the land
without the lord's assent.
The normal outfit of the Villein was a pair
of oxen, and the ploughing was usually done with
a team of eight oxen. Thus even so far as the
beasts were concerned the co-operation of at
least four villeins was required. We find also
that certain craftsmen held their virgates in
virtue of their services to the village, and the
principal wants of the community were satisfied
by its OAvn labour. Everywhere and in every-
thing custom was in force limiting the nature
and amount of the services and prescribing the
times and methods of cultivation. The princi-
pal diff"erences between the English village com-
munity at the Conquest and at the time of the
Black Death (1349 a.d.) are to be found in the
gradual break-up of these overpowering customs
and the increasing scope given to individual
enterprise and variety. The nature of the
movement is shown by the increasing irregu-
larity of the holdings and the departure from
the normal type, by the progressive limitation
of the services demanded and above all by the
substitution of money payments for these services
and payments in kind. This commutation in
the mode of rendering tribute to the landowner
was the most potent cause of economic progress
in the mediaeval period. By the time of tlie
Black Death the option at any rate of money
payments had become usual. The landowner
found his advantage in the greater efiiciency of
hired labour, and the villein had the power of
benefiting himself by exceptional industry.
For a long time, however, the customary
methods of cultivation prevailed, and, as pointed
out above, the open fields remained down to
the close of last century. The principal point
to observe is that starting with the Conquest,
economic and agricultui'al improvement has
been closely connected with the disintegration
of Village Communities. The nature of this
movement is, however, often overlooked, because
a comparison is made at different times between
different parts of the social scale, the modern
farm labourer being compared to the villein
with the virgate, to the apparent, disadvantage
of the former in spite of serfdom. But the
true counterpart of the modern labourer was
the mediaeval slave, and the villein corresponds
to the modern small farmer or landowner.
When we go back beyond the Conquest we
find strong evidence of the prevalence in the
eastern districts of Britain of these village com-
munities in serfdom under manorial lords,
though the points of similarity are at first dis-
guised by the difference of language. There
seems, however, little doubt that, whatever
may have happened at the time of the Saxon
invasion and in the dark period which followed
after the departure of the Romans, as soon as
the Saxons were settled they developed (or
adapted) the essential economic features of the
manor (compare the Laws of Ine quoted by
Mr. Seebohm, p. 142). It is at this point that
the principal controversy arises. The older
view generally associated with the name of Von
Maurer was that the Saxons imported into this
island the fully-developed ^Iark System. The
members of the mark were freemen, and in
their assemblies decided on points of interest
to the community. The arable land was divided,
and the portions of meadow were allotted by
popular vote. According to this vieAV the
village community in historical Saxon times
had degenerated from this original type, the
overlordship of a single individual having
taken the place of the free assembly of equals.
Against this view, however, Mr. Seebohm has
made out a very strong case. His principal
points are that the Saxons in their own homes
do not appear to have cultivated land on the
Three-field System ; that as soon as historical
26 AGRICULTURAL COMMUNITY— AGRICULTURAL HOLDINGS ACTS
evidence is available we find the closest ana-
logies between the agricultural systems in Saxon-
England and that in the Romano -Teutonic
portion of southern Germany ; that there is no
sufficient time allowed for the full development
independently of the manorial from the mark
system, and that there is no reason to suppose
that the Saxons exterminated the inhabitants
and treated the land as if it were virgin forest.
The conclusion is that to a great extent the
Saxons simply adopted the system which they
found already established by the Romans during
their four centuries of occupation. This opinion
is supported by the close analogy between the
conditions of tenure of the Romano-British
eolonus and the later villani (Seebohm, p. 267).
Thus the Roman villa is made to contribute
some of the most important elements of the
late English village. But now the question
arises : — Whence were the elements of the
Roman system in Britain derived ? Did the
Romans themselves import their own agricul-
tural customs and impose them upon the in-
habitants, or did they adapt what they found
to their own uses? It is known from other
sources that the most usual course of the Romans
in their policy of parcere suhjedis was to
amalgamate as far as possible foreign customs
with their own. It is known also from his-
torical evidence that before the Roman invasion
in many parts of Britain there was a settled
system of agriculture, notably in the south-
east, and it would be in accordance with their
usual practice for the Romans to take what
they found as the basis of their own methods
of cultivation and extracting revenue from
the people. We are thus thrown still further
back, in order to discover the elements of
this system which existed in Britain before
the Roman invasion, and in the search we
discover, following the lines of Mr. Seebohm's
investigation, that through the whole period
from pre-Roman to modern times there were two
parallel systems of rural economy the essential
features of which were preserved in spite of
the Roman, English, and Norman invasions —
namely the village community in the east and
the tribal community in the west of the island.
Neither system was introduced into Britain
during a historical period of more than 2000
years. The village community of the east was
connected with a settled system of agriculture ;
the equality and uniformity of the holdings
were signs of serfdom, and this serfdom again
had itself arisen from a lower stage of slavery.
The mark Math its equal freemen, so far as this
part of Britain is concerned, is thus an unten-
able hypothesis. We have equality and com-
munity, it is true, but they are based not on
freedom but on organised serfdom. On the
other hand the Tribal System which prevailed
in the west of Britain (especially Scotland and
Wales) and also in Ireland was connected with
an earlier stage of economic development mainly
of a pastoral kind. The tribal community was
bound together by the strong ties of blood -
relationship between free tribesmen. This free
equality involved an equal division amongst the
tribesmen according to various tribal rules,
and this custom of sub-division has survived to
our own day in the "Rundale" or "run-rig"
system of the west of Scotland and Ireland. In
this brief summary many interesting points have
been omitted and many certainly require further
investigation. The origin of the size and shape
of the long -acre strips, the original object of
the irregular scattering, and the way in which
the system became solidified in such an incon-
venient form for modern requirements, can only
be alluded to. Perhaps the most remarkable
general result is that co-operation which we are
accustomed to regard as a purely modern pro-
duct is very ancient, but whether this co-opera-
tion arose, unlike most other ancient institutions,
purely from rational elements and from motives
of economy and convenience, has not yet been
the subject of sufficient investigation. Certainly
hitherto the principal danger in re-constructing
primitive societies has been to import too readily
modem ide^s and not to allow sufficiently for
what we should now call irrational elements.
[Besides the works referred to above the reader
may consult for the history of English villenage,
Six Centuries of English Work and Wages, b>
Prof. Thorold Rogers ; and for other matters
Coote's Romans in Britain. — Skene's Celtic Scot-
land ; various works and papers by Professors
Hannsen and Meitzen and Lamprecht on the open-
field system in Germany ; also the volumes en-
titled Domesday Studies. — G. L. Gomme, The
Village Community with special reference to thi
origin and form of its survivals in Great Britain.
London, 1890.] J. s. N.
AGRICULTURAL GANGS. See Gangs.
AGRICULTURAL HOLDINGS ACTS. An
Agricultural Holdings Act for England and
Wales was passed in 1875, but, not being
compulsory, remained inoperative, and was re-
pealed by the act of 1883, which is now in
force, and applies to agricultural and pastoral
holdings, to market gardens, and to holdings
let to tenants in connection with any employ-
ments. The principal provisions of this act
come under five heads : (a) Compensation for
improvements, (b) fixtures, (c) distress, (d)
notice to terminate yearly tenancy, (e) resump-
tion of holding by landlord for the purposes of
carrying out improvements.
(a) At common law an outgoing tenant is
not entitled to compensation for improve-
ments, except under a local custom. It is now
provided that every tenant on quitting his
holding shall be entitled to compensation for
the improvements made at his own expense
during his tenancy. The act enumerates three
classes of improvements. As regards the first
class (comprising the erection of buildings,
AGRICULTUKAL SYSTEMS— AGRICULTURE IN ENGLAND
27
laying down of permanent pasture, making of
gardens, etc.), compensation cannot be claimed
unless the landlord has given his consent to the
improvement. As regards the second (drainage),
notice must be given to the landlord, who has the
option of executing the improvement at his own
cost, charging 5 per cent interest. The im-
provements comprised in the third class (boning,
chalking, liming, application of artificial
manm'e, etc.) may be executed without the
landlord's consent and without notice to hini.
The sum payable for compensation is to re-
present the value of the improvements to an
incoming tenant. Any contract made by a
tenant, by vii'tue of which he is deprived of
his rights to compensation, is void.
(b) At common law fixtures on agricultural
holdings belong to the landlord. The act now
provides that engines, machines, fences, or
buildings, which the tenant affixes or erects
without being obliged to do so, may be re-
moved by an outgoing tenant, unless the land-
lord (to whom notice must be given) elects to
purchase them at a price representing their
fair value to an incoming tenant.
(c) In ordinary cases the landlord may dis-
train for six years' arrears of rent, but in the
case of holdings coming under the act the right
to distrain is now limited to one year's rent.
Some partial and total exemptions from dis-
traint are also created by the act. Live-stock
taken in to be fed at a fair price payable by the
owner cannot be distrained, if other sufficient
distress be found, and cannot in any case be
distrained for a sum exceeding the amount
remaining due from the owner for the cost of
feeding. Hired machinery, and live-stock be-
longing to another person which is on the
premises merely for breeding pm-poses, are not
to be distrained at all.
(d) The usual tenancy from year to year can
be terminated at the end of each year by a
six- monthly notice, but in the case of a holding
coming under the act, one year's notice is now
required in the absence of any special arrange-
ment.
(e) The act allows a landlord in the case of a
tenancy from year to year to give notice to
terminate the tenancy, as to part only, if the
land be wanted for labourers' cottages, or
gardens, for allotments, for the planting of
trees, for mines, quarries, or sand-pits, or for
making watercourses or reservoirs, roads, rail-
ways, etc. The tenant may, however, within
twenty -eight days after receiving the notice,
inform the landlord that he accepts it as a
notice to quit the entire holding.
See also Appendix, sub voce. An act applying
to Scotland was passed in 1883 ; it contains
provisions as to compensation, fixtures, notice, and
some matters peculiar to Scots law. As regards
Ireland, see Irish Land Laws. e. s.
AGRICULTURAL SYSTEMS. Adam Smith
uses this term in the title of ch. ix. of bk. iv.
of the Wealth of Nations, as equivalent to
"those systems of political economy which
represent the produce of land as either the sole
or the principal source of the revenue and wealth
of every country." The last part of the chapter
deals with the policy of favouring agriculture
rather than manufactures and commerce
adopted by China and ancient Egypt, Hindo-
stan, Greece, and Rome. This policy Adam
Smith treats as an agricultural system, presum-
ably because he thought it to have been inspired
by a belief that the produce of land is the
"principal" source of wealth. But the chief
object of the chapter is to explain and criticise
the system of the French "economists" or
physiocrats, in which the produce of land is
represented as the "sole" som-ce of wealth.
For an account of this system see Physiocrats.
Prof. Oncken maintains in the Introduction to
his Quesnay, that Adam Smith has done less than
justice to the "sect " of the " economists."
AGRICULTURE IN ENGLAND. The
agriculture of the Romans in England, familiar
Vv^ith writers like Columella, and supplying the
needs of an advanced civilisation, was superior
to that of their barbarous predecessors or suc-
cessors. During the Roman occupation the
land which was owned by individuals was tilled
in one of three ways : (1) by slave labour
directed by a steward (villicus) ; (2) by tenants
at produce rents (partiarii or mdayers) ; (3)
by free farmers at money rents {liberi coloni).
[See Dickson's Husbandry of the Ancients, Coote's
Jiomans in Britain, Daubeny's Lectures on
Homan Husbandly.'] It is probable that among
the Romans, the Celts, and the Anglo-Saxons,
common tillage was practised (on the question
whether the Anglo-Saxon comimmities ever, in
this country, owned the land they cultivated,
see Commons). In one essential point the
farming of the Celtic people who preceded the
Romans differed from that of the Teutonic
settlers by whom they were succeeded. Among
the Celts fresh tracts of grass-land were succes-
sively taken in by the co- partners, tilled for
corn, and then thrown back into pasture. To
this primitive form of nomadic farming the
name of " wild- field-grass husbandry " has been
given (cp. Nasse on Village Community, and
Marshall's Agriculture of the Western Counties).
In the common fields of the Anglo-Saxon com-
munities, on the contrary, pasturage and tillage
were permanently separated ; gi^ass-land always
remained pasture ; it was never broken up for
tillage. This permanent separation of grass-
land from tillage appears a retrogi-ession in
farming practice. It is the application to
England of a system which Avas better adapted
to the drier climate of the country whence the
Saxon immigrants came. Among the early
Saxons the soil had been tilled by Village Com-
munities. The land held by the association
28
AGRICULTURE IN ENGLAND
was divided into two main divisions : (1) round
the homesteads lay permanent enclosures held
as private property (cp. Tacitus, suam quisque
domum spatio cirmmdat) ; (2) beyond the village
lay the common lands of the association. This
latter portion consisted of {a) arable fields, some-
times two, generally three, and in later times
four, in number ; {h) meadowland for hay ; (c)
rough wild pasture for live stock. Of the three
arable fields one was cultivated each year for
wheat or rye, another for oats, barley, peas, and
beans, and the third lay fallow. Thus each
field every third year was fallow. Both the
meadow and arable lands were cut into strips
and annually allotted to the use of individuals
from putting up for hay or from seed-time.
Each partner held scattered intermixed parcels
in each of the arable fields, so as to equalise
the quality of the land, and to give each a share
in the diff'erent crops cultivated. The farming
was regulated by a system of "field constraint,"
or later by the Reeve of the manorial lord.
After the crops were cleared, separate use ter-
minated and common rights recommenced, the
cattle and sheep of the community wandering
over the fields before the common herdsman or
shepherd (for a detailed account of the system
see Seebohm's The English Village Community).
Oo-tillage remained a feature of English farming
after the Norman Conquest. Up to the close
of the 18th century half the soil of England was
thus cultivated, and, in 1879, 600 acres at
Stogoursey near Bridgwater were farmed on this
system (for the theories respecting the changes
effected at the Conquest, see Commons). By
the close of the 11th century, the immediate
lordship of the soil was vested in lords of
manors, subject to regulated rights of user en-
joyed by the co-operative farmers. The manorial
estate was divided into three parts, the Demesne,
the tenemental land of the associated farmers,
and the lord's wastes, over which the live stock
of the tenants grazed. The soil was tilled by
serfs, by freemen, and by semi-servile tenants,
who paid for their land by military or agricul-
tural services. Out of these grades in the rural
population sprang the freeholder, the copyholder,
and the free wage-earning labourer. The most
striking features in mediaeval farming were the
violent alternations from perpetual cropping to
barrenness, from indolence to intense labour,
from famine to feasting. Scarcely anything was
grown for markets ; nearly all the produce was
consumed at home by the producers. Arable
land exceeded grass-land. No manure was em-
ployed ; horses were scarcely ever used ; oxen
were more economical ; their food, harness, and
shoes were cheaper ; when dead they were meat
for man. The crops were wheat, oats, barley,
rye, beans, peas, flax, and hemp. Rye was the
chief grain crop. Roots, artificial grasses, and
potatoes were unknown. There was little or no
winter keep for live stock ; consequently cattle
were killed at Michaelmas, after having been
well nourished by the aftermath of the meadows,
or the stubble and haulm of the arable land,
and salted for winter provision. Wheaten bread
was a luxury of the richest. The monks were
the only pioneers of good farming. In the
change from mediaeval to modern farming two
great epochs must be noted — (A) the Tudor
period ; (B) the latter part of the 18th century.
(A) The Black Death, 1348-49-61, is said to
have destroyed half the population of the country
(see Hecker's Epidemics of the Middle Ages;
Rogers's Hist, of Prices, vol. i. ; Jessop, Coming
of the Friars, and other Essays). The mortality
resulting raised the rate of wages 50 per cent.
The attempts of manorial lords to fix rates of
wages by statute (25 Ed. III.) or to resume
personal services, caused the Peasants' Revolt
of 1 381. This proves that by 1350 the relations
of occupiers and owners had settled down into
more modern conditions, that tenant-farmers,
copyholders, and free wage-earning labourers
had replaced the serfs and villeins, that leases
had become common, that the customary ser-
vices of the peasantry were first rendered certain
and then commuted for money rents or money
wages (see Denton's England in the Fourteenth
Century, and Ashley's Econmnic History). The
effects of the Black Death were social rather
than agricultural, and as such will be noted
elsewhere. With the close of the "Wars of the
Roses and the commencement of the 15th cen-
tury, begins the era of farming for profit which
characterises the Tudor period. Feudalism was
extinct ; commerce progressed ; the wool trade
flourished ; landlords required money, not re.
tainers. Two great changes were introduced :
(1) individual for common occupation ; (2) the
conversion of arable land into pasture. (1)
Lords of manors withdrew from the agrarian
associations and enclosed their demesnes and
wastes ; common-field farmers were encouraged
to extinguish their reciprocal common rights,
and exchange solid tenements for their scattered
strips. (2) Arable land was converted into
pasture, farms were consolidated, farm-buildings
destroyed, and England became a sheep-produc-
ing country. The increase of enclosures and
decrease of tillage, combined with the dissolu-
tion of the monasteries and the absorption of
church lands into the estates of adjoining land-
lords, inflicted serious losses on thousands of
cottagers, common-field farmers, and labourers,
and produced the widespread social discontent
of the Tudor period. It is the first step in the
separation of the peasantry from their interest
in land and the extinction of the Yeomen class.
Towards the end of the reign of Elizabeth the
balance of social relations began to recover its
equilibrium. The 17 th century was a period
of theoretical progress, practically interrupted
by civil disturbances. The improvement ia
shown in (1) the rise of agricultural literature.
AGRICULTURE IN ENGLAND
29
beginning with Fitzhekbert and Tusser ; (2)
the introduction of new crops — hops (Reginald
Scot's A Per file Platform, of a Hoppe-Garden,
1574), potatoes (J. Foster's English Happiness,
1664), turnips (Sir R. Weston's Discourse of
Rushandry, 1650), artificial grasses (Hartlib's
Legade, 1652) ; (3) improved methods of culti-
vation— Gabriel Plattes advocated drill-sowing ;
Vaughan (TFater Workes, 1610) urged irriga-
tion ; Blith {Tlie English Improver, 1649) studied
drainage as a science ; (4) increased attention
to live stock — (Mascall's QovemtneTit of Cattell,
1605) ; (5) removal of feudal abuses (stat. 12
Car. XL) ; (6) increased enclosui-es (Joshua
Lee's Eutaxia toit Agrou, 1656).
(B) The work of the 18th century may be
summed up in the practical application, diffusion,
and extension of these improvements through
the work of men like TuU, Townshend, Bake-
well, Arthur Young, and Coke of Holkham.
lull was a man of scientific turn, who invented
several improvements in implements and was
the exponent of drill -husbandry. "Turnip"
Townshend introduced into Norfolk turnips and
artificial grasses. The alternations of these
crops with cereals enabled farmers to observe
what, in the absence of chemical manures, was
the golden rule of not taking two coin-crops in
euccession, largely diminished the area of fallows,
assisted them to carry more live stock and feed
it in the winter, increased their command of
manure, and consolidated the light sandy soils
of the eastern counties. Bakewell was the
founder of the grazier's art. He was the first
scientific breeder of sheep and cattle ; and the
methods ho adopted with his Leicester sheep
and Leicester longhorns were applied through-
out the country by other breeders to other
breeds. As population advanced, sheep and
cattle were valued more for their carcases than
for their fleece or their powers of draught. So
long as the common -field system prevailed,
Townshend's or Bakewell's improvements were
impossible. England, excluded from foreign
markets by wars and commercial policy, was
compelled to supply the needs of vast manu-
facturing centres from her native resources.
The common- field system, only adapted to meet
the wants of producers, was obsolete. Arthur
Young was the theoretical. Coke of Holkham
the practical, exponent of the new system of
large farms and capitalist farmers. Landlords
put themselves at the head of the movement,
expended money in buildings, gi-anted long
leases. New roads and canals opened out new
means of communication. Agricultural societies
and shows were multiplied ; surveys of the
country were made by Young, Marshall, and
the Board of Agriculture, which was constituted
in 1793 (see Board of Agriculture). Be-
tween 1760 and 1820 more than 6,000,000
acres of land were enclosed. The change pro-
duced a new agricultural and social crisis more
severe than that of the Tudor period. Tha
century closed with the miseries which resulted
from enclosures, consolidation of holdings, and
the reduction of thousands of small farmers to
the ranks of wage-dependent labourers. The
result of the crisis was to consolidate large
estates, extinguish the yeomanry and tlie peasant
proprietary, and to sever the connection of the
labourer from the soil. The subsequent
history of agriculture may be summed up in
the application of science to practice under the
conditions of land-tenure, with which we aro
now familiar. Vast capital has been cx})ended
on farm -buildings and drainage ; machinery
and steam have lessened the cost of production ;
the farmer's resources of crops, winter food,
manures, and implements are indefinitely in-
creased ; new means of transport have opened
new markets in every direction ; mechanics,
capitalists, arcliitects, geologists, chemists,
physiologists, botanists, statisticians, are now
enlisted on the side of the farmer. Smith of
Deanston (1834) and Josiah Parkes (1843)
applied their i)ractical and scientific knowledge
to drainage ; Reed's cylindrical pipes (1843),
Scrogg's machine (1843) for their construction,
and the facilities provided by pailiament for
raising loans for land improvement (1846)
enabled landloids to profit by improved science
and new appliances. New manures were dis-
covered. Nitrate of soda (1835), Lawes's
superphosphates of bone dust (1843), Henslow's
superphosphates from coprolites (1843), Odam's
ammoniacal manures (1851), revolutionised the
old rules of cropping. Inventions in agricul-
tural implements of every description were
rapidly produced. New crops such as swedes,
field cabbages, kohl-rabi, mangel-wurzel, etc.,
were introduced. More live stock is kept, and
it is better bred, better fed, and more rapidly
brought to maturity. Intelligence is more
widely diffused both among landlords and
farmers. Agricultural statistics supply new
and valuable information and record the results
of striking experiments. The constitution of
the Royal Agricultural Society in 1838, in place
of the old Board of Agi-iculture wliicli ex])ired
in 1819, marked the return of prosperity after
the disastrous interval from 1795 to 1835.
Many legislative improvements were effected,
such as the new Poor Laws, the Commutation
of Tithes, the General Enclosures Act, the En-
franchisement of Copyholds, the Settled Land
Acts, the Agricultural Holdings Acts.
Recently also (1889) the Board of Agricul-
ture {q. V. ) has been re-established. But in the
last fifteen years agriculture has ceased to pro-
gress, even if it has not retrograded, owing to the
agricultural depression, 1873-89 (Depression,
Agricultural ; Depression of Trade).
[Besides the books mentioned in the text the
student is referred to the following works : (1)
Professor Rogers's Agriculture and Prices ; (2)
30
AICKIN— ALCAVALA
Professor Kogers's Six Centuries of Work and
Wages, both which contain an immense amount
of valuable information ; (3) Prothero's Pioneers
and Progress of English Farming, which is in-
tended to meet the want of a short history of
agricultural progress, especially in the 18th and
19th centuries ; (4) and the following origitial
authorities— Arthur Young's Tours of the English
Counties (Southern, 1768, 1 vol.), Northern (1770,
4 vols.), Eastern (1771, 4 vols.),— and Tour in Ire-
land (1776-79);— Marshall'siitwaZ (Economy of the
English Counties and Scotland (1787-98, 14 vols.) ;
—Reports of the Board of Agriculture, 1793-1815 ;
— Reports of the Royal Com^missionson Agriculture,
1820, '21, '22, '33,' 36, '37, and '79-81 ;— Pusey's
Parliamentary Committee on Agricultural Customs,
1848 ;— Sir James Caird's letters to the Times as
ri?n«s commissioner in 1850-51 ; — Landed Interest,
4th ed., 1880 ; and the letters of the commissioner
of the Morning Chronicle in 1850 ; — the Parlia-
mentary Inquiry into Land Improvements, 1873 ; —
Report of the Central Chamber of Agriculture on
Agricultural Customs, 1874; — and the Agricul-
tural Returns annually published since 1864.]
R. E. P.
AICKIN, Rev. Joseph, author of Mysteries
of the Counterfeiting of the Coin of the Nation
. . . (London, 1696). As a method of "pre-
venting the said abuse for ever," it is proposed
that a licence should be required for all occu-
pations ill which the materials or implements
employed in counterfeiting coin are made, sold,
or used. F. Y. E.
AID, AuxiLiUM. A tax, which might be as-
sessed, while the feudal system prevailed, on the
knight's fee on three occasions : (1) when the
king made his eldest son a knight ; (2) when
the king gave his eldest daughter in marriage ;
(3) if the king were made captive, to ransom
his person (Dowell, History of Taxation in
England, vol. i. p. 21). Used also in same
sense as Subsidy (q.v.)
AID, Rate in. See Local Taxation.
AIDES, CouR DES. The aides, or indirect
taxes on commodities, were first imposed in
France by the States-general in 1355. Instead
of entrusting their administration to the existing
financial court, the chambre des comptes (see
CoMPTES, Chambre des), a new body was
created called the cour des aides. Before long
its functions became almost solely judicial, the
decision of disputes arising about the Gabelle
on salt and other indirect taxes. Its jurisdiction
was curtailed by the usurpations of the conseil
du roy, and was frequently disputed by the
rival chambre des comptes. It continued to
exist as one of five cours souveraines till it was
swept away with the other institutions of mon-
archical France by the Revolution.
[Gasquet, Precis des Institutions politiques et
sociales de Vancienne France.] r. l.
AIKIN, John, M.D. (1747-1822) brother of
Mrs. Barbauld and author of General Biography,
Works of th^ British Poets, etc., editor of Bods-
ley's Annual Register (1811-15), the Athenmum,
etc., published in 1795 his Description of the
Country from 30 to 40 miles round Manchester,
giving details of commerce, manufactures, popu-
lation, in addition to physical features, history,
and biography of leading men — a work still
valuable for the history of the Industrial
Revolution {q.v.) j. b.
AISLABIE, John, bom December 1670, sat
as M.P. for Ripon 1695-1702, then for North-
allerton, and for Ripon again from 1705 to his ex-
pulsion. He was chancellor of the exchequer in
the Sunderland ministry in 1718, and supported
the South Sea scheme for paying off the national
debt. When the bubble broke in 1720, a secret
Committee investigated his connection with the
company and he was expelled the House of
Commons. He died in 1742. He wrote :
Speech upon his Defence in the Hou^e of Lords
against the Bill for raising Money upon the Estates
of the South Sea Directors, London, 1721, 4to (three
editions ; also in Dutch). — Second Speech, London,
1721, 4to. — Memorial of the Contractants tenth
Mr. Aislabie in a Letter to Lixiniv^ Stolo, London,
1721, 8vo. H. R. T.
ALBA FIRMA. The term applied to rents
reserved by the crown in silver, or white money,
as opposed to rents reserved and payable in
kind. 2 Coke's Institutes, 19. j. e. o. m.
ALCAVALA. A tax formerly charged in
Spain and its colonies on all sales of property.
The name, of Moorish origin, had existed from
very early timeS ; we possess documents of the
12th and 13th centuries in which it occurs ;
but it appears to have been then applied to a
species of seigniorial due, or, perhaps, sometimes
to a tax levied to meet a special emergency and
confined to certain places. Alfonso XL, 1342,
imposed it on the whole of Castile and Leon,
his object being to procure money for the war
with the Moors. At first only temporary, the
cortes of Burgos, 1377, granted it to Henry II.
without limitation of time. It was a duty,
originally of 10, afterwards of 14 per cent on
the selling price of every sort of property,
whether movable or immovable, chargeable as
often as the property was sold. In Adam
Smith's time it had been reduced to 6 per cent.
It continued to exist down to the invasion of
Spain by Napoleon, except in Catalonia and
Arragon, those provinces having purchased ex-
emption from Philip V. It violated the fourth
of Smith's canons of taxation, taking and keep-
ing out of the pockets of the people more than
it brought into the treasury of the state. It
was, besides, a great annoyance to manufac-
turers, merchants, and shopkeepers who, for
the purpose of its collection, were subjected to
the continual surveillance of the tax-gatherers.
Ustariz attributes to it the ruin of the manu-
factures of Spain ; he might, says Smith, have
imputed to it also the decline of agriculture, aa
it was imposed not only on manufactures, but
on the rude produce of the land.
ALCOCK— ALIENS
31
[Colmeiro, Historia de la Econoviia Poliiica en
Esjpafla, vol. ii. p. 550 ; Smith, Wealth of Nations,
bk. V. ch. ii.] j. k. i.
ALCOCK, Rev. Thomas, was born in 1709,
and died in 1 798. He graduated M. A. at Oxford
(Brasenose Coll.) in 1741. He was presented to
the vicarage of Runcorn in Cheshire, and printed
some small pieces, besides the following ably
written pamphlets : — Observations on the Defects of
the Poor Laws, and on the causes and consequences
of the great increase and burden of tJie Poor,
London, 1752, 8vo (an attack upon compulsory
provision). — Remarks on two Bills for the Better
Maintenance of the Poor, London, 1752, 8vo. —
Observations on that part of a late Act of Parlia-
ment which lays an Additional Duty on Cyder
and Perry, Plymouth, 1764, 8vo. (The duty
of 4s. per hhd. on cider imposed in 1763 was
repealed in 1766.) h. r. t.
ALEATORY (derived from the Latin alea, a
die) means uncertain, risky. The more uncer-
tain any prospective advantage appears, the
less ceteris paribus will be given for the chance
of obtaining it. In other words a greater risk
must be compensated by a prospect of greater
gain, the purchase -money being the same.
Thus £100 stock bearing a fixed interest, say
£3 per cent, will fetch a lower price the less
safe the security is. A person investing a
certain sum of money, say £100, will expect a
higher interest according as the investment is
more speculative. It must not be supposed
that the diminution of value due to uncertainty
admits of being determined by any actuarial
calculation of probabilities. For the deprecia-
tion depends not so much on the real imcer-
tainty as on the purchasers' estimate of the
risk. On the one hand, as Prof. Sidgwick
points out {Principles of Political Economy, bk.
ii. ch. vi. § 2), "ignorant, rash, and credulous
persons investing in novel undertakings are
believed to get, on the average, considerably
less interest than if they had lent their capital
on perfectly good security." On the other
hand "there may be and often is something to
be allowed as a charge on account of uncer-
tainty" . . . considered as " an evil in itself."
... A railway stock that is certain to pay 4 per
cent will sell for a higher price than one which
is equally likely to pay 1 or 7 per cent, or any
intermediate amount " (Prof. Marshall, Principles
of Economics, bk. vi. ch. vi. § 5). Similar prin-
ciples apply to the influence of risk upon the
remuneration of different occupations. Adam
Smith's remarks upon the "natural confidence
which every man has more or less not only in
his own abilities, but in his own good fortune "
( Wealth of Nations, bk. i. ch. x.), do not require
to be quoted. Prof. Marshall thinks that "in
the large majority of cases the influence of risk is
in the opposite direction " {loc. cit.), tending to'_
increase the remuneration by an amount greater
than the insurance against risk.
For a fuller discussion see Peobability and
Risk as an Element of Cost of Production.
F. Y. E.
ALE-TASTER. This was the title of an
officer formerly appointed under the Assize of
Bread and ale (1267) to inspect the quality and
regulate the sale of those commodities in every
borough and manor. In some parts of England
the ofiice still survives, but its functions have
become purely formal. r. l.
ALGAROTTI, Francis, born at Venice
1712, died at Pisa 1764. He was learned and
very witty, and owes his reputation to his liter-
ary merits and his long personal intercourse and
friendship with Frederick II. of Prussia, who
ordered a monument to be erected at Pisa to
his memory with the epitaph :
Algarotto . OviDii . Aemulo
NeWTONI . DiSCIPULO
Fridericus . Magnus
He was a great admirer of English science,
English literature, and English political institu-
tions. As an economist he -wrote but little —
An Essay on Commerce and a short pamphlet
on the advantages of developing Africa com-
mercially rather than Asia or America, This
little tract contained an idea which -was utilised
thirty years later by the African Company,
directed by Sir Joseph Banks, at whose expense
the famous traveller Mungo Park undertook his
expedition. m. p.
ALIENI JURIS. Persons are alieni juris
if they are not fully capable of binding them-
selves by contract or to alienate property, alien-
able in itself, e.g. infants and man-ied women.
They are opposed to persons sui juris, e. s.
ALIENS. The subjects or citizens of a
foreign state. The disabilities of aliens have
in England been almost entirely removed. Up
to the year 1870, aliens were unable to acquire
any land either by descent or purchase, and
even natural-born subjects could not make a
title to land by descent from alien ancestors.
The only disqualification which still remains,
as regards the ownership of property, arises
from the rule of law that no alien may be
owner or part OAvner of a British ship.
An alien etumy, though he can make a valid
contract in England, has, during tlie continu-
ance of the war, no right to enforce it by action,
and if the war lasts long enough his claim may
thus be barred by the Statute of Limitation.
An alien cannot be a member of cither house of
parliament, and has no parliamentary vote ; on
the other hand he has the privilege of serving
on juries if he has resided in England or Wales
for upwards of ten years. An alien involved
in civil or criminal litigation in England was
up to the year 1870 entitled to a jury "de
medietate linguse" — i.e. a jury one half of
which was composed of foreign subjects.
An alien may become a British subject by
naturalisation, either by special act of parlia-
ALISON— ALLOTMENT
ment or by a certificate of the Secretary of
State. The law as to Naturalisation is at
present regulated by the acts of 1870 and 1872,
the effect of which is to confer on naturalised
foreigners all the rights and privileges of a
British-bom subject. A candidate for natural-
isation must have resided in the United King-
dom or served under the crown for at least five
years, and must declare his intention to estab-
lish his permanent residence in the United
Kingdom or to take service under the crown.
He must also swear the oath of allegiance.
E. S.
ALISON, Sir Archibald, first baronet, son
of Kev. A. Alison (bom 1792, died 1867), was
educated at Edinburgh University. A paper
written by him in reply to Malthus determined
his profession as a lawyer. Alison was called to
the Scottish bar December 1814, and appointed
advocate-depute in 1822. He travelled on the
Continent, wrote much in Blackwood, was made
Sheriff of Lanarkshire in 1834, and published
his voluminous History of Europe (1789-1852),
full of economical reflections, some biographies,
an autobiography, and other works. The Act
restricting the paper currency, the Eeform of
1832, and the abolition of the com laws were his
special abominations. Few, if any, writers have
insisted with more vehemence on the advan-
tages of an increased production of the precious
metals than Alison {History of Europe, ch. 1.
§§ 33-40, 1851-52). It was to the decrease
in the supply of gold and silver and to the
shrinkage in the circulatory medium thus
caused, that he ascribes the decline and fall of
the Roman Empire. Hence it was natural that
Alison should entirely approve of the Suspension
of Specie Payments in this country carried out
in 1797, and the substitution of a paper
currency during the severe struggle of the
early years of this century (see "Walker, Money,
pp. 81-83, 349, 350, New York, 1883). He
wrote :
The Principles of Population and their Connec-
tion with Human Happiness, Edinburgh, 1840, 2
vols. 8vo (dull and wordy ; the relations between
population and subsistence are elaborately set
forth). — Free Trade and Protection, being a Tract
on the Necessity of Agricultural Protection, Edin-
burgh, 1844, 8vo. — England in 1815 and 1845,
or a Sufficient and Contracted Currency, Edin-
burgh, 1845 (4th ed. IM1).—Free Trade and a
Fettered Currency, Edinburgh, 1847, 8vo. — Essays,
Edinburgh, 1850, 3 vols. 8vo (many economical).
H. R. T.
ALISON, William Pultenet, M.D., pro-
fessor of the practice of medicine in Edinburgh,
brother of the historian, is best known by his
Observations on the Management of the Poor in
Scotland, 1840 (see Carlyle's Past and Present),
and his Remarks on the Report of the Commis-
sioners on the Poor Laws of Scotland, 1844.
He gives extracts from the evidence, drawing
special attention to the unemployed. In opposi-
tion to T. Chalmers, and indeed to the Report
itself, he pleads for an extension of legal relief.
He wrote a dissertation on the Reclamation of
Waste Lands (1850), in which he suggests this
as a proper field of employment for convicts
and paupers. J. b.
ALLMEND. See Agricultural Com-
munity.
ALLONGE. A slip of paper fastened to a
bill of exchange to receive indorsements for
which there is not space on the bill itself ; "as
a protection against fraud, and in compliance
with the provisions of some of the foreign codes,
the first of the indorsements in connection with
it is sometimes so made that it begins on the
biU and ends on the allonge. There is no legal
limit to the number of indorsements."
[Hutchison, The Practice of Banking, vol. i. p.
188.]
ALLOTMENT. A small portion of land
cultivated by a labourer or artisan in his leisure
hours. There is ample evidence to show that
previous to the Tudor period the labourer
and the artisan had usually a piece of ground
attached to their homes. A series of economic
changes and the policy of the land system gradu-
ally resulted in the separation of the labourers
from the soil (see Cliffe Leslie's Land Systems
of Ireland, England, and the Continent, London,
1871 ; Nasse's Land Community of the Middle
Ages, London, 1871 ; Rogers' Six Centuries of
Work and Wages, London, 1884). An attempt
to check this movement was made by the 31
Eliz. c. 7, which prohibited the building of any
cottage without an allotment of four acres. The
inclosure acts of the 18th century deprived
many labourers of their land, though the ad-
vantages of allotments were recognised, in 1795,
by a select committee of the House of Commons.
The Select Vestry Act, 1819, empowered the
churchwardens and overseers of a parish to let
land to industrious inhabitants and the 1 &
2 Wm. IV. c. 42 ; 1 & 2 WHl. IV. c. 59 ; and
2 "Will. IV. c. 42 contained similar provisions.
The Allotments Committee of the House of Com-
mons in 1843 recognised the importance of
allotments, but the "Women's and Children's
employment committee of 1868 reported that
but sparing use had been made of the facilities
granted by the legislature. The total number
of separate detached allotments under one acre
existing in 1890 was 455,005. The number
of other small holdings up to 50 acres was
409,422 (see Return of Allotments and Small
Holdings, 1890, c. 6144).
In 1887 an act (50 & 51 Vict. c. 48) was
passed which empowers a sanitary authority on
the petition of six ratepayers to purchase land
for allotments not exceeding one acre each. If
the land cannot be obtained by agreement, the
county council may authorise its being taken
compulsorily, the price being determined by arbi-
tration. All the conditions of tenancy are to be
i
ALLOWANCE, TARE— ALLOWANCE SYSTEM
33
fixed by the local authority, but no buildings
save those mentioned in the act can be erected
on the land. On the economic advantage of
allotments see in addition to the authorities
above quoted, Report of the Poor Law Commis-
sioners, 1834 ; English Land and English Land-
l(yrds, by G. C. Brodrick (London, 1881). As to
Bmall holdings, see Report of Select Committee
H. ofC, 1890.
[J. S. Mill objects. Principles of Political Econ-
omy, bk. ii, ch. xii. § 4, to the allotment system.
For account of the law previous to 1886, see The
Law of Allotments, by T. H. Hall (Loudon, 1886).]
J. E. C. M.
ALLOWANCE (Tare, or difference between
Gross and Net). A commercial term signify-
ing the deduction made from the gross weight
of the goods, either to represent the weight of
the package or refuse, or a particular deduction
established by custom of certain trades, districts,
or countries. 2\ire has been more especially
described as the allowance for the weight of the
box or package, or the cart or waggon in which
the goods are conveyed ; and tret as an allow-
ance for waste, but the former is the word more
generally in use ; and gross weight and net
weight, live weight and dead weight, and
allowance in converting from one to the other,
are busiuess terms commonly understood. One
instance of allowance will sulfice. The coal
merchant receives from the colliery 21 cwts. of
coal from the pit for every ton purchased by
him, while he sells to the cousumer but 20
cwts. The difference is the allowance, or tare,
to cover waste in transhijjment, cartage, and
screening. In many other industries similar
allowances are made.
ALLOWANCE SYSTEM. The allowance
system was a conspicuous feature in the adminis-
tration of the poor law at the very end of the
last and beginning of the present century. It
was a form of out-door relief (see Poor Law),
and may be defined as relief given to those em-
ployed by individuals at the average wages of a
district. It was thus, in effect, an attempt on
the part of the state to regulate wages, and its
history gives an illustration of the results which
political economy leads us to expect from such
interference. It is not too much to say that in
the brief space of forty years, the allowance sys-
tem sent large areas of land out of cultivation,
forced capital into less profitable employments,
and caused a demoralisation from which the
labourers in some rural districts have not yet
recovered. The very class which it was designed
to benefit has suffered most from its action.
It originated with the administrative author-
ity, viz. the justices of the peace. These derived
or assumed their powers under 5 Eliz. c. 4,
which authorised them to fix wages, taken in
connection with 3 & 4 W. and M. c. 11, and 9
Geo. I. c. 7, which empowered them to order
and direct relief. The system in practice dates
VOL. 1.
from 6th May 1795, when the Berkshire justices
resolved to make up by relief from the rates
the difference between actual wages and what,
in their judgment, was a minimum or "fair"
rate for the county. In fixing this last, the
price of bread and the size of the family were
to be taken into account, e.g. when bread was
at Is. 8d. the gallon, a single man was to
receive in all 4s. 6d., a man and wife 6s. 8d., man,
wife and five children 17s. 6d. This resolu-
tion is often called the ** Speenhamland Act,"
from the place of meeting of the justices, and
the scale drawn up for Berkshire was used as a
model by most of the southern counties. It
may be doubted how far such action was even
legal, as, by 9 Geo. I. c. 7, relief had been
prohibited to those who refused to accept it in
a workhouse ; but it was supported by public
opinion, and confirmed in principle the next
year by 36 Geo. III. c. 23, which repealed the
prohibitory clauses of 9 Geo. I. c. 7, and
empowered justices to order relief to any indus-
trious poor person at his own house or home.
The effects of the system were soon seen.
Within forty years of the passing of 36 Geo.
III. c. 23 it seemed probable that rents Avould
cease altogether to be paid, and in one parish,
Cholesbury, Bucks, the rates had actually
swallowed up the rental. Where the leasehold
system threw the burden temporarily on the
occupier, no solvent tenants were forthcoming
owing to uncertainty as to the amount which
they might be called upon to pay, for in some
cases the rates increased threefold in twenty
years. In several counties (e.g. Kent, Cambridge-
shire, Leicestershire) rent was gradually but
surely disappearing.
It might seem, at first sight, as if profits
would.be raised by a system which forced non-
employers to contribute to the wages of labour.
But in agriculture any such advantage was
more than counterbalanced by an increase in
the cost of labour, due to its diminished eflSci-
ency. The motive to industry being removed
whsn the reward of the labourer no longer
depended on his exertions, industry itself dis-
appeared. In manufactures, on the other hand,
where piece-work was generally adopted, a closer
supervision exercised, and a larger proportion
of non-employers liable to the poor-rate, the
system increased profits largely.
Both in agi'iculture and in manufactures the
wages of labour were lowered, partly by the
great diminution of efficiency, partly by the
increase of population which was stimulated
under a system which placed the married man
with a family in a better position than the single
man, and the mother of illegitimate children
than the honest woman, partly, again, because
employers were deterred from employing non-
paupers by the consideration that they were
thus reducing their neighbours' labour bill.
More important still was the moral effect of the
34
ALLOY
system upon the labourers. Industry and
prudential foresight were extinguished when
the possession of property was a bar to employ-
ment, and the position of the thriftless was
made an object of envy to the careful : parental
responsibility, filial obligation and affection ^ere
discouraged ; drunkenness, vice, and crime grew
apace ; and the deterioration of a large part of
the labouring population in the districts in
which the system was adopted became matter
of common knowledge. Had it continued in
force but a few years longer the whole social
fabric must have crumbled away. The rela-
tions between employer and employed were
embittered to an extent which showed itself in
constant riots ; in the southern counties the
labourers established a reign of terror. Mean-
while the production of wealth fell off as the
rates rose, population grew apace, and civilisa-
tion went backwards.
Allowances in aid of wages were gradually
abolished as regards men, by the orders of the
poor-law board restricting or prohibiting out-
door relief to the able-bodied. It may, how-
ever, be questioned whether the same results
are not now produced in the case of women by
a loose administration of the law.
[For a full account of the allowance system, see
Poor- Law Commissioners' First Eeport, 1834
(reprinted by order of House of Commons, 1885).
— Nicholls, Hist, of the English Poor Law. —
Eden's State of the Poor. — Fowle, The Poor Law
(Macmillan ; English Citizen Series).] L. r. p.
[The following statement, taken from the obitu-
ary notice of the Rev. Henry Playsted Jeston,
late perpetual curate of Cholesbury, Bucks, in the
Guardian newspaper of 3d July 1889, gives a vivid
picture of the effects of the allowance system under
the old poor laws.
"In 1830 the parish (Cholesbury), under the
old poor law, was on the verge of bankruptcy. In
1831, out of 98 who had a settlement in the parish
(the total population being then 127, and in 1881
being 99), there were no less than 64 in receipt of
relief, and the poor-rates alone exceeded 24s. in
the pound. As the result, the glebe, as well as
all the land in the parish save some sixteen acres,
was thrown out of cultivation, and the parish had
to exist for some time by means of rates in aid
levied on other parishes in the hundred. This
state of affairs, together with a series of letters
which Mr. Jeston wrote to the Times, and his
evidence before the poor-law commission, had a
considerable share in bringing on the present poor
law. Before his death Mr. Jeston saw his parish-
ioners in a fairly prosperous condition, not one of
them being in receipt of relief from the rates."]
ALLOY. With regard to the derivation of
the word "aUoy " it may be sufficient to point
out that the old French alei was retained in
the Norman as alai or allai, whence our word
"allay." Through the erroneous fancy that
the French aloi was equivalent to d loi (to law),
the word meaning originally simple ''combina-
tion union" came to be used specially of the
mixing baser metal with gold and silver in
coin so as to bring it to the recognised standard,
and hence of the standard itself. The French
word comes from alleium or alaium, the ori-
ginal being probably adligo (allego), to bind to.
The meaning of the word alloy in mint lan-
guage is different from that ordinarily accepted
in scientific phraseology, as it is applied to the
base metal added to a more precious one, and
not to the mass — which may be either molten
or solidified — of the mixed metals.
The reasons for the use of alloys for the
coinage in preference to pure metals are some-
what complex, and many conditions have to be
taken into consideration in choosing the base
metal to be added to the precious metal. The
resulting alloy must be of good colour, must be
ductile, and must not exhibit any traces of
brittleness. In the case of gold, silver forms
a very ductile alloy, but then it sensibly lowers
the colour of the gold. Copper, on the other
hand, heightens the tint and has the advantage
of yielding a durable as well as ductile alloy.
A triple alloy of gold, silver, and copper may
be made of delicate tints, but a triple alloy is
difficult to assay, and it is undesirable to com-
plicate the^ accounts of a mint by the use of
two precious metals and a base one in the same
alloy, therefore a single base metal — copper —
is almost universally used.
It has long been known that the union of
two or more metals produces a result which
often differs more in physical properties from
either of its constituents than these do from
each other. Copper and tin, for instance,
yield alloys of a wide range of properties and
there is hardly any fact more remarkable in
the whole range of metallurgy than the enor-
mous influence exerted on a large mass of metal
by a small quantity of another metal as
metalloid.
The properties which are found the most
desirable to be secured are: — (1) ductility;
(2) durability ; (3) uniformity of composition.
The alloys actually used for coinage at the
present time are not numerous, but looking
back over the numismatic history of the world,
endless combinations of the precious and base
metals will be found to have been used. Pure
gold and silver have been used, either singly or
alloyed with each other, or alloyed with copper,
the latter metal in turn being sometimes em-
ployed with only infinitesimal additions of
precious metal.
In the case of both the gold and silver
currency of this country the adjustment of the
relative proportions of the precious and the
base metals was undoubtedly guided by the
particular systems of weights used. To take
the silver coinage first, the fineness of alloys
of this metal has from very early times been
computed by divisions of the troy Poitnd,
which weight is still retained in weighing
ALOD— ALTERNATIVE STANDARD
35
gold and silver. The computation of the
standard fineness for alloys of gold is based
on the singular ''carat" system of weights,
the origin of which is popularly believed to
have been derived from the weight of an
oriental plant seed. It appears more probable,
however, that it came from the ^^ Keralion," a
small Greek weight (see also Peiuot).
The standard ef fineness of the alloy used at
the present time for tlie British gold coinage is
22 carats, or 91 6 '66 i)arts in 1000 of pure
gold ; that for the silver coinage is 925 parts
pure silver.
The accompanying table shows the variations
in the standard of fineness from the reign of
Henry III. to the present time. The coins in
circulation in France from the beginning of
the 17th to the end of the 18th century varied
in fineness from 900 to 982, when, however, the
decimal system of weights and measures was
fairly established, coins were issued in con-
formity with it. The law of the 28th Ther-
midor, an. iii. (1796), enacted that the
standard fineness of the silver coins should be
900, and eight years later a law prescribed the
coinage of gold pieces of twenty francs, the
standard of wliich was also 900. A subse-
quent law lowered the standard fineness of
silver coins to 835. By the Monetary Con-
vention of 1865 concluded between France,
1250 7275 7325 13
75 1425 14
75 1525
7550
1600
1650
^7000
Z 925
>
Z
Ul
EOWARD.I.
EDWARD.II
Q
cr, <
RICHARD.il
HENRY.IV.
HENRY.V.
ii
>
1
h
>
d
1
rTi
7550 MARY
ELIZABETH
1584
1601
JAME8.I.
CHARLE8.1
IS
t
._.!....
—
99
" 916-66
958-3
I
..__
^
...
is50
111
CO
3 700
O
o
Ul
cc
'^ 550
u.
O
CO
H
t ann
1
833-3'^y \
i
500 s !j
2™"
250
333-3^- j
1
250 1 1
Belgium, Italy, and Switzerland these stand-
ards of fineness were adhered to, and several
other countries have adopted the same mone-
tary system. In Germany the standard fine-
ness of both gold and silver has been fixed at
900, and the same standard has been adopted
in the United States for both metals.
It will be evident, from the table as Avell as
fi'om the foregoing remarks, that the two really
important alloys used for the coinage of gold
have respectively the standard fineness of
916-6 and 900, Avhile the standard 900 is
now more widely used than any other, Eng-
land alone employing 925, which still maintains
the connection Avith Saxon coins. c. r-a.
ALOD, Alodial Land. When the German
tribes overran Europe in the 5th century,
they distributed among themselves the con-
quered lands. In England, owing to the dis-
placement of the conquered population, this
distribution was probably more complete than
elsewhere. Each toAvnship or village received
an allotment of land, the surplus being the
Folkland, or property of the tribe. Within
the village a further distribution took place
among the free heads of households, each of
whom had a homestead as private property,
while the arable and pasture land remained for
some time in common occupation, being annually
distributed for the harvest, whether of hay or
corn. Land which was held in se]»arate owner-
ship was called ethel or alod. The derivation
of the latter word is disputed, but it is probably
connected with lot, and thus expresses the
original method of distribution. In the 11th
century we find the term applied in England to
all land held independently, without rent or
sei-vice to a superior. It thus included both
the original cfJirl, and also Bocland, or private
estates carved out of the folkland for the benefit
of individuals. After the Norman Conquest
alodial land ceased to exist, owing to the general
introduction of feudal or conditional tenure.
[See Stubbs, Constitxdional History, vol. i. ch.
V. — Kemble, Saxons in England. — Freeman, Nor-
man Conquest, vol. i.] R. L.
ALTERNATIVE STANDARD. It has
been urged by monometallists that a Standard
OF Value formed of two metals is not really
a double, but only an alternative standard,
debtors, where payment is permitted in either
metal, naturally electing to use the cheaper
36
ALTERNATIVE STANDARD— ALTHUSIUS
in discharge of their obligations. Jevons
says on this subject, referring to the countries
included in the Latin union— "When silver
is lower in price than 5s. Q^^d. per ouiice,
silver becomes the standard ; when silver rises
above this price, gold takes its place as the
real measure of value. So far the English
economists are no doubt correct ; but, in the
first place, it does not follow that the prices
of commodities follow the extreme fluctuations
of value of both metals, as many writers
have inconsiderately declared. Prices only
depend upon the course of the metal which
happens to have sunk in value below the legal
ratio of 15^ to 1. ... At any moment the
standard of value is doubtless one metal or
the other, and not both ; yet the fact that
there is an alternation tends to make each vary
much less than it would otherwise do. It
cannot prevent both metals from falling or
rising in value compared with other commodi-
ties, but it can throw variations of supply and
demand over a larger area, instead of leaving
each metal to be affected merely by its own
accidents." 3foney, by Prof. W. S. Jevons, pp.
137-140.
It is alleged, on the other side. (1) That the
currency may indeed alternate, in greater or
less degree, under the influence of a difference
of ratio in another bimetallic country ; but
that this does not affect the standard, nor the
public right under a bimetallic law to have
either metal coined at the legal ratio, and to
pay one's debts in either at one's own choice.
(2) That, as to internal action, no one has yet
shown how the debtor can obtain one metal at
a "cheaper" rate than the other, inasmuch as
it is inconceivable that the seller, who can get
silver coined into a fixed number of francs or
shillings at the mint, would be content to take
a smaller number from any one else.
(3) That, as to external action, though it were
true, which bimetallists maintain it never was,
that either metal was wholly absent from the
circulation, yet the effect of the law on mono-
metallic countries would, and always did re-
main intact, the open mint, and the right of
sending either metal to be coined into the
current money of the bimetallic state, making
it impossible that the metal so sent could
materially fall in price in the monometallic
state remitting it ; because such remittance
must always be realisable at the rate of ex-
change current between the two states ; and
that accordingly the price (of silver, for example)
in the English market, neither did nor could
fall below 6s. O^fd., except so far as it might be
modified by the current rate of exchange.
(4) That, consequently, a par of exchange was
established and maintained between all silver-
and gold-using countries. (See Bimetallism ;
Guinea, Rating of ; Standard of Value).
These are the contentions on both sides.
[The difficulties experienced in keeping two
metals in circulation are described in Sir I. New-
ton's three reports " Representations on the Sub-
ject of Money," 1711-1712, 1717. Private reprint
of Tracts on Money, collected by J. R. M'Culloch
(London, 1856), pp. 269-279. The two principal
of these reports are also reprinted in Report and
Proceedings International Monetary Conference,
1878 (Washington, 1879), pp. 317-321.— Also
Investigations on Currency and Finance, Prof.
W. S. Jevons.]
ALTHUSIUS, Johannes (1557-1638), a
German writer, born at Diedenshausen (Witgen-
stein-Berleburg). He is said to have studied at
Geneva under the influence of Calvinistic
teachers. In 1586 he became professor of law
and ethics at Herborn (Nassau), and in 1604
syndic of the free town of Emden. This honour
was conferred upon him on account of his
treatise on politics ; in his new position he
struggled successfully against the pretensions
of the nobility and the count of Eastern Fries-
land. He died at Emden in 1638. His
Politica is the first systematic treatise on that
subject written in Germany ; he regards politics
as the art of constituting social life — " symbiotic
art." The fipundation of the organisation of
"social life" is an express or tacit contract
between associated men. As all rights there-
fore proceed from the people, they have the
right of resistance against usurpations of
authority. " Even if the people would like to
do so, they could not transfer or alienate the
sovereign power to any one else, just as no one
can give to another the physical life he himself
has." In consequence of these opinions Althus-
ius has been ranked among the "monarcho-
machic school" (George Buchanan, 1579,
Languet, 1579 ; Boucher, 1591 ; G. Rossaeus,
1590 ; Hotomannus, 1573 ; Mariana, 1599 ;
Althusius, and John Milton, 1651), and was
assailed by H . Arn isaeus, De autoritate principum,
1611 ; Grotius, De jure belli ac pacts, 1625,
I. ch. iii. § 8 ; Conring, De auctorihus politicis,
and Boecler, Institutiones polit., Argentor,
1674, II. ch. i. p. 102. Though forgotten in
the latter half of the 17th century, this work
seems to have had considerable influence upon
the formation of the political ideas of Rousseau
(compare Gierke, p. 201). The social and
economical ideas contained in it are remarkable,
it analyses the historic forms of political associa-
tions in the order of formation, and distinguishes
between associations for the realisation of private
common interests (" peculiare commune "), both
natural (the family) and civil (corporations),
and associations for public interests (the
"politeuma") both particular (parish, town,
province) and universal (the state). In the
latter resides the supreme power, controlled,
however, by ephori, and exercised by supreme
"magistratus," whose creation is effected by a
contract ; and the different forms of government
ALTRUISM— AMERICAN SCHOOL OF POLITICAL ECONOMY
37
are only as many species of supreme magistrates,
be they monarchical or polyarchical.
The views held by Althusius on economic
policy and in respect of which he follows Botero,
are contained in the 32d chapter {De administra-
tione mediomm ad vitce socialis commoditates
necessariorum). Trade enriches, as is shown by
the example of Venice and Genoa, the sovereign
and the people. Tlierefore the sovereign must
procure a steady supply of all things needed for
the public weal, secure the public from enhance-
ment of prices, prevent the importation of
dangerous or immoral commodities, and the ex-
portation of provisions. The establishment of
staples and the maintenance of Gild regulations
are recommended by Althusius, but monopolies
should only be allowed in case private means are
not suflBcient or security is wanting. Among
monopolies he reckons combinations of artisans.
His definition of monopolies has been quoted by
Edw. MissELDEN, Free Trade, or, the Meanes to
make Trade florish, 1622, ch. iii. p. 59.
Politica methodice Digesta, Herbomae, 1603,
2d ed., Groningae, 1610 ; 3d ed., Arnheim, 1617 ;
8th and last ed., Herbomae, 1654. His other
works are : Jurisprudentia Bomana, Herbomae,
1588 ; Dicceologicce lihri tres totum et univer-
sum jus, quo utimur, methodice complectentes, Her-
bomae, 1617 ; Fraucofurti, 1618.— See Otto Gierke,
Johannes Althiisiics und die Entwicklung der
naturrechtlichen Staatstheorien, Breslau, 1880,
and Friedrich Althaus, Theodor Althaus, ein
Lebensbild, Bonn, 1888. 8. b.
ALTRUISM. Altruism is an ethical term
which is often used in economic discussions on
Socialism, Laissez - Faire, the functions of
government, and generally questions of distribu-
tion. Altruism is the opposite of indi\adualism
or egoism, and embraces those moral motives
which induce a man to regard the interests of
others. Most English economists have ^v^itten
with the "regulative idea" that self-interest
should at least provisionally and hypothetically
be regarded as the mainspring of economic
activity. In recent times, however, the tend-
ency, especially under German influences, has
been to give more weight to altruistic impulses.
[Compare Dr. Sidgwick's Principles of Political
Economy, bk. iii. ch. ii. — and Prof. Marshall,
Principles of Economics, bk. i. ch. vi.] j. s. N.
AMANA SOCIETY, The, a communistic
society and religious sect ( JVahre Inspirations
Gemeinden), consisting of Germans, established
at Amana, Iowa Co., Iowa, U.S.A. More than
a century after its foundation in Germany the
sect, in 1843, emigrated to Ebenezer near
Buffalo, and there adopted communism. The
society thus formed eventually removed to
Amana, where it still (1890) exists (see Com-
munism). E. c.
AMERCEMENTS. The mediaeval history
of pecuniary penalties possesses an economical as
well as a legal interest. Even in the royal
courts of justice the decision of criminal or
civil causes was not the sole object aimed at.
For it was also the duty of the court to assess
and account for tlie various fines and amerce-
ments found to be leviable in the course of the
sitting. These payments form a regular portion
of the issues of the County, and are duly ac-
counted for by the sheriff at the exchequer.
Their amount was limited by the clause of the
Great Charter declaring that no free man shall
be amerced except according to the measure of
his offence, and protecting from seizure the
freeman's house and household goods and the
villein's wainage. The local seigneurial juris-
dictions imitated the royal courts in making a
free use of pecuniary penalties, but there is
reason to believe that the amercements in-
flicted by them were of a far more extortionate
character. The clause in Magna Charta gave
little or no protection to the Villein, and the
Steward or Rkevk who presided in these local
courts, naturally found their chief interest in
raising as much money as possible by way of
"profits of the court," a regular item in
manorial accounts. A glance through Prof.
Maitland's Select Pleas in Manoi'ial Courts
brings out the fact that the regular punishment
for manorial offences, such as bad ploughing, or
not coming to wash the lord's sheep, was an
amercement, amounting in some cases to a
tax of 6s. 8d. on the township. Besides this, fines
were levied for breaking the Assize of Beer,
for trespassing on the lord's wood, for fighting,
and for a large number of other reasons. The
amount of these must frequently have been
burdensome. The oppressive reeve is expressly
reproved in the Ayenhit oflnwyt (written 1340) ;
in his Parsons Tale Chaucer devotes a long
passage to the blame of extortionate amerce-
ments ; and the same tone can be noticed in
Piers Ploughman, passus ix. (C. text) and in
Wyclif s writings.
{Select Pleas in Manorial Courts, vol. i., edited
for the Selden Society by F. W. Maitland, 1889.
— Chaucer's Canterbury Pilgrims ; The Parson's
Tale, 1386. The Vision of Piers Ploughman, text
C. passus ix. 1393, Early English Text Society.
— Unpublished English Works of Wyclif, Early
English Text Society, 1880.] c. g. c.
AMERICAN SCHOOL OF POLITICAL
ECONOMY. Stiictly speaking, an American
school of political economy has not yet arisen,
but two movements are sometimes referred
to under that title : (1) In the strong pro-
tective agitation which began in the United
States about 1820, the name "American system"
was applied to the general policy of developing
the resources of the country by high import
duties on the one hand, and by extensive in-
ternal improvements on the other. But the
phrase obviously points to an episode in political
history rather than to a movement in political
economy. The best advocacy of this American
system is to be found in the speech of Henry
38
AMOETISATION— ANARCHISM
Clay on the tariff, made in 1824, easily to be
found in the various editions of his writings.
(2) With more propriety, the term American
school may be applied to the doctrines of Henry
C. Carey (g.-y.) and his followers. The rejection
of the Ricardian doctrine of rent and of Ihe
Malthusian theory, the general optimism, the
reference of value in all instances to cost of pro-
duction, the advocacy of protection, are easily
seen to be connected with the conditions of a
new country possessed of abundant fertile land,
rapidly increasing in population and wealth,
confronted as yet by few of the difficulties that
beset older communities, constantly varying and
develo])ing its industries as time passes on.
Carey's doctrines in this sense are American ;
and are the most distinctively national contribu-
tion which the United States has yet made to
economic literature. Among his followers are :
Erasmus Peshine Smith, A Manualof Political Economy,
Philadelphia, 1852, and later editions.— William Elder,
Questions ofthf. Day, Philadelphia, 1871.— Robert Ellis
Thompson, Social Science and National Economy, Phila-
delphia, 1875, and later editions ; Protection to Home
Industry, New York, 1886.— W. D. Kelley, Speeches,
Letters, and Addresses, Philadelphia, 1872. f. w. t.
Among otlier writers of great ability space only allows
Tis to name, C. F. Adams, J. Davidson, C. P. Dunbar,
F. A. Walker. D. A. Wells, H. C. Adams, J. B. Clark,
D. R Dewey, R. T. Ely, C. Gross, A. T. Hadley, J. W.
Jenks, S. N. Patten, B. R. A. Seligman, and F. W.
Taussig.
AMORTISATION, or Amortization. The
financial signification of amortisation is the
redemption, reimbursement, liquidation, or re-
payment of debt generally, and the term is
often applied in connection with the sinking
funds of mortgages and debentures. Thus, in
the recent rearrangement of the Venezuelan debt
we read, " the surplus applicable, after covering
the interest, to amortisation shall be applied
half-yearly," etc., and in the instance of one of
the Buenos Ayres loans — " the government have
the power to at any period increase the amount
of the amortisation." But the word is much
more often used in French finance. Thus M.
Waddington wrote to Messrs. Rothschild on
28th October 1878, "nous declinons toute re-
sponsabilite relativement au paiement del'interet
et de I'araortissement de I'emprunt prqjete."
The French expressions "fonds d'amortisse-
ment" (sinking funds) and "caisse d'amortisse-
meut " (sinking fund office) are in common use.
But here, in the sense of the amortisation of
loans, the operation can be treated more in de-
tail under the head of Sinking Fund (q.v.)
In law amortisation signifies the transfer of
lands to a corporation, Gild, or charitable body
in perpetuity, or in other words, an alienation
in mortmain. The laws in force restricting
such amortisation of property in perpetuity are
recounted under Mortmain (q.v.)
AMSTERDAM, Bank of. See Banks,
Early European.
ANALYTICAL METHOD. We employ an
analytical method in science when we commence
with particular facts, and, by analysing them,
discover the laws in operation, thus working up
to general principles ; we employ a Synthetic
Method when we commence with general prin-
ciples, known or assumed, and combine them
so as to obtain conclusions that serve to explain
particular facts. In the one case, we proceed
from the individual to the universal ; in the
other, from the universal to the individual.
In political economy one of the main contro-
versies as to method turns on this distinction.
It is maintained, on the one hand, that our
starting-point should be the analysis of complex
industrial phenomena ; it is affirmed, on the
other hand, that the science should be con-
structed by deductive reasoning from elementary
laws of human nature.
In reality the contrast here indicated is far
too sharply drawn. A true economic science
can be built up only by a method of combined
analysis and synthesis. The former without the
latter would yield merely empirical results of
uncertain validity, and disconnected with one
another. The latter without the former would
yield results always hypothetical, and sometimes
entirely renfote from the actual facts of the
economic world. Hence the synthetical method
is required to rationalise and systematise con-
clusions gained by the method of analysis, and
the analytical method is in its turn required to
guide and give reality to the synthetical. It
may be said that upon this point, thus broadly
stated, economists are, generally speaking, com-
ing to agreement. At the same time, some differ-
ence of opinion is always likely to remain in
regard to the relative importance of the two
methods in economic science, and the extent to
which, at different stages of inquiry, each should
in its turn be subordinated to the other. In
the last resort, some latitude must be left to
the natural intellectual bias of the individual
investigator. For further discussion of this
question, see Deductive Method ; Inductive
Method. j. n. k.
ANARCHISM is the theory held by a party
which denies the justice and expediency of both
government and property, and tries to over-
throw these institutions by violence. At the
peace congress of Geneva in 1867, Michael
Bakounin (q.v.), a Russian exile, advocated the
abolition of centralised states, and the substitu-
tion of voluntary federations of independent
communes. He urged the next congress, held
at Berne under the presidency of Victor Hugo in
1868, to declare in favour of socialism, and join
the International (q.v.) Failing to convince
the assembly, he formed his supporters into a
'* Social Democratic Alliance," the aim of which
was to make land and capital the collective
property of society, and secure that they should
be used only by agricultural and manufacturing
associations. All existing states were to " dis-
ANARCHISM— ANDERSON
39
appear in the universal union of free associations."
The Alliance desired to be recognised as part of
the International, but its claim was rejected,
whereupon it dissolved after six months' ex-
istence, during which it had been active in
Spain and Italy, and its sections joined the
International separately. At the beginning of
1869 the groups of the International in French-
speaking Switzerland organised themselves as
the ** Romance Federation." This speedily split
into two sections, one of which, under James
Guillaume, a disciple of Bakounin, became the
"Federation of the Jura." Bakounin, Guil-
laume, and shortly afterwards the whole Fed-
eration, were expelled from the International.
The Federation did not acquiesce in its expul-
sion, but held meetings in 1873, 1874, 1876,
and 1877, which professed to be the sixth,
seventh, eighth, and ninth general meetings of
the International. To its influence Prince
Kropotkin, in 1882, ascribed the greater part
of the gi'owth of anarchist opinions in France
and elsewhere. As early as at the meeting of
1873, Brousse said incidentally "anarchy is
your progi-amme," but it was not till five or
six years afterwards that the "anarchists"
became definitely known by that name, and
ceased to rank as collectivists (see Collectiv-
ism). In August 1882, a meeting held at
Geneva for the express purpose of making clear
"the separation of the anarchist party from all
political parties," issued a manifesto which
declared the enmity of " anarchists, that is men
without chiefs," to all who have, or wish to
get power — to the lando%vner, the capitalist
employer, the state, "abstractions of authority,"
such as God and the Devil, and "the law,
always made for the oppression of the weak by
the strong." "We declare ourselves allies of
every man, group, or society which denies the
law by a revolutionary act. We reject all
legal methods. . . We spurn the suffrage
called universal. . . We wish to remain our
own masters. . . Nevertheless we know that
individual liberty cannot exist without associa-
tion with other free comrades. . . . Every
social product is a result of collective work to
which all are equally entitled. We are there-
fore communists ; wo recognise that without
the destruction of family, communal, provincial,
and national boundaries, the work will always
have to be done over again. " The idea of making
the commune the basis of a social reorganisation
was a mere Russian importation (see ]\Iir), which
never obtained any hold on western minds, and
may have been discredited by the failure of the
Commune of Paris (q.v.) to establish its inde-
pendence. The "free association," which has
taken the place of the commune, has acquired
no definite shape. Anarchists are content to
believe that every one would behave properly
if governments with their forcible methods
were abolished. They are not satisfied with
watching or even with accelerating the gradual
elimination of force which marks the progress
of civilisation, but insist on the immediate
extinction of force by force.
Bakounin died in 1876 ; the chief agitators
who have carried on his work are Prince
Kropotkin, Elisee Reclus, and Emile Gautier in
Switzerland and France, and Most, editor of
the Freiheit newspaper among Germans, first in
England, and afterwards in America (see Com-
munism ; Socialism ; Nihilism ; Proudhon).
[J. Garin, L'Anarchie et les Anarchistes, 1885.
— E. de Laveleye, Le Socialisme Contemporain, 3™*
ed. 1885, ch. ix. x. — Elisee Reclus, "Anarchy"
in the Contemporary Review, May 1884 (xlv. pp.
627-641, especially 635, 636).— John Rae, Con-
temporary Socialism, 1884. — Prince Kropotkin,
" The Scientific Bases of Anarchy," in the Niiie-
teenth Century, February 1887 (xxi. pp. 238-252,
especially 242). — "The Coming Anarchy," Ihid.,
August 1887 (xxii. pp. 149-164).— R. T. Ely,
Recent American Socialism [Johns Hopkins Uni-
versity Studies, 3d Series, No. 4), April 1885. —
Wm. Godwin's PoliticalJustice, 1793, is to a great
extent an antici})ation of the anarchist theory.]
(See also Socialism in App.) e. c.
ANATOCISJNIUS. A term employed in the
technical language of the civil law for compound
interest. The Roman law did not allow com-
pound interest and even prevented a creditor
from claiming an accumulation of simple interest
in so far as it exceeded the amount of the
principal. E. s.
ANDERSON, Adam, bora in Scotland about
1692, was for forty years a clerk in the South
Sea House. He died at Clerkenwell, 10th Janu-
ary 1765. His only work was —
An Historical and Chronological Deduction of
the Origin of Commerce from the Earliest A ccounts
to the Present Time, London, 1764, 2 vols, folio
(a monument of industry in the form of annals,
treating specially of Great Britain and Ireland).
A new edition, carefully revised and coJitinued (by
Wm. Combe), London, 1787-89, 4 vols. 4to.
Anderson's text from 1492 to 1760, was incorpor-
ated by David Macpherson in his Annals of
Commerce, London, 1805, 4 vols. 4to. H. R. T.
ANDERSON, James, LL.D., born at Hermis-
ton, near Edinburgh, 1739, died at West Ham,
Essex, 15th October 1808. A practical farmer,
employed by Pitt to survey the fisheries, Scot-
tish rural economy owes much to him. Dr.
Anderson first propounded the theory of
"rent," afterwards rehandled by Malthus
and RiCARDO. In his works, e.g. in his Obser-
vations on the National Industry of Scotland
(vol. ii. pp. 208-9, published 1779, but written
1775), he says that rent is a premium for the
cultivation of the richer soils, reducing the
profits of the cultivators to an equality with
those of the cultivators of the poorer.
He edited The Bee, Edinburgh, 1790-94, 18 vols.
8vo ; — Recreations in Agriculture, Natural His'
t&ry, etc., 1799-1802, 6 vols. 8vo, and wrote among
40
ANDERSON— ANNUITY
other things : — Inquiry into the Nature of the Corn
Laws, vnth a View to the new Corn Bill proposed
for Scotland, Edinburgh, 1777, 8vo (the earliest
explanation of the theory of rent usually called
after Ricardo ; see also his Recreations, v. 401-28).
— Inquiry into the Causes that have hitherto Re-
tarded the Advancement of Agriculture in Eurbpe,
Edinburgh, 1779, Svo. — Account of the Present
State of the Hebrides and Western Coasts of Scot-
land, Edinburgh, 1785, 8vo. — Essays Relating to
Agriculture and Rural Affairs, 5th ed., London,
1800, 3 vols. 8vo. — Investigation of the Circum-
stances that have led to the Present Scarcity of
Grain in Britain, London, 1801, Svo (friendly to
protection). H. R. T.
ANDERSON, James (No. 2).
such as Observations on the National Industry
of Scotland (vol. ii. pp. 208-209, published
1779, but written 1775) show clearly that
Anderson had a more correct view of the theory
of rent than his greater contemporary and
compatriot, A. Smith. Rent, he says, is a
premium for the cultivation of the richer
soils, reducing the profits of the cultivators to
an equality with those of the cultivators of the
poorer. j. b.
ANGARIE, Droit d' {ayyapeia, see St.
Matthew v. 41). Angarie means in interna-
tional law the actual impressment of foreign
(even neutral) vessels, as distinguished from
embargo, which is mere exclusion from the
ports. The right was exercised by the Prus-
sians in the war of 1870-71, when they sank
six English ships in the Seine. j. b.
ANGEL. English gold coin (Edward IV. to
Charles I.) of the following weights, fineness,
and value —
Value in
A ■
Fine-
gold 916-6,
Reign.
Year.
Rating.
bO
fine at
1
ness.
£3 : 17 : lOJ
1 an oz. 1
grains.
Edward IV.
1466
6s. 8d.
85-25
994-8
153.
Henry VIII.
1527
7s. 6d.
80
14s. Id,
>i
1543
8s.
"
916-6
12s. ll|d.
Edward VI.
1551
j^
"
994-8
14s. Id.
Mary
1553
lOs.
Elizabeth
1601
79
13s'' lid.
James I.
1605
„
71
12s. 6d.
„
1606
,,
65-5
lis. 6^d,
t.
1610
lis.
1619
,,
64-25
lls."3|d.
Charles I.
1627
lOs.
"
>>
F. E. A.
ANNA (British India). One sixteenth of
a rupee. Silver coins: 4 and 2 annas, 916 '6
fine ; weight 45 and 22^ grains ; value 6|d.
and S^d., or "59 fr. and -30 fr. respectively.
F. E. A.
ANNATES. This was the first year's
revenue of a bishopric or benefice which was
paid to the pope in all countries which acknow-
ledged his spiritual headship. It is probable
that the practice was not introduced into Eng-
land until after 1213, when John did homage
to the papacy. This and other papal exactions
were very unpopular in England, and the clergy
themselves petitioned for the abolition of an-
nates, when Henry VIII. quarrelled with the
pope about his divorce. A bill for this purpose
was passed by parliament in 1532, but Henry
postponed his consent, hoping to use it as a
means of influencing the Roman court. In
1534, however, the Annates Act became law.
Besides prohibiting the payment to Rome, this
Act also laid down the regulations for the choice
of bishops which are still observed. To the
great disappointment of the clergy, the annates,
instead of being abolished, were transferred to
the crown. Mary surrendered them, but they
were restored to the crown under Elizabeth.
Ultimately Anne gave them back to the church,
in order to subsidise small livings, and the fund
still exists under the name of Queen Anne's
bounty.
[Perry, History of the English Church, 1887,
vol. ii.] R. L.
ANNEALING. Most metals and alloys, when
submitted to the operations of rolling or wire
drawing, lose their malleability or power of
being extended. This may be restored by cm-
n^aling, which consists in raising the metal to
a high temperature, usually above redness, and
allowing it to cool slowly. With some metals
it is immaterial whether the cooling from the
high temperature takes place rapidly or slowly.
Thus certain alloys of copper and tin are ren-
dered most malleable by rapid cooling and the
same observation applies to alloys of iron and
manganese which contain more than 8 per cent
of manganese. In the preparation of steel for
industrial use annealing is of great importance,
and the particular temperature suitable to each
variety of steel has to be determined with great
accuracy. The density of rolled metals is gener-
ally diminished slightly by annealing. The pro-
cess is of importance in the coinage of the
precious metals (see Alloy). c. r-a.
ANNUAL RENT (Scotch). Nearly equiva-
lent to rent charge.
ANNUITY. The simplest way in which an
annuity can be defined from an economic point
of view is to regard it as p payment in one in-
stalment, or in any number of instalments,
composed (1) of the sinking fund to redeem or
restore the principal or purchase money of the
annuity by an investment increasing at interest
in geometrical progression ; and (2) of the interest
on the principal or purchase money and its un-
redeemed balances throughout the term of the
annuity, such interest decreasing in geometrical
progression until the sinking fund replaces the
whole of the principal or purchase money.
Thus, if an annuity of £100 for one year be
bought to pay 3 per cent interest, it is worth
£97*0874 purchase money, and the annuity
itself is made up : —
ANNUITY
41
(1) Of the present value at 3 per cent
interest of the sum of £100, due
at the end of one year, or of a
sinking fund of . . .
(2) Of the interest at 3 per cent for
one year on the £97-0874 pur-
chase money ....
£97-0874
2-9126
Total annuity
. £100-0000
The value of each instalment for any term of
years for which an annuity is gi-anted, may be
similarly calculated ; thus, the value at 3 per
cent interest of an annuity of £100 per annum
to endure in perpetuity or for an infinite number
of years, may be stated in the same manner as
made up : —
(1) Of the present valueof £3333-3333
(or of the purchase money at 3
per cent of a perpetual annuity
of £100) redeemable at the end
of an infinite number of years £000-0000
(2) Of the annual interest at 3 per
cent upon the £3333-3333
purchase money . . . 100-0000
Total annuity
. £100-0000
In any scheme of taxation which deducts a
percentage, or so much in the pound, upon the
whole or gross amount of an annuity, without
distinguishing between what part of it is sink-
ing fund and what part interest, the result is
that the fiscal burden infringes on property as
well as on income, although in ordinary language
this common mode of procedure is called an
income-tax. If it were so purely and truly, it
would, in the first of the above examples, make
a deduction for tax, not upon the whole £100
of annuity, but upon £2-9126 only, so that the
exaction is more than thirty-three times too
great. In the second example the tax is rightly
levied upon the whole £100 of annuity, as there
is no possible existence of a sinking fund where
the term the annuity has to run is infinite. It
follows that the shorter such term is the greater
is the inequity of assessment, and the longer
the term the less its inequity. So much has
this been felt by those who purchase annuities
or rent charges by way of equated payments
continuing for a given number of years, that it
is not uncommon for purchasers of such annui-
ties, or lenders of money on their security, to
contract themselves out of the incidence of the
Income tax on that part of the annual payment
which represents Sinking Fund. This is done
by the annuity or mortgage-deed containing a
schedule setting forth in separate columns what
is sinking fund and what is interest. Thus,
for example, in an annuity of £100 gi-anted for
two years and calculated to pay the purchaser
3 per cent, the value or purchase money of this
18,* by calculation, £191*3470. The schedule
runs thus :
Col. 1.
Year.
Col. 2.
Repayment
of Piuehase
Money.
Interest on
Yearly Balance g;
of Purchase '^
Money.
Col. 4.
'H
1 . . .
2 . . .
Total payments
£94-2596
97-0874
£5-7404
2-91-26
£100-
100-
£191-3470
£8-6530
£200-
By this means income-tax becomes assessable
in the two years upon £8-6530 instead of upon
£200.
The same methods of analysis of an annuity
ceasing at the death of a single lite or of the
survivor of any number of lives, could be applied
so as to distinguish between capital and income,
and the sinking fund and interest admit of
being similarly separated and defined from the
initial year or age at which the life-annuity
commences to its ultimate or terminal year,
which, in such cases, is tlie oldest age to which
it is possible tlie life or lives can attain, accord-
ing to the particular table of mortality on which
the annuity is based or valued.
From what has been above stated several im-
portant economic conclusions follow — (1) that
wlien a state borrows money by grant or sale
of Terminable Annuities ceasing at the ex-
piration of a certain number of years, long or
sliort, and its fiscal system at the same time
includes the imposition of what is called an
income-tax, such a tax falls upon the whole of
the capital out of which the annuity is consti-
tuted, and the tax becomes one on property as
well as on income ; (2) that although the system
of borrowing on terminable as compared with
that of borrowing on perpetual annuities has
been frequently extolled as the more provident
and beneficial of the two arrangements, it is
really subject to much qualification, as it involves
in every instance an obligatory sinking fund,
which cannot be suspended, for the repayment
of principal. This must continue for the whole
of the term of years the annuities have to run,
during which the borrower (and few modern
states fail to be in that position over many
years) is hampered with the prejudicial condition
of having to borrow to pay debts, a course
generally antagonistic to the principles of sound
finance ; (3) that as in these terminable annui-
ties the state as borrower repays portions of
principal combined with every payment of in-
terest, the state creditor, small as well as great,
is, in his turn, compelled to reinvest, periodi-
cally and with undeviating regularity, fractions
of the principal returned to him, unless he be
content to see his capital destroyed. This
liecessity of re-investment is a troublesome, and
sometimes a difficult, task, and has a tendency
42
ANSELL— ANTI-RENT AGITATIONS
towards improvidence on the lender's part, as
it exposes him to the temptation of omitting to
save the means by which he may restore his
capital ; (4) the knowledge of these circum-
stances and the unfair incidence of the income-
tax on terminable annuities combine in render-
ing it impossible, as a general rule, for large
state loans to be contracted at as low a rate of
interest in terminable annuities as in perpetual
annuities. The market price of the Ibrmer as
compared with the latter has in almost every
known instance revealed a lower public estima-
tion of the terminable annuity, and it has
shown that as the repayment of the principal
augments in geometrical proportion with each
instalment, the depression of the security grows
greater and greater as the annuity approaches
nearer and nearer to its terminal period. Out
of the total sum of about 585 millions sterling
raised by loans in England in 1792-1816, not
more than 1^ per cent can be estimated to have
been obtained through the employment, as an
adjunct to other financial methods, of the ter-
minable annuity system. The remaining 98|
per cent of what in those days was a huge
mountain of fresh indebtedness, was raised by
perpetual annuities. The terminable, or long
annuities as they were called, mostly granted
for sixty years, were only floated on terms of
market valuation imposing a differential and
higher rate of interest on the borrower of at
least 1 per cent as compared with the terms for
perpetual annuities. The writer of the present
article was associated with the late Mr. New-
MAECH, in 1854-55, in the investigations that
served as the basis of the elaborate essay by
that economist On the loans raised by Mr.
Pitt during the first French War, 1793-1801,
with some statements in defence of the methods
of funding employed. London : Effingham
Wilson, 1855 {vide pp. 29-31). This essay
has now become extremely scarce. A short
paragraph may be quoted from it as giving the
pith of a very laborious inquiry. " Upon mere
financial gi-ounds a public loan contracted in
terminable annuities is, perhaps for the state,
the form of borrowing the most desirable, for at
the lapse of the term the annual burden of the
debt ceases. But connected with the plan of
terminable annuities there are other considera-
tions of a higher and more general nature than
those of mere finance ; and when the whole
question has to be discussed it will appear,
that while terminable annuities maybe employed
with advantage as one of several forms of fund-
ing, it would be exceedingly unwise to resort to
them as the sole or even as the principal
method." See Terminable Annuities ;
National Debt. f. h.
ANSELL, Chakles, F.R.S., born 1794, died
1881. He entered the Atlas Fire and Life As-
surance Company in 1808, became actuary of
the life branch in 1823, and held the office
down to 1864. He applied himself much to
the actuarial problems connected with friendly
societies, and wrote —
A Treatise on Friendly Societies in which the
Doctrine of the Interest of Money artd the Doctrine
of Probability are applied, London, 1835, 8vo
(published by the Society for the Diffusion of Use-
ful Knowledge ; one of the first attempts to treat
the subject scientifically). H. R. T.
ANTEDATE. To date a document from a
point of time earlier than the actual date of
execution. If this is done with the intention
of defrauding a third party, the parties to the
document are liable to be prosecuted for forgery.
E. s.
ANTICHRESIS. A contract of Roman
law by which a mortgagee acquired the right to
take the profits of the mortgaged property in
the place of interest on the mortgage debt.
Such contracts were not allowed, if they were
made with the intention of evading the Roman
usury laws. e. s.
ANTI-CORN-LAW LEAGUE. It cannot
be doubted that the irritation caused by the
agitation for the factory acts, which applied to
children only in the manufacturing districts, and
not to tho^e in the agricultural part of the
country, supplied a great stimulus to the agita-
tion against the corn laws. The formation of
an association under the name of the Anti-Com-
Law League was the inevitable consequence, and
apart from an active canvass all over the country,
the association at last started a newspaper of
great force and ability under the name of the
League, complete copies of which are now very
uncommon.
The success of the League was in great degree
assisted by the potato plague and the very scanty
harvest of 1845. Sir R. Peel, then in power,
took the step of opening the ports, an expedient
which the executive had frequently adopted
during the scarcities of the 18th century.
It was impossible to reverse this policy, and
the repeal of the corn laws became inevitable
in the next session of parliament. It is re-
markable that a parliament certainly summoned
to defend and maintain the laws, should have
been the instrument of extirpating them, but
the situation could not be trifled with, and
Peel, as the introducer, said that his action
averted the troubles of 1848 from the United
Kingdom.
As soon as the act repealing the com laws
had received the royal assent, the leaders of
the League at once broke up their organisation
and extinguished the machinery which they had
driven at high pressure. This policy was
exceedingly conciliatory, and greatly assisted in
obviating any reaction. j. t. r.
ANTI-RENT AGITATIONS. The phrase
has been used by English writers with special
reference to the movement countenanced by
O'Connell in 1843, and a similar movement
ANTONINUS— APPLEtON
43
countenanced by some of the Irish leaders in
1881, among the Irish tenants. In both cases
the threat to pay no rent was a temporary
expedient to enforce an article of popular
policy. The advocates of the nationalisation
of the land cannot be said to conduct an anti-
rent agitation, for they do not aim at the re-
moval of rent, but at a change of landlords.
In the United States the name ' ' anti-renters "
was given to the farmers of New York State,
holding their lands on long leases, who de-
manded the removal of quit rents and gi-ound
rents (1839-46). The movement led to riot
and bloodshed ; and was at the time only
partially successful, though now the system of
land-tenure which occasioned it has all but
wholly disappeared.
See E. P. Cheyuey, The Anti-rent Agitation of
the State of New Fork, Philadelphia, 1887. J. B.
ANTONINUS, St., archbishop of Florence,
was born 1389 and died 1459. Following
Aquinas (q.v.), Antoninus defines what transac-
tions are to be condemned as usury ; and remarks
on the difficulty of determining the fair price
JusTUM Pretium of an article on sale. See
his Summa Theologica in quatuor partem clistri-
buta, 2d Part, Title II. ch. 6, 7. f. y. e.
A POSTERIORI reasoning is reasoning that
is directly based on observation and inductive
generalisation. It follows, therefore, and does
not precede experience of the specific class of
phenomena to which the conclusion relates.
The kind of reasoning with which it is con-
trasted is called A Pmoiii (q.v.)
It is held by the majority of English
economists that in political economy the purely
a posteriori method is inefficacious for arriv-
ing at any considerable body of valuable
truth. The opposite view is maintained by
the HisTOEicAL School of Economists.
Without entering here upon the controversy
between these schools, it may be pointed out
(1) that the a posteriori method is, in certain
cases, employed even by those who for the most
part reject its aid in economic reasoning ; and
(2) that when entire reliance is not placed
'Upon it, it may still be used to supplement
reasoning of a different type. As an illustra-
tion of a posteriori reasoning in economics,
reference may be made to Mill's treatment of
[the subject of peasant proprietorship in the
[second book of his Principles of Political
\Economy. A considerable mass of evidence is
[cited as to the working of this system in those
I countries in which its operation can be observed
Ion a large scale ; and the force of Mill's argu-
iment as to the influence of peasant properties
>in stimulating industry, training intelligence,
iand promoting forethought and self-control,
[depends more upon the generalisations that the
tabove evidence seems to justify, than upon
[direct deductions from general principles of
Inhuman nature.
A posteriori reasoning is also described as
analytical, and as inductive. For further discus-
sion, see Analytical ; Deductive : Induo
TiVE ; Synthetic Method. j. n. k.
APPANAGE (French apanage, from Pro-
ven9al verb apanar, to give bread), the provision
made by French kings and barons for daughters
and younger sons (puis-nes), as distinguished
from the eldest son (aind = aisn6, avant-n6).
The ap})anage of royal princes consisted in some
cases of lands so extensive and wealthy {e.g.
Normandy or Burgundy) that the possessors
were dangerous rivals to the monarch himself,
especially as the salic law increased their pro-
spects of ultimate succession to the throne ;
hence the attempts {e.g. of Charles V. in 14th
century) to limit the appanage of sons to a
specified money revenue from land. As early as
Philip Augustus (13th century), the daughters'
do^vries were paid in that form. From St.
Louis downwards (13th century), the kings tried
to secure the reversion of the appanage to the
crown on failure of male heirs ; and the crown
lands ceased in point of fact to be rediWded.
Appanages were abolished by the constituent
assembly in 1790, and the burden put on the
civil list ; revived by Napoleon and the Bour-
bons, they disappeared definitively in the re-
volution of July 1830.
The corresponding provision in England is
an annual income voted by parliament out of
the imperial taxes {e.g. in 1889 for the Queen's
grandchildren). A similar course is followed
in Italy. In many German states the a])panage
is often a mere rent-charge on crown-lands. Tlie
German lawyers of last century confined the
term apanagium to the provision in money, and
used paragium for provision in lands (see Civil
List). j. b.
APPLETON, Nathan, merchant and cotton
manufacturer ; born in New Hampshire 1779 ;
died in Massachusetts 1861. He was one of the
three founders of the gi'eat manufacturing town
of Lowell ; served a number of years in congi-ess,
where he was a champion of Whig principles.
His best known pamphlet is Pemarks on cur-
rency and banking, Boston, 1841, pp. 48 (3d
ed. 1857, pp. 63). He favoured a national bank
as a fiscal agent of the treasury, but denied its
necessity to regulate the currency, equalise the
exchanges, or supply a uniform paper medium.
He also ^vrote An examination of the hanking
system of Massachusetts in reference to the renei'ial
of the hank charters, Boston, 1831, pp. 48.
Appleton objected to state banks with small
capitals : the bank should have a paid-up capital
exceeding its issues ; and the tax should be
upon the circulation instead of upon the capital.
He persistently advocated high tarifl" duties by
speeches in congress ; of these the one of 30th
May 1832 is the most valuable, in which he criti-
cised at length the theory that a tax on imports
is a tax on exports. In an article on Labour
44
APPLIED ECONOMICS— APPORTIONMENT
in Europe and America compared, Hunt's Maga-
zine, 1844, pp. 16, he denied that the theory
of wages as stated by English economists applied
to American labour, owing to the cheapness of
land. A list of his writings is found in Robert
C. Winthrop's Memoir of Nathan Appleton,
Boston, 1861, pp. 64.
Among them may be mentioned, What is a
Revenue Standard ? and a Review of Secretary
Walkers Report, 1846. — Introduction of the
Power-Loom and Origin of Lowell, 1858.
D. R. D.
APPLIED ECONOMICS. The term applied
economics or applied political economy has
been used in at least three different senses :
(a) To designate the application of economic
science to the solution of practical questions ;
in this sense equivalent to what is also called
the Art of Political Economy, {h) To
designate the application of economic science
to the interpretation and explanation of par-
ticular economic phenomena, (c) To mark off
the more concrete and specialised portions of
economic science from those more abstract
doctrines, which are held to pervade all
economic reasoning. The term is used in this
last sense by Jevons when he remarks that
" currency, banking, the relations of labour and
capital, those of landlord and tenant, pauper-
ism, taxation, and finance, are some of the
principal portions of applied political economy,
all involving the same ultimate laws, manifested
in most different circumstances." {Fortnightly
Review, Nov. 1876, p. 626.) J. N. k.
APPORTIONMENT (No. 1). The distribu-
tion of one subject in proportion to another pre-
viously distributed. Though Rents form the
chief subject matter of apportionment, the term
is also applied to the division of covenants and
conditions. As regards rents a distinction has
to be drawn between rent services and rent
charges. A rent service may be apportioned
by (1) act of God ; (2) operation of law ;'(3)
act of parties. (1) Where a portion of land
demised is surrounded or covered by the sea,
this being the act of God, the rent is appor-
tioned so that the tenant pays rent in respect
of the uncovered land only. (2) At common
law there could be no apportionment of rent
in respect of time, the contract for payment
being regarded as " entire," or incapable
of division. Hence a successor in interest
succeeding before a periodical payment became
due took the whole, and the representatives
of his predecessor took nothing. This was
remedied by the 11 Geo. II. c. 19, § 15 ;
4 & 5 Will. IV. c. 22 ; and 33 & 34 Vict.
c. 35. The effect of these statutes is that
all rents, annuities, dividends, and other
periodical payments in the nature of income
are like interest on money lent, to be re-
garded as accruing from day to day, and to
be apportionable in respect of time.
(3) Where a part of a reversion was granted
away, an apportioned part of the rent passed
with it as incident thereto. By the 22 & 23
Vict. c. 35, § 3, where a reversion is severed
into parts, and the rent is "legally appor-
tioned," the assignee of each part becomes
entitled, as regards his part, to the benefit of
all conditions for securing the payment of rent
attached to the original undivided rent, and
the 10th section of the Conveyancing Act, 1881,
extends this principle, and renders aU con-
ditions and provisos apportionable.
As regards rent charges, the general rule was
that they could not be apportioned, and hence
if the owner of a rent charge purchased any
portion of the land out of which it issued, the
whole rent charge became extinct. This was
remedied by the 10th section of the 22 & 23
Vict. c. 35, which provided that the release
from a rent charge of a part of the land charged,
should only bar the right to recover any part
of the rent charge out of the land released.
[The Law of Rents, by W. A. Copinger and J.
E. C. Munro, London, 1886.] . J.E.C. M.
APPORTIONMENT (No. 2). Apportionment
may be further explained as the distribution of
benefits or burdens connected with property
among several persons becoming successively or
simultaneously owners of the property to which
they refer. With regard to successive owners,
rent and other periodical payments were for-
merly not apportionable. If land was leased
for the life of the tenant-for-life only, the sub-
tenant was not liable to pay any rent for the
period between the last payment and the death
of the tenant-for-life. If the lease extended
beyond the life of the tenant-for-life, and if
the person entitled to the rent for life died
on the day before the rent became due, his
representatives could not claim any part of the
rent, and the whole of it went to the person
next entitled to the income of the land ; the
same thing happened with respect to dividends
on stock, or annuities to which a person was
entitled for life. Successive acts of parliament,
beginning with one passed in the reign of
George II., have gradually removed these
anomalies, and now the Apportionment Act of
1870 provides that all rents, dividends, and
periodical payments in the nature of income,
shall be considered as accruing from day to day,
and shall be apportionable in respect of time
accordingly. Apportionment of benefits or
burdens between persons becoming simul-
taneously owners of property was formerly not
possible in many cases. Rent -charges, for
instance, were not apportionable, and if the
owner of a Rent-Charge purchased part of the
land subject to it (which naturally had the
ettect of releasing that part from the rent-
charge) the whole property became discharged '
in the same way the benefits of conditions of
re-entry and other conditions in leases could
APPRAISERS— APPRENTICESHIP
46
not be apportioned ; if land subject to a lease
was sold in part or sold in several lots, the
benefit of such conditions lapsed entirely.
Ordinary rent was always apportionable be-
tween persons becoming simultaneously the
o\vners of the property with respect to which it
was payable, and modern acts (among wliich
the Property Law Amendment Act of 1859, and
the Conveyancing Act of 1881, are the most
important) liave provided for the apportionment
of rent-charges, and of the benefit of conditions
in leases among simultaneous owners of land
subject to a rent- charge or a lease. Under the
Tithe Commutation Act of 1836, the rent-
charge in lieu of tithes may be specially ap-
portioned, so as to throw the amount attribut-
able to the tithes of an entire estate upon some
particular persons in exoneration of the residue.
E. s.
APPRAISERS. Sworn and licensed valuers
of poinded goods (goods on which execution is
levied) in Scotland. The business of appraisers
(valuers) in England is usually conjoined with
that of the auctioneer.
APPRECIATION OF STANDARD. The
alterations in purchasing power of the standard
of value are, when the period over which tlie
investigation extends is only a short one,
among the most difficult questions into which
the economist has to inquii-e. Remote events
stand out in this respect more clearly. The
great, and up to the present time permanent,
depreciation occasioned by the enormous finds of
the precious metals in South America wliich
followed the discovery of that continent by
Columbus, is now matter of history, as is also
the further change in the same direction occa-
sioned by the development of new mines in
California and Australia, commencing ratlier less
than fifty years ago. During a comparatively
recent period, however, now extending over ten
or fifteen years, the balance appears to have
turned the other way, and an appreciation of
gold, to a considerable extent, to have taken
place. It was pointed out by Giffen, Essays in
Finance, 2d series, p. 19, that average prices,
1885, stood "about 5 per cent less than the
average of 1845-60," and by Palgrave, Appen-
dix B, Third Report of Royal Covimission on
Depression of Trade and Industry, pp. 329, 330,
that, as compared with 1865-69, prices in 1885
showed a drop of more than 20 per cent. The
VaHation of Prices and the Value of the Cur-
rency since 1782-1S65, a paper by Jevons,
Journal of the Statistical Society of Lon-
don for June 1865, reprinted in his volume
Investigations in Currency and Finance, shows
the oscillations of prices very^ clearly. Periods
of transition in matters of this description are,
as Chevalier remarks {De la Baisse Pro-
bable de V Or), painful to pass through. It is here,
however, the fact of a recent appreciation
which it is desirable to note, not the causes
which have led to it, or the results which have
followed it. Though the tendency of the
standard of value appears, so far as history ex-
tends, to have been generally towards deprecia-
tion, and not towards appreciation, so recent
and marked an instance of appreciation deserves
record (see also Depreciation of Monetary
Standard, Sj andard of Yalue).
[For history, Jacob, On the Precious Metals
London, 1831. — Jevons, Investigations in Currency
and Finance, London, 1884. — Giffen, Essays in
Finance, 2d series, London, 1886. — Palgrave,
Appendix B, Third Report, Roijal Commission on
Depression of Trade and Industry, 1886.]
APPRENTICESHIP. A system by which
those intended to follow a particular occupation
engage to serve and work under a master for
a certain period, and the master engages to
teach them during that period the industry or
branch of industry in which he is occupied.
This system was once very common, if not
universal ; and with few, if any, exceptions,
every workman was compelled to serve a master
for seven years before he ciould practise a handi-
craft on his own account. A large number of
tlie rules and regulations of the mediaeval craft
guilds (see Gilds) dealt with the conditions
of apprenticeship ; and a solemn ceremonial
was observed when a boy was bound over to
be an apprentice, and when, the period of his
service being ended, he became a full member
of the guild. These rules and regulations,
which obtained the binding authority of uniform
custom, were embodied in law by the statute
of apprenticeship (5 Eliz. c. 4) by which it
was "enacted that no person should for the
future exercise any trade, craft, or mystery at
that time exercised in England unless he had
previously served to it an apprenticeship of seven
years at least." The system, however, was open
to abuse ; and Adam Smith ( Wealth of Nations,
bk. i. ch. x. part ii.), protested against the way
in which the trade corporations employed it,
to maintain a monopoly of their exclusive
privileges. But gradually it came to be held
that industries which had arisen since the
passing of the statute, or which were not
carried on in market towns, were exempt from
its limitations; and in the development of
factory industry at the close of the last and
the commencement of the present century,
manufacturers exhibited a wholesale disregard
of the restrictions of apprenticeship. The efforts
of the early trades unions (see Trade Unions)
were directed in many cases towards securing
the observance of the Elizabethan Legisla-
tion. Prosecutions were instituted against the
masters with successful results. But the opera-
tion of this statute was suspended by parliament
- for the cloth trade during successive years from
1803 to 1809, and in the last year it was alto-
gether rescinded for that trade, and in 181 4 for all
trades. The custom, however, of apprenticeship
46
APPRENTICESHIP, STATUTE OF
continued to prevail ; and it still forms part,
in theory at least, of the policy of some trades
unions to attempt, by positive regulation or
otherwise, to restrict the number of apprentices,
and to insist on the production of evidence of
having served a regular apprenticeship before a
man is admitted to the membership of the
union. But despite of these efforts the system
appears, with the growing subdivision of labour,
to be falling into disuse, in many trades, at any
rate in its strict form. Some wi'iters have
urged, although others have maintained that
this is impracticable, that technical education
should be generally introduced as a substitute
for apprenticeship.
[For the regulations of the old craft guilds on
the matter cp. Brentano on Gilds and Howell's
Conflicts of Capital and Labour, eh. i. pt. iv. For
the efforts of early trades unions cp. the same book,
oh. ii. , and Arnold Toynbee's Industrial Revolu-
tion : Lecture on Industry and Democracy, pp.
178, etc. For the present attitude of workmen cp.
Howell, ch. v. gmdMaxshalV a Economics of Indv^stry,
bk. iii. ch. v. §§ 3 and 9. A list of recent German
works on Apprenticeships is given by Prof. Stieda
in an article in Jahrbiicher fur Nat. Oek. u. Stat.
21st June 1890 ("Das gewerbliche Lehrlings-
wesen ").] l. l. p.
APPRENTICESHIP, Statute of (5 Eliz.
c. 4). This statute is of considerable import-
ance in the history of English labour. Its
general drift was not new. Many of its pro-
visions had been previously enacted. The
preamble points out the failure of former statutes
"partly through the imperfection and con-
trariety" in the laws themselves, and "chiefly
for that the wages and allowances . . . are too
small, and not answerable to this time (1562)
respecting the advancement of prices of all
things. ' ' The legislature proposed therefore ' * to
digest and reduce into one sole law " the sub-
stance of the old statutes, in the hope that the
new law (duly executed) would ** banish idle-
ness, encourage husbandry, and yield unto the
hired person, both in the time of scarcity and
in the time of plenty, a convenient proportion
of wages." Former statutes, thirty-four in
number since Edward III., were repealed so far
as they concerned the hiring, keeping, wages,
etc. of servants, labourers, artificers, and appren-
tices. According to the new statute certain
persons were confined to the craft in which
they were brought up, and all persons
not otherwise employed, nor possessing a
certain amount of property, were compelled to
serve in husbandry. The latter clause was
supplemented with a law of settlement, which
however was relaxed in time of harvest. The
regulations with regard to apprenticeship were
important. The term of apprenticeship was
to be seven years. Except in the case of
smiths, wheelwrights, plaisterers, bricklayers,
etc., certain property qualifications were
necessary for apprenticeship, and the craft
could be carried on only by those who had
served their time. Every person with three
apprentices must keep one journeyman. No
one could be apprenticed over the age of twenty-
one. Penalties of imprisonment were imposed
on those who refused to be apprenticed. The
act was administered by the justices of the
peace, or other magistrates specified in the act.
They were empowered to fix the rate of wages
in their districts, etc. at the Easter Quarter
Sessions, and to enforce this rate by fine and
imprisonment. They were also to arbitrate in
disputes between masters and apprentices. The
hours of labour were to be from 5 a.m. till
6 or 8 P.M. in the summer, and from daylight
to dusk in the winter, not more than two and
a half hours being allowed for meals. There
were numerous other provisions of a less import*
ant character. By 39 Eliz. e. 12 the act was
extended to weavers. It was continued by 43
Eliz. c. 9, and 1 Jac. c. 6, the latter of which
extended the power of the justices and town
magistrates to fix limits to the wages of all
labourers and workmen whatever. As Prof.
Rogers points out {Agriculture and Prices, vol. v.
p. 821) the law was " effectually supplemented "
by 14 Car. ,11. c. 12, 3 W. and M. c. 11, 8 &
9 Will. III. c. 30, 9 Will. III. c. 11, and 11
Will. III. c. 13.
It is not easy to form a just estimate of the
effects of Elizabeth's legislation. The materials
are scanty, and contemporary evidence of the
working of the statute difficult to obtain.
A. Smith ( Wealth of Nations, bk. i. ch. x.
pt. ii. ) criticised the apprenticeship clauses in
terms which were certainly justified at the
end of the 18th century. Brentano (Bnglish
Gilds, § 5) has taken a more favourable view
of the statute, and has produced evidence to
prove that modem trade unions originated in
the non-observance of its provisions. Bren-
tano's criticism, however, is open to much
adverse comment. Prof. Thorold Rogers
attributed much of the misery of the working
classes in succeeding generations to the opera-
tion of this statute. He described it ( Work and
Wages, p. 353, cp. also Agriculture and Prices,
vol. V. ch. xxiii., xxviii.) as "the third in the set
of causes from which pauperism was the inevit-
able effect." He justly remarks that the statute
"seems to favour traders and artisans at the
expense of labourers in husbandry, by limiting
the number of the former and making tlie latter
the residuum of all non-apprenticed labour."
It may be doubted, however, whether at
present it is possible to form an accurate
judgment with regard to the working of the
statute. Comparatively few wages assessments
have yet been discovered. In 1793, Ruggles
could refer to only one. Sir F. Eden increased
the number to eight, and Thorold Rogers to
eleven. Four more are printed in Hamilton's
Quarter Sessions from Mimbeth to Anne,
APPROPRIATION— A PRIORI
47
pp. 12, 163, 249, and 273, and two in the
Belvoir Papers (one of them, 9th April 1621,
in full). The act was no doubt a great hard-
ship where it was rigorously enforced, especially
amongst the agricultural labourers. Three Devon-
shire assessments covering a period of 119 years
(vide Hamilton) indicate a very slow increase,
except in the case of indoor servants, while in
Bucks the rate of wages for farm labourers in
the reign of Anne was no gi-eater than that
fixed in Devonshire in the reign of Elizabetli.
It may, however, be doubted if the act was on
the whole effectual. Prof. Rogers's statistics
show that the wages received by the labourers
in the main exceeded the rate fixed by the
justices, i.e. the employers were more merciful
than the Quarter Sessions, or (more probably)
wages fluctuated in spite of the statutes. The
statute continued in force, without substantial
modification, until 1825, when it was repealed ;
but it had been practically a dead letter for
many years.
[Adam Smith, Wealth of Nations, bk. i. eh. x. —
Eden's State of the Poor, Loudon, 1797. — Bren-
tano's English Gilds, § 5. — Thorold Rogers's
Work and Wages. — Thorold Rogers's History of
Agriculture and Prices, vols. iv. v. vl. — Thorold
Rogers's Economic Interpretation of History. —
Hamilton's Quarter Sessions from Elizabeth to
Anne. — MSS. of the Duke of Rutland preserved at
Belvoir Castle vol. i. (Historical MSS. Commission).]
W. A. S. H.
APPROPRIATION. The appropriation of
the instruments of production by individuals
either singly or in gi'oups, is of great antiquity.
Food and other forms of movables seem to
have been appropriated prior to land, and
though we cannot imagine a time when private
property was unknown, there is strong evidence
to show that in primitive times the important
forms of property were regarded as belonging to
the group and not the individual. The Irish
early feudal system was, for instance, based on
the loan of cattle by the chief to his adherents,
the land belonging to the whole tribe. The
accumulation of movable property would begin,
when once a separate household was acquired by a
family, since a house would involve the necessity
of some movable articles. When in course of
time the relative importance of land and mov-
ables altered, land was appropriated by groups
of men united by a real or supposed blood relation-
ship. From this collective form of ownership
private property in land was slowly evolved (see
Property. — Maine's Early History of Institu-
tions, London, 1875 ; — Maine's Village Com-
munities, London, 1871 ; — Laveleye's Primitive
Property, London, 1878).
The title of modern states to the territories
appropriated by them is based either on con-
quest or on discovery and occupation, confirmed
by lapse of time (Wheaton's Int. Law, ed. Boyd,
London, 1880, c. iv.) It is now admitted that
the high seas, i.e. the seas more than 3 miles
distant from low water mark, cannot be appro-
priated either by a state or an individual (lb.
p. 251) though the fish in such seas may be
taken by capture. As regards the seas within
3 miles of the coast, some writers allow a state
jurisdiction only, whilst others assign to it pro-
perty over such seas (see the various views in
Hall's Int. Law, Oxlbrd, 1890). From the
maxim cuius est solum eius est usque ad ccelura
et ad infe7-os, it follows that not only mines but
even air may be appropriated. Under English
law the owner of land as such is entitled to all
the light and air that fall per})endicularly on
his land. By lapse of time, i.e. twenty years,
he may also acquire a riglit to the reception of
light and air in a lateral direction, and that either
for domestic or tratle purposes (Gale on Ease-
ments, London, 1888).
The extent to which appropriation of natural
agents is to be permitted is a matter for state
regulation (see Occupation ; Possession ; Pro-
perty). J. E. C. M.
APPROVED BILL. A bill of exchange to
which no reasonable objection can be made.
A PRIORI reasoning is reasoning that starts
from general principles, and not from an induc-
tive examination of particular instances. What
constitutes the basis of the argument is thus prior
to observation or experience of the specific class
of phenomena to which the conclusion relates.
KicARDo's ordinary method of reasoning is
a priori. Thus, in order to show that a tax on
raw produce falls on the consumer, he takes for
granted the general principles that profits tend
to equality, and that the {)rice of raw produce is
determined by its cost of production on land that
yields no rent. Then, taking the case of produce
raised on the margin of cultivation, he argues as
follows : "A rise of price is the only means by
which the cultivator could pay the tax, and
continue to derive the usual and general profits
from this employment of his capital. He could
not deduct the tax from his rent, and oblige his
landlord to [»ay it, for he pays no rent. He
would not deduct it from his profits, for there is
no reason why he should continue in an employ-
ment which yields small profits, when all other
employments are yielding greater. There can
then be no question, but that he will have the
power of raising the price of raw produce by a
sum equal to the tax. A tax on raw produce
would not be paid by the landlord ; it would not
be paid by the farmer ; but it would be paid, in
an increased price, by the consumer " (Principles
of Political EconoTny and Taxation, ch. ix.) It
will be seen that this argument does not pre-
suppose any examination of instances in which
taxes on raw produce have actually been imposed,
or of the consequences observed to result there-
from. According to the school of Ricardo the
right method of economic reasoning in general
is of the above character ; it is a priori. The
48
AQUINAS
same view is expressed in Senior's dictum that
"political economy depends more on reasoning
than on observation."
A priori reasoning is also described as syn-
thetical, and as deductive, the terms used in anti-
thesis being A Posteriori {q.v.), analytical,
inductive. For further discussion see Analyti-
cal ; Deductive ; Inductive ; Synthetic
Method. • J. n. k.
AQUmAS, St. Thomas {h. 1225, d. 1274),
the gi-eatest of the schoolmen, is of the utmost
importance in the history of economic thought,
in that he sums up the teaching of the mediaeval
church, and at the same time furnishes the
point of departure for all subsequent reasoning
down to the Kenaissanee. He would seem,
indeed, to have had no special interest in the
economic side of life ; he was led to handle it
partly because his Summa Theologica was in-
tended to be encyclopaedic, partly because the
growth of industry and trade, and the tendency
to apply to them the maxims of the Civil Law
{q.v.), rendered necessary a restatement of
Christian principles. Politics and economics
were not yet separated from theology ; accord-
ingly the utterances of Aquinas on political
economy are to be found not in any one place,
but scattered up and down his great treatise
and his minor writings. It will, however, be
convenient to group them under three heads —
(i.) fundamental questions of social organisa-
tion ; (ii.) the ethics of business ; (iii.) the
theory of taxation.
(i.) The early Christian Fathers had used
language which might seem to deny the justice
of private property ; the canon law had ex-
pressly included community of goods among its
examples of natural law, and had even incor-
porated a passage ascribed to Clement of Rome
(bishop of Rome in the latter part of the 1st
century), wherein it was laid down that the use
of all that is in the world ought to be common
to all men. Aquinas, with strong common sense,
set himself to justify individual ownership with-
out directly taking up a position of antagonism
to those earlier ideals. In the first place, he
explained away the significance of the generally
accepted phrase as to natural law, by drawing a
distinction between what was natural absolutely,
and what was natural by way of consequence.
In the former sense, it was true, there was no
reason why a field should belong to one man
rather than to another ; but in the latter sense
such ownership might properly be called natural,
considering how necessary it was that the land
should be cultivated and that its fruits should
be enjoyed in peace. Moreover, argued Aquinas,
the phrase did not mean that natural law for-
bade private property, but only that it did not
introduce it ; its introduction was due to positive
law, the invention of human wisdom. In the
second place, he fell back on the teaching of
Aristotle — whose Politics he was the first of the
schoolmen to incorporate with mediaeval thought
— and pointed out the beneficial results of private
property ; and in Aristotle's maxim that pro-
perty should be owned separately but used for
the common good, he found a distinction which
seemed to harmonise with the meaning of the
Fathers.
But if the absence of private property was
not suitable for society generally, might it not
be a duty incumbent on such Christians as
sought perfection in the religious life to divest
themselves of their wealth ? St. Francis had
taken poverty for his bride ; there was a strong
party among the Franciscans who opposed even
the corporate holding of property ; and the
question of apostolic poverty was already be-
ginning to tear the church asunder. Accord-
ingly Aquinas devotes to this topic a more than
usually long section. Poverty, he lays down,
is not an end in itself, but a means — a means
towards following Christ. Riches, therefore,
aire wrong only so far as they are hindrances in
the way of this object. And if external goods
are possessed only in such moderate quantities
as are necessary for men's due maintenance,
they need not distract the soul. If they are
the common property of a religious body, the
care of them may even be regarded as a work
of charity. But in this case the degree in which
material goods are desirable, will depend on the
character of each particular organisation.
The duty of almsgiving had been closely
associated in the teaching of the Fathers with
their views as to property ; and it had been in-
culcated without much regard to possible limit-
ations. Here again Aquinas endeavoured to
state traditional principles in a more prudent
form. The giving of alms was, of course, with
him also, a matter of divine command, and not
merely a counsel of perfection. But it was to
be guided by right reason, according to which
men were not bound, unless in exceptional
cases, to give more than their superfluity ; and
superfluity was defined as that which remained
after providing for a man's due maintenance,
and that of those dependent on him, in the rank
of life to which they belonged.
In what to Aristotle was the other great
fundamental question, viz. Slavery, Aquinas
was clearly but little interested, doubtless owing
to the changed conditions of society. He no-
where discusses at any length the justice of
personal servitude, and his occasional arguments
on the subject seem purely academic. He would
appear to have accepted Aristotle's view of the
expediency of slavery ; but he differed from him
in believing that by nature (in the "absolute"
sense of the term) all men were equal ; and he
followed some of the Fathers in holding that
slavery was among the consequences of the fall
of Adam.
(ii.) Of wider practical importance was his
teaching as to the ethics of business. Hf
AQUINAS— ARABLE LAND, CONVERSION TO PASTURE
49
contributed but little to the development
of church doctrine in this regard ; but he
gave it a systematic shape which greatly
strengthened its hold upon men's minds. In
laying down that, in buying and selling, no-
thing but a Just Price {q.v.) should ever be de-
manded or paid, Aquinas was quite conscious
that he was enunciating a principle in direct
opposition to that of the civil law ; and he
met the difficulty by urging that human law
was necessarily limited, and that it could not,
like divine law, prohibit all that was opposed
to virtue. As to trade, he agreed with Aristotle
that it was base (see Aristotle), and with the
Fathers that it was sinful, if carried on for the
sake of gain ; but it was not sinful when the
merchant sought only a moderate reward for his
exertions, and spent it in the maintenance of
his family or the relief of the poor ; still less
when it was carried on for the public good, that
a country might not be without the necessaries
of life (see Fathers). Concerning usury he
repeated the arguments of his predecessors
Alexander of Hales and Albert the Great, laying
particular stress on the distinction between
Fungibles and Consumptibles (q.v.): with
the loan of a consumptible, such as money,
passed the right to make use of it, so that to
demand the return of the money and a payment
for its use was to make a double charge for one
thing. He allows, however, that a compensa-
tion may justly be received for a Damnum
Emergens (q.v.), i.e. the loss arising from the
non-restoration of a loan at the appointed time,
though not for a Lucrum Cessans (q.v.) But
he makes two dangerous concessions when he
allows that a man may, without sin, borrow
from one who is already a usurer, if it is for
some good object ; and that a man may, without
sin, entrust his money to a usurer, if the purpose
is not gain, but the safe keeping of the money,
(iii.) The treatise De Begimine Principum, the
most popular manual of statecraft in the later
Middle Ages, is, unfortunately, from the hand of
Aquinas only as far as the middle of the second
chapter of the second book (see Ptolemy or
Lucca). But there is extant almost interesting
letter of his in reply to certain questions of the
Duchess of Brabant ; among others as to the
justice of Taxation. Aquinas replies that as
princes are established by God, not that they
may seek their own gain, but the common utility
of the people, they should, as a general rule,
content themselves with the revenues of their
demesne lands. But when these will not suffice
for the defence of the country or to meet other
emergencies, then it is just that subjects should
be called upon to give their aid. This position
is identical with the demand, which appears so
often in the constitutional struggles of the 14th
century in England, that the king should " live
of his own."
[There is no adequate account of the economic
VOL. I.
teaching of Aquinas, which indeed may be best
collected from Aquinas himself. See the Suiiima
Theologica, as to private property, Secunda Secundae,
Quaestio 77, Articulus 3 ; Q. 66, Art. 1, 2 ; as
to voluntary poverty, Q. 188, Aft. 7 ; as to alms,
Q. 32, Art. 5, 6 ; as to slavery, Pars Prima, Q.
96, Art. 3 ; Prima Secuudse, Q. 94, Art. 5 ; as
to price, Secunda Secundse, Q. 77 ; as to usury,
Q. 78 ; as to taxation, De Regiviine Jitdceorum
among the Opuscula. The best brief account will
be found in C. Jourdain, La Philosophie de S.
Thomas d'Aqtdn, 1858. See also W. J, Ashley,
Economic History, vol. i. pt. i., 1888 ; — P. Janet,
Histoire de la Science Politique, 3d ed., 1887 ; —
H. Contzen, Geschichte der Volksidrthsthaftlichen
Literatur im Mittelalter, 2d ed., 1872; — J. J.
Baumann, Die Staatslehre des h. Thovias, 1873
(little more than a series of extracts in German).
For its relation to the teaching of the church in
general, W. Endemauu, Studien in der Rovianisch-
Kanonistischen Wirthschafts ic. Rechts-lehre, vol.
i., 1874 ; vol. ii., 1883 ; and the brief (^'eschichte
des Kirchlichen Zinsverbotes of F. X. Funk, 1876.]
w. J. A.
ARABLE LAND, Conversion to Pasture
IN Great Britain. Naturally and histori-
cally Great Britain is a grass-gi'owing pastoral
country. Nature, by the moist climate, sug-
gests a preponderance of permanent grass-land ;
history proves that, before the Napoleonic wars
and the pressure of scarcity and corn laws,
this preponderance in fact existed. But, at the
beginning of the 19th century, vast areas of
poor soils, of downs, heaths, sheep-walks, and
rabbit-warrens, were ploughed uj) under the
temptation of high prices. These tracts cannot
now be tilled with prolit, nor can many of them
be restored to pasture so as to benefit the
present generation. Within recent years, the
heavy fall in the price of cereals has led to the
reconversion of arable land to pasture, and the
consequent diminution of the corn -growing
area. The increase of permanent pasture has
been greatest in grain -gi-owing districts, which
are, by climate and by soil, least adapted for
pasture, and the economic loss is consequently
gi-eater. In 1872 the total acreage of per-
manent pasture was 12^ million acres ; in
1877 it was 13,575,606" acres ; in 1887 it
was 15,671,395 acres; since 1904 it has been
over 17 million acres. Bearing in mind the
fact that the increase has been greatest in corn-
growing districts, it is improbable that the
reconverted pastures are really permanent, or
that they represent more than a temporary loss
of capital. The immediate results of the
change are : (1) a considerable reduction in the
farmer's labour bill. Assuming that farmers
save £1 an acre by the change, more than two
millions are annually withdrawn from the wages
of the agi-icultural population. Half the popu-
, lation only is required when dairying replaces
-tillage, and less than half where neat stock are
kept The full results of the displacement of
1 labour cannot be gauged, partly because the
60
ARBITRAGE
area over which it extends is wide, partly
because agricultural labourers, especially the
older generation, remain at their homes, though
employment may be precarious, in preference to
seeking permanent work elsewhere. The census
returns for 1911, compared with those for 1671,
show a decrease in the number of agricultural
labourers of about 410,000. Part of this
decrease must be attributed to the develop-
ment of agricultural machinery. (2) A con-
siderable loss in the producing power of the
country is, for a time at least, the second
result of the conversion. Under favourable
circumstances of soil and climate, it takes ten
years before a profitable permanent pasture can
be obtained. Under unfavourable conditions,
the period may be doubled or even trebled.
The expense of converting arable land to pasture
is greatest where the return is least, and longest
postponed. Thus in the moist climate of the
west, permanent pasture may be secured by
allowing arable land to fall down to grass. In
the eastern counties, "tumble-down" land can
scarcely ever become profitable pasture. Great
care, liberal management, abundance of manure,
are necessary. If these are neglected, especially
in the third and fourth years from the sowing,
the soil will become bare as the desert. On
reconverted pasture, the value of the additional
sheep, cattle, pigs, hay, and milk will for
many years — and the gi-eater the necessary
outlay of capital the longer the profits are
postponed — fall below the value, even at present
prices, of the corn and straw they replace.
[The practical side of the question is treated in
all books on agriculture. But see especially the
article by Mr. Faunce de Laune of Sharsted, Sitting-
bourne, in the Journal of the Royal Agricultural
Society, pt. i. 1882, and Permanent and Tem-
porary Pasture, by Martin J. Sutton.] b. e. p.
ARBITRAGE (Stock Exchange). On the
stock exchange arbitrage dealings are those
which are done by houses in London, for in-
stance, to cover other transactions which may
be done in Paris or Berlin or New York or in
other distant places. The method pursued is
often something like this : The arbitrage dealer
learns by telegram from some distant place that
his colleagues stationed there have bought or
sold certain securities at advantageous prices.
His business then is to sell or buy in London if
possible at a better price for the same securities.
For example, A. sells Egyptian Unified bonds in
Paris at a price corresponding to 80 here. B.,
an arbitrage dealer in London, thereupon en-
deavours to buy the same amount here at 79|,
leaving a profit of |- per cent to be divided be-
tween the two firms. Or C. buys in New York
Erie Railroad shares at 29^, and seeks to im-
prove his bargain by instructing D., his colleague
in arbitrage business, to sell the same number of
shares at 30 here if possible. The nicest atten-
tion to the rate of exchange, cost of transit,
insurance, loss of interest, etc., must be given
to these transactions. Arbitrage is also con-
ducted, under the title of " shunting, " between
London and Liverpool, or Manchester, or Glas-
gow, as the case may be, the favourite opera-
tions between these markets being English
railway stocks, which are dealt in indifferently
in each. a. e.
ARBITRAGE (General Business). An
expression used in general business language for
international dealings in stock exchange securi-
ties, bullion, specie, bills of exchange, etc. If
the price of a security is higher in one place than
in another, it is said that there is a margin be-
tween the two places in the particular security,
and arbitrage dealers, whenever they discover
such a margin, take advantage of it by effecting
purchases in the cheaper, and sales in the dearer
market. As one of the two operations must
precede the other, the margin may disappear be-
fore the transaction is completed ; but this is not
the only element of uncertainty. The original
arbitrage transaction always involves a covering
transaction to re-imburse the buyer for his out-
lay. The re-imbursement can be effected either
by a reversed buying and selling of some other
security, or by the remittance of bills of ex-
change from the seller to the buyer, or by the
issuing of a draft on the seller by the buyer,
The first operation may not always be possible
without loss, and the second and third may be
disturbed by an unfavourable fluctuation in the
rate of exchange. The original margin ought
to be wide enough to cover all these risks as
well as the outlay for carriage, insurance, bill
stamps, security stamps, brokerage, etc. In
some cases it may be advisable, instead of for-
warding the securities, to continue the bargains
on each side until the margin is reversed, and
then to close the transaction by buying in the
place where the first sale took place and by sell-
ing in the place where the first purchase took
place. In this way all the forwarding expenses
and stamps are saved on both transactions, but
there must, of course, be a reasonable prospect
of such a reversal in the margin within a
measurable time, and there must be no un-
favourable difference between the rates of con-
tinuation in the two places (for this see Con-
tinuation OR Contango). As whenever there
is a margin in any secuiity all arbitrage dealers
buy in the one place and sell in the other, the
price in the cheaper place necessarily rises almost
immediately, and in the same way the price in
the dearer place falls, and as, moreover, for vari-
ous reasons, which it would not be possible to
explain in a short space, arbitrage operations
are frequently effected with a very slight, or even
without, margin, the natural effect of arbitrage
business is to maintain the prices of securities
in all places on the same level. e. s.
ARBITRAGE (Exchange). The difference j
in the rates of exchange {i.e. the prices payable M
ARBITRATION BETWEEN EMPLOYERS AND EMPLOYED
51
for bills of exchange on foreign countries) in
different places occasions the so-called "arbi-
trage transactions in exchange." If, for in-
stance, bills on demand on Berlin can be bought
in London at 20*40, and bills on London can
be bought in Berlin at 20 "So, it will be profit-
able for a Berlin banker to buy the latter and
to obtain in exchange bills on Berlin. For
every £1000 on London which he buys he has
in that case to pay 20,350 marks, while the
same £1000 in London will enable him to
purchase 20,400 marks on Berlin ; he therefore
receives 50 marks more than he spent, from
which sum, however, the expenses for postage,
bill stamps, brokerage, etc., must be deducted.
In the case of long bills, allowance must also be
made for the rates of discount on both sides.
These transactions become more complicated if
a bill on a third place is remitted from one of
the two places — if, for instance, the Berlin
banker, instead of obtaining a bill on Berlin in
London in exchange for the bill on London
remitted by him, instructs his correspondent to
send a bill on St. Petersburg ; in such a case
there is more risk of loss involved, as, before
the St. Petersburg bill is received in Berlin
and negotiated there the exchange m.ay vary
to the disadvantage of the transaction. The
competition of arbitrage dealers naturally re-
duces the margins of profit, and thus the rates
of exchange in all important centres nearly
correspond with each other. [See H. Deutsch,
Arbitrage, Effingham Wilson, 1910.] E. s.
ARBITRATION BETWEEN EMPLOYERS
AND EMPLOYED. A system of adjusting
industrial disputes. It should not be identified
with conciliation (see Conciliation, Boakds
of), although a hard and fast line of distinc-
tion cannot be drawn. Arbitration may, perhaps,
be said to be adapted to a more advanced stage
of a dispute, and to be more compulsory in
character. If the representatives of employers
and employed at a board of conciliation cannot
arrive at a mutual agreement, they may refer —
and definite provision is generally made for such
ultimate reference — to an arbitrator. Arbitra-
tion may also be found possible where there is
no board of conciliation established, and has
sometimes paved the way for the institution of
such a board. The details of arbitration are
subject to great variation. The arbitrator may
be an outsider, or he may be himself a member
of the trade in which he is called upon to arbi-
trate. The advantage of the former alternative
is the avoidance of suspicions of bias which may
naturally arise in the latter case ; but one disad-
vantage is the necessity of acquainting the arbitra-
tor with the meaning of those technical terms
which would be familiar to a member of the
* trade. In some cases the attempt is made to
javoid these diflBculties by the appointment on '
either side of an arbitrator who is a member of
'the trade, and by the selection, in addition, of a
single umpire who is an outsider invested with
the power of final decision should the arbitrators
disagree. The questions referred to an arbitrator
may also be various, but, in the generality of
cases, they are concerned with the regulation of
wages. The procedure pursued, again, is subject
to variation, but is usually of the following
nature. The arbitrator holds a court, as it is
termed, on a fixed day. Some time before he
is furnished with statements from both the
contending parties, setting forth their rival
claims and the arguments on which they are
based. On the day Avhen the court sits repre-
sentatives of both sides attend and state their
case, sometimes by means of printed or AVTitten
documents, sometimes supplementing these by,
or substituting for them, oral pleadings. The
arbitrator asks for any additional evidence he
may consider necessary, and makes his award
either at once or at a subsequent date. The
diflSculties connected with industrial arbitration
may be summarised under three heads. The
award may be disregarded, and to avoid this
some A\Titers have urged that a legal character
should be given to courts of arbitration, and a
legal sanction to the awards of arbitrators.
Others have contended that this would tend to
impart too elaborate and technical a character
to the proceedings, and that it is not in harmony
with English traditions or inclinations. They
liave also pointed to the fact that there is already
]n-ovision in the statute book for legalised ar-
bitration, e.g. (1) a series of acts passed in the
18th century, providing for the settlement of
disputes in particular trades, and consolidated
in 5 Geo. lY. c. 96 ; (2) Lord St. Leonard's
Act of 1867 (30 & 31 Yict. c. 105), providing
for the establishment of councils of conciliation
after the model of the French conseils de prud-
'hommes (see Conseils de Prud'hommes) ; and
(3) Mr. Itlundella's Arbitration Act of 1872 (35
& 36 Yict. c. 46), and that this legislation has
hitherto proved inoperative. And therefore,
they contend, the only satisfactory means of
avoiding the difficulty is to secure thorough
representation of the contending parties by
means of Tiiade Unions and Masters' Asso-
ciations (which see). The second difiiculty
connected with arbitration is the element of
contentiousness naturally attaching to the pro-
ceedings, which are, however, often, if not
generally, conducted with remarkable courtesy.
The third and last, and perhaps tlie crucial, difii-
culty is that of securing accurate data for the
arbitrator, and of determining the principle on
which his award should be based — whether, that
is, decisions as to changes in wages should rest on
changes in the prices of the articles produced by
the wage earners, or on changes in the ccst of
the raw material (see Competition ; Engineer-
ing Trades Industrial Treaty, App.)
[For an account of these difficulties see Price's
Industrial Peace, ch. iii., where a history \b
52
ARBITRATION— ARISTOCRACY
given of the board of conciliation and arbitration
m the manufactured iron trade of the north of
England, and Professor Marshall's preface to the
same work. — Consult also Jevons's The State in
Relation to Labour^ ch. vii. — Marshall's Economics
of Industry, bk. iii. ch. viii. — Howell's Con-
flicts of Capital and Labour, ch. xi. part ii.* ; —
and for the difficulty of determining the principle
on which the award should be based, Sidgwick's
Principles of Political Economy, 2d ed. , bk. ii.
ch. X. § 5, and bk. iii. ch. vii. § 7, and Price's
Paper on Sliding Scales and Economic Theory
{British Association Report, 1889, pp. 523-35) —
Crompton's Industrial Conciliation contains a
good account of experiments in arbitration and
conciliation, but is now out of print.] L. L. P.
ARBITRATION", Scotch. The principal
distinctive features are : (1) the arbiter's award
("decreet-arbitral") can only be set aside by
an action of reduction on the ground of bribery,
corruption, or falsehood ; (2) the arbiter lias
implied power to give costs ; (3) the decree is
attested and executed in the form of a regular
deed ; it is transcribed in the public registers,
and gives warrant for execution issuing against
either party. a. d.
ARBUTHNOT, John, M.D., born 1667 ;
died 27th February 1734-35 ; he was appointed
physician to Queen Anne ; founded the Scrib-
lerus Club with Swift, Pope, Gay, and ParneU ;
wrote some witty political satires, a few pro-
fessional papers, and the following important
work.
Tables of the Grecian, Roman, and Jewish
Measures, Weights, and Coins reduced to the
English Standard, London [1705], 8vo, reprinted
as Tables of Ancient Coins, Weights, and
Measures, Explained and Exemplified [published
by his son Charles], London, 1 727, 4to. — Second
Edition, with Appendix, containing Observations,
by B. Langwith, D.D., London, 1764, 4to (Latin
translation by D. Konig, Lugd. Bat., 1764, 4to).
ARBUTHNOT, John, of Mitcham (Surrey),
towards the end of 18th century, whose abilities
as a farmer have been acknowledged by Arthur
Young {On the Husbandry of three celebrated
British Farmers, 1811, pp. 17-28), refutes, in
An Inquiry into the Connection between the
present Price of Provisions, and the Size of Farms,
etc., By a Farmer, 1773, the views of authors
ascribing the high price of provisions to large
farms, asserts that the proportion of land which
is in some degree governed by its value should
be equal to a given capital (p. 35), and ascribes
the deamess to failures of crops, luxury in the
mode of living, and the increase of post-horses.
The remedy consisting in the extension and
improvement of agriculture, he recommends
enclosures. Then '*make the trade free . . .
let corn flow like water, and it will find its
level " (p. 88). Even the bounty on its exporta-
tion is needless. The effects of importation
from America are not dangerous, "for there
labour is dear." He laments only that the
development of large farms was accompanied
by " the loss of our yeomanry, that set of men
who really kept up the independence of this
nation ; and sorry I am to see their lands now
in the hands of monopolising lords, tenanted
out to small farmers, who hold their leases on
such conditions as to be little better than
vassals ready to attend a summons on every
mischievous occasion," p. 139 (see Yeomen).
This work has been translated into French by
Freville, 1775, as the second volume of his
Arithmitiqu^ politiqiie de A. Young. — See M'Cul-
loch. The Literature of Political Economy, pp.
193, 194.— K. Marx, Capital, vol. ii. pp. 746
note 2, 751 note 1. s. b.
ARCO, Gherardo Giambattista dei Conti
d'Arco, born at Arco in the Tyrol 1739, died
at Goito 1791, was a great personal friend of
CoNDiLLAC. As an economist he was a man of
sound common sense, possessing no brilliant
talent. His writings, consisting mostly of prize
essays written for academies, have been collected
by CusTODi in his Economisti classici Italiani,
1804, Milano. His principal essays are dated
as follows :
On the Politicaland Economical Harmonybetu^een
Tovmsand Country, 1771 (Mantua Academy). — On
Com Stores, 1,775 (Mantua Academy). — On the In-
fluence Commerce exerts over Talents and Habits,
published in 1782 (written in 1777 for the Aca-
demy of Marseilles). — On the Influence the Spirit
of Commerce exerts on the Domestic Economy of the
People and on the prosperity of States, 1778 (pub-
lished in Cremona). — Reply to the Question whether
Agriculture or Industry is to be preferred in a fer-
tile Country, 1780 (Mantua Academy). — On the
Liberty of Transit Commerce, 1784 (published in
Mantua). M. p.
ARGENSON, R6n^ Louis de Voyer de
Paulmy, Marquis d', born 1694, died 1757 ;
was the eldest son of the "Garde des sceaux"
of the same name, under the Regency. He is
better known by his celebrated mot "Pas trop
gouvemer," — lineal ancestor in the spirit of the
" laissez-faire, laissez-passer " of Gournay, —
than by his works, now little read. His Con-
siderations sur le gouvernement ancien et present
de la France (published 1764, but written more
than thirty years previously), in which he treats
of democracy in a state governed by a monarch,
deserves, however, to be reprinted. He was one
of the most active members of the Club de
V Entresol (Place Vendome), which was founded
in 1724, and closed in 1731 by order of Cardinal
de Fleury. A. c. f.
ARGENTARII. The bankers of ancient
Rome. There were some special rules regarding
their transactions. An action of a special
kind could, for instance, be brought against an
argentarius who had engaged to answer for the
debt of another. The argentarii had special
privileges as regards the right of set-ofF. E. s.
ARISTOCRACY. Aristocracy meant to the
Greeks "government by those who are best,"
ARISTOCRACY— ARISTOTLE
53
in other words not government by one indi-
vidual (monarchy), or by the majority (demo-
cracy), but by a select class, who are privileged
because of some real or alleged superiority to
the rest. Government by a class, if it possessed
no such superiority, was not aristocracy but olig-
archy (government of the few). Such are in the
main the distinctions of Aeistotle {Politics).
Aristocracy, however, has come to mean in our
own day simply that class in society which is,
or claims to be, superior to the rest, with or
without any special power in the government.
Historically, therefore, there have been as many
forms of aristocracy as there are forms of excel-
lence amongst men. There were aristocracies
built on a superiority of race and birth, aristo-
cracies of culture (such as a caste of priests) ;
aristocracies of age and experience (senatus,
yepovaia) ; military aristocracies, territorial
aristocracies (of proprietors of land), and finally
aristocracies of wealth (equites, merchant princes).
It is of the last that Cicero recorded his opinion :
"Nee ulla deformior species est ciWtatis quam
ilia in qua opulentissimi optimi putantur " {Rep.
I. 34). The popular notion of aristocracy
changes with the popular standard of excellence ;
and the changes have clearly been, on the whole,
for the benefit of civilisation. Between the
actual equality of men in barbarous societies, and
the endeavour after equality in the most civil-
ised, there are intervening stages where society
is necessarily composed of privileged and un-
privileged classes. The relative justification of
slavery, for example, lies in the sparing of the
conquered, the training of them to habits of
industry, and the securing to their masters of
the leisure for the acquisition of science and
culture. But if these were the conditions of
the beginning of progress, they are not neces-
sarily the conditions of its continuance.
In the same way an aristocracy of birth has
been the means of reducing a people to military
and political discipline, as in the Roman
republic and mediaeval Europe. The republic
of Venice grew strong and wealthy under a
governing council filled entirely by sons of
office-holders. But the lessons once learnt, the
teachers are dismissed. In Venice, e.g.^ the
(closing of the Lihro d'oro in 1309 was the suicide
I of the governing class. In modern times the
two types of most importance in economical
band social development have been the territorial
id the commercial aristocracies. The aristo-
Jidracy of feudalism became territorial when the
award of victory was the grant of lands. Land
JWas in those times "the means not of subsist-
merely, but of power and protection."
Juch customs as Primogeniture and Entail
reserved the estate to the lord's family ; to divide
le land would have been to lessen the power.
Jut by thus endeavouring to maintain their
)wn power, the lords were giving security of
erson to their dependants, and to their country
a continuity and stability of institutions which
every country in Europe needed above every-
thing in those times. In addition they intro-
duced a rale of conduct {noblesse oblige) which
had in many ways a real superiority to that
of common folk. Nevertheless the growth of
absolute monarchies, of towns, guilds, and com-
merce, not only made the feudal institutions
unnecessary as guarantees of stability, but re-
vealed the fact that they might be hindrances
to progress. Economical causes worked, among
others, to free the dependants and to raise up
formidable rivals to the power of the nobles.
Politically their exclusive privileges may be
said to have lasted in France till the Revolu-
tion of 1789. In England territorial nobles
tempered the hostility of the merchant princes
by admitting many of the latter from time to
time within their ranks ; and they thus saved
their privileges for another half century. The
aristocracy of wealth, which at first rivalled
and then conquered the aristocracy of birth in
England, will no doubt give place in its turn
to a successor when its work is done. It is of
a nature to invite the odium of those who are
excluded from it, in proportion as fortunes seem
to be due to chance and speculation more than
to industry and talent. The recognition of its
superiority is often the confession of weakness
in presence of strength rather than reverence
before admitted excellence. The latter feeling
is not only consistent with modern democracy,
but is an imperative condition of its health.
Democracy claims a fair field for the exercise
of all the powers of men, and anything like a
hereditary caste of privileged persons would
never be willingly created, and is very re-
luctantly maintained by it. But it recognises
an inequality of ability, an aristocracy of genius,
and an aristocracy of labour. The difierences
in talent between individuals, and the eft'ect
of heredity in intensifying them, will remain
a constant factor of economical and social
development (see also Equality ; Feudalism ;
Heredity ; Inheritance, Estate of).
[Bluntschli, Staatslehre, II. x. and VI. xix.
(1875). — Stahl, Philosophie des Rechts, vol. ii. p.
103, Der Add (1878).— Ad. Smith, Wealth of
Nations, bk. iii. — G. C. Lewis, Use and Abuse oj
Political Terms, § 8 (1832). — Montesquieu, Esprit
des Lois, II. iii.. III. iv.] J. b.
ARISTOTLE. By (Economic {oUovoficKT})
Aristotle meant the practical science, or art,
of household management — practical wisdom
{(f>f)6v7j<ns) applied to the household {Eth. Nic.
VI. 8 § 3), the household {otKta) including the
three relations of husband and wife, father and
child, master and slave, and obviously requiring
property for its maintenance {Pol. I. 2). The
two disconnected books called The (Economics,
which have come down to us among Aristotle's
writings, are certainly not his, but works of the
Peripatetic school, the first being earlier and of
54
ARISTOTLE
more value than the second (Zeller, Phil, der
Grieehen, Ed. 3, Theil II., Abtheil. 11. p. 944).
The first book of the Politics constitutes his own
contribution to the subject (cp. PoL I. 3, § 1 ;
and III. 6, § 3), and is, indeed, summarised
under the title of we pi rod oiKovofiiKov, i.e. Con-
cerning the (Economist, in the epitome by Areius
Didymus (?) preserved in Stobseus {Bel. II. c. 6).
XprjfxaTLa-TiKTi, the science or art of wealth, is,
he tells us, by some considered identical with
household management, by some regarded as
the most important part of it (Pol. I. 3, § 3).
He treats of it in chaps. 8-1 1 ; and in these chap-
ters, taken along with JEth. Nic. V. 5, §§ 6-16, we
have what would now be called the "political
economy " of Aristotle. Both households and
states require means for their support. Wealth
(ttXoOtos) is, therefore, defined as *'a quantity
of instruments for the household or state " (Pol.
I. 8, § 15). This definition Mill {Pol. Econ.
" Preliminary Remarks") would consider "philo-
sophically correct," though like other English
economists he prefers to define wealth in terms
of Exchange. In Eth. Nic. IV. 1, § 2, Aristotle
defines, or rather describes, property (XpiJ/^ara)
as "everything whose value is measured by
money ; " but the more scientific definition of
the Politics serves him as a basis for his opinion
about the true relation of xPVf^o.ri.aTiK'^ to
oLKovofiLKrj and ttoKltlkt} (as we should say "of
economics to politics"). A science of instru-
ments or means is obviously subordinate to a
science of ends.
Aristotle uses xpij/^ctrio-Ti/cj? in the widest sense
as equivalent to kttjtlkti, the art of acquisition
in general ; but in a narrower sense it is limited
to the art of acquiring that wealth which is
only rendered possible by exchange and, on any
considerable scale, by Money. The kinds of
acquisition are distinguished as "natural" and
"unnatural," the latter arising through the
introduction of exchange. "Natural" wealth
is to the household just what nature's provision
of food is to animals, e.g. mother's milk to the
young, or its ordinary food to the graminivorous
or carnivorous animal. And so hunting, either
of wild animals for their flesh or skins (fishing
would fall under the same head), or of slaves to
serve as "living tools," is named among the
"natural" modes of acquisition. The "nom-
adic ' life of those who rear sheep and cattle,
agriculture (including tlie cultivation of fruit-
trees), the keeping of bees (important when
sugar was little known), and the rearing of
fowls and fish — all these are considered
" natural " ways of supporting life. Intermedi-
ate between these and the " unnatural " class,
Aristotle places wood-cutting and mining : the
man who grows corn is in immediate contact
with nature, but the man who makes the spade,
or plough, or procures the materials for it, is
a step removed from nature — such, at least,
seems to bo his line of thought. Exchange
{pLera^XriTiK'n), as already said, introduces the
"unnatural" kind of acquisition. Aristotle
distinguishes, as Adam Smith did again long
afterwards, between the Value possessed by any-
thing in v^e and its value in exchange {Pol. I.
9, § 2). If a shoe be worn, that is according to
nature ; if it be used to purchase other com-
modities, that is not "natural," though still a
use of the shoe qud shoe ; for the person who
takes it in exchange takes it because it is a shoe.
Exchange only comes to be needed when wo
pass outside the limits of the household. In
early stages of society, "as among many bar-
barians still," it took place by simple Barter
{Pol. I. 9, § 5). The introduction of money
{vbiuffimY makes no difterence in the character of
exchange {Eth. Nic. V. 5, § 16), but facilitates it
enormously by supplying a measure of value
{irdvTa TToiet (TvpLfierpa, "it makes all things
commensurable," Eth. Nic. V. 5, § 15) and a
convenient medium of exchange. Money is
defined as "a conventional exchangeable repre-
sentative of demand" {vTrdWay/ma ttjs xP^^°-^
Kard (Twd-fiK-qv, Eth. Nic. V. 6, § 11. Gold and
Silver serve this purpose best ; being useful
themselves, they are at the same time easily
carried about {Pol. I. 9, § 8), and, although liable
to change in value, they do so less than other
commodities {Eth. Nic. V. 5, § 14). At first
they were always weighed, afterwards a stamp was
imposed {Pol. I. 9, § 8). This brings out the
conventional character of Currency, so that a
change in the currency will make the old coins
useless {Eth. Nic. V. 5, § 11). About money
there are two opposite errors : (1) that wealth
consists in a quantity of money {Pol. I. 9, § 10) ;
(2) that it is something utterly valueless — (here
he doubtless alludes to Cynic theories, such as
are maintained in the pseudo- Platonic Eryxias).
The "unnatural" kind of xPW°-'^'-'^''''-i^'0 ^^'
eludes (1) Trade {efiiropla, commerce, and Kain}-
Xi/c?7, retail trade), diff"erent forms of which are
ship-owning, the carrying-trade, shopkeeping ;
(2) Money-lending (T0K:i(rAi6 J, ^jSoXocrrart/c^), which
is even more unnatural, for it is a perversion
even of the natural use of money to make money
breed money, instead of simply facilitating ex-
change ; (3) Labour for wages {jxiadapvla) ;
for while, in Aristotle's view, there are slaves
by nature, the hired labourer, whether skilled
or unskilled, is something contrary to nature —
1 A remarkable proof of the force with which this
conception has been impressed on modern thought is
found in the reference made by Mirabeau to Aristotle at
the session of the National Assembly, 12th December
1790 (see Dana Horton, Report on International Monetary
Conference, Paris, 1S78, p. 29 (art. Bi-metallism).
The same influence is also exemplified in the statement
made by recent bi-metallists, " that the greater part of
the value of vi/j,i(r/^x, (money) is given it by v6f/.6; (law),
to which it, as Aristotle says, both etymologically and
actually owes its origin" (see letter to the Times of
Chrysargyros, 26th May 1881), and in the remarks of
H. Cernuschi, " Money is instituted by law : nomos, law ;
nomisma, money" in his work, Bi-metallism at \b\ a
necessity nf the Continent, for the United States, for Eng-
land, by H. Cernuschi, London, P. S. King, 1881.
(
ARISTOTLE— ARITHMETIC, POLITICAL
56
something for which he can find no proper place
in his political ideal. Regarding wealth as an
instrument to life, and therefore as a means and
not as an end, Aristotle rejects the money-
making life as one that no rational man would
choose (Elh. Nic. I. 5, § 8, 6 S^ xPW^ti-<^ttis
[sc. ^tos], j8^ai6s rts eo-rij', "The money-making
life is" either "unnatural" or rather "chosen
only under compulsion," " as a mere necessary "
— a passage of which the mistranslation, "The
money-maker is a violent person," determined
the position of the usurers in Dante's Inferno,
canto xi.) But is Aristotle quite consistent in
holding, as he does, that the city state is " prior
by nature," and so higher in type, than the
village community or patriarchal family, and
yet condemning as unnatural all the more
complex economic conditions of city civilisation ?
His economic views are really dependent on the
ethical principle that conduct (Trpa^is), and not
the production of commodities {Troirjcns), is the
end for man. This and the prejudices of a slave-
holding society prevented him, perhaps, from
sufficiently understanding the economic struc-
ture even of the very society in which he was
living.
To return to the original question, his answer
is that only the natural kind of xp77/AaTio-Ti/c'J7 is
a part of household management. The other
kind is subordinate or subservient (v-n-qpeTLKri,
Pol. I. 10, § 3) ; and, because concerned with
mere means and instruments of living, both
kinds are to be pursued only to a limited degi-ee.
Thus those are wTong who identify household
management with amassing wealth, and states-
manship with finance.
While thus laying the foundations of a special
science of wealth, Aristotle never treats the
subject apart from ethical and political con-
siderations. In Eth. Nic. V. 5, he seems to
consider that the value of commodities is, in
some way, determined by the value of the pro-
ducers. Fair exchange is reciprocal action
regulated by proportion (t6 avTiireirovebs Kar
avaXoylav), e.g. as the farmer to the shoemaker,
so must be the quantity of shoes that the farmer
receives to the quantity of corn that the shoe-
maker receives. Money, as already said, makes
commensurability and so equalisation possible
between such incommensurable quantities. AVe
may perhaps make his idea intelligible to our-
selves by thinking of the amounts to be given
in exchange as in the inverse ratio to the value
of an hour's labour of each producer.
Aristotle was fully alive to the close relation
between social or political institutions and econ-
omic conditions. In Pol. I. 8, he points out
that, just as the food of animals determines their
habits as gregarious or solitary, etc., so are men's
lives different in the pastoral, the hunting and
fishing, and the agricultural stage (or in various
combinations of these). The pastoral is here
placed first, not as Deiug the nideati but as
that which leaves most leisure. And so in Pol,
YI. ( = VII. in the changed order of St. Hilaire,
etc.) 4, when grouping the different types "of
democracy according to economic conditions, he
considers a pastoral democracy less stable than
an agricultural, because there is more leisure for
political interests ; while, again, an industrial
population, living in a city, develops the most
extreme form of democracy.
Colonies are referred to as a remedy for over-
population (VI. 5, § 9). The nature of a Mono-
poly (with the use of this term) is illustrated
in I. 11. In criticising Plato's Communism
Aristotle uses the argument, often repeated
since, that "the magic of property" is needed
to ensure due care of anything. Not abolition
of all private property, but e(jualisation of pro-
perty among the free citizens, along with the
maintenance of a nearly equal population, con-
stitutes his own ideal state on its economic
side {Pol. VII. = IV. in order of St. Hilaire, etc.)
Most of Aristotle's economic discoveries may
be said to have lain dormant, and to have re-
quired rediscovery in modern times. His
influence, however, was directly exercised as
one of the factors in the mediaival abhorrence
of usury (cp. Ashley, English Economic History,
I. pp. 145, 152. See Canon Law ; Usury).
[Newman, The Politics of Aristotle (Oxf. 1887),
i. pp. 125-138; ii. pp. 165-208.— Jowett, The
Politics of Aristotle (Oxf. 1885), vol. ii. pp. 24-37,
especially p. 35, where will be found a convenient
table of the various divisions of ktt^tlkt}, which we
are permitted to reproduce here in English : —
The art of acquisition {kttjtlkti : but xpT/Marto-rt/c?]
is sometimes used in this wide sense).
1. Hunting (a) of wild beasts {b) of those
who are " by nature slaves."
2. xp77/iaTt(rTi/c'?7 (c. 9, § 1), the science or
art of wealth.
(1) Natural, including
{a) keeping of cattle, flocks, etc.
(b) agriculture (including cultivation of
fruit trees).
(c) bee-keeping.
{d) keeping of fish.
{e) keeping of birds.
(2) Intermediate,
(a) wood-cutting.
(6) mining.
(3) Unnatural ( = fxera^XTjTLK-^, exchange).
(a) trade (commerce and retail trade).
1st, ship-owning.
2d, carrying-trade.
3d, shopkeeping.
{b) money-lending (usury).
(c) labour for hire.
1st, of the skilled artisan.
2d, of the unskilled.] D. G. R.
ARITHMETIC, Political. Economic in-
quiry was sometimes styled thus during the
early development of the study of economics,
the best known example being found in the
works of Sir William Petty, who, writing in
the latter half of the 17 th century, speaks of
66
ARITHMETIC, POLITICAL
the mode in which he conducted his economic
investigations — a mode which later inquirers
have scarcely been able to improve on — thus :
' ' The Method I take to do this, is not yet very
usual ; for instead of using only comparative
and superlative Words, and intellectual Argi\-
ments, I have taken the Course (as a Specimen
of the Political Arithmetick I have long aimed
at) to express myself in Terms of Number,
Weight, or Measure ; to use only Arguments of
Sense, and to consider only such Causes, as
have visible Foundations in Nature ; leaving
those that depend upon the mutable Minds,
Opinions, Appetites, and Passions of particular
Men, to the Consideration of others : Really
professing myself as unable to speak satis-
factorily upon those Grounds (if they may be
called Grounds,) as to foretell the Cast of a
Dye ; to play well at Tennis, Billiards, or Bowls
(without long Practice,) by Virtue of the most
elaborate Conceptions that have ever been
written De Projedilihus et Missilihus, or of the
Angles of Incidence and Reflection " (p. 98).
Several Essays in Political Arithmetick, by Sir
William Petty, London (Fourth edition), 1755.
ARITHMETIC, Political. History of.
The name of this mother science, both of
statistics and of political economy in England
can be traced to Sir William Petty's Discourse
made before the Royal Society the S 6th of November
1674, Concerning the use of duplicate proportions
in sundry important particulars, London, 1674
(the Epistle Dedicatory to His Grace William,
Lord Duke of Newcastle). * ' There is, " he says,
"a. political arithmetic and a geometrical justice
to be yet further cultivated in the world ; the
errors and defects whereof neither wit, rhetoric,
nor interest can more than palliate, never cure.
For falsity, disproportion, and inconsistence
cannot be rectified by any sermocinations,
though made all of figurate and measured
periods, pronounced in tune and cadence,
through the most advantageous organs ; much
less by grandisonous or euphonical nonsence
farded with formality ; no more than vicious
wines can be remedied with brandy and honey,
or ill cookery with enormous proportions of
spice and sugar : Nam Pes nolunt maU ad-
ministrari." Besides the founder of this new
science other eminent British writers laboured
on the subject of "political arithmetic," desir-
ing to supply by its means solid arguments in
favour of the economical superiority of the
nation. They extended the field of investiga-
tion to the extent and productiveness of land
and population, considering them to be the
real sources of national riches. These com-
putations could be no more than estimates of
complex facts of political interest, starting from
the most typical and calculable instances.
Though Adam Smith confesses not to have
great faith in political arithmetic (Wealth of
Nations, bk. iv. ch. v.), its conclusions have
often been affirmed by later investigations and
its methods followed by modern statists.
This method is exemplified by the Natural
and Political Observations mentioned in a follow-
ing Index and made upon the Bills of Mortality,
By John Graunt, citizen of London, With Pefer-
ence to the Government, Religion, Trade, Growth^
Ayer, Diseases, and the several changes of the
said City. London, 1662. By an ingenious
analysis of the bills of mortality (after 1603),
Graunt constructed a rude statistical statement
of births, deaths, and disease, the very begin-
nings of vital statistics.
Sir W. Petty used political arithmetic to in-
quire into the wealth of the nation, taking some-
times the annual consumption, sometimes the
poll and other taxes as basis. His followers
were Gregory King (1696), whose name is con-
nected with the laws of prices ; Ch. Davenant
(1656-1714), Erasmus Philips (1725), A.
HooKE (1750), Mitchell (1767), Pulteney
(1779), Arthur Young in the second part of his
Political Arithmetick (1779), the first being a
treatise on agricultural politics (1774), and
G. Chalmers (1783, 1812). Decaying since
Davenant, this branch of political arithmetic
reached its end with the inquiries founded upon
the new income tax [introduced in 1843] ; H.
Beeke (1800) ; W. Playfair (1801, author of
a Breviary showing on a principle entirely new
the resources of every state and kingdom in
Europe), London, 1801, and P. Colquhoun
(1815), still professing the old method.
In France Vauban, Dixme Roy ale (1707),
and later on Quesnay and Mirabeau (1760),
Lavoisier (1791), and Lagrange (1796) tried
to calculate the production and consumption
and revenue of their nation, relying on the
doctrines known under the title of Agricul-
tural Systems (q.v.)
To the inquiries into the number of popu-
lation and its increase, about which numerous
controversies had taken place (Hume v. Wal-
lace, Temple v. Bell, Hewlett v. Price, and
at last Mai thus v. Godwin), the census of 1801
put an end. The inquiries on the movement
of population were continued and developed in
the most remarkable manner by E. Halley, An
Estimate of the Degrees of Mortality, 1693.
He gave the first exact account of the chances of
life and hints as to its application to insurances
and annuities on lives. His followers in Eng-
land were Derham (1713), Demoivre (1725),
Shout (1750), Simpson (1742), Hodgson
(1747), Brakenridge (1755), Price (1771),
Heysham (1797) ;— see C. Walford, The Inmr-
ance Cyclopaedia, vol. i., Annuities on Lives and
Bills of Mortality. This branch of political
arithmetic, concerning insurance calculations,
has survived the others and is sometimes still
called by its old name.
Following this line of inquiry, W. Kersseboom
(1777) in Holland, A. Deparcieux (1746) in
ARITHMETICAL RATIO OR PROGRESSION— ARMSTRONG
57
France, Wargentin (1764-1767) in Sweden, in-
quired into the average probabilities of life.
The most systematic of this series of writers is
John Peter SiJssMiLCH {Gottliche Ordnung, 1741,
4th ed., 1775). Taking the regularity of the
phenomena of mortality and conjugal fertility, as
well as that of the rarest events of life for a
proof of divine interference, his work became the
forerunner of Malthus's theory of population
as well as of Quetelet's moral statistics.
It is besides worth notice that modern
Demography {q.v.) comprehends nearly the
same domain of statistical inquiry which was
originally cultivated by political arithmetic ; it
deals with the numerical apprehension of facts
"concerning trade and government, others
concerning the air, countries, seasons, fruitful-
ness, health, diseases, longevity, and the pro-
portions between the sex, of ages of mankind "
(John Graunt, Natural and Political Observa-
tions, 1662. The Epistle Dedicatory).
[See Davenant, Of the use of Political Arith-
metic (1698); Works, vol. i. p. 128.— Melon,
Essai politique sur le commerce, 2d. ed. 1736,
ch. xxiv. — Egerton Brydges, Censura Literaria,
1805, vol, 1. pp. 59-79. — Ingram, History of
Political Economy, p, 51. — John, Geschichte der
Statistik, pp. 155-273. — Meitzen, Geschichte,
Theorie, und Technik der Statistik, pp. 15-181. —
J. B. Say, Cours complet, part ix. ch. ill. —
M'Culloch, Literature of Political P2conomy, pp.
211, 258, 271.— R. Giffen, The Growth of Capital,
1890. — Gabaglio, Storia e teoria generate delta
statistica, 1880, — H. Westergaard, Die Grundziige
der Theorie der Statistik, 1890, pp. 253-270,—
Farr, Vital Statistics, 1885.] s. b.
ARITHMETICAL RATIO OR PROGRES-
SION. Three or more quantities are in arith-
metical progression when they increase or
decrease by a common difference, e.g. 1, 4, 7, 10,
where the common difference is 3 ; 2, 2^, 3, 3^,
where it is \ ; and 25, 21, 17, 13, where it is 4.
Malthus introduced the term into political
economy in comparing the possible increase
of food with that of population. He thought
that after a country was as fully peopled as
Great Britain was in 1798, the addition which
could be made in the course of any given
period, such as twenty-five years, to the normal
annual production of food would actually de-
crease as the annual production of food grew
larger. But for the purpose of argument he
was willing to suppose that instead of decreas-
ing, the possible periodical addition might
remain the same. Under this supposition, if
the annual production of food were always
increased as much as possible, it would be
represented at the end of successive equal
intervals of time by quantities in arithmetical
progression, or, as Malthus put it, the pro-
duction of food would increase in an arithmetical'
ratio. Population, on the other hand, Malthus
described as having the capacity and tendency
to increase in a Geometkical Ratio {q.v.)
[Todhunter's A Igebra. — Malthus, Essay on the
Principle of Population, bk. 1. ch. i., and "Popu-
lation" in the E7icyclopcedia Britannica, 4th ed.,
Supplement 1824.] e. c.
ARLES OR ARRHES. Earnest- money-
money paid on initiation of a bargain to secure
its fulfilment.
ARMED NEUTRALITY. The right of
neutral states to trade with belligerents was one
of the most important questions in the 18th
century. According to the policy of the Mer-
cantile System every power tried to monopolise
the trade with its own Colonies. But in time
of war such a monopoly was often rendered im-
possible, and a belligerent found it necessary to
relax its restrictions in order to receive colonial
produce in neutral ships. England, in its fre-
quent wars with France, endeavoured to pre-
vent this jiractice, and acted upon the old-
established principle that "the goods of an
enemy found on a neutral ship are liable to
seizure." The maritime ascendency of England
enabled it to exercise its right of search with an
efficiency that was resented by the neutral
powers, especially as ports were often declared
to be blockaded when there was no sufficient
force to close them. In 1780, when France and
Spain were supporting the American colonies of
Great Britain against the mother country, the
northern states, headed by Russia, concluded
the Armed Neutrality to protect their interests.
The chief principles which they laid down were,
that neutral vessels may carry all goods of
belligerents which are not contraband of war,
and that a Blockade need not be respected un-
less there are a sufficient number of ships to
enforce it. This league was extremely advan-
tageous to the enemies of England, because it
protected them from the complete interruption
of their commerce which England was endeav-
ouring to bring about. It was only gradually
broken up by treaties between England and the
various powers (see Search, Right of).
In 1800, during the 'war with revolutionary
France, the northern states concluded a second
Anned Neutrality on the same lines as the
league of 1780. England still refused to ac-
cept the principles thus laid down, but this
time she was able to act with more energy than
on the previous occasion. Copenhagen was
bombarded and the Danish fleet seized. In
1801 the death of the Czar Paul broke up the
Armed Neutrality, and a convention at St.
Petersburg fixed limits to the light of search
and agreed that a blockade must be efficient to
be respected. But the gi-eat questions at issue
remained unsettled, and to this day the extent
to which a belligerent is entitled to damage the
trade of its enemy is a subject of discussion.
[Wheaton, International Law. — Lecky, History
of England in the ISth Century. — Alison, History
of Europe.] R. l.
ARMSTRONG, Clement (an English writer
58
ARND— ART OF POLITICAL ECONOMY
about 1530) complains of the speculations in
wool of merchant staplers, who drive by importa-
tions of foreign commodities the money out of
the realm and destroy husbandry by converting
the cornfields into sheepwalks. He proposes
to erect a staple of woollen cloth in London, 4;o
restore tillage, and to set people to work, for
" the hoU welth of the body of the realme risith
out of the labours and workes of the common
peple " (p. 61). Sermons and Dedaracions
agaynst Popish Cdremonies, reprinted in Drei
volksvdrtschaftliche Denkschriften aus der Zeit
Heinrichs VIII. von England. Zum ersten Male
herausgegeben von Reinhold Pauli, 23, Bd. Ab-
handlungen der K. Gesellsch. der Wissenschaften
zu Gdttiugen, 1878. — G. Schanz, Englische Han-
delspolUik gegen Ende des Mittelalters, Bd. i. pp.
83, 475. — Cunningham, The Growth of English
Industry and Commercey 1890, p. 292 n. s. b.
ARND, Karl (a German economist), bom at
Fulda, 1788, was an architect in Hesse, and
died, 1877, at Hanau. He was a warm
advocate of Free Trade and of one Single Tax
on rent. He opposed Ricardo's theories and
his German followers, as well as Fr. List's
protectionist views.
Dieneicere Guterlehre, 1821. — Die naturgem&sse
Volksvnrtschaft, 1845. — Die Volkswirtschaft, he-
griindet auf und andelhare Naturgesetze, 1863. —
Die Befreiung der Bodenrente und die Emancipa-
tion des Bauernstandes, 1865. — Adam Smith's des
jungemPrufung der heutigen volksvnrtschaftlichen
Systeme, 1867 ; see Roscher, Oeschichie der Na-
tionaZokonomik in Deutschland, p. 500 ; and
Handworterbuch der Staatswissenschaften, heraus-
gegeben von Conrad, Lexis und Loening, 1890,
vol. i. p. 931. s. B.
ARNOULD, Ambroise-Marie (1750-1812)
a French economist, was director of the board
of commerce under the revolution. His works
contain valuable information upon the theory of
trade, the state of the Balance of Trade in
Europe during the 18th century, French finances,
etc. He advocated the division of France into
departments according to their homogeneous
economical nature ; and appealed to all mari-
time nations to confederate against the menac-
ing power of England.
De la Balance du Commerce^ 2 vols., 1791. —
Repartition de la contribution fonci^re, 1791. —
Systeme maritime et politique des Europeens pen-
dant le 18e. siecle, 1797. — Histoire generate des
finances dp. la France^ 1806. s. B.
ARRANGEMENT WITH CREDITORS.
See Bankruptcy, Law and Administration.
ARRANGEMENT, Deed of. An instru-
ment embodying an agreement between a
debtor and the general body of his creditors for
the purpose of modifying the debtor's obliga-
tions without resorting to bankruptcy proceed-
ings. Some additional security is frequently
given in such cases, but the fact of the other
creditors foregoing part of their claims, and
thus making the debtor's position an easier one, is
considered to be a valid consideration for the in-
dulgence granted by any individual creditor. An
arrangement of this nature is, of course, binding
on those creditors only who expressly assent to it.
The Deed of Arrangement Act 1887 (50 & 51
Vict. c. 57), provides that a deed of arrange-
ment is void unless registered within a given
time and stamped with an ad valorem stamp.
The register is open to the public. The act de-
fines a deed of arrangement so as to include (a)
any assignment of property ; (6) any agreement
for a composition ; (c) any deed of inspectorship ;
(c?) any letter of licence to carry on business with
a view to the payment of debts ; (e) any agree-
ment for the carrying on or winding up a business
for the benefit of creditors. e. s.
ARREARS. Sums remaining unpaid after
they are due ; for example — interest in arrear ;
arrears of dividend ; instalments in arrear ;
arrears of wages, of rent, etc. ; contracts in
arrear, etc. Such arrears often involve penalties
(see Contract, Lavv^ of ; Wages).
ARREST. A process of the Admiralty
Division of the High Court by which the
removal of a ship or cargo pending an action
referring to the same is prevented. Certain
actions in that Division (called actions inrem.^
are not broug'ht against a personal defendant,
but against a ship or a cargo against which the
claim is directed. The owner may, on giving
security, prevent the arrest by the entry of a
caveat (s.v. Caveat) or, after the arrest haa
been effected, obtain a release. e. s.
ARRESTMENT (Scots law). Attachment
of debt either before or after judgment.
ARRESTMENT JURISDICTIONIS FUN-
DAND^ CAUSA. See Jurisdiction, Scotch.
ARRIVABENE, Giovanni, Count, born in
1787 in Mantua, died June 1881. Condemned
to death for political conspiracy in 1824, he fled
abroad. In 1847 he was a promoter of the
economical congress of Brussels. His high
position amongst political men, and in cultivated
society, gave him a standing as an economist
which he otherwise would not have held. He
was a friend of N. W. Senior and translated
some of his best writings. Arrivabene's writ-
ings were collected in 1870 under the title,
Scritti morali ed economici, Firenze. A part of
his life has been told by himself in Un epoca
delta mia vita, Memorie, Torino, 1860. The
book which first established his credit was
WTitten by him in London, Di varie society e
istituzioni di heneficenza in Londra, 1828,
Lugano. m. p.
ART OF POLITICAL ECONOMY. By the
majority of English economists for the last half
century political economy has been held to be in
itself a positive science, concerned exclusively
with the investigation of uniformities, and not
directly formulating a single practical rule of
action. While the knowledge it affords may be
turned to practical account by tlie legislator or
ARTEL— AKTICLES OF ASSOCIATION
59
the social reformer, it is described as in it-
self standing neutral between competing social
schrmes. In other words, a sharp line of distinc-
tion is drawn between economic science, and tlie
application of economic science to practice. A
very different view is taken by the majority of
continental economists, who, generally speaking,
make little attempt to separate theoretical and
practical problems. Adequately to treat these
problems apart from one another is even main-
tained to be an impossibility, and hence it is
denied that political economy can properly be
regarded as a purely positive science. Its prim-
ary function, according to this view, is to direct
conduct to given ends rather than merely to in-
vestigate facts qf a given kind.
It has been further maintained that English
economists are themselves inconsistent, and
that, professing to construct a pure science of
economics, they do in fact build up an economic
art. It is pointed out, for instance, that
nearly the whole of the last book of Mill's
political economy is concerned with the discus-
sion of practical questions. It would not be
difficult to explain away tliis apparent incon-
sistency, so far as our leading economists arc
themselves concerned ; but at the same time it
cannot be maintained that the distinction
which they profess to draw between political
economy and its applications has ever been
clearly gi-asped beyond what may be called the
inner circle of their disciples. One consequence
of this has been grave misconception as to the
true meaning of many of the laws which they
have formulated. They have often been under-
stood to prescribe what ought to be, when their
sole intention has been to determine what is.
Partly to correct this error, and partly for
other reasons, it has been proposed explicitly
to recognise the twofold aspect of economic
inquiry by dethiitely formulating an economic
art as well as an economic science.
[See, in particular, Sidgwick, Principles of Pol-
itical Economy, 1887, p. 395. The art is
described by Dr. Sidgwick as consisting mainly
of the theory of what ought to be done by
government to improve production or distribu-
tion, and to provide for governmental expenditure.
A similar division of economic doctrine was
indicated by Senior, Political Economy, Intro-
duction, p. 2 et seq., ed. 1854, and the distinction
is also put clearly by Professor Cossa. The latter
writer describes the art of political economy as
studying economic phenomena with the immediate
aim of providing safe rules for administration, or
of directing economic institutions, so that they
may conduce to the general welfare. Compare,
further, Keynes' Scope and Method of Political
Economy, ch. ii., note B.] j. N. K.
ARTEL (Russian for "gang,") is used
specially of the Russian associations of inde-
pendent workmen undertaking a job in concert
and dividing its gains equally. This primitive
form of artd is still to be found (e.g. among the
fishermen of Archangel). But the peasants, at
least in the less fertile districts, find greater
security in working for a contractor ; and the
"gangs" so Avorking have no co-operative
feature, except occasionally the common pur-
chase of ])rovisions. In towns the arid is often
simply a trade guild with mutual responsibility ;
thus that of bank porters is jointly responsible
for its several members. Since the Emancipa-
tion, 1861, various local councils throughout
Russia have tried to establish associations for
production, with scant success. The workmen's
own attempts have been more fortunate, es-
pecially in popular banks. But the new
co-operative societies will not be a mere re-
vival of the old artel. The industrial village
of Struve & Co., engineers (founded 1885),
is on the model of Pullman City, U.S. The
communism of the sect called Douchobornians
differs both from true co-operation and from the
old art^l (see Banks, Popular ; Co-operation).
[Les A rteles et le Moiivement Co-operatif en Russie,
W. Longuinine, (Paris, 1886). — Russia, Mackenzie
Wallace, ch. vi. (1877). — Proprietcl Capitalista,
Loria (1889), vol. ii. pp. iSQ-7.— Political Science
Quarterly (New York), I\Iarch 1887, — Rabbeno, Le
Societd Co-operative, Part I. (Milan, 1889). See
too the article by \V. Stieda in the Jahrbiicher fUr
Nationalok. und Statist (Neue Folge), vi. pp. 192-
230. The Russian authorities include IsajefT,
Kalachoff, Nemirotf, Vreden, Scherbina, and Novo-
selsky.] j. B.
ARTICLES OF APPRENTICESHIP. Writ-
ten agreements by which the master })romises
to instruct, and the ap})rentice promises to
learn and serve. The master frequently receives
a premium, which must be set forth as the
consideration of the agreement for the purpose
of ascertaining the stamp duty. Seven years
were formerly the minimum period of ap-
prenticeship, but there is now no fixed period.
The master is entitled to all the apprentice's
earnings and has certain other rights under the
contract notwithstanding the apprentice's in-
fancy, but he cannot bring an action to enforce
the covenants of an infant apprentice, and the
apprentice may disaffirm the contract on attain-
ing the age of twenty -one. The master's
bankruptcy determines the contract. Disputes
between masters and apprentices to the business
of a workman may be brought before the justices,
who may make an order directing the apprentice
to perform his duties under the apprenticeship,
or may rescind the instrument of Apprentice-
ship (q.v.) (38 & 39 Vict. c. 90, §§ 5-7). e. s.
ARTICLES OF ASSOCIATION contain the
regulations concerning the constitution and
management of joint-stock companies registered
under the Companies Acts. The first schedule
of the Companies Act 1862, Table A, contains
a set of regulations which may be adopted
wholly or in part, and which in the case of a
company limited by shares are deemed to be
adopted by the company, if the memorandum
60
ARTICLES OF ROUP— ASSAY
of association is not on registration accompanied
by articles, or in so far as the articles do not
expressly exclude or modify them. In the
case of a company limited by guarantee, or of
an unlimited company, articles of association
must always accompany the memorandum.
While the Memorandum of Association can-
not be varied even by the unanimous decision
of aU the shareholders unless such variation is
confirmed by the court under the provisions of
the act of 1890 (except with regard to the
amount and division of the capital), articles of
association may be varied by special resolution
and the company cannot deprive itself of its
power to alter them. In a conflict between the
articles and the memorandum the former must
give way. Articles of association generally con-
tain most of the following heads : (1) Prelimin-
ary (definitions, commencement of business, allot-
ment of shares, etc.), (2) Certificates, (3) Calls,
(4) Transfer and Transmission of Shares and
Stock, (5) Share Warrants, (6) Forfeiture and
Lien, (7) Conversion of Shares into Stock, (8)
Increase of Capital, (9) Reduction of Capital,
Consolidation and Sub-division of Shares, (10)
Surrender of Shares, (11) Borrowing Powers,
(12) General Meetings, (13) Votes of Members,
(14) Directors (qualification, etc.), (15) Proceed-
ings and Powers of Directors, (16) Officers, (17)
Dividends, (18) Accounts and Audit, (19)
Notice, (20) Arbitration, (21) Winding up (see
Joint-Stock Companies, etc. ; see Partner-
ship ; Limited Partnerships Act, 1907, App.)
E. S.
ARTICLES OF ROUP (Scotch). Conditions
of sale by auction.
ARTISAN. An artisan is a person employed
in the industrial arts, formerly distinguished
from other labourers by the fact that he works
for himself. This, however, is only true of a
few remaining village artisans, such as the
blacksmith and the carpenter. The early
English artisans were few in number. They
supplied labour only, their employers finding
materials. In course of time they became
organised in guilds, at least in the towns (see
Gild). The 15th century saw the rise of the
capitalist artisan, but the invention of machinery
paved the way for the modern forms of industry
under which production is carried on by associated
labour working under capitalists. The artisan
is now usually a workman employed by others,
though in some districts and in some villages
a few of the old capitalist artisans still remain.
[Six Centuries of Work and Wages, by J. E.
T. Rogers, Loudon, 1884. — Labour in Europe and
America, by Edward Young, Washington, 1870. —
Conflicts of Capital and Labour, by George
Howell, London, 1878 (see Labour, Skilled).]
J. E. c. M.
ARTS AND CRAFTS. See Corporations
OF Arts and Trades.
AS. A Roman coin, of an alloy of copper
and tin called aes, of different weights and com
position at diff'erent times. Originally 1 lb.,
reduced to 2 oz. after the first Punic War, to
1 oz. during the second Punic War, and finally,
by the Papirian Law, to \ oz. Design : a sheep,
(jjecus, hence the word pecuniary), an ox, or a
sow. F. E. A.
ASGILL, John, born at Hanley Castle,
Worcestershire, 1659, called to the English bar
1692, expelled from the Irish House of Commons
1703, and from the British Parliament 1707,
for an eccentric pamphlet contending that man
could be translated to heaven without dying.
He left this world in the ordinary way, 1738.
He wrote the following economic works.
Several Assertions proved in order to create
another Species of Money than Gold and Silver,
London, 1696, 8vo (based on the theory " rnan
deals in nothing but earth ; " a contemporary
pamphlet asserts that it is plagiarised from J.
Briscoe's {q.v.) Discourse on the Late Funds, 1694,
4to). — Essay on a Registry for Titles of Land,
London, 1698, 12mo (4th ed., 1758).—^ Collec-
tion of Tracts, London, 1715, 8 parts, 8vo. — Ab-
stract of the PvJblick Funds Granted and Continued
to the Crown since 1 W. <h M., London, 1715, 4to
(reprinted in Somers's Tracts, 1815, xiii. pp. 730-
742). » H. r. t.
ASHBURTON, Alexander Baring, first
lord, second son of Sir Francis Baring, was born
1774. He visited America on business connected
with his father's firm, the head of which he be-
came in 1810 ; he was president of the Board of
T RADE in 1 8 3 4 , and raised to the peerage in 1 8 3 5 .
He concluded the boundary treaty between the
United States and England at Washington in
1842, and died 1848. He wrote —
Inquiry into the Causes and Consequences of the
Orders in Council and an Examination of the Con-
duct of Great Britain towards the neutral Commerce
of America, London, 1808, 8vo (two editions ; op-
poses restrictions on commerce). — The Financial
and Commercial Crisis Considered, London, 1847,
8vo (three editions ; to show how mischievous at
that date was the Bank Charter Act of 1844).
H. R. T.
ASHLEY, John, member of council in Bar-
badoes, died at Blackheath, Kent, 1751. He
wrote —
The Sugar Trade, with the Incumbrances thereon
laid open, London, 1734, 8vo. — Some Observations
on a direct Importation of Sugar from the British
Islands, London, 1735, 4to. — Memoirs and Con-
siderations concerning the Trade and Revenues of
the British Colo7iies in America, Loudon, 1740-43,
2 parts, 8vo. H. R. T.
ASSAY. The assay methods for Silver and
Gold are analogous, in so far that both are puri-
fied by the action of a solvent, but the base
metals are removed from silver by fused
litharge, while in its turn silver is parted
from gold by nitric acid.
If the silver has been associated only with
readily oxidisable metals, especially copper, as
is usually the case when silver coins are
ASSAY— ASSESSMENT
61
assayed, it then only becomes a question of
providing the amount of lead necessary to
furnish, by oxidation, sufficient litharge to
dissolve the oxides and carry them away. If,
however, the silver is associated witli gold, the
latter metal resists oxidation, and will remain
on the cupel with the silver. The cupellation
stage must then be supplemented by a
"parting" operation, that is, the silver must
be dissolved away by some solvent that will
leave the gold untouched, and for this purpose
nitric acid is universally employed. If the
silver contains but a minute particle of gold,
the presence of the latter will be indicated by
a few specks of bro\vn powder left at the
bottom of the vessel in which the silver is
dissolved ; if, however, the silver contains
about one thu'd of its mass of gold, and has
been extended into a strip, the gold will
remain, after the action of the acid, as a co-
herent band retaining the original form of the
strip but much reduced in volume. There is
this difference between the assay of gold and
silver. In the case of the cupellation assay of
silver, the button of metal has only to be
removed from the cupel, and when the adhering
bone ash has been removed with a brush, it
passes direct to the balance. The process
would also be sufficient for gold, if it contained
no other precious metal ; when, however, the
problem is to ascertain by assay how much
gold is contained in an alloy, which may
contain silver or platinum and other metals of
similar properties, then care must be taken
that the amount of gold believed to be jn-esent
in the alloy does not exceed the third part of
the mass, as a larger proportion of gold would
protect the alloy from the solvent action of the
acid, and the gi-eater the amount of gold, the
less perfect would be the attack of the acid.
The first stage of assaying a gold alloy, say a
sovereign, is to melt it with such an amount
of silver as shall yield a button containing
rather less than one third of its weight of gold.
For the sake of convenience and for the inci-
dental advantage that the solvent action of
fused litharge removes copper and other
impurities, the first stage of the assay of gold
is conducted on a cupel, the object to be
attained being mainly to secure a button of
gold and silver in a convenient form for sub-
mitting to the subsequent operations. The
alloying stage would, however, be just as
effective if it were conducted in a small non-
porous receptacle, such as a small crucible of
glazed porcelain.
The subsequent operations are, flattening the
button, annealing it, rolling it into a strip, and
annealing it a second time. It is then coiled
into a spiral, or cornet, and treated by two
successive portions of nitric acid in order to
remove the silver ; after this the spiral of
spongy gold, which retains the original form
given to the silver -gold alloy, is heated to
redness, when it becomes bright, and is some-
times so coherent that it may be unrolled
without fracture. The cornet is then weighed
on a delicate balance, and its weight, compared
with that of the portion of metal taken for
assay, affords a means for readily calculating
the proportion of precious metal present in the
mass assayed (see Alloy ; Periot). c. r-a.
ASSESSED TAXES. A group of taxes " on
houses, carriages, men-servants, saddle and
carriage horses, and race horses " (Dowell, His-
tory of Taxation, 2d ed. vol. ii. p. 189). These
were placed imder better supervision by W.
Pitt, 1785, and were intended to be taxes on
" luxuries. " Hair powder and armorial bearings
were afterwards added. The sporting and dog
duties, though not included among assessed
taxes, may be considered as of an analogous
nature. Some of these taxes, as those on horses
and hair powder, have been remitted, but the
principle of taxing luxuries has been main-
tained, though not unfrequently modified, in
our fiscal system (see Taxation, Taxes, etc.)
[Dowell, History of Taxation and Taxes in
England, 4 vols., 1888, 2d ed.]
ASSESSMENT. The official valuation of
income or property for the purposes of taxation.
The word is sometimes used in another sense,
viz. the amount of a tax a particular person has
to pay. It was also applied to certain taxes
on lands and goods levied during the common-
wealth, and which Dowell (History of Taxation,
London, 1888, iii. p. 72) says formed the link
between the Subsidy of the Tudor and earlier
Stuarts and the Property Tax of William III.
Where a tax has to be levied on property or on
income, the amount of such property or income
must be ascertained, and this is by no means an
easy task. Even then the principles of taxation
may require certain allowances to be deducted
before the taxable property is ascertained. In
some cases the assessors are officials, in other
cases they are elected directly or indirectly by
those who pay the tax.
1. Imperial Taxation. — In the case of im-
perial taxes, assessment is required for the
Land Tax, the inhabited house duty, the income
tax, and the Death Duties. The amount of
the land tax payable by each parish is fixed by
statute, and each parish raises its quota by a
rate on the yearly value of all lands and heredita-
ments. The gi-eat increase in the value of land
in many parishes has gi'eatly diminished the
rate per £ necessary to raise the quota in such
parishes (Bourdin's Land Tax, by S. Bunbury,
London, 1885). Inhabited houses are assessed
to the inliabited house duty at the yearly rent
they are worth. Where the occupier is also
the owner, some difficulty often exists in fixing
the yearly value. Perhaps the soundest prin-
ciple would be to take a certain interest, so much
per cent, on the selling value as the estimated
62
ASSESSMENT— ASSIGNAT
rental (see Inhabited House Duty). As re-
gards income tax, income from landed property
including houses, is assessed at its rent or annual
value, but speaking generally with respect to
profits for occupation of land the assessment
is one-half the rent in England, and one-third
in Scotland and Ireland, subject to rectification
if che profits are less. No deduction is allowed
on account of repairs. Returns are made by
the occupiers, and on such returns the assess-
ment is made. Income derived from public
funds or from public offices is assessed at the
amount received, and the tax is deducted
where possible before the income is paid.
Income derived from professions, trades, and
other occupations is assessed upon the average
profits of the preceding three years, other
forms of income are assessed at the amount
actually received. Incomes under £160 are ex-
empt, and the following abatements are allowed
on incomes : —
Over £160 but below £400, abatement of £160
„ 400 „ ,, 500, ,, ,, 150
500 „ „ 600, ,, ,, 120
„ 600 „ „ 700, „ „ 70
Allowance for children may be claimed on in-
comes under £500. £10 to be free of tax in
respect of each child under 16 years of age. In-
comes over £3000 pay a super- tax charged on
the amount over £2500, imposed 1914.
2. Local Taxation. — Taxes required for local
purposes, such as the poor rate, the county rate,
the borough rate, are levied upon the full rate-
able value, with certain exceptions that are
based on no definite principle. The assessment
for the lighting and watching rate is three times
greater on buildings than upon land, certain
lands are assessed to the general district rate at
one-fourth the rateable value, whilst owners of
small tenements, if they compound for the
rates, are assessed at one-half the rateable value.
The rateable value for the poor rate which is
conclusive for the majority of rates, is defined
by the 6 & 7 Will. IV. c. 96, as "the net
annual value of the several hereditaments rated
thereto ; that is to say, of the rent at which the
same might reasonably be expected to let from
year to year free of all usual tenants' rates and
taxes and tithe commutation rent-charge, if any,
and deducting therefrom the probable average
annual cost of repairs, insurances, and other
expenses, if any, necessary to maintain them in
a state to command such rent." The pro-
visions of 6 & 7 Will. IV. c. 96, do not,
however, apply to the metropolis. In the
metropolis the gross value is taken as the basis
of the assessment for the purpose of ascertain-
ing the rateable value, and deductions are made
which vary according to the nature of the
tenement, a maximum percentage being fixed
for the deduction in each case. Land occupied
by the crown for public purposes, property un-
occupied or not capable of yielding any rent,
and personal property, are not rateable. (As
to the taxation of ground rents, see Ground
Rents.) The basis of the county rate is ascer-
tained in a similar way, but the assessors are
not bound to follow the poor-rate assessment
(see County Rate). By the bill introduced by
]\Ir. Goschen in the House of Commons on the
3d April 1871 it was proposed to render "every
hereditament, corporeal or incorporeal," with
the exception of rent-charges, liable to be rated
to all local taxes (see Local Taxation, by G. J.
Goschen, London, 1872 ; and the Report of the
Select Committee of the House of Commons on
Local Taxation, 1871).
[On assessment for local taxation see Local Govern-
ment and Local Taxation, by R. S. Wright and H.
Hobhouse (London, 1884), — Law of Rating, by
E. J. Castle (London, 1%%^).— Handbook for
Council Authorities, by A, Pulling (London, 1889).
( For assessment for general average, see Adj ustment,
Average; Average, Maritime.)] j. e. c. m.
ASSETS (Lat. ad satis; French assez)-, liter-
ally, sufficient. Originally the use of the word
was confined to property which an executor or
lieir could apply for the discharge of the debts
and legacies due from the estate of a deceased
person. Those obligations could only be en-
forced in so far as the property available for
that purpose was suflicient. The applicat'on
of the expression was afterwards extended to
the property which could be applied for distri-
bution among the creditors of an insolvent
debtor, and in course of time acquired the still
wider meaning of any person's property in so
far as it could be used for the discharge of his
liabilities. The assets remaining after the dis-
charge of liabilities are a person's actual capital.
ASSIENTO TREATY. This treaty requires
mention, owing to the connection between it
and the development of slavery in North
America. In 1713 Spain by agreement
(Assiento) conceded to France the privilege of
carrying negro slaves to the Spanish colonies.
France, by the treaty of Utrecht, surrendered
this privilege which, by the treaty de 1' Assiento,
was granted to England for thirty-three years
from the 1st May 1713. England engaged to
furnish 4800 slaves annually, and in return
was entitled to send two phips every year with
negroes to America. The South Si-:a Company
obtained the benefit of this monopoly. At the
outbreak of the war with Spain, the Assiento
was suspended, but it was renewed in 1725 and
again in 1748,
[The leading clauses are set out in Hosack's Law
of Nations, London, 1882, p, 355, and are taken
from Actes et Memoires de la Paix d' Utrecht.
See also Histoire des Traites de Paix, par F. Schoell,
p. 214 (Brussels, 1837),] J, e, c, m.
ASSIGNAT (from Lat., Assignatus). The
Paper Money issued by the French republic in
1789-94, in consequence of the scarcity of coin,
was termed assignats because it was secured
ASSIGNAT
63
not upon coin, but upon crown and church pro-
perty, in the purchase of which these notes were
receivable at par. Each note was of 100 francs
(£4), and notes returned to the state in pay-
ment of purchase money were to be cancelled.
The first issue of 400,000,000 francs carried
interest at a daily rate (as exchequer bills did
here prior to 1862), but were inconvertible ex-
cept in payment for property publicly assigned
for the purpose. A second issue of 800,000,000
francs carried no interest, and further issues
effected rapidly brought the total up to
3,750,000,000 francs, or £150,000,000, nomi-
nal. At that time, in August 1793, the de-
preciation of the assignat had become so great,
it being quite impossible for the country pro-
perly to absorb this vast amount of paper, that
the 100 francs nominal ranked for less than 20
francs coin. Then recourse was had to pro-
tective legislation. First, May 1793, a decree
was issued that farmers must declare the quantity
of corn in their possession, and sell it in recog-
nised markets, no one being permitted to pur-
chase more than suflBcient for one month's con-
sumption. Then maximum prices were decreed,
and as such laws could not rehabilitate the
assiguats, a forced loan of 1,000,000,000 francs,
and the forced prepayment of taxes, were applied
to the reduction of this paper currency. lii
this way the total was brought down to about
2,500,000,000 francs. But the wants of the
government were so pressing that but a few
months had elapsed before these notes had been
reissued, and a far larger amount followed.
In June 1794 the assiguats in circulation reached
the vast total of 6,536,000,000 francs, or
£261,440,000, nominal. The result of legisla-
tion then was that the land remained untilled
and all business was paralysed. At this time
the 100 francs assignat was not worth 1 franc,
and though, after the fall of Robespierre, the
maximum laws were relaxed, the value of the
assiguats did not recover. The government and
the entire country had been reduced to a state of
pauperism, and when, in October 1795, the Direc-
tory had been established, the total issue reached
22,000,000,000 francs, or £880,000,000, nomi-
nal. Yet in two months another 15,000,000,000
francs were issued, and the depreciation was such
that the paper became entirely valueless. Then
followed the conversion of the assignats into
mandats (or warrants) at the thirtieth part of
their face value, and these in their turn were
returned to the state in 1796 at about the seven-
tieth part of the value of coin. Thiers' History
of the French Revolution gives a vivid description
of this eventful period, and of the disastrous
effects of these issues of inconvertible paper.
In Russia in the early part of the present
century an issue of paper was made similar in .
form to the assignats in France and became
greatly depreciated. These notes were subse-
auently to a large extent withdrawn.
Professor F. A. Walker has in his work on
Money (ch. xvi.), described the development of
the paper issue, and the fruitless opposition of
Necker. It was assumed that the republic
could do safely what had been (1719-21) dis-
astrous under the monarchy. "Paper money,"
it was argued before the assembly, * ' paper money
under a despotism is dangerous, it favours cor-
ruption ; but in a nation constitutionally
governed, which takes care of its own notes,
which determines their number and their use,
that danger no longer exists. " A desire to com-
mit the thrifty middle class of France to the
principles and measures of the Revolution for
political purposes largely actuated the assembly.
This was avowed by Mirabeau, ' ' Partout ou se
placera un assignat -monnaie, 1^ silrement re-
posera avec lui uu vosu secret pour le credit des
assignats, un desir de leur solidite . . . par-
tout ou se trouvera un porteur d'assignats,
vous compterez un defenseur necessaire de
vos mesures, un creancier iuteresse a vos
succes." These notes, the Comte de JSriRABEAU
continued to declare, could never be issued in
excess. "They represent," he said, "real
property, the most secure of all possessions,
the soil on which we tread." Again, "There
cannot be a greater error than the fear so
generally prevalent as to the over-issue of
assignats. . . . Re-absorbed progressively in the
purchase of the national domains, this paper
money can never become redundant."
The following table of the depreciation of
the assignats, derived from M. Bresson {Hist.
Financikre de la France), shows how entirely
Mirabeau's anticipations were falsified by events.
24 livres in coin were worth in assignats —
April 1,
1795
. 238
Oct. 1, 1795
1205
May „
))
. 299
Nov.,, „ .
2588
June ,,
))
. 439
Dec. ,, ,,
3575
July „
) t
. 808
Jau. ,, 1796
4658
Aug. ,,
. 807
Feb. „ „ .
5337
Sept. „
. 1101
At the last,
"an as
signat professir
ig to b
worth 100 francs Avas commonly exchanged for
5 sous 6 deniers, in other words, a paper^note
professing to lie worth £4 sterling passed
current for less than 3d. in money " (Twiss,
Progress of Political Economy, p. 263).
M. Joseph Gakxier gives {Traiti de Finances,
p. 408), the following statement from a work of
M. Ramel, former minister of finance. The
figures represent millions of francs.
Assignats crees par I'assemblee constituante (lois
des 21st Dec. 1789, 1 7th Avril
1790, 19th Juin 1790) 1,800
,, ,, par I'assemblee legislative 900
,, ,, directement par la Con-
vention . . 7,278
, , , , par les Comites au torises
., ., par le Directoire
33,603
43,681
64
ASSIGNATION— ASSIZE OF WEIGHTS AND MEASURES
M. Bresson gives a total differing by only two
or three millions from the above (see Money, by
Francis A. Walker, pp. 336-347, for further
details). See Chamberlen, H. ; Law, J.
ASSIGNATION (Scots law term). Assign-
ment.
ASSIGNEE. One to whom a right or pro-
perty is transferred. The terra "assignee in
bankruptcy" is not used under the present
bankruptcy law, but there is an "official as-
signee " on the London stock exchange on whom
certain duties devolve in the case of the in-
solvency of a member.
ASSIGNMENT. The transfer of a right or
property. In strict legal phraseology the word
is used with reference to personal property only.
It is correct to speak of the assignment of a
lease, but the term could not be applied to the
transfer of freehold property.
ASSIGNMENT, Deed of. This expression,
though it might be used for every deed assign-
ing property, is more specially applied to in-
strum^ts by which a debtor's property is con-
veyed or assigned to a trustee for the benefit of
his creditors generally. An assignment of this
nature is considered an act of bankruptcy
(Bankruptcy Act 1883, § 4 {a)). e. s.
ASSIGNOR. One who transfers a right or
property.
ASSIZE OF BREAD AND BEER. In the
collection of ancient acts of parliament, two are
always cited as of indefinite antiquity, neither
reign nor date in which they were first enacted
or promulgated being given, or indeed discover-
able. These are the statute on weights and
measures, and the assize of bread and beer. It
is highly probable that these statutes are
declaratory of very ancient custom, and were
necessarily reduced to a form because they
each represent rules exhibited in figures. They
are constantly copied in those legal handy
books which lawyers possessed and referred to,
and of which some still survive, dating occa-
sionally from the 13th century. It was at
first the duty of the local court (that of the
Manor), to enforce the assize, and the records
of those courts contain frequent entries of fines
levied on those offenders who had broken the
assize.
The assize of bread and beer is drawn up in
the form of a sliding scale, the price of the
unit (in bread, the weight of the unit) varying
vnth. the price of grain by the quarter, wheat
and malt as the case may be, information as to
the price having been easily procurable from
market rates. The scale of prices goes beyond
recorded experience of cheapness or dearness, at
least as far as the writer has registered prices.
The assize was therefore a regulation by ancient
custom or law of the rate at which baker and
brewer ^should be remunerated for the service
which their labour did to society. The uni-
formity of this practice was the justification for
other and subsequent statutes regulating the
price of labour, statutes which were enacted and
re-enacted from 1349 till 1824, at which lattei
date the labour statutes were repealed en masse.
After the discipline of the manor court had
become obsolete, the assize of bread and beer
was enforced in quarter sessions uncertainly,
but by the corporations of towns regularly into
the last quarter of the 18th century, the
archives of these corporations constantly sup-
plying evidence of wheat and malt prices. The
assize of bread and beer proves indirectly that
the traditional food of the English was wheaten
bread, and their drink barley beer, for the
assize was a law which was operative all over
England from the Scottish border to the
Channel. It is to be observed that, except on
very rare occasions, the legislature or the
government did not aff'ect to fix the price of
the materials, wheat and malt, as foreign
governments, especially that of France, habitu-
ally did. The regulation, too, was avowedly
in the interest of consumers, for the rolls of
parliament and the statute - book supply
abundant evidence of the anxiety with which
the government foresaw and provided against
artificial dearness. Later experience has in-
ferred that tteir remedies were nugatory, ot
even mischievous, but there can be no doubt as
to their motives. In brief, the assize of bread
and beer had the same object with the laws
directed against Badgers ; Forestallers and
Regrators, viz. the protection of the consumer.
J. E. T. B,
ASSIZE OF WEIGHTS AND MEASURES.
Besides the assize of bread and beer, weights and
measures, and the articles themselves which were
thus computed, were subject to similar legisla-
tion. Thus innkeepers, licensed victuallers,
vintners, butchers, and others were subject to
regulations of the same class. The " inholders "
were to use measures "a small quantity bigger
than the standard" to allow for the "working
and ascending of the Yest and Froth," and, with
the "Cooks and Victuallers," were "forbidden
to bake, seeth, or roast, any Fish or Flesh twice,
or sell and utter unto the subjects any manner
of corruptible Victuals, which may be to the
hurt and the infection of Man's body " — their
"excessive price" was guarded against, and a
scale appointed at which horses were to be re-
ceived "to Livery at Hay and Litter by Day
and Night." If the price of hay was 31s. 6d.
a load, the calculation was as follows : —
" Then if the Botel of Hay shall weigh three
Pounds for a halfpenny, which is six Pound for
one penny, and so 18 Pounds of Hay for
three pence, the which 1 8 Pounds of Hay, with
reasonable Provender at every watering, will
suffice one Horse Day and Night." The rate for
litter being fixed in proportion, it was considered
that the "Inh older" would have "sufficient
gain." The rates were to vary according as the
I
ASSUMPTION— ATELIERS NATIONAUX
65
price of the "Load of Hay shall yearly increase
and diminish." The rules for the butchers were
more particular. These were "most carefully
looked into and provided for by good and
ancient Orders and Laws of this Realm, and also
by Advice of the learned and skilful Physicians
of the same ;" — the Butchers were to take the
utmost care that the meat was to be wholesome,
they were not to "kill and sell any Bull or
Bulls unbaiten." The weight also was to be
exact and true. They were not to "sell their
Flesh, with any Beam or Balance inclining
more unto one end than to the other " ; " Musty
and Corrupted Meat " was also strictly guarded
against. Similar regulations were also extended
to other articles. "The Assize of Fuel, to be
observed in the City of London, Westminster,
and the suburbs of the same," fixed the size and
weight of the sack of charcoal, the billet, and the
faggot, requiring each "Faggot-band to contain
in length three foot, and the Band of every such
Faggot to be 14 inches about, besides the knot."
Among the punishments for these offences was
the pillory, the fraudulent butcher to be exposed
there, and " his corrupt flesh to be burnt openly
before his place in the Market-place, " the fraudu-
lent seller of fuel with a "Billet, Faggot, or
Sack of Coals bound to some part of his body."
Besides articles of this class, building materials
were subject to similar regulations ; the dimen-
sions of lath, timber, and tiles were strictly laid
down, and directions even given as to the
manner in which the earth of which the tiles
were made was to be worked. These regula-
tions, together with those which regulated the
assize of bread and beer, may be found described
in The Assize of Bread and other Assizes of
Weights and Measures, to which the name of
John Powel, clerk of the market, originally
of the king's (James I.) household, is attached.
Reference is made in this to the order in council
31st January 1604, in which the whole question
was reconsidered. The edition from which the
quotations made above are made contains
references to the early acts of parliament, etc.,
and is dated 1714. It is interesting as giving
incidentally a vivid picture of "state regula-
tion " in early ages.
[An account of the assize of bread, meat, and other
necessaries in Germany is given by Rohrscheide in
\Jah/rbucher f»ir NationaLokonomik, October 1888.]
ASSUMPTION, Deed of (Scots law term).
[Deed of appointment of new trustees.
ASSURANCE. See Insurance.
ASSYTHMENT (Scots law). Damages suable
at common law by wife, family, or relatives of
person killed, from person culpable, though not
convicted and punished, the assythment being
both a consolation and an indemnification for
pecuniary damage. a. d.
ATELIERS NATIONAUX, government
workshops, tried in France 1848, with the object
of aff'ording relief, in the form of wages, to the
VOL. I.
unemployed. The name is inexactly given to
(1) the old ateliers de charity, which gave em-
ployment and a small wage, often in kind, to
destitute workmen ; (2) Louis Blanc's pro-
posed ateliers sociaux or state - supported co-
operative productive societies.
On the 25th February 1848, the day after
the abdication of Louis Philippe, the provisional
government, under urgent popular pressure,
published a decree undertaking to guarantee a
livelihood to every one who would work, and
therefore to find labour for any citizen. Three
days later public works were proclaimed to begin
from 1st March ; every one in want of employ-
ment was invited to apply to his mayor, who
would immediately direct him to the national
workshops. So precipitate was this step that
no workshops could be found, nor any works
except some ti'ifling road repairs and navvies'
jobs. To gain admittance to the "workshops "
a man procured from his landlord a certificate
of six months' residence in Paris, had this
visaed by the local police, and exchanged it at
the mairie for an admission ticket. The pay
was two francs a day. When the number em-
ployed reached 6000 no work could be found
for more. After vainly applying at each dis-
trict, and having their admission tickets en-
dorsed accordingly, men were paid 1^ frs.
daily. Two central bureaux were o])cned to
avoid the inconvenience of visiting each district.
When the lack of work became notorious, men
in regular work attended these bureaux, and
drew 1^ frs. without quitting their own
employment. Unscnipulous men obtained
certificates from two landlords, and drew double
pay. Moreover the "inactive" men formed
angi-y crowds around the bureaux, endangering
public order and alarming the government.
At this stage (3d March), a young chemist,
M. Emile Thomas, suggested that the men
should be brigaded so as to assure regularity,
centralise relief, and prevent double inscriptions,
while a free registry should facilitate their em-
ployment by private persons. His plan was
approved, and he was appointed director (6th
March). He embodied ten men in a squad,
five squads in a brigade, four brigades in a
lieutenancy, and four lieutenancies in a com-
pany. Each division was under an ofiicer
eventually elected by his subordinates. A
company, therefore, numbered 900 men. A
chefde service commanded three companies, a chef
d'arrondissement a district. The daily pay was :
cadets, d^ves is the original word, 5 frs. ; these
were students chosen by Emile Thomas from his
old school the Ucole Centrale des Arts et Mitiers,
where they were training for civil engineers,
etc. ; lieutenants, 4 frs. ; brigadiers, 3 frs. ;
heads of squads, 2^ frs. (active), 1|- frs.
(inactive) ; men, 2 frs. (active), 1 fr. (inactive).
By dint of tact and energy, M. Thomas
maintained order. This was all he had under-
66
ATELIEKS NATIONAUX— ATTACHMENT
taken to do. He could not procure work.
The government, glad to be momentarily rid
of peril, turned a deaf ear to his appeals. He
set some of the men to make shoes and clothes
for others, but such small expedients availed
little. His numbers steadily swelled, being :
21st March, 30,000 ; 16th April, 66,000 ; iSth
May, 100,000 ; 25th May, over 115,000. The
needy and criminal classes flowed in from all
parts of France, and even from Belgium, and
easily obtained false certificates of domicile.
Ministers and influential men constantly pushed
their friends and supporters into appointments
as officers. 600 actors, artists, and clerks
claimed in one day the right to employment.
The expenses grew rapidly, but the government
had political aims in view. At one time it
counted on the ateliers for support at the polls ;
at another a minister spoke of using the men
in the streets in case of a rising ; yet again it
was hinted that collapse would be useful in
damaging the party of Louis Blanc, whose
principles of V organisation du travail and le
droit au travail, were supposed to be bound up
with the experiment (see Blanc, Louis). The
jealousy of the official engineers still starved
the ateliers of work. So futile were the tasks
set the men that one of them sarcastically pre-
dicted they would be set to bottle off" the Seine !
After the elections, the government became alive
to the expense and political danger of the growing
agglomeration. The director was ordered (23d
May) to dismiss immediately all bachelors
under twenty-five who would not enlist in the
army, all men who could not prove six months'
residence in Paris, and all who refused offers of
private employment in their own trade. Day
work was to give way to task work ; and men
were to be liable to be drafted into the provinces.
M. Thomas protested that this ordinance was
harsh, dangerous, and contrary to the previous
decree of the whole government (25th February,
supra). It was withdrawn for a time. But on
the 20 th June (M. Thomas having, meanwhile,
been superseded) it was approved by the national
assembly, and published. The workmen re-
volted at once throughout Paris. The ateliers
were dissolved, and the rising was suppressed
by troops after three days' fighting (23d to
25th June), during which 10,000 men were
killed and 12,000 captured.
The ateliers were evidently not fairly tried.
But they are open to fatal political and econo-
mic objection. A heterogeneous crowd of social
failures employed in indefinite numbers by a
party majority must seriously endanger political
morality. Louis Blanc would have each man
engaged at his own trade. Obviously, however,
this replaces private enterprise by pure socialism.
'i&i'L'L{Dissertations,i\. 384) contends that the
right to labour depends upon the same principle
as the poor law of Elizabeth. But is the state
fitted to discharge the correlative duty of em-
ployment? Taxing and trading are widely
different functions. Fawcett (Manual, p. 586)
considers that government might possibly,
though rarely, be justified in giving employment
during occasional depression.
[Consult Histoire des Ateliers Nationaux, par
l^mile Thomas, Paris, 1848 ; well condensed in
the Quarterly Review for June 1850 (vol. Ixxxvii.
No. 173). — Rapport de la Commission d'EnquUe
sur V Insurrection du 23 juin, et surles ivenements
du 15 mai 1848, Paris, 1848. — Histoire de la
R^olution de 1848, par L. A. Garnier-Pages,
Paris, 1861-72. — 2848 Historical Revelations,
Louis Blanc, London, 1858.] h. h.
ATKINSON, William, bom towards com-
mencement of 19th century, was a Fellow of
the Statistical Society, from which he retired in
1844. One of the early assailants of the classical
school, he lays great stress on its inability to
agree upon questions of population, of the
preference of home over foreign trade, and its
want of moral and religious principle. Though
his own arguments in favour of protection are
founded upon a rather abstruse "law of pro-
portions," they have been welcomed by Ameri-
can economists. His last work gives curious
details upon the influence of the orthodox
school on coijamercial politics in England.
The Principle of Protecting Home Trade or the
Principle of Free Trade Refuted, ISSS.— The State
of the Science of Political JEconomy investigated,
1838. — Principles of Political Economy, 1840
(reprinted 1843, New York, with an introduc-
tion by Horace Greeley). — Principles of Social
and Political Economy, vol. i. (and last) 1858
(see Classical Economists). s. b.
ATTACHMENT. 1. The legal seizure of a
debtor's property. In the Rules of the Supreme
Court the term is used for the process by which
a judgment creditor tries to secure for himself
the judgment debtor's money claim against a
third party (called the Garnishee). The Court
may, on satisfactory proof that the judgment
remains unsatisfied, and that the garnishee
(who must be within the jurisdiction) is in-
debted to the judgment debtor, order the gar-
nishee to pay the applicant to the extent of his
claim. A peculiar process (called foreign attach-
ment), by which any part of a debtor's property
may be seized before judgment, is available for
creditors whose claims have arisen within the
city of London, through the instrumentality of
the Lord Mayor's Court.
2. A writ of attachment against a disobedient
party is used in the supreme court for the en-
forcement of — (1) judgments for the recovery
of any property other than land or money ; (2)
judgments for payment of money into court if
the liability is within the exceptions of the
Debtor's Act ; (3) judgments or orders against
corporations wilfully disobeyed by the directors
or officers ; (4) orders to answer interrogatories,
or for discovery or inspection of documents, and
in several other cases. The disobedient partly
ATTESTATION— ATTWOOD
67
is imprisoned until his discharge is ordered by
the court. e. s.
ATTESTATION. The verification of a docu-
ment by the signature of a witness or witnesses
who were present at the time of its execution.
ATTORNEY, Power of. A document
generally authorising an agent to act for his
principal.
ATTORNMENT. An acknowledgment of
tenancy by the tenant to a landlord. The
purchase of land subject to leases was formerly
incomplete tOl the lessees had attorned to the
purchaser ; but this was rendered unnecessary
by the statute 4 & 5 Anne, c. 3. It was
formerly usual to insert attornment clauses into
mortgage deeds, so as to create a tenancy be-
tween the mortgagor and the mortgagee, and to
give the latter a landlord's preferential rights.
A clause of this nature would now mostly be
futile unless the forms requii'ed by the Bills of
Sale Acts of 1878 and 1882 are complied with ;
and as it exposes the mortgagee to certain
special liabilities, it is considered more prudent
for mortgagees to omit it. e. s.
ATTWOOD, Thomas (born 1783, died 1856),
belonged to a Birmingham firm of bankers
during the first half of this century. The
Birmingham Currency School, to which he be-
longed, were, as mentioned by J. S. Mill {Prin-
dples of Political Economy, bk. iii. ch. xiii. § 5).
strong supporters of inconvertible currency,
Thomas Attwood wrote the following pamphlets :
Letter to JV. Van sit tart on the Creation of
Money and on its Action upon National Prosperity,
Birmingham, 1817, 8vo. — Observations on Cur-
rency, Population, and Pauperism, Birmingham,
1818, 8vo. — Exposition of the Cause and Remedy
of the Agricultural Distress, Hertford, 1828, 8vo.
Evidence of Thomas Attwood before the Select
Comniittee on the Depressed State of Agriculture,
1821, Parliamentary Papers, viii. pt. ii. — Scotch
Banker, 1828, embodying six articles on banking
and currency contributed by Thomas Attwood to
The Globe (reviewed by Cobbett in his Political
Register, for 24th May 1828, and noticed by the
Quarterly Review, No. 78). — Letters of Thomas
Attwood to the Times [and comments of the Times
thereon, Oct.-Dec. 1843.] h. r. t.
ATTWOOD, Thomas, and the Birmikg-
; ham School. Thomas Attwood is a signal ex-
[ample of good sense and general intelligence
foverborne by a futile monetary theory. He was
[the leader of the "Birmingham School," who
Ivocated high prices maintained by inflation
[of the currency. Attwood and his followers
mght a lesson needed by some of their con-
jmporaries when they insisted on the hardship
^inflicted on debtors by a fall in general prices, or
rise in the value of the monetary standard. But
"le extent of the evil was greatly exaggerated when
'the Resumption of Specie Payments in 1819
was made responsible for almost every trouble
which subsequently befell the kingdom — the
agricultural distress in England, the turbulence
of O'Connell in Ireland, or the " Rebecca " riota
in "Wales. The argument directed against the
resumption deserves particular attention. It
was held that the depreciation of paper with
respect to gold just before the resumption was
much less than the appreciation of gold with
respect to things in general which followed the
resumption. ' ' That measure (which it was said
would only eff"ect a charge to the extent of 3
per cent) had imposed an additional burthen of
25, 30, or 40 per cent on every man in the
community in all cases of deed, mortgage, settle-
ment, or contract." Prof. Walker appears
inclined to ascribe some weight to this argu-
ment (Money, p. 388 ; Money, Trade, and
Industry, p. 282).
Thomas Attwood's advocacy of monetary
reform derived strength from his political in-
fluence. He was the founder of the " Political
Union" at Birmingham, and took an active
part in the agitation for parliamentary reform.
It was believed that Attwood desired political
reform principally as a means whereby to obtain
a rectilication of the currency. To that end
he moved in the reformed parliament for a
select committee to inquire into the causes of
the general distress. This motion, like others
which emanated from the Birmingham School,
was lost.
Thomas Attwood was greatly assisted in this
monetary crusade by his brother Mathias (born
1779, died 1851). Mathias's speech on the
currency, 11th June 1822, is placed by Alison
with Huskisson's speech on the other side, as
"containing all that ever has, or ever can be,
said on the subject." In 1830 Mathias pro-
posed a double standard of silver and gold ; at
the rate of 15^///^ lbs. of silver to 1 lb. of gold
(Hansard, 1830, vol. xxv. pp. 102-145 ; Alison,
History of Europe, 1815-52, vol. iv. ch. xxii. §
32). Mathias, unlike his brother, was a Tory.
He was a successful banker, co-founder of the
National Provincial Bank of Ireland, the
Imperial Continental Gas, and other companies.
So little is business power alone a guarantee of
sound economical theory.
There is an appreciative account of Thomas
Attwood and the Birmingham School in a
series of letters which were addressed to the
Midland Counties Herald in 1843 by two Bir-
mingham men (T. B. Wright and J. Harlow)
signing themselves Gemini, and were repub-
lished in 1844 in the form of a book under
that title. The title Gemini was ajipropriate
according to Sir Robert Peel, for "the efforts
of no single writer are equal to the production
of so much nonsense " (Speech on the Bank
Charter, 1844). According to this par nobile
"the political economy of Mr. Attwood has this
one great distinguishing feature, that it releases
the nation from the thraldom of the heart-
chilling doctrine of Malthus. The world ia
capable of multiplying its production to an
68
AUBAINE— AUCTION
almost unlimited extent ; the governments of
the world would have only to provide for the
proper distribution of the productions, and the
wants of all people will be supplied." Such
are the beneficent results of "accommodating
our coinage to man, and not man to our coin-
age " {Gemini, Letter 24). The cardinal tehets
of the "Birmingham economists" are com-
pendiously stated at page 104, and again at page
285 of Gemini.
There is in the library of the British Museum
a life of Thomas Attwood by his grandson, 0.
M. Wakefield, "printed for private circula-
tion ; " which throws much light on the his-
tory of the Birmingham School. Mr. Wake-
field does not profess to interpret his grand-
father's views on currency.
J. S, Mill devotes a paragraph to the refuta-
tion of Attwood's theory of currency {Pol. Econ. ,
bk. iii. ch. xiii. § 4). F. Y. B.
ATJBAINE, Droit d'. Under the French rule
of law, known as the droit d'aubaine or right of
alienage, the whole property of an alien dying
in France without leaving children born in that
country escheated to the crown. The royal
right was not universally exacted, and at a very
early period special exceptions were introduced
in favour of certain classes. Thus Louis XI.
exempted merchants of Brabant, Flanders,
Holland, and Zealand from the operation of the
law, and a similar privilege was extended by
Henri II. to merchants of the Hanse towns,
and from Scotland. Henri IV. and Louis
XIV., in their desire to promote the settlement
of skilled artisans in France, exempted at a
later date various classes of workmen, and the
latter king extended the exception to include
aliens serving five years in the navy and then
settling in France. The towns of Lyons, Tou-
louse, Bourdeaux, and some other ports in Pro-
vence and Guienne were also free from the
operation of the rule.
Originally one of the rights possessed by the
feudal lord, the droit d'aubaine or similar
institutions, existed in most countries where the
form of society was feudal ; and the alien's
power of bequest was restrained in the same
manner in Tuscany, the two Sicilies, Spain,
Germany, Prussia, Holland, Denmark, and
other countries. Even in England the power
of the crown over the goods of aliens was
formerly considerable, though no strictly similar
rule of law seems to have existed in this
country. Treaties for the mutual abrogation of
the right did something to modify the applica-
tion of the law. But its complete abrogation
is due primarily to the policy of Necker, who
was controller-general of finance at the time
when the decree of the 6th August 1790 abol-
ished the droit d'aubaine and the droit de de-
traction in France. In his work De V adminis-
tration des Finances he had already pointed out
that owing to the expenses of collection the
annual not produce of the right did not amount
to more than 40,000 ecus. The droit d'aubaine
in its original form was never re-established in
France. But with the droit de detraction, which
enabled the state to confiscate part of the prop-
erty bequeathed by aliens, it reappeared in the
Code Civile in a modified form. Under the
provisions of sections 726 and 912 no alien
could possess in France a larger power of suc-
cession or bequest than a Frenchman would
possess in the alien's country. But even this
relic of the old feudal right was abolished by
the law of the 14th July 1819.
[Diderot et D'Alembert, EncyclopSdie, 1772.— r
Dictionnaire general de la Politique, par Maurice
Block, 1873. — Les Codes annotSes de Sirey, Edition
enti^rement refondue, par P. Gilbert, 1847. — De
V administration des Finances de la France, par
M. Necker, 1784.] c. g. c.
AUCKLAND, William Eden, first lord, the
third son of Sir Robert Eden, born 3d April 1744,
M.P. for Woodstock 1774, was one of the five
commissioners sent to America in 1 7 7 8. As chief
secretary, 1780-82, he established the National
Bank of Ireland, and was sent by Pitt to
Versailles, 1785, to negotiate the commercial ■
treaty with France, signed 1786. He was raised
to the English peerage 1793, and died 28th
May 1814. Among his writings are —
Fovnr Letters to the Earl of Carlisle, London,
1779, 8vo (on public debts, credit, revenue laws,
etc.; 3d ed., 1780, with a fifth letter on popula-
tion).— Short Vindication of the French Treaty.
London, 1787, 8vo. — Substance of a Speech in the
House of Peers on the Third Reading of the Bill
for granting certain Duties upon Income, London,
1799, 8vo (three editions). h. e. t.
AUCTION, Ordinary (Lat. aicctio, an in-
crease— because each bid is an increase on the
preceding one). A public sale in which succes-
sive bidders increase the price until one offers a
price which no others are prepared to exceed.
The auctioneer is recognised by law as the agent
both of the vendor and purchaser ; he is bound
to take out a licence to the amount of £10
annually ; he is bound to give due public notice
of the sale ; to provide a properly attested cata-
logue ; and, as a rule, the conditions of sale are
printed on the catalogue. The auctioneer is for-
bidden to buy on his own account ; and his sign
of office is a hammer, the fall of which repre-
sents that the sale has been eff'ected. It is a
common practice for the actual vendor of the
property put up to auction to bid until what he
regards as a sufficient price for his goods has been
attained, or he may place a "reserve price " upon
them. Until the hammer falls the bidder may
retract his bid, but when the hammer falls the
contract is notified and there is no appeal upon
either side. The auctioneer makes a charge for
his services, which ^i paid by the vendor. At
one time a duty was payable to the government
upon the value of all auction sales, and in
1830 a revenue of £234,854 was derived from
AUDIFFRET— AUDIT
69
£6,326,481 worth goods sold. But this duty
has now been relinquished by the state. The
conditions of sale usually contain a statement
in effect that "any error or mis-statement shall
not vitiate the sale, but that an allowance shall
be made for it in the purchase money," but this
is only held to guard against unintentional
errors, not designedly misleading statements.
Many descriptions of merchandise, such as
wool, tallow, hides and leather, timber, hemp,
wine, etc., are sold by periodical auctions, at
which buyers from all parts can conveniently
attend and have a good selection to purchase
from. At the five series of colonial wool sales
in London, wool is annually disposed of to the
value of £20,000,000 and more, and many
others of these auction sales are most valuable
in their results and in the worth of the goods
disposed of. In 1830 the auctioneers' licences
issued in the United Kingdom numbered 3043 ;
in 1913 the number issued in England and
Wales was 6160, Scotland 695, Ireland 861.
The business oi auctioneer is often combined with
that oi appraiser and house-agent, and in 1913
these businesses together paid £87,332 to the
inland revenue. The sales of real property at
the London Auction Mart, in the Country
and Suburbs, and by Private Contract as
stated by the Estate Exchange Auction JNlart,
London, were in 1913, £8,574,111 ; 1912,
£9,089,543; 1911, £8,397,794.
A Dutch Auction is a public sale in which
the vendor continues to lower his prices until a
bidder is found, or until in his own interest he
[can lower them no more. Dutch auction some-
[times enables a better price for the goods sold
' to be obtained than ordinary auction.
[As to effect on price by employing English or
(Dutch mode of sale by auction, see W. T. Thokn-
[nON on Labour, p. 47, et stq., ed. 1869.]
AUDIFEKET, Ch. L. G., Marquis d', bom at
[Paris 1787, died April 1878. He entered, when
quite young, the financial department of
16 government, through all the grades of which
16 was destined to pass with great rapidity.
^Originally placed, 1805, as a book-keeper in the
^"Caisse des depots et consignations," he be-
ime, 1808, a clerk in the public treasury, and
appointed, 1815, director of the office of
16 "comptabilite generals des finances."
I6n, in 1829, he passed, from being director
the finances to the presidency of the "cour
comptes." He prepared in 1830 the Rap-
au roi, which appeared in March under
16 signature of the Comte de Chabrol ; was
)pointed a "Pair de France" in 1837, and in
drew up the famous Reglement de la
nptabilit^ jmblique, a subject of which he was
uknowledged a passed master. In 1839 Audif-
published the Examen des revenus publics,
vol. in 8vo) ; in 1840 the first edition of the
hme financier de la France (2 vols, in 8vo), in
1841, Le Budget (1 vol. in 8vo) ; in 1843 the
Liberation de lapropri6t6 ou refornie de Vadinin-
istration des impots directs et des hypotlUques
(8vo, pamphlet), and in 1848 ia crise financiere
de 1848 (8vo, pamphlet). He entered the
senate in 1852, having published, 1851, an
8vo pamphlet entitled R&forme de Vadminis-
tration financiere des hypothhques. An imperial
decree, 24th April 1853, appointed him to the
Academic des sciences morales et politiques. In
1854 he published a second edition of his prin-
cipal work : Le SystSme financier de la France (5
vols, in 8vo) ; of this a 3rd ed., also in 5 vols.,
appeared in 1863-64. In these were embodied
all his writings on administrative questions or
others. To these five volumes were added a
sixth in 1870, containing parliamentary reports,
eloges, etc., and in 1876 a final one, under the
title of Souvenirs de ma carriere, an auto-
biogi-aphy in which he shows himself to be a
persistent partisan of the monarchy, without
regard' to the occupant of the throne. A. c. f.
AUDIGANNE, Amand, born at Antwerp
1814, died at Paris 1875. He was for many years
employed at the Minist^re de V agi-iculture et du
commerce ; and wrote, commencing 1846, many
articles in the Revue des deux mondes, on agri-
culture, trade, banking, railways, and par-
ticularly on the condition of the working
classes, which had been the object of many
conscientious inquiries on his part. Originally
a declared Protectionist he became Liberal as
time went on. In 1 850 he published the Ouvriers
en famille in the form of conversations (Paris,
in 32mo, frequently reprinted), then, Les popula-
tions ouvrieres et les industries de la France
(2 vols. 1854, in 18mo, which has gone to a second
edition), L'industrie contemporaine (1 vol. in
8vo, 1856), Les ouvriers d'd present et la
nouvelle iconmnie du travail (1 vol. in Svo,
1865), L" economic de la paix et la richesse des
pcuples (1 vol. in 8vo, 1866), La lutte in-
dustricllc des pcuples (1 vol. in Svo, 1867) ;
then Les chemins de fer aujourd'hui et dans
cent ans chez tous les pcuples (2 vols, in 8vo,
1858-1862). This last is an economic and
financial history of railways, principally in
France, containing judicious remarks on the
future of this great industry, some of which
have been realised. A. c. f.
AUDIT. An audit is the examination of an
account, or books of account, for the purpose of
ascertaining their correctness. The word shows
that such an examination originally consisted
of the hearing of explanations from the person
rendering the account, such as would be fitting
from an agent when submitting his account to
his principal. The term is now generally used
in connection with the examination of accounts
of public bodies or companies by persons ap-
pointed for the purpose, and accounts or books
are considered as audited or proved if supported
by such written evidence with regard to the
transactions recorded as may, in the opinion oi
70
AUDIT
the auditor, be considered sufficient to establish
the correctness of the individual entries and the
truth of the accounts. It has long been the
habit of those responsible for the accounts of
charitable institutions or publicly subscribed
funds, to obtain and publish a certificate of one
or more independent persons, to the effect that
the accounts have been examined and found
correct. Joint-stock companies also from an
early period have employed the services of
auditors, and the law which has grown up with
regard to the management of these companies
contains various regulations with reference to
the audit of their accounts. The Companies
Clauses Consolidation Act 1845 (8 Vict. c. 16)
provides that, except where by special act
auditors shall be directed to be appointed other-
wise than by the company, two auditors, each
holding at least one share in the undertaking,
shall be elected by the company in general
meeting, and that it shall be their duty to
receive from the directors the periodical accounts
and balance sheet, to examine the same, and
confirm or report upon the accounts to be read
at the ordinary meeting. The Companies Act
1862 (25 & 26 Vict. c. 89) and the great
extension of joint-stock enterprise under limited
liability which followed, led to greater attention
being paid to the subject of audit. In the first
schedule appended to that act. Table A, regula-
tions for management are prescribed for such
companies as may not have articles of association
of their own framed to suit their individual
requirements, and these include provisions with
regard to the appointment and duties of auditors.
The audit of the accounts of railway companies
was the subject of special legislation in 1867,
the attention of parliament having been drawn
to the imperfect and erroneous accounts issued
by some companies. The Railway Companies
Act of that year (30 & 31 Vict. c. 127, § 30)
prescribes : —
' ' No dividend shall be declared by a company
until the auditors have certified that the half-
yearly accounts proposed to be issued contain a
full and true statement of the financial condition
of the company, and that the dividend proposed
to be declared on any shares is bona fide due there-
on after charging the revenue of the half year with
all expenses which ought to be paid thereout in
the judgment of the auditors."
The Regulation of Railways Act 1868 (31 &
32 Vict. c. 119, § 12) repeals the regulation of
the Companies Clauses Consolidation Act 1845
as to auditors being necessarily interested as
shareholders.
The parliamentary accounts of the public
expenditure of the United Kingdom — that is,
of all moneys expended for the public service by
he various departments of the State out of
erial public moneys — are rendered to and
ted by the comptroller and auditor-general,
r the Exchequer and Audit Departments Act
1866 (29 & 30 Vict. c. 39). This act, which
abolished the former offices of comptroller-
general of the exchequer and of commissioners
of audit, defines the functions of the comptroller
and auditor-general generally in regard to the
examination of the public accounts ; and in
particular requires him, on behalf of the House
of Commons, to examine and report on the
"appropriation accounts" of money gi-anted by
parliament upon the annual estimates for the
naval, military, and various civil services.
These last-named annual accounts, and the
reports of the controller and auditor-general
thereon, are presented to the House of Commons
at the commencement of the session immedi-
ately following their preparation, and are re-
viewed by a committee of the House, called the
' ' Public Accounts Committee, "who take evidence
from the departments concerned, and from the
Treasury, on any points to which attention is
drawn by the comptroller and auditor-general,
and report their conclusions and recommenda-
tions to the House.
The procedure to be observed in an audit,
and the extent to which an audit can be carried,
depend largely on the character of the trans-
actions of which the accounts which are the
subject of the audit are the record. The audit
of the cash account of a charity would naturally
include the vouching of the payments by the
written acknowledgments of the persons to
whom the cash is paid, and of the receipts by
the counterfoils of the printed forms filled up at
the time of acknowledgment, or, if there be
such, by the published list of subscriptions and
donations. The auditor might obtain evidence
to satisfy him that aU the moneys that should
have been received had been brought into the
account, that the payments were correctly made
and proper in their character, and that the
balance of funds in hand at the date of closing
the account duly existed. This should be
proved by the bank pass-book supported by a
certificate from the bankers. The audit in such
a case might be thorough and complete.
The audit of a bank, on the other hand, can-
not be carried much further than the examina-
tion of the accuracy of the balance-sheet as
representing the financial position of the com-
pany at the date of the account. It would be
impossible for the auditor, even if evidence were
procurable, to prove the innumerable entries
recording the transactions of the bank and re-
sulting in the profit taken credit for, and his
work necessarily consists mainly of an examina-
tion to ascertain that the assets and liabilities
of the bank are correctly described in the balance-
sheet, that the assets are taken at no more than
their actual value, due reserves being made for
any depreciation in the value of securities or
for probable loss or bad debts, and that all the
liabilities are brought into the account. The
securities representing investments should be
AUDIT— AUDIT OFFICE
71
examined at the date to which the accounts are
made up ; the stocks which are registered without
the issue of a certificate, such as consols, bank
stock, and most colonial stocks, being proved
by a special letter from the Bank of England or
other registering office, certifying the holding.
With railways, the abstracts of traffic from
which the revenue is derived, are in all large
companies submitted to the examination of a
distinct department of the railway called the
"audit department" which is wholly inde-
pendent of the issue of tickets or the receipt of
cash, and the shareholders' auditor can but ac-
cept the totals arrived at by that department as
the gi'oss earnings of the company. It is his
duty to see that these are duly entered and
accounted for, to examine into the correctness
of the records of the company's expenditure,
and more especially to satisfy himself that the
allocation of this expenditure as between capital
and revenue is a fair one.
It is not considered the duty of an auditor
to express any opinion as to the policy of a
board of directors, or to object to any outlay
which the board, under parliamentary authority,
or under the general powers entrusted to direc-
tors, may think fit to incur ; but should any
expenditure take place of an unusual character,
or which, in the auditor's opinion, the directors
are not autliorised to make, or should the ac-
counts be drawn up on what appears to him to
be an erroneous basis, it is incumbent on him,
if his views are not adopted by the board and
the accounts amended accordingly, to see that
the facts are laid before the shareholders.
The duties of auditing now form a very im-
portant portion of the business undertaken by
chartered accountants. The variety and in-
tricacy of present systems of account keeping
make it difficult for persons, without special
training and experience, to discover error and,
it may be, fraud, on the part of those who draw
them up, and it has become the practice of com-
panies and other piiblic bodies to appoint profes-
sional men for this purpose. As an instance of
this tendency the statutes made for the uni-
versities of Oxford and Cambridge by the com-
missioners acting in pursuance of the Universities
of Oxford and Cambridge Act 1877, provide for
the audit of the accounts both of the universities
and of all the colleges, either by professional
accountants carrying on business in London or
"Westminster, or by persons conversant with
accounts approved by the permanent secretary
to Her Majesty's Treasury. It is also an
increasing practice with private banks and
commercial firms to have the accuracy of their
books and annual balance-sheets tested by
professional accountants. The rapidity of
modern commercial transactions leads to the-
finance of business offices being entrusted more'
and more to salaried assistants, and, as a check
on these, to the employment of independent
persons to supervise the work periodically.
The methods adopted by the professional
accountant and his trained clerks in the ex-
amination of books, constitute a more complete,
systematic, and independent audit than can be
easily undertaken by a partner in the business,
however conversant he may be with the work.
An audit of this kind secures, as far as possible,
accurate bookkeeping, the detection of fraud,
correct and intelligible balance-sheets, and the
proper distribution of profits or losses, and acts
in not a few cases as a deterrent from crime
by practically destroying the probabilities that
\vrong-doing will escape detection. Such firms
and companies also who seek to attract business
by exhibiting the sound condition of their
finances, and with that object publish their
balance-sheets, find it necessary to have their
accounts confirmed by independent professional
men, on whom a very large share of responsi-
bility properly rests for the accuracy of the
figures which they certify.
[Auditors, their Duties and Responsibilities, F.
W. Pixley, London, 5th ed. 1889.] KW.
AUDIT (Scots law). Taxation.
AUDIT OFFICE. The department of the
state, officially designated the Exchequer and
audit department, which is entrusted with the
audit and control of the public accounts.
The necessity of making provision for an
efficient audit of the receipt and expenditure of
public moneys has long been recognised, the
office of auditor of the exchequer, the most
ancient of all offices of control, having been
established as far back as the year 1314. Many
of the great departments of the state were at
the outset subject to separate and independent
audit arrangements, but in the year 1785 a
special office for auditing the public accounts
was created, and the first step of importance
taken towards the concentration of this function
in the hands of a single authority. In 1867
this object may be said to have been definitely
attained by the amalgamation of the offices of
the comptroller -general of the exchequer and
of the commissioners for auditing the public
accounts, a single department being then estab-
lished for the dual purpose of controlling the
receipts into and issues from the exchequer, and
of examining the accoimts of receipt and ex-
penditure.
The responsible heads of this department are
the comptroller and auditor- general and the
assistant comptroller and auditor, both of whom
are appointed by the croAvn and hold their
offices during good behaviour, being immovable
except on an address from both houses of par-
liament.
The comptroller and auditor -general is re-
quired to examine, on behalf of the House of
Commons, the accounts of all moneys voted in
supply, or which are a charge on the consoli-
72
AUDITOR OF THE COURT OF SESSION— AULNAGER
dated fund, and for this purpose full powers of
access to public accounts are given him. He is
required to report the result of his examination
annually, and if the treasury fail to present his
reports to the House of Commons, he must do
so himself. In addition to this duty tijchnicarlly
described as the "appropriation audit," the
comptroller and auditor - general must, if the
treasury so direct, examine and audit any other
public accounts submitted to him for the purpose,
but in respect to this portion of his functions,
the comptroller and auditor-general must accept
the decision of the treasury on any question
which he may raise, his direct responsibility to
the House of Commons being limited to the
appropriation audit above referred to. In con-
nection with the exchequer branch of his depart-
ment, the comptroller and auditor -general is
required from time to time, upon the requisi-
tions of the treasury, to grant credits upon the
exchequer for consolidated fund and supply
services, if he is satisfied that they are not in
excess of the sums granted by the various acts
of parliament, and all warrants for the prepara-
tion and issue of exchequer bills and bonds and
treasury bills are countersigned by him.
Recently, the opinion has been very generally
expressed that the manufacturing, shipbuilding,
and other like accounts of the army and navy
should be subjected to a more rigorous inde-
pendent scrutiny than has hitherto been the
case. Effect has been given to this opinion in
the Army and Navy Audit Act, 1889 (52 and
63 Vict. c. 31), which imposes upon the
comptroller and auditor -general the duty of
examining accounts showing the distribution
and cost of labour employed and the value of
stores expended in the several government dock-
yards, ordnance factories, and other manufactur-
ing establishments of the army and navy.
For the year 1913-14, over 200 persons were
employed by the department, the cost, mainly
for salaries, amounting to £68,265.
The duties of the audit office are set forth in
detail in the act 29 and 30 Vict. c. 39, and
the annual reports of the comptroller and
auditor -general issued with the appropriation
accounts for the army, navy, and civil services
respectively may also be consulted, t. h. e.
AUDITOR OF THE COURT OF SESSION.
Taxing-master.
AUGMENTATIONS, Court of. This was
created in 1536 to collect and administer the
property of the dissolved monasteries. It con-
sisted of a chancellor-treasurer, an attorney,
ten auditors, and seventeen receivers. A vast
amount of wealth passed through the hands of
this body during the next few years. In 1545
the property of colleges, chantries, hospitals,
and guilds was also confiscated to the king, and
its administration entrusted to the court of
augmentations. But this enormous property
was soon dissipated by the extravagance of
Henry VIII. and of the council under Edward
VI., and with its dispersal the functions of the
court came to an end.
[Perry, History of the English Church, 1887,
vol. ii.] R. L.
AUGUSTINIS, Matteo de (a Neapolitan,
living in the first half of 19th century), the
author of two elementary treatises of political
economy ; both are summaries of the leading
doctrines of his time, mixed with criticisms
from a moral and political point of view. He
is of opinion that Free Trade ought somewhat
to be restricted for moral and social considera-
tions, and considers A. Smith's doctrines as
leading sometimes to anarchy of both personal
interest and human passions ; nevertheless he
thinks that liberty ought to be the rule, and
government interference the exception. De
Augustinis represents a singular intermixture
of doctrines taken from J. B. Say, Dunoyer,
Senior, and other liberal economists, and of
doctrines taken from Sismondi and Romagnosi
favourable to state interference. He is an
eclectic writer, somewhat like Florez-Estrada.
In the theory of value he tries to reconcile the
doctrines based on the cost of production with
those based oa the principle of utility ; but he
does this in an infantine manner. This author,
like Cagnazzi and many other second - rate
economists, would have been totally forgotten
by this time if the modern historical school
and the Socialists op the Chair had not
picked up and collected every trace of opposi-
tion which in course of time had manifested
itself against the so-caUed English school, and
if they had not given a renewed importance
to the intermixture of moral, or political, or
social questions, with economic topics. De
Augustinis's Istituzioni di EcoTwmia Saddle
appeared in 1837, Naples (tipografia Porcelli),
and his Elementi di Eeonomia Sociale in 1843.
His best work is a critical essay on Pellegrino
Rossi's lectures on political economy : Studii
critici sopra it corso di Eeonomia pol. di P. Rossi,
Napoli, 1844. He examines in it one by one the
thirty-six lectures of Rossi, making not seldom
acute remarks in favour or against doctrines of
Rossi. This work was originally published in
a series of articles in a weekly review called
Libcifero, and now forms a volume of 176 pages
of small print in 8vo.
As statistician he is known by a series of
letters on the economical condition of Naples :
Delia condizione economica del Regno di Napoli,
Lettere, Napoli, 1833, Manzi. m. p.
AULNAGER. Under Richard I. it was
ordered that "woollen cloths, wherever they
are made, shall be of the same width, to wit,
of two ells within the lists, and of the same
goodness in the middle and sides." This rule
was again asserted in Magna Charta, art. 35,
and under Edward I. an official, called aulnager,
was appointed to enforce it. It was his duty
AUNCEL— AUTUMNAL DRAIN
73
to affix a stamp to all cloth as evidence that it
was of the necessary size and quality. When
the arbitrary regulations of Richard I. were
abandoned in the 14th century, the aulnager's
stamp -was still used to certify the difference
between any piece of cloth and the old require-
ments. The office continued to exist until the
reign of William III., but it had ceased to
be of much importance in securing customers
against fraud and imposition.
[Ashley, Economic History, i. p. 180.] R. L.
AUNCEL, or HANDSAL weight, a kind of
balance used in weighing wool. Forbidden by
25 Ed. in.
[Smith's Memoirs of Wool, 1747, vol. i. p.
38.] J. B.
AUSTRIAN SCHOOL OF ECONOMISTS,
The. Among German -speaking nations the
predominant school of economists has been,
since the middle of the century, the historical,
which seeks to reconstruct economics by the
aid of history and sociology. Since 1871
its supremacy has been threatened in Austria
(if not in Germany) by a group of writers who
have returned to the deductive method. From
their agreement in method and leading doc-
trines, as well as from their virtual collabora-
tion with each other, these writers are justly
regarded as a distinct school, which may (from
the nationality of the chief members) be called
the "Austrian" school of economists. Their
method is, like Ricardo's, deductive ; and, like
RiCARDO, they treat the doctrine of value as
the cardinal point in economic theory. Their
results, however, differ considerably from the
Ricardian. Like Jevons, they find the key to
the problem of value in the notion of final
utility. Unlike Jevons, they regard economics
as having nearer affinity \vith psychology than
with mathematics, and they are sparing in the
Use of mathematical illustration. They have
thus made the doctrine of Final Utility {q.v.)
intelligible to a wider circle ; and have influ-
enced economists outside of their school (for
example, M, Block in France, Professor Cossa
in Italy, and Professors J. B. Clark, E. B.
Andrews, and S. Patten in America). It was
stated in reply to enquiries in 1914 that they
have practically ceased to exist as a separate
School. The chief authors and works are :
Carl Menger, Grundsdtze der Volksxvirthschafts-
lehre, Vienna, 1871 ; Methode der Sozial-vnssen-
\8chaften, Vienna, 1883 ; Irrth'dvier des Hislorismus
in der deutschen Nationalokonomie, Vienna, 1884.
; — Friedr. v. Wieser, Ursprung und Hauptgesetze
\des vnrthschaftlichen Werthes, Vienna, 1884 ;
^Ber Naturliche Werth, Vienna, 1889.— Em il Sax,
Wesen und Aufgaben der Nationalokonomik,
Vienna, 1884 ; Qrundlegung der theoretischen
Staatswirthschaft^Yienna, 1887. — Eugen v. Bohm-
Bawerk, Rechte und VerhoLltnisse vom Stand-
punkte der volkswirlhsch. Griiterlehre, Innsbruck,
1881 ; Kapital und Kapital-zins, vol. i., Inns-
bruck, 1884 ; vol. ii., Innsbruck, 1889.— Robert
Zuckerkandl, Theorie des Preises, Leipzig, 1889.
— E. von Philippovich, Avfgcd>e und Methode der
politischen Oekonomie, Freibiu-g, 1886. — Robert
Meyer, Principien der gerechten Besteuerung,
Vienna, 1884; Das Wesen des Einkoynmens, 1887.
— Victor Mataja, Der Unternehmergewinn,Yienna,,
1884 ; Das Recht des Schadenersatzes, Vienna,
1888. — Johann v. Komorzynski, Werth in der
isolirten Wirthschaft, Vienna, 1889. — Dr.E. Seidlei
in Jahrb. fur JVat. Oek. und Statist., March 1890
applies the theory of value to doctrine of legal
punishments ; he gives a full bibliography. — Ugo
Mazzola, Finanza pubblica (Rome, 189U). — C. A.
Conigliani, Effetti Economici delle Imposte (Milan,
1890). — For a criticism from a Ricaidiau point of
view, see A. Loria in the Nuova A7itoloyia, April
1890. — Compare H. Dietzel in Conrad's Jahrb.
fiir Nat. Oek. und Statist., June 1890. — See also
Quarterly Journal of Economics (Harvard), Octo-
ber 1888 and April 1889. Cf. articles below on
Value ; Historical Method, etc. j. b.
AUTHORITIES, Economic. See Political
Economy, Authorities on.
AUTUMNAL DRAIN. A movement of coin
in the autumn throughout the country, taking
its origin from the season, which stimulates
employment in agi'iculture, and sets great part
of the population free for an autumnal holiday.
Statement showing autumnal movements of gold
and silver coin held by Bank of England for
1881-1900 — beginning of September to about
the middle of November (OOO's omitted), thus
£1772 reads £1,772,000.
Year.
S
p
Gold Coin.
Silve
rCoin.
i
•2 "
■1%
I fi-oin or
IlomeCir-
II balance.
0)
«3
%a^
.s^
•2^
> 5 -
-o
o
y
Hi
3
&
£
Q
£
£
£
£
£
£
£
£
18S1
1772
811
430
788
8801
60
1882
417
838
610
880
2745
..
19
1883
413
795
ISO
873
2261
92
1884
1460
765
270
935
3430
67
1885
754
660
1110
252
2776
13
1886
259
..
717
330
391
1179
28
1887
353
575
25
383
630
57
1888
..
2513
445
420
689
4067
141
1889
,.
2431
612
300
.,
640
3983
414
1890
,,
2009
616
480
1215
4320
174
1891
1471
478
320
288
2559
••
77
1892
1856
533
235
720
3344
153
1893
65
SOO
440
724
451
145
..
1894
74
584
300
730
1540
40
1895
3329
964
178
1213
5684
104
1896
1453
539
108
_^
348
2448
27
1897
928
685
SOO
..
137
2050
..
4
1898
..
773
829
345
,^
1523
3470
..
131
1899
4905,
515
357
,_
1149
6926!
132
1900
1052' 926 1
330 163
2145 1
■•
49
A corresponding influx occurs in May and June
of 2 to 3 millions. (See also suh voce in App.)
The effect of this autumnal pressure was
described, 1857, by the late Mr. William Lang-
ton to the Statistical Society of Manchester
(Transactions, Session 1857-58), and the investi-
74
AUXIEON— AVERAGE, MARITIME
gation was carried on, with his accustomed in-
genuity and research, by Prof. W. S. Jevons,
1866 {Statistical Society of London Journal, vol.
xxix.) The pressure appears to be enhanced
somewhat by the requirements of the Bank
Act of 1844, in consequence of the movements in
the Scotch and Irish issues. On average, for the
years 1846-1900, the rate of discount charged
by the Bank of England was higher during the
autumn months, and particularly in November,
in connection with this movement. A some-
what similar influence is traceable in the re-
turns of the banks of France and Germany.
[Jevons, Investigations in Currency and Finance,
London, 1884. — R. H. Inglis Palgrave, Bank Rate
in England, France, and Germany, 1844--'?8,
London, 1880.— See also R. H. Inglis Palgrave,
Evidence before Select Committee of House of Com-
mons, Banks of Zssue, 1875. — Notes on Banking,
R. H. Inglis Palgrave, London, 1873.]
AUXIRON", Claude FRAN901S Joseph d'
(b. 1728, d. 1778), an engineer and physio-
cratic economist; was author of the anonymously
published —
Principes de tout Gouvernement, ou Examen des
causes de la faihlesse ou de la splendeur de tout
Stat consider^ en lui-mime et indipendamment des
■moeurs, 1766. r. y. e.
AVERAGE. In the most familiar applica-
tion of the term the average of a given set of
quantities denotes their sum divided by their
number, their arithmetic mean. More gener-
ally an average may be defined as an intermedi-
ate value derived from a given set of quantities
by a process such that, if all the quantities
were equal, the derivative quantity would coin-
side with the given ones. For example, if a,
6, c, etc., are given quantities in numlDer w,
then the expression
J'-
i-fC^
etc.
average. Of the forms included under this de-
finition the number is infinite. The following
four appear to be most important : (1) the
arithmetic mean above defined ; — (2) the geo-
metric mean, formed by multiplying n quantities
together and extracting the wth root ; — (3) the
median, which is such that, if the given quan-
tities be arranged in the order of their magnitude,
there shall be as many of them above as below
the median ; — (4) the mean value distinguished
by Fechner as ''dichteste werth," and by De
Venn as the "maximum ordinate average,"
which is such that in its neighbourhood the
given quantities cluster most densely. — Varieties
of these species arise when, instead of allowing
to each of the given quantities an equal part in
forming the average, we assign more importance
to some of the data than to others.
In choosing among these different species and
varieties, attention must be paid to two rather
subtle distinctions. First, in taking an average
we may have in view some special purpose as dis-
tinguished from the general objects of art and
science. Suppose, for instance, our object in
finding the average variation of prices is to
ascertain how much the monetary value of a
specified set of articles, say the necessaries of a
labouring man, has varied. This specific ob-
ject is evidently correlated with a qualified or
veighted arithmetic mean. But, if the average
stature for each of several districts were required,
in order to investigate whether there is any con-
nection between height and food (or other
attribute), there is no longer the same presump-
tion in favour of the arithmetic mean. Possibly
the third or fourth species of average might be
better. Again, the average may or may not be
designed to represent something outside and
behind the given numbers. Thus in taking
the average of several independent estimates of
the number of coins in a country, our quoesitv/m
is an objective thing, the real amount of coin.
Less substantive, but still extraneous to the
given statistics, is a species of qucesitum more
common in social science, which may be de-
scribed as that mean value towards which tends
the average of the cmnplete series, of which the
given statistics are only samples. Thus, in
taking the average of a given set of price-varia-
tions, we may aim at ascertaining, as far as
possible, what would be the mean variation of
prices, if we could complete the whole series of
statistics out of which we have only selections.
The general result of these considerations is,
on the one hand, in many cases to add some
reasons in favour of the arithmetic mean be-
sides the obvious grounds of familiarity and
convenience, and, on the other hand, in certain
cases to show that one of the other species of
average is preferable (see Adjustment, Aver-
age ; Average, Maritime).
[Bertillon, " Moyemie," Dictionnaire Encyclo-
p9dique des Sciences Medicates. — Edgeworth,
"Observations and Statistics," Transactions oj
the Cambridge Philosophical Society, 1885. —
"The Choice of Means," London Philosophical
Magazine, 1887. — " Some New Methods of Measur-
ing Variation of Prices," Journal of the Royal
Statistical Society, 1888. — Galton and Macalister,
"Law of the Geometric Mean," Proceedings oj
the Royal Society, 1879, — Lexis, Massenerschevn-
ungen. — Messedaglia, " Calcul des Valeurs Moyen-
nes," Annates de Demographic Internationale,
1880 (translated from Archivio di Statistica). —
Venn, Logic of Chance, 3d ed., chaps, xviii. and
xix. See also the older authorities, Laplace,
QuETELET, and others, referred to by the above -
named writers.] r. T. E.
AVERAGE (Maritime), is the custom that
all parties concerned in the adventuie of a
vessel at sea are liable in equitable proportion
to contribute their shares of losses (particularly
those arising from "jettison" or the throwing
overboard of cargo to lighten the vessel) and of
expenses, when such losses and expenses are
incurred for the common good by one or more
of the adventurers. Although this custom is
AVERAGE, MARITIME— BABBAGE
75
not expressly set forth in the most ancient sea-
laws, owing perhaps to the then infrequency of
joint-stock adventures at sea, it came at length
to be so fully and clearly adopted in the laws of
Rhodes as to commend itself in its integrity to
the founders of the Roman civil law, and after-
wards, with occasional modifications of no very
great importance, by all commercial countries,
from the date of the Pandects down to the
present time. The chapter of the digest De
Lege Rhodia de Jadu (xiv. 2) gives full details.
The following is the illustrative example it
contains : " Wherefore, if two men should each
of them own a hundred parts in the cargo, and
Oaius, the owner of the goods thrown overboard,
shall own two hundred, Caius, on a loss of the
cargo, should receive fifty from each of them :
losing his other hundred by shipwreck, because
he had just as large a share in the wares lost
as they together had in the wares preserved.
Hence, as the share of Caius, which represented
two hundred, was in excess of the share of each
of them which represented one hundred each,
in the same proportion after the disaster, the
share of Caius, representing one hundred, will
be in excess of the share of each representing
fifty, just as both before and after the disaster
the share of Caius exceeded by a half the share
of each of the others. On the other hand, if
Caius should throw overboard wares to the
value of fifty, but each of the other men shall
have kept his own, estimated at one hundred
each, Caius shall suft'er a loss of ten, but these
other two shall contribute double each, namely
twenty ; so that just as his fifty answered to
the one hundred of each of his })artiiers, in like
manner his forty may answer to the eighty
apiece that each of them retains."
It would certainly have conduced to clearness
if this example had set out that the total
cargo was made up of 400 parts, and that the
loss of Caius's goods, 200 parts, entailed an
average contribution of one-half on each of the
adventurers' shares. Similarly, in the second
case, the total value of the cargo was 250,
and the loss of Caius's goods, worth fifty, en-
tailed an average contribution of one-fifth on
each of their shares in tha total value, f. h.
AWARD. The decision of the arbitrators or
of the umpire to whom parties, wishing to avoid
recurrence to a legal tribunal, have referred
their dispute. A submission to arbitration may
be made a rule of court on the application of
either party, and if this has been done, the award
may be enforced with the court's assistance ;
otherwise the only means of compelling the
party, against whom the award has been given,
to satisfy its directions, is to bring an action
and to obtain judgment on the basis of the
award (see Arbitration). e. s.
AZUNI, DoMENico Alberto, born at
Sassari (Sardinia) in 1760, died 1827 at
Cagliari in Sardinia. A famous commercial
lawyer and president of the Court of Appeal of
Genoa, he became a member of the French corps
legislatif, and was appointed by Napoleon I.
one of the members of the commission which
drew up the Code de Commerce. He was the
principal author of the Livre dcuxUme du
Commerce maritiine. Maritime commerce, is
also the subject of his principal works which.are
^vritten in French, or in French and Italian.
Sistema universale dei priiicipii del diritto
marittimo deW Jiiirojja ; the French edition has
the title Droit maritime de V Europe ; — Essai
sur Vhistoire geographique, politique et morale de
la Sardaigne ; — Suit' origine delta bussola; Dizion-
ario di giurisprudenza mercantile; — Memoires
pour servir d Vhistoire des viarins navigateurs de
Marseille. M. p.
BABBAGE, Charles, born near Teign-
mouth 1792, studied at Trinity College, Cam-
bridge, gi-aduating (without honours) 1814.
In 1816 he was made fellow of the Royal
Society. He was also an active member of the
Astronomical Society. Feeling the defects of
the Royal Society as then organised, he helped
to found the British Association (1831), the
statistical section of which (1833) was due to
him, as well as the Statistical Society (1834).
Between 1822 and 1843 his time and money
were almost wholly devoted to the building of
his two great calculating engines, one of which
(partially complete) is preserved in the South
Kensington Museum. In 1828 he was chosen
Lucasian professor of mathematics at Cambridge.
He wrote not only on mathematical subjects,
but on geology, the diving bell, lighthouses,
metal-planing, life insurance, infant mortality,
taxation, and last (but to economists not least),
on machinery and manufactures. His last
public efforts were to repress the barrel-organ,
an unhappy application of mechanical invention
to the fine arts. He gave the world a retro-
spect of his own career in Passages from the
Life of a Philosopher (1864). He died in 1871.
Though Babbage himself has done compara-
tively little for economic theory, he has certainly
aided it indirectly, by his full and faithful de-
scriptions of some of the most characteristic
phenomena of modern industry. If he is con-
tent to take most of his economical doctrines
at second hand, he at least holds them intelli-
gently, and states them with a vigour of his
own, dwelling chiefly on the aspect which
strikes him most. Political economy, he says,
proceeds on the assumption of certain principles
which are no more than general,- not com-
pelling universal obedience like the principles
of mathematical science, but no less than
general, being much more frequently obeyed than
violated. Such is, e.g., the principle that
76
BABBAGE
men are governed by their imagined interest,
and that each individual is the best judge
of this for himself. The proper method of
economic (as of other) inquiries is "to divide
the subject into as many different questions g,s
it "A^ill admit of, and then to examine each
separately, or in other words, to suppose that
each single cause successively varies, whilst all
the others remain constant." It is hopeless
for those who cannot master the separate
questions in their simplicity to make a success-
ful investigation of their united action (Bx-
position of 1851, pp. 1-4). Babbage has a clear
view of the distinction between economics and the
exact sciences, and, though a mathematician and
a contemporary of Cournot, Whewell, and
Tozer, he makes no attempt to treat political econ-
omy by mathematical methods. He lays down
with great clearness the distinction of fine arts
from industrial arts, a technical distinction that
involves an economical one. He makes it plain
that economical inquiries must deal mainly with
industrial arts. In the fine arts, "each example
is an individual, the production of individual
taste, and executed by individual hands," and
therefore costly. In the industrial, "each ex-
ample is but one of a multitude generated ac-
cording to the same law, by tools or machines,
and moved with unerring precision by the
application of physical force," and therefore
cheap {Exposition of 1851, pp. 48, 49). The
social and economical effects of cheapness are
brought out by Babbage with useful reiteration
in support of free trade, and more especially in
connection with the invention and application
of tools and machinery. In fact, his chief direct
contribution to theoretical economics has been
his clear analysis of the Division of Labour
(g-.-u.), and of the economical function of Ma-
chinery in the modern industrial system. In
regard to division of labour, the merits of his
discussion of the subject are generally admit-
ted. He pointed out that the advantages
mentioned by Adam Smith in the Wealth
of Nations (bk. i. ch. i.), would not explain
the cheapness of manufactured articles, un-
less, to that author's list we add the following
{Economy of Machinery and Manufactures, ch.
xviii. p. 1 3 7). " That the master manufacturer,
by dividing the work into different processes,
each requiring different degrees of skill and
force, can purchase exactly that precise quantity
of both which is necessary for each process, —
whereas, if the whole work were executed by
one workman, that person must possess suffi-
cient skill to perform the most difficult, and
sufficient strength to execute the most laborious,
of the operations into which the art is divided. "
In other words, advantage must be taken of
the several individual capabilities of the work-
men, intellectual and physical, and the work
must be so organised that workmen be only
called upon to do that which they can do best
of all. In the statement of this principle he
has, as he allows, been anticipated by Gioja, the
Italian economist {Nuovo Prospetto delle Scienze
Economiche, vol. i. ch. iv., Milan, 1815) ; but
he was led to it independently by his own
observation of the actual working of English
and foreign factories. Without this organis-
ation of labour (he says), full advantage cannot
be taken of tools and machines, however
ingenious. The nature of machinery, as dis-
tinguished from mere tools, is thus described :
"When each process has been reduced to the
use of some simple tool, the union of all these
tools, actuated by one moving power, constitutes
a machine " {Economy of Machinery and Manu-
factures, p. 136 ; cp. Marx, Kapital I. xiii. 389
note). The examples show that Babbage con-
ceived, as Marx has done after him, that so
long as the moving power is simply the human
muscles, we have to do, not with a machine,
but only with a tool. It is on subjects like
these, at once of technical and of economical
importance, that Babbage is at his best. In
his views on taxation and currency, he accepts
substantially the ordinary doctrines of the domi-
nant school of economists. His criticisms of
the defects in^the exhibition of 1851 remind
us in many places of Cobden's views {e.g. in
England, Ireland, and America) on the blessings
of cheap goods and large advertising. But in his
Economy of Machinery and Manufactures (1832),
Babbage not only showed the range and accuracy
of his own personal observation and inquiry, but
displayed a better comprehension of the econ-
omical bearings of the factory system of produc-
tion than any previous economical writer. The
book is a storehouse of illustrations from actual
business ; the writer never draws on his
imagination for an example when his memory
and his note -book will serve him. On the
other hand, his book is not like Beokmann's
History of Inventions, a mere collection and
narrative of facts, without an interpretation of
them by economical principles, nor is it, like
Ure's Philosophy of Manufactures, a mere eulogy
of the factory system of his own day. Though
he lays, perhaps, undue stress on the capitalist,
and his gains by the economy of materials and
labour, he sees the need of improved industrial
arrangements for the workmen, co-operative
stores, and industrial profit-sharing, and is in
favour of the abolition of the truck system, and
all unfair restrictions on workmen's liberty of
combination {Economy of Machinery and Manu-
factures, ch. xxi. p. 177, ch. xxviii. p. 253).
He is no blind worshipper of Mammon ; and
he sneers at the vulgar notion that no calling
is respectable which does not produce wealth.
It is in the public interest rather than their
own that he wishes scientific men to have a
larger material reward than niggardly govern
ments were then granting {Exposition of 1851.
p. 147, etc.)
B ABBAGE— B ABEUF
77
He Mo-ote with feeling on this last subject
because he was himself above everything an
inventor. This is not the place tp discuss the
merits of his calculating engines, or the justice
of his complaints against the successive govern-
ments witli which he contended in his twenty
years' endeavour to build his engines (see
Appendix to Exposition of 1851). But we may
note that his design in the invention of them
was simply to convert into physical mechanism
what had already become a mechanical process
psychologically (Mach. and Maniif., ch. xix.
p. 157), and this is one of the brightest aspects
of the work of a modern inventor. In the ab-
stract, Babbage was far from magnifying an
inventor's office. '*The man who aspires to
fortune or fame by new discoveries must," he
sa,ys (Mack, and 3Ianvf. , ch. xxv. p. 212), "be
content to examine with care the knowledge of
his contemporaries, or to exhaust his etibrts in
inventing again what he will most probably find
has been better executed before ; the power of
making new mechanical combinations is a pos-
session common to a multitude of minds, and
by no means requires talents of a high order."
It results, he believes, from the principle of the
division of labour, which should be applied not
only to industrial, but to mental labour, and
has a great career still before it in the latter
field. Under happier auspices, Babbage would
no doubt have led the way in person still further
than he did, in the directions thus indicated.
Those of l)is works which are directly and
indirectly of most economical importauce are the
following : — On the Economy of Machinei-y and
Mamtfacturcs, 1 832, third edition,1833. — Thoughts
on the Principles of 2\ixation with reference to a
Property Tax and its Exceptions [exemptions from
it], 1848 ; second edition, 1851 ; third edition,
1852. An Italian translation of the first edition,
with notes, was published in 1851 at Turin. — Ob-
servations on the Decline of Science in England,
1830 [largely an attack on the Royal Society]. —
A Comparative View of the different Institutions
for the Assurance of Life, 1826.— Essay on the
General Principiles which regulate the Application
of Machinery (from Encyclop. Metropolitana,
1829).—" Letter to T. P. Courtenay on the Pro-
portion of Births of the two sexes amongst Legiti-
mate and Illegitimate Children " (Brewster's
Edinr. Journal of Science, vol. ii. p. 85, 1829). —
"On the Principles of Tools for Turning and Plan-
ing Metals " (In Holtzapffel's Turning and Mechani-
cal Manipulation, vol. ii. 1846). — The Exposition
of 1851, or Views of the Industry, the Science, and
the Government of England, 1851. — Statistics of
• the Clearing House, reprinted from Transactions
of the Statistical Society, 1856. — Passages from
" the Life of a Philosopher, 1864. J. B.
BABEUF, Franqois Noel, called Caius
Gracchus, born at Saint Quentin 1764, died at
VendOme, 24th February 1797. Left to his own
resources at the age of sixteen, his youth was.
stormy, and his whole life wild and irregular.
From the commencement of the Revolution he
wrote in the journal Le correspondant Picard,
articles so violent in tone that he was brought
to trial. His acquittal, 14th July 1790, did
little to calm him. Appointed administrator
of the Departement of the Somme, he soon
had to be dismissed from tliat office. This
was the time at which he took the name of
Caius Gracchus, posing as a Tribun du peuple.
He gave the same name to a journal, which he
had previously carried on under the sub-title of
Defenseur de la liberte de la prcsse. All this
took place shortly after the fall of Robespierre
from power. This for a time had his approval ;
but he soon returned to his earlier views and
appealed to those violent 2>assions which, as a
demagogue, he knew how to rouse. He gathered
round him, under the name of the Secte des
Egaux, all the old Montagnards who were dis-
satisfied with the regime of the Thermidorians.
The object of this sect, which drew its inspira-
tion from some of the sentimental ideas of J. J.
Rousseau, was to destroy inequality o f condition,
with the object of attaining the general good.
Sylvain Marechal, author of a Dicfionnaire des
AtMes, BuoNAimori, who claimed to be descended
from Michael Angelo, with Amand and Anto-
nelle, who did not, it is true, remain associated
long, and some others, formed the stall wliich
recognised Babeuf as tlieir chief. AVorking with
feverish activity, they gathered round them a
considerable number of adherents. The place
where their club met was the Pantheon. At
first orderly, their meetings became tumultuous
and threatening and were ]u-olonged far into
the night. Attending armed, they prepared to
resist by force the dissolution of tlic club wliieli
the authorities had determined on. General
Bonaparte, acting with nmch tact, contrived to
close the meetings of the club, but the members
formed tliemselves forthwith into a secret society,
and gradually, by winning over soldiers and
police, . became a formidable body, numbering
nearly 17,000 able-bodied and armed men, with-
out including the Faubourgs Saint-Antoine and
Saint-Marceau, which Avere at their back. Ad-
dressing themselves to the masses, tliey pub-
lished a manifesto written by Sylvain Marechal
in his most inflammatory style — "AVe desire,"
said they, ' ' real equality or death. This is
what we want. And we will have real e(piality,
no matter what it costs. Woe to those wlio
come between us and our wishes. Woe to him
who resists a desire so resolutely insisted on.
. . . If it is needful, let all civilisation perish,
]irovided that we obtain real equality. . . .
The common good, or the community of goods.
No further private property in land ; the land
belongs to no private person. We claim,
we require the enjoyment of the fruits of the
land for all ; the fruits belong to the whole
world," etc.
Instructions in great detail as to the methods
of raising insurrectionary movements were added.
78
BACK-BOND— BADGER
" Those who hinder us shall be exterminated ;
. . . shall all alike be put to death : Those
who oppose us or gather forces against us ;
strangers, of whatever nation they may be, who
are found in the streets ; all the presidents,
secretaries, and officers of the royalist (sic) con-
spiracy of Vendemiaire, who may also dare to
show themselves." If the lives of men were
to be treated thus, one may guess what fate
was reserved for their property. But, after
massacres and spoliations, what was to come of
it all ? The public authorities were to organise
employment ; there was to be only one source
of employment, the state, with subdivisions
devised to meet the wants, somewhat rudimen-
tary, of the community. Every one was to
have a right to lodging, clothes, washing, warm-
ing, and lighting, to food, mediocre maisfrugale,
to medical attendance. This is much what
Louis Blano, who appears to have sought his
inspiration among the decrees of the Ripuhlique
des Egaux, enunciated in more methodical and
sober language. " Every one is to work as he is
able, and to consume according to his wants."
The secret was well kept ; it was only a few
hours before the moment fixed for the explosion
of the conspiracy (May 1796) that a captain,
named Grisel, revealed it to the directory.
Decisive steps were taken at once ; a vigorous
watch was kept, while the public authorities
seized the leaders and their papers.
Babeuf and Darthe, condemned to death the
23d of February 1797, stabbed themselves before
the tribunal. Life still lingering on, they were
guillotined the next day. Buonarroti and
Sylvain Marechal, condemned to exile (deporta-
tion), died, the first in 1837, the second in 1803.
It may be added that Babeuf seems to have
had rather a disordered brain than an absolutely
criminal disposition. He died with courage,
leaving his wife a written paper declaring his
conviction that he had always been a "perfectly
virtuous man."
See Blano, J. J. L. ; Brissot de Warville ;
Communism ; Proudhon. a. c. f.
BACK- BOND (Scots law term). A declara-
tion by one apparently an absolute owner that
he is only a trustee or mortgagee.
BACKWARDATION. When a seUer of
stock "for the account" (v. Account) on the
stock exchange finds that he has not previously
obtained the stock which he sold, he asks the
dealer to whom he sold to allow him to prolong
his bargain until the next settlement. If the
security in question be unusually scarce, the
buyer finds himself in a position to charge the
seller for the accommodation, and the rate or fine
which he imposes upon the person unable to
deliver his stock or shares, according to the con-
tract, is called a Backwardation. This fine, being
paid again and again from settlement to settle-
ment, at varying and sometimes very high rates,
is the main source of profit in a Corner (q.v.)
in stocks and shares. The unlucky seller in
blank, being unable either to deliver or borrow
stock in satisfaction of the contract, is occasion-
ally at the mercy of the buyer. The stocks of
certain railways have, on some occasions, been
made so scarce by such operations that specula-
tive sellers have had to pay whatever "back-
wardation" the successful speculative buyers
have been pleased to impose. a. b.
BACON, Francis (Viscount St. Albans).
Born 1560-61, died 1626. At the time when
Bacon lived, economic questions had not taken
any separate place among the studies to which
a statesman gave special attention ; but Bacon's
mind, ingenious, fertile in resource, keen in
research as it was, did not neglect the examina-
tion of those questions of policy which require
economic treatment. Mr. Spedding (Bacon's
Works, ed. Spedding, vol. iii. p. 515) considers
that Bacon was "little before his age in his
views with regard to usury, trade, etc." (See
Essay xxxiv., " Of Riches "). By the time,
however, when the essay on " Plantations " was
written, Colonies, as Mr. Reynolds observes,
had been successfully founded. Bacon's remark,
"Let there be freedom from custom tiU the
plantation be of strength, and not only freedom
from custom, hut freedom to carry their com-
modities where they may make their best of
them, except there be some special cause of
caution," and those on the treatment and
government of colonies generally, show perhaps
his best judgments on these matters. Most of
Bacon's writings deal with other subjects, but
the reference to colonial possessions in his
speech when lord chancellor on the election of
Serjeant Richardson as Speaker (1620), describ-
ing this country's portion "in the New World,
by the plantation of Virginia and the Summer
Islands. . . . Sometimes a grain of mustard
seed proves a great tree, who can tell ?" (Bacon's
Works, ed. Spedding, vol. xiv. p. 175), may
also be quoted in this connection. The essay
"Of the true greatness of Kingdoms and Estates,"
and the history of Henry VII., though these
deal principally with politics, show that Bacon
had taken the study of these branches of econo-
mics also "among his portion."
The editions of Bacon's Works are many. That
edited by Spedding, Ellis, etc. (14 vols., London,
1857-74), and those of the Essays (London,
1881) and the Advancement of Learning by W.
Aldis Wright, and of the Essays by S. H. Rey-
nolds (both these Clarendon Press), may be speci-
ally mentioned. Mr. Reynolds remarks, and
truly, that in Bacon's "views about trade he
takes the mercantile theory as his guide."
BADGER. This name was formerly used to
signify a small trader buying corn or victuals
(fish, butter, or cheese, specially mentioned) in
one place in order to sell them in another. The
Act 5 & 6 Edw. VI. c. 14, § 7 exempts these
men from the penalties enacted against Fore-
BADGER— BAGEHOT
79
STALLERS AND Regrators {q.v.), but requires
them to be licensed by three justices of the
peace of the county where they dwell. A subse-
quent act, 5 Eliz. c. 12, declares that the result
of this legislation was that many persons ' ' seek-
ing only to live easily and to leave their honest
labour" have taken up this trade, and enacts
that licensees are to be householders having
dwelt in the county for three years, and that
the justices may require a badger to enter into
recognisances not to forestall or engross. The
rules as to licensing are made more stringent,
and penalties assigned for a breach of them.
The word is now obsolete excei)t in certain
dialects. It was used to denote the foreman of
a Gang of agricultural labourers (Kebbel's Agri-
cultural Labourer, 1870, p. 3).
[Tomlins' Law Dictionary, 1835. — Dr. Murray's
New English Dictionary, s.v. 1884.] C. G. c.
BAGEHOT, Walter. Born at Langport,
Somersetshire, 1826, died at Langport, 1877.
Bagehot was son of the managing partner of
Stuckey's Bank who sent him to be educated
at University College, London. After taking
successively his B.A. and M.A. degrees at
London University, with the higliest honours,
in 1846 and 1848, he read law, and was
called to the Bar ; but, after a visit to Paris,
where he was living at the time of the coup
d'4tat, in 1851, he decided to enter his
father's bank. His stay in Paris gave occa-
sion to a series of very brilliant letters on the
political condition of France under the prince
president (as Louis Napoleon was at that time
entitled), which were published in the Inquirer
newspaper. They were in effect an apology for
the coup cCitat. After Bagehot's death they
were republished in an appendix to the Studies
on Literature. These letters gave the first
evidence of the rise of a new critic of higli
genius, a critic who will take his place far
above Lord Jeffrey, and Lord Brougham, and
Sydney Smith — though in mere humour Bage-
hot, humorous as he was, would hardly com-
pare with the last - mentioned — in relation
both to political literature and belles-lettres.
Indeed, in belles - lettres Bagehot will take
rank with Matthew Arnold as one of the two
most lucid as well as most discerning critics of
that time. The essays which Bagehot con-
tributed, first to the Prospective Review and
then to the National Review, between 1853 and
1864, were not merely among the most brilliant,
but among the most remarkable for wide in-
tellectual survey and a detached literary judg-
ment of any published in England during those
years. In style they were remarkable equally
for their gaiety, for the delicacy of their appre-
hensiveness, for the savoir faire of a man of the
world, and for the impartiality of their personal
estimates. It is difficult to say whether he.
wrote best on a theologian like Bishop Butler,
on a sensitive poet like Hartley Coleridge, on a
novelist like Sir Walter Scott, or on a great
historian and essayist like Macaulay. Bagehot's
style was buoyant, bright, and often eloquent,
but there was always a certain dash of mockery
in his eloquence, and a large infusion of serious-
ness in his mockery. In 1858 he married the
eldest daughter of James Wilson, editor of the
Economist, and two years afterwards succeeded
his father-in-law in the editorship of that paper,
retaining the post till his death in 1877. He
was universally regarded as one of the best
financiers of his day, and was consulted by
successive chancellors of the exchequer on all
critical occasions.
The special service which Bagehot sought to
render to economics may be roughly described
as the reconciliation of it with history. He
was not himself able to perfect this work ; but
he has stated the needs of the case clearly, and
has pointed the way to a solution of its diffi-
culties. ' ' The great want of our present
political economy " (he says in the preface to
Universal Money, 1869) "is that some one
should do for it what Sir Henry Maine has
done so well for ancient law. We want some
one to connect our theoretical account of the
origin of things with the real origin." Simple
definitions come first in the text-books ; but,
as in physics, the actual commencements
in history and experience have been much
harder and odder. Banks, for example, are
now part of a refined mechanism of credit, but
they were first invented to supply a verified
and trustworthy money for traders {Universal
Money, p. xv. seq.)
No economical writer shows clearer conscious-
ness of the enormous difference between the
present conditions of European commerce and
the conditions of life and industry among our
rude forefathers ; or, at the present day, among
barbarous nations. He had always the twofold
object before him — to perfect the abstract
theory of political economy as applicable to the
former, and to bring home to himself and his
readers the existence of the latter. An abstract
Deductive Method seemed to him indispens-
able from the very complexity of the subject ;
but it was to be applied only to the study of the
peculiarly modern "large commerce," which he
loved to contrast with the simple industry of
primitive men. Epigram, however, even more
than antithesis, was his strength, if sometimes
his snare. He was never at a loss for words,
and he had a "gay wisdom," absent from
economical writing since Perronet Thompson.
He can hardly be taken quite seriously when
he complains that Montesquieu, Hume, and
Adam Smith would have written more pro-
foundly if the public for whom they wrote had
not been so intolerant of dulness {Econ. Stud.
p. 131).
Political economy, as he understands it, is
not "a questionable thing of unlimited extent,
80
BAGEHOT
but a most certain and useful thing of limited
extent" {Econ. Stud. p. 21). It is "a conveni-
ent series of deductions from assumed axioms
which are never quite true, which in many
times and in many countries would be utterly
untrue, but which are sufficiently near to ijie
principal conditions of the modern world to
make it useful to consider them by themselves "
{Econ. Stud. p. 157). Bagehot considers himself
the last man ofthe ante-Mill period (ibid. p. 215) ;
he thinks that J. S. Mill "widened the old
political economy either too much or not
enough " (pp. 19, 20). If he meant to carry on
what Adam Smith and Ricardo had begun, and
to give a theory of modern large commerce only,
he has given us too much ; if he meant to give
a theory applying to all societies, "advanced" or
not, he has given us too little. Bagehot had
almost unbounded admiration for Ricardo, with
whom, as at once business man and abstract
thinker, he had many points of affinity. " The
true founder of abstract political economy is
Ricardo " (p. 151). Adam Smith discovered the
country but Ricardo made the first map (p. 18).
Ricardo, it is true, dealt in abstractions without
knowing them to be abstractions, and fancied
them the real things (p. 157). But it is by the
method of Ricardo that Bagehot would build
up the science. Two rival methods he mentions
only to reject. The first is the "All Case
Method," recommended by some theorists of
the historical school, who tell us that before
we begin to reason we must have "a complete
experience." We might as well (says Bagehot)
demand a complete record of human conversa-
tion as demand a complete record of commercial
facts (Econ. Stiid. pp. 11-14). The second
rival method is the "Single Case Method," the
advocates of which recommend that each group
of facts, e.g. a commercial panic, be analysed
separately on the merits, without any prelim-
inary theory. But you might as well (says
Bagehot) attempt to explain the bursting of a
boiler without knowing the theory of steam.
On the other hand the mathematical method
(ibid. p. 15) of Professor Jevons and Professor
Walras is too abstract for him (pp. 15, 16); he
hints that it explains obscurum per obscuriits-
(p. 77). He thinks (with the later rather than the
earlier economists) that definitions must (very
much, it may be added, as in Law) adapt them-
selves to the subject matter (p. 49).
His own definitions of wealth — (p. 81) and
cajntal (pp. 49, 50) for example are on the whole
on the old lines. Incidentally, in dealing witli
" Adam Smith and our modern political eco-
nomy, " he gives us his idea of what a treatise on
political economy should contain. It should (he
says) answer four questions — (1) What is the
cause which makes one thing exchange for more
or less of other things ? (2) What are the laws
under which that cause acts in producing these
things (the laws, namely, of population and
capital) ? (3) If these things are produced b^
the co-operation of many people, what settles
the share of each of those people in those things
or in their proceeds (the laws, namely, of
distribution) ? (4) If this co-operation costs
something, who is to pay that cost, and how is
the payment to be levied (the theory of taxa-
tion) ? (Econ. Stud. pp. 99, 100.)
In considering his own answers to these
questions we have to make some allowance for
the incomplete state of much of his published
writings. He had begun in the Fortnightly
Review, 1876, a series of essays ("The Postulates
of Political Economy") which were to have
developed into three distinct volumes on politi-
cal economy (see prefatory note to Economic
Studies). The first was apparently to include
the abstract theory and the complementary
comparison with primitive life, the second a
criticism of the works of previous economists,
and the third a biographical sketch of them.
Though he never carried out the whole plan, he
has left us specimens of his work in all its
three sections. The biographies include ' * Adam
Smith as a Person," which is in his best manner.
The criticism of previous economical work is
acute ; but, in the case where it is most elabor-
ate (Demand and Supply, and Cost of Produo-
,tion), it results (as he himself says of Adam
Smith's reasonings) not in the "establishment
of coherent truths," but in "a rough outline of
sensible thoughts" (Econ. Stud. p. 119). His
criticism (p. 138 seq. ) of the theory of population
is hardly consistent with his own general
account of economical laws (e.g. p. 76). Like his
father-in-law he was perhaps stronger in
presenting the axiomata media than the first
'principles (Literary Stud. -p]). 374, 375). He was
one of the first economists in England to
recognise the importance of the idea of develop-
ment (which to him meant Darwinism) for
social and economic theories ; yet in most cases
he is more careful to dwell on the contrast
between the old and the new than to show how
the one passed into the other or how the pheno-
mena of the one shed light on the phenomena
of the other. In one case. Barter, where he
has done the last very skilfully, his own re-
sults might have suggested to him the possi-
bility of an abstract economical theory, even of
exchange, by no means confined, as he has
confined it, to the facts ofthe "great commerce "
(Econ. Stud. p. 102). His conception of the
process of mediating between the two extreme
stages of culture, or in other words, passing
from the " pre-economic " to the "economic
age," is given in outline in his Physics and
Politics, in which book (as even in the " Letters
on the Coup d'Etat," and the pamphlet on
" Parliamentary Reform ") he shows the bent of
his mind in his preference for economical illus-
trations, and his special note of the economical
aspects of the subject in hand. Towards the
BAGEHOT
81
working classes and Trade Unions he was
never hostile ; but he was not demonstratively
sympathetic. His sympathies lay with the
capitalist-employers ; — the people who "spend
their minds on little else than on thinking
whether other people will pay their debts "
{Econ. Stud. p. 45) have seldom found a more
brilliant spokesman. The book by which
he will always be best known to economical
students is undoubtedly Lombard Street, a
History of the Money Market. No more vivid
picture of "what they do in the City," — no
more j^erfect description of a "Single Case,"
was ever given ; tlie author is "in the secret,"
and can vouch for the facts at first hand. The
wonderful clearness of Bagehot's power of state-
ment, his exact knowledge of the subject
treated on, together with his ffl-ra grasp of
economic theory have caused this volume to
exert an influence which few books on a subject
naturally so dry have possessed. The first
sentence gives the key-note, " I venture to call
this Essay ' Lombard Street, ' and not the
* Money Market, ' or any sucli phrase, because
I wish to deal, and to show that I mean to
deal, with concrete realities." The promise of
this opening is abundantly ful Idled. The
character of thought in the " City," the cease-
less movement of men and business, the
reasons which led to our money market being
arranged and worked as it is, the relative posi-
tion of the Bank of England to the other
banks, the results of Government interference
with banking, are all treated with the vividness
of one who felt every vibration of these varied
currents in every fibre of his own life. The
reform Bagehot recommended in the govern-
ment of the Bank of England has not yet been
carried out, but a proposal so original as the
appointment of a permanent head to an institu-
tion which, since its formation, some two
centuries since, has always been managed on
the principle that tlie head should never be
permanent, could hardly be expected to win
acceptance on its first suggestion. Events since
Bagehot wrote have shown more distinctly
even than in his time the prudence contained
in a proposal apparently so revolutionary.
" liOmbard Street," perhaps more than any
otner of Bagehot's works, shows how gi'eatly
Economic Science gains when those who are
"conversant with its abstractions" are in "true
contact with " the facts with which it deals.
On the advantage the knowledge hence arising
gives the economist, Bagehot not only wrote
but constantly spoke during his life, with a
vigour and an insistence which those who knew
him will continually remember, and which
those who read him will be able in some
measure to appreciate. The papers on the
"Depreciation of Silver" and on "A Universal
Money " were also on a congenial subject. In
the latter he advocates! the farthing plan, or
VOL. T.
the reckoning of 1000 farthings instead of 960
to the English sovereign, thus making the
sovereign equal to five dollars and the half-
penny equal to the cent. This, he thought,
would at least provide the Anglo-Saxon races
with a comnion money of account.
In the volume on the Depreciation of Silver,
Bagehot discusses the position of England,
France, India, and the United States, in view
of the falling gold price of silver in 1876.
The cause of the fall, in his opinion, was not
an actually increased supply of silver but the
apprehension of an increased supply, together
with the inconstant proceedings of the German
and French governments (pp. 51, 52), He lays
stress on the fact that Indian prices have not
risen in response to the fall (p. 54, etc.) Yet
he refuses all remedies but laissez-faire ; we
must simply give silver a free course, and in
the end the prices will rise in India, and the
previous condition of trade and finance there
will be restored (Depreciation, pp. 40, 55, etc.)
Changes in currency should never be introduced
except when trade is in its normal condition
(p. 113). In regard to Bi-Metalltsm he deals
far too hastily with tlie arguments which tell
in its favour as an abstract theory ; he scouts
it both as an abstract theory and as a practical
measure {Depreciation, pp. 11, 12, 13, 37, 110
scq. to 118). So in the papers on "Universal
Coinage" he says bluntly: "The French coinage
is based on a double standard, which is absurd "
(p. 23), " The French is a symmetrical embodi-
ment of imperfect principles ; the English, a
confused embodiment of the best principles "
(p. 27). From his attitude to these and not a
few other questions, Bagehot might be faii-ly
set down as one of the last economists of the
ante-Jevons period.
Perhaps the most complete of Bagehot's
works was the study of The English Constitution,
which has been used as a text-book both at
Oxford and in several of the universities of the
United States, and translated into Gennan,
French, and Italian. He preferred very much
the English constitution, with that complete
fusion of the legislative and administrative
powers which was effected by the relation of
the cabinet to the House of Commons, to the
American constitution with its careful separa-
tion of legislative and administrative powers,
an arrangement which, in his opinion, resulted
in making the people indifferent as to their
choice of representatives who vere so carefully
restrained from exerting any dominant influence
over the actual executive. Bagehot attached
great importance to what he called the orna-
mental parts of the constitution, namely the
throne and the House of Lords. Not that he
regarded them as essential elements in the
action of the state, but that he thought that
without them the people of the United Kingdom
would be far more restless, far more unwilling
82
BAILEE— BAILEY
to submit to political guidance, far more dis-
posed to interfere mischievously in arrange-
ments which they do not really understand.
The "ornamental parts" of the constitution
contributed, in his opinion, greatly to the
safety of the whole, as they disposed the
English people to defer to the opinions of the
prosperous and wealthy classes, and to be on
their guard against violent and needy adven-
turers. The whole discussion of the theory of
the cabinet, as a constituent element in political
philosophy, is of the highest value.
["Letters on the Coup d'Etat of 1851, "written to
the Inquirer (Unitarian organ), 1852, and reprinted
in vol. i. of Literary Studies. — Parliamentary
Reform (review of Newmarch on Electoral Sta-
tistics) reprinted, with additions, from National
Review (Chapman and Hall, 1858). — History of
the Unref&rmed Parliament (also from National
Review). — Estimates of some Englishmen and
Scotchmen, 1858, written for the Prospective
Review and National Review and in great part
reprinted in Literary Studies and Biographical
Studies. — Many Articles in the Economist, 1860
to 1877. — Physics and Politics, or Thoughts on
the Application of tlie Principles of Natural Selec-
tion and Inheritance to Political Society, 1872
(Internat. Sclent. Series). (In the German transla-
tion (1874) this figures as Ur sprung der Nationen).
— Lombard Street, a Description of the Money
Market, 1773. New Ed. (Smith, Elder & Co.),
1910. — Various Articles in the Fortnightly Review,
e.g. "Postulates of Political Economy," Feb.
and May 1876. See Economic Studies. — The
English Constitution, 1867 (enlarged, 2d ed,,
1872 ). — IntemationaZ Coinage. A Practical Plan
for Assimilating the English and American Money
as a Step towards a Universal Money (reprinted
from the Econmnist), 1869, 2d ed. 1889.— On the
Depreciation of Silver (from the Economist, 1876),
1877. — Literary Studies (with a biography of the
author), ed. by R. H. Hutton, 2 vols., 1879.—
Economic Studies, 1880. — Biographical Studies,
1881. New Editions (Longmans) 1905-7. See
also Political Economy in England, by L. L.
Price, London, 1891, ch. vi., on Walter Bagehot's
position as an economist.]
BAILEE. A person to whom the goods of
another are entrusted, either for custody or for
other purposes. The most conspicuous class of
bailees consists of the so-called common carriers
of goods, viz. railway companies, steamship
owners, and others whose business it is to carry
goods from one place to another. They are
subjected to a particularly stringent liability for
the safety of the goods, but as a general rule
bailees are liable for those losses only which
occur in consequence of their negligence. A
bailee who takes goods into his custody with-
out being rewarded for doing so is called a
gratuitous bailee.
BAILEY, Samuel, was born in 1791, the son
of a Sheffield merchant, was elected a town
trustee in 1828, and became known as the
" Hallamshire Bentham." Failing to be elected
as M. P. , he applied himself to local affairs, and
left, when he died, 18th January 1870, over
£80,000 to Sheffield. Besides some political
pieces, he wrote —
A Critical Dissertation on tJie Natwre, Measures,
and Causes of Value, London, 1825, 8vo (a re-
markable little volume, pointing out the incon-
sistencies of RiCARDO, J. S. Mill, and De Quincet
in their theories of value). — Letter to a Political
Economist, London, 1826, 8vo (reply to a notice
of the previous work in the Westminster Review). —
Money and its Vicissitudes in Value as they affect
National Industry, London, 1837, 8vo. — Defence
of Joint- Stock Banks and Country Issues, London,
1840, Svo. H. B. T.
BAILEY, Samuel, on Value. Bailey's
"dissertation" on the theory of value requires
separate notice. Known in metaphysics by his
attack on Berkeley's theory of vision, Bailey
plays a similar part in economics, objecting
to subtleties sanctioned by authority. Defin-
ing value as nothing positive or intrinsic, but
merely the relation in which two objects stand to
each other as exchangeable commodities, Bailey
controverts through several chapters Ricardo's
theory of real value and its corollaries. Bailey
refuses to admit the antithesis of real and
nominal value {Critical Dissertation, ch. ii.),
the possibilfty of comparing the value of com-
modities at different periods (ch. v.), the
Ricardian formula that the value of A in
relation to B "depends on the comparative
quantities of labour necessary for the pro-
duction of it and B, and not on the greater or
less compensation which is paid for that labour "
{ih.), the distinction between value and riches
(ch. ix.), and any measure of value of the sort
desiderated by Malthus (ch. vii. et passim).
Malthus, severely criticising the Critical Dis-
sertation (Definitions, ch. viii.), contends that
the writer, by his too narrow definition of
value as relating to some definite thing, has
missed the essential idea of value in relation
to things in general. Upon Bailey's principles,
"we must on no account say that butter has
been rising during the last month." The con-
troversy is now of some practical importance,
as it has a bearing upon recent proposals for
determining the variation in the value of
money (in relation to things in general) by a
Tabulae Standard or Index Number (g.v.)
in particular that standard which is based on
wages. Of more purely historical interest are
other observations, new perhaps when made
(1825). Criticising Ricardo, Bailey disen-
tangles different senses of profits (ch. iv.)
He classifies valuables much as J. S. Mill
(Pol. Econ., bk. iii. ch. ii.) ; and remarking on
the class of commodity which " admits of hemg
increased by industry and competition, but
only at a greater cost," observes — "The extra-
ordinaiy profit out of which rent arises is
analogous to the extraordinary remuneration,
which an artisan of more than common dex-
terity obtains beyond the wages given to work
BAILY— BAINES
83
men of ordinary skill" (cli. xi. p. 197). He
complains that the Rieardians "attempt to
give the science an air of simplicity which it
does not possess." "Why persist in calling
quantity of labour the sole determining principle
of value" {ib. p. 217) ; instead of "the more
accurate proposition that it is the principle
cause" (p. 232). "What should we think of
an assertion that coats are to each other in value
as the quantities of cloth contained in them "
— with the addition " that due allowances must
be made for the different qualities of the
cloth?" (p. 211). De Quincey (q.v.) in his
Logic of Political EcoTwmy has replied to Bailey
(see Rent). f. y. e.
BAILY, Francis, was born at Newbury in
[Berkshire, 28th April 1774, and went on the
jondon Stock Exchange, 1799. He helped to
[found the Royal Astronomical Society, and
stu'ed from business in 1825 in order to devote
[himself entirely to astronomy. His revision of
[star catalogues ranks him among the greatest of
modern benefactors to that science. He died
80th August 1844. Among other books he
wrote —
The Doctrine of Interest and Annuities, London,
1808, 4to. — The Doctrine of Life Annuities and
Assurances, London, 1810, large 8vo ; again in
1813, 2 vols. 8vo, with Appendix, new edition,
[enlarged, by H. Filipowski, Liverpool, 1864,
8vo (the best work on the subject when first
[published, and still useful ; French translation by
[A. de Courcy, 1836, 8vo). — Account of the several
\I/ife Assurance Companies in London, 2d ed.,
[London, 1811, 8vo (reprinted from the foregoing). —
[TaJbUsfor the Purchasing and Reneioing of Leases,
[London, 1802, 3d ed., 1812, 8vo. H. r. t.
BAINES, Edward, 1774-1848, descended
[jfrom a family of Yorkshire yeomen, and a't first
[apprenticed to the printing trade, became (1801)
litor and proprietor of the Leeds Mcrcnry,
rhich became under him the leading Whig
iper in Yorkshire. Cobbett {Manchester Lee-
res, 1832), calls him "the gi-eat oracle of the
forth." He was a zealous social reformer. In
[1834 he succeeded Macaulay as one of the two
[members for Leeds, retiring in 1841. He wrote
rief histories and gazetteers of the counties of
[York and Lancaster ; his chief work being a
^standard History of the County Palatini, and
>^Duchy of Lancaster (Fisher, Son, and Jackson,
London, 1836). He was also the author (aided
very largely by his son Edward) of a History of
the Wars of the French Revolution (2 vols. 4 to,
1817), which was expanded after the close of
the reign, by the addition of two volumes, into
a History of the Reign of George III. (London,
1823). He visited Owen at New Lanark in
1819 with Oastler and Cawood, and helped to
institute at Leeds a home colony on Owen's
model. See Life of Edward Bain^s, by his son
Edward Baines, London, 1851. J. b.
BAINES, Sir Edward, (1800-1890), second
son of the preceding, is best known by his
History of the Cotton Manufacture (1835),
which was originally written for his father's
history of Lancashire, but expanded and separ-
ately published on the suggestion of M 'Culloch
{Edinburgh Review, No. 117). He wrote in
1826 a letter To the U')iemployed Workmen oj
Yoi'kshire and Lancashire on the Present Distress,
and on Machinery, published fiist in the Leeds
Mercury, and afterwards, by order of the magis-
trates, very largely circulated as a ti'act through
the manufacturing districts, and which was held
to have had the happy effect of settling the
minds of many whose opinions had been waver-
ing. In the year 1843 he published Tline
Letters to the Right Hon. Lord John Russell,
entitled "Reasons in favour of Free Trade in
Corn, and against a Fixed Duty." In the same
year he vrrote Two Letters to Si)- Robert Peel on
Die Social, Edu^cational, and Religious State of the
Manufactu/riiig Districts (1843) — a criticism of
the school clauses in Sir James Graham's Fac-
tory Educational Bill, from the point of view of
a Nonconformist, and as being too unreservedly
in the interest of the employers. He succeeds
in showing that the charges of depravity and
ignorance made against the manufacturing dis-
tricts of the north were largely exaggerated, and
could in any case have been brought with equal
justice against the agi'icultural districts of
south England. In 1846 he wrote a series of
twelve Letters to the Right Hon. Lord John
Russell on the subject of the resolutions which
resulted in the system of grants under the com-
mittee of the privy council on education, bearing
on the analogy between "government protec-
tion to industry and government protection to
mind," — sifting the statistical evidences on which
the proposals were based, both as to the actual
position at home and the comparison vnih. the
conditions of the people. The results of various
state systems of education on the Continent of
Europe and in the United States. These and
other letters were collected into a volume and
published by a company in London for ' ' cheap
circulation" (1847). Again in 1871, as chair-
man of the educational department of the
Social Science Association, at its annual meeting
in Leeds, he delivered an address, subsequently
published in London, On the Position and Pros-
pects of National Education. In 1823 the first
mechanics' institution in England was estab-
lished ; and in 1837, on the formation of the
Yorkshire Union of Mechanics' Institutes,
Baines was elected president, and for more than
fifty years, in his annual addresses from the
chair, he reviewed the position of scientific and
technical education in this country (see Annual
Reports of the Yorkshire Union of Mechanics*
Institutes). In 1858, as president of the
'section of economic science and statistics at the
annual meeting of the British Association for
the Advancement of Science, at Leeds, his
address wa.s " On the Woollen Manufacture of
84
BAINES— BALANCE OF TRADE
England, with Special Reference to the Leeds
Clothing District," and it was published both
in the report of the British Association and in
the Journal of the Statistical Society of Londo-n,
March 1859. He represented Leeds as a
Liberal in the House of Commons from 1859-74,
he took a leading part in modifying the pro-
posals for taking the Census for 1861, and
notably against a census of religious opinions.
He brought in a Borough Franchise Bill in
1861, and on moving the second reading (lOtb.
April), he traced the progress of the country,
and notably of the working classes since 1831,
in education, in providence, in temperance, and
in morality ; illustrating these, too, by the
growth and the improved character of our
periodical literatm-e. The speech was said by
Mr. Gladstone to have added a new chapter to
the social history of the country. It was pub-
lished in London under the title of Progress and
Reform, 1831 and 1861.
BAINES, Thomas, younger brother of Sir
E. Baines (1806-1881), wrote on the History of
the Town and Commerce of Liverpool (1852), On
the Agricultural Hesources of Great Britain,
Ireland, and the Colonies, 1847, and on the
Present State of the Affairs of the River Plate,
1845. J. B.
BAIRN'S PART OF GEAR. See Legitim.
BAKOUNIN, Michael (1814-1876), the
founder of anarchism, began life as a Russian
artillery officer. Stationed in Poland, he con-
ceived a disgust at the repressive measures he
saw in force there, resigned his commission,
and devoted himself to the study of philosophy
at Moscow. He went to Germany about 1846,
and became a Hegelian. In 1847 he was at
Paris, and made the acquaintance of Proudhon.
Expelled from France, he returned to Germany
and took a prominent part in the Dresden in-
surrection of 1849, for which he was condemned
to imprisonment for life. He was handed over
to the Russian authorities, aud confined in the
prison of SS. Peter and Paul at St. Petersburg
for eight years. Then, in 1857, he was exiled
to Siberia, whence he soon managed to escape
to Japan. After passing through America and
England he established himself in Switzerland.
His subsequent history will be found under
Anarchism (q.v.) He died at Berne 2d July
1876.
[6. de Laveleye, Le Socialisme Contemporain,
3me M. 1885, pp. 227-239.] E. C.
BALANCE OF TRADE. "It often happens, "
says Mill, referring to the supposed mercan-
tilist views on money, " that the universal belief
of one age of mankind" "becomes to a subse-
quent age so palpable an absurdity that the only
difiiculty then is to imagine how such a thing
can ever have aj^peaied credible." It is gener-
ally found, however, on investigation that the
"palpable absurdity " formed but a minor part
of a system the rest of which is forgotten, but
which, as a whole, was, in the historical condi-
tions of the case, not unreasonable. This ia
true especially of the doctrine or policy of a
"favourable balance of trade." From the
modern ])oint of view we take it as axiomatic
that, apart from other international obligations
such as tributes and the like, exports must over
a term of years pay for imports. No nation,
it is held, can go on receiving from other nations
quantities of real wealth, actual consumable
commodities, without giving something in re-
turn. But the store of precious metals, and
even the power of incmTing debt, or of paying
by previous commutations, would soon be ex-
hausted with a constantly adverse balance, and
accordingly produce must pay for produce, tak-
ing the term in its most general sense (cp. H.
Sidgwick, bk. i.), so as to include services
freights, etc. It is further argued that if a
nation were to attempt to import more than its
normal exports could pay for there must soon
be a drain on its money, and then directly or in-
directly, by the Quantity Theory (see Money),
prices would fall. This fall would stimulate
exports and place a check on imports until the
balance was again restored. Under a system of
approximately perfect competition it follows
from the very nature of money that all Ex-
change is ultimately Barter, and that the flow
of the precious metals from country to country is
an effect and not a cause of the direction and ex
tent of its foreign trade. A nation will always
obtain under such a system enough of the
precious metals to keep its prices at such a level
that its exports will just pay for its imports ;
in other words, that the balance of trade will, if
time is allowed for adjustment, be even. Ac-
cordii!gly nothing can seem more absurd, so far
as trade is concerned, than for a government to
attempt to get a permanent and constant excess
of Exports over Imports in order that a balance
may be due on the precious metals. For by a
converse train of reasoning the eflfect of such an
influx would soon be a rise in prices and a check
on exports and a stimulus to imports until the
natural rate of exchange was restored. Thus
from the modern point of view the policy of
attempting to obtain a favourable balance (or
excess of exports) in order to obtain money
seems not only palpably absurd, but on analysis
quite impossible.
Yet in its origin this peculiar importance
attached to the Precious Metals was by no
means an absurdity, and the regulations intended
to increase the amount of money in the country
to a great extent achieved their object. In the
Middle Ages we find the germ of the balance of
trade system in what was very hai)pily styled
by Jones the balance of bargain system (Jones
Political Economy, edit, by Whewell). [Com-
pare Mercantile System ; Commercial Sys-
tem]. According to this primitive method the
state, through its officials, attempted on every
BALANCE OF TEADE
8fi
bargain to obtain a balance in money (of silver
or later on of gold). Thus, with certain material
imports a certain amount of money must be
brought in ; the foreign merchant who came
to the country to sell was obliged to " employ "
the money he obtained in the purchase of English
wares ; the organisation of the Staple was used
to the same end, and, in short, all kinds of devices
by way of prohibition and encouragement were
adopted so as to obtain a favourable balance in
money. There can be little doubt (compare
Schanz, Englische Handels - Politik gegen Ende
des Mittclalters, etc.; Jacob's History of the
Precious Metals ; Jones, op. cit. ) that this policy
was at any rate partially successful, and that
the country obtained more money than it other-
wise would have done. But not only was this
policy, to some extent at least, practicable, but
under the historical conditions it appears to
have been justidable. In the Middle Ages
Credit was almost unknown, and the rudiment-
ary forms which appeared were strangled by
the wide-reaching laws and adverse public
opinion on interest. As a consequence thei-e
was often a real dearth of the precious metals,
in a sense that to us is almost unintelligible.
At the same time also it must be observed the
whole economic progress of tlie mcdireval period
was bound up with the commutation of services
and payments in kind into money payments
(compare T. Roger>; on Scutage in Six
[Centuries of English Work and Wages). Thus
lany scarcity of money was a real evil involving
[very real burdens, and it was good policy to
)btain a favourable balance because money was
peculiarly important part of the fixed capital
Eof the nation. In process of time the balance
[of bargain system gave place to the balance of
le, and nations took the place of individuals
[(see Commekcial System). Adam Smith had
difficulty in showing that before his time
lis system had become antiquated and useless
luse the natural course of trade gave a
ifficiency of money, and the accumulation of
rtreasure was not desirable (even if possible) for
Irfiirthering foreign policy. Money, in fact, had
idy lost its peculiar importance, and it was
3y to show at any rate that if a favoural)le
lance was desired, one country must be com-
with the rest of the commercial world,
id that the best policy was to buy in the
leapest and sell in the dearest markets, inde-
rpendently of the particular balance with indi-
vidual countries.
Reverting to the modem position, it must be
noticed that exports and imports form only a
part (though with this country the most con-
siderable part) of the international indebtedness
(for a complete enumeration of items see
Goschen's Foreign Exchanges, ch. iv.) There
must also be taken into account "invisible"
exports, such as freights, commissions, loans,
expenses of government or individuals abroad,
tributes, interest, etc. It must be noted also
that so far as the influx or efflux of the precious
metals is concerned, it is not the permanent in-
debtedness but the need of payment at a par-
ticular time which is of importance. Thus the
balance of indebtedness may for the time being
be in favour of a country that is hopelessly in-
solvent (compare Commerce).
In conclusion it may be observed that even
under modern conditions sometimes it is of real
importance to the nation as a whole to have a
favourable balance, or at least to be able to
brave an unfavourable one, in other words, to
check a drain of gold. In normal conditions
the existence of a favourable balance (or a state
of indebtedness in Avliich money is due to the
country) would simply mean that importers of
foreign goods can obtain exporters' bills at a
cheaper rate than usual owing to their relative
abundance, so that favourable is construed re-
latively to importers, the same state of things
being adverse to exporters, and practically in-
difl'erent to the nation at large. But at certain
times a foreign drain becomes sufficiently serious
to threaten the stability of the banking system
of the country, and in technical language the
"exchanges must be corrected." Tliis can
only be done, as a rule, either by effectively
raising the rate of discount or l)y affecting the
trade balance through checking imports and
increasing exports (see Exchakges, Foreign ;
Drain of Bullion). Apart from this occasional
effect of an adverse balance from the banking
point of view, the principal point to observe is
the rightful interpretation of the causes of a
certain purely trade balance. Thus for many
years the imports into England of commodities
liave exceeded the exports, whilst with India
the converse is the case. The explanation is
to be found in the other elements of interna-
tional indebtedness. It is a gi-eat error to argue
at once that because there is an excess of imports
the nation is practically living on its capital,
for the other items in the account, especially
interest on foreign investments and paymenth
of freights, must be considered (see Sir K. Giffen,
essay on "The Use of Import and Export Sta-
tistics " in Essays on Finance).
[For the historical treatment of the question
compare Schanz, op. cit., and Adam Smith's
Wealth of Nations, bk. iv. — List, National System
of Political Economy. The theory is given in all
the text-books, but special attention may be called
to Prof. Bastable's International Trade.]
J. S. N.
BALANCE OF TRADE (History of the
Theory). — The views of the earliest popular
economists of England on the best manner of
enriching the nation agree with the measures
-taken by the legislature and with the balance-
of-bargain system, as enforced by the statutes
of employment. "The holl welthe of the
reame is for all om' riche commodites to gete
86
BALANCE OF TRADE
owt of all other reamys therfore redy money ;
and after the money is brought in to the holl
reame, so shall all peple in the reams be made
riche therwith." (Clement Armstrong, A
treatise concerninye the Staple and the Com-
modities of this Realme, 1530, ed. Pauli, 'pp.
32, 61).
But when the English merchants had broken
down the power of foreign Companies and had
formed companies of their own, they sought
after a rule by which to ascertain what advan-
tages the regulation of commerce afforded to
the nation taken as a whole. Even during the
prevalence of the balance-of-bargain system, a
rough rule for the policy on which the coinage
should be based had been given by an officer of
the mint, Richard Aylesbury, who thought
that "provided the merchandise exported from
England was properly regulated, that is, if no
more of foreign commodities were allowed to be
imported than the value of the native com-
modities which should be taken out, the
money in England would remain, and gi-eat
plenty would come from beyond the seas."
Rolls of Parliament, vol. iii. p. 126 ; in Rud-
ing, Annals of the Coinage, vol. i. p. 241,
These views, put forward in 1381 by Richard
Aylesbury, contrary to the then prevalent
opinion (Cunningham, Growth of English In-
dustry and Commerce, Early ami Middle Ages,
1890, p. 354), were formulated anew and with
success by the anonymous author of " A Dis-
course of the City of London." He shows that
the increase of prices, which followed the influx
of the precious metals from the West Indies
had induced the gentry to ' ' play the fermours,
grasiars, brewers, or such like." This mercan-
tile spirit must be guided by the experience of
the merchant's daily practice. England being
in need of foreign commodities, and having no
mines of its own, "it foUoweth necessarily,
that if we follow the councel of that good old
Husband Marcus Cato, saying, ' oportei patrem
familias vendacem esse, non emacem ' and do
Carrie more commodities in value over the seas,
then wee bring hether from thence : that then
the Realme shall receive that Overplus in
Money " {A JDiscoiirse of the Names and First
Causes of the Institution of Cities, and peopled
Towns ; and of the Commodities that do grow by
the same ; and namely of the City of London,
etc. (about 1578), in Stow's Survey of London,
1598, p. 450). William Stafford accepted
these principles, adding, that the imported com-
modities should be "most apte to be either
carried for or kepte in store," and he praised the
bailiff of Carmarthen, who had forbidden a ship
freighted with oranges to sell them (^A Compendi-
ous and Brief Examination, ed. 1581. New
Shakspere Soc. Ed., pp. 50, 54, 57). This rule
of commercial politics has been accepted by
John Wheeler (A Treatise of Commei'ce, 1601,
pp. 7, 8) and by Gerrard de Malynes, who seems
to have suggested the name of balance, say-
ing that the prince should not suffer " an over-
balancing of forreine commodities with his home
commodities, or in buying more then he selleth."
A Treatise of the Canker of England's Common-
wealth, 1601, p. 2. The underbalance of trade
and the consequent scarcity of money he
ascribed to the "undervaluation of our Money
in Exchange," effected by the practices of the
bankers. His erroneous ideas and those of
Thomas Milles concerning " merchandising ex-
change" {The Customer's Replie, 1604) were
attacked by Edward Misselden, who hoped to
remedy this undervaluation of the coin by
"raising" it {Free Trade or the meanes to
make Trade florish, 1622, pp. 103-105), similar
views being expressed in the parliament {Pari.
Hist. i. 1195) ; he calls, however, the balance
of trade "an excellent and politique invention,
to shew us the difference of waight in the com-
merce of one kingdome with another in the
scale of commerce " {The Circle of Commerce, or
the Balance of Trade, in defence of Free Trade,
by E. M., 1623, pp. 116, 117). He considers
poverty and prodigality as the causes of the
present underbalance, the Dutch at once grow-
ing rich by , manufactures and restraining the
home consumption (pp. 132-135). These
opinions were generally accepted even by Fras
Bacon {Letter of Advice to George Villiers, 1616
Letters and Life, ed. S})edding, vol. vi. pp,
22-49, and History of Henry VII. Works, vol
vi. p. 223), and King James L {Pari. Hist
vol. i. p. 1179). As stress was laid upon the
profit of exportation of manufactures, the use-
lessness of the prohibitions of the exportation
of money and bullion became more and more
evident. Commercial states like Tuscany and
Holland, allowing its free exportation, grew rich,
while those forbidding it, like Spain, became
impoverished. This point was clearly elucidated
by Lewes Roberts, The Treasure of Traffike,
1641, p. 77, and the whole doctrine, including
the views on exchange as a symptom, not as an
agent of trade, as Malynes had maintained,
was most systematically explained by Thomas
MuN in his posthumous treatise England's
Treasure by Forraigne Trade ; or the Balance
of our Forraigne Trade is the Rule of our
Treasure, 1664, who in his Discourse of Trade
(new ed. 1621) had still advocated the statutes
of employment. To him therefore the honour
of its invention has often been ascribed. The
obstacles to trade were for the most part caused
by fiscal motives, and the Commonwealth sought
to stimulate the exportation of English com-
modities by the Act of Navigation. The balance
of trade was thought to be advantageous : by
fetching the commodities from the immediate
places of their production and by sending them
to their best market, where they yield the
greatest price, but above all by the cheapness
of the exported manufactures and the reductior.
BALANCE OF TEADE
87
of the price of labour {The Advocate : or a
Narrative of the State and Condition of Things
between the English and Dutch Nation, eel.
1651.) This programme was supported by the
gi-eatest economists of the end of the 17th
century like Petty, Temple, Locke, having all
the tendency to overwhelm the Dutch power,
Another body of practical men inquired into
the advantage of some special trades, among
which the French and East India trade was
found ruinous, as absorbing money and bullion,
and giving in its stead but wines or spices.
To these at a later date acceded the fear of
Irish competition in the matter of wool. This
pessimistic series of writers begins with S.
Fortrey's England's Interest and Improvement,
1663 ; i\\Q ax\t\iOV oi Britannia Lanrjuens, 1680,
and J. PoLLEXFEN, England and East India In-
consistent in Their Mannfa/Aures, 1697, were its
foremost champions. The commercial treaty
with France in 1713 was a new matter of
complaint. In the British Merchant, all the
arguments against the underbalance are restated
by Sir Theodore Janssen in his General Maxims
in Trade, 1713, and by Joshua Gee, who after-
wards put forward his views in The Trade and
Navigation of Great Britain consider d, 1729.
"His writings," says Hume, "struck the nation
with an universal panic, when they saw it
plainly demonstrated that the balance was
against them for so considerable a sum as must
leave them without a single shilling in five or six
years." Nevertheless, the creed of the balance
of trade was shared not only by Cantillon and
Sir J. Steuart, bk. ii. ch. xv., but even by free-
traders like Thomas Gordon, The Nature and
Weight of the Taxes of the Nation^ 1722, Van-
derlint. Money answers All Things, 1734, and
the author of An Essay on the Causes of the
Decline of Foreign Trade, 1743.
For some time, however, the belief in the doc-
trine had been shaken, partly by traders whose
interest it was to refute its postulates, partly by
the in^possibility of giving the exact statistical
statement of the balance, partly by the doubts
raised by superior thinkers. One of the first,
it seems, was the author of Free Forts, the Nature
and Necessltie of them Stated, B. W., 1652.
"All consultations whatsoever about trade, if
free ports bee not opened and this wholesale or
general trade bee not incouraged, do still but
terminate in som advice or other about regulat-
ing our consumption ; and have no other good
at farthest, but jireventional, that our Ballance
of Import exceed not our Export : which to
confine ourselves to alone, is, on the other side
a cours to short, as it will neither serv to rais
the Strength of this Nation in shipping, or to
Govern the Exchange abroad " (p. 8). But the
first thorough refutation was given by Nicholas
Barbon in 1690 and 1696 (see Barbon), and
his influence is to be traced in the writings ojf
Sir Dudley North {Discourses of Trade, ed.
1691), who calls, evidently in reference to it,
the balance of trade one of the current "poli-
tick conceits in trade ; most of which Time and
better Judgment hath disbanded." The in-
crease of manufactures had in opposition to the
former opinion that "trade was the source of
national riches " made way to the doctrine that
the employment of population and labour was
the primitive enriching power. "Land and
labour," says therefore John Bellers, "are the
foundations of riches, and tlie fewer Idle Hands
we have the faster we inciease in value ; and
spending less than we raise is a much greater
certainty of gi-owing Rich than any computa-
tions that can be made from our Exportation
and Importation " {Essays about the Foor, 1699,
p. 12). These views, though far more mingled
with mercantilist beliefs, were U]»held by the
author of The Advantages of the East India Trade
to Eigland consider'd (1701 and 1720), who
pointed out, that the only rule of foreign
trade should be "to get a greater for a less
value," and by De Foe, who while refuting the
authors of the British Merchant, declared him-
self to be "a profess'd opposer of all fortuitous
calculations, making estimates by guess work of
the Quantities and Value of any Trade or Export-
ation" {A Flan of the English Commerce, 1728
(2nd ed. 1737, p. 232). This confession and the
doubts raised by Bishop Berkeley in his Querist
(1735), Queries 555, 556, whether the rule of the
balance of trade held always true, and whether it
admitted not of exceptions, were indeed nothing
new. For even Davenant, originally much de-
voted to these estimates {Of the use of Fqlitical
Arithmetic, 1698, Works, vol. i. pp. 146-148),
declared himself afterwards convinced that they
were inaccurate for many important trades {A
Report to the Commissioners, 1712, Works, vol.
V. p. 382). Sir Josiah Child also stated, as
Berkeley did, that by means of smuggling, and
furthermore in the case of countries whose
income was consumed by absentees, like Ireland,
exports could exceed imports without enriching
the peoj)le {A new Discourse of Trade, 1690,
ch. ix.) The doubts which all these ex-
pressions of opinion fostered, paved the way
for the overthrow of the system. This was
accelerated by the flourishing state of English
trade, which continued to prosper through the
18th century notwithstanding all the predic-
tions of evil expressed by the balance- of- trade
theorists.
The successful onslaught on the system made
by Hume in his Essays (1752) is now a matter
of history. In these he restated Barbon's
assertion that an equivalent must be paid in
an export for every import received. Hume's
refutation of the balance-of-trade theory had a
considerable influence on the free trade doctrines
of the Physiocrats and also upon Adam Smith.
The latter, like Barbon, controverted the theory
on this subject which was laid down by Mun
88
BALANCE OF TRADE— BALANCE-SHEET
and by Locke. Adam Smith also, in the
preference he gave to the home trade, and in
his opposition to the mercantilist views, shows
an inclination to incredulity in relation to the
theory of foreign trade. The manner in which
Adam Smith thus placed himself in opposition
to the commonly-accepted opinions of his time
explains the fact that his criticism of the theory
of foreign trade obtained, when it first appeared,
comparatively few adherents. Even Pitt,
while proving the success of his policy by the
growth of exports, said, when the authority of
Adam Smith was quoted against him, that he
considered "that great author, though always
ingenious, sometimes injudicious " {Pari. Hist.
xxxiii. 562-3). The questioning, however, as to
the complete applicability of the theory gradu-
ally extended as the 18th century waned.
Afiter the successful peace of Paris in 1763
the fear of a drain of specie began to spread
in consequence of the growth of indebtedness
to foreigners ; and though the balance of trade
seemed favourable, new doubts were expressed
whether the values stated of the goods exported
were accurate {The Present State of the Nation,
1769 ; by W. Knox, secretary to George
Grenville, pp. 65-67). The observations of
Burke on this occasion, though professedly
designed to prove the balance to be favourable,
are very acute. Though not allowing the
statement as to the certificated goods for re-
exportation to admit of error, he concedes the
possibility for free goods, exported without
drawback and bounty ; he remembers that the
costs of freight and the profits of the merchant
are not taken into account, that in the balance
of the Irish and West India trades import and
export both refer to one nation, and he ridi-
cules those who held that the foreign imports
were a loss without even considering that part
of it which enters into production. {Observa-
tions on a late State of the Nation, 1769, pp.
34-38. Also his Letters on a Megicide Peace,
1796, Works, vol. iv. p. 554). The refutation
of the original theory of the balance of trade is
justly ascribed to Adam Smith, and his pre-
decessors in England, of whose principal works
some notice has been given here. The work of
Adam Smith was completed by Ricardo in his
theory of international trade (see International
Trade ; Burke ; Adam Smith ; Rioardo)
which has hitherto been the special domain of
English economics.
[See Buckle's History of Civilisation in England,
vol. i. pp. 210-212. — J. Janschull, English Free
Trade (Russian) 1 part, Moscow 1876. — E. von
Heyking, Zur Geschichte der Handelshilanztheorie,
Berlin, 1882.— W. Cunningham, The Growth of
English Industry and Commerce, 1885, p. 362. —
C. F. Bastable, The Theory of International Trade,
Dublin, 1887, p. 164.— G. Schanz, Englische
Handelspolitik, 1881.] s. B.
BALANCE-SHEET. The simplest form of
balance-sheet which a trader can require is the
following : —
BALANCE-SHEET of
. 19
Assets.
Liabilities.
Debtors on open
account . . £4500
Stock in Trade . 8250
Balance at Bankers 1250
Other Property . 6000
Creditors on open
account . . £2750
Acceptances . . 1250
Other Liabilities . 7000
Surplus or Capital 9000
£20,000
£20,000
How much may depend, not only on the
amount, but on the character of the various
"assets" and "liabilities," is explained with
great clearness in the Country Banker by Mr.
George Rae, Letter III. on the "Testimony of
a Balance-Sheet." Mr. Rae remarks on this :
"A man's duly-certified balance-sheet is the
one reliable voucher of his actual position ; all
other information that we can gain respecting
him must be more or less at second hand and
imperfect, and it may be delusive. But there
is no mistaking the figures of an honest balance-
sheet."
Mr. Rae writes especially from a banker's
point of view, as a man in the habit of advanc-
ing money, sometimes in large sums, to traders,
but the knowledge of what a man's own business
position may be is often obscured even to him-
self by careless and slovenly book-keeping, and
the habit of preparing an "honest" balance-
sheet is essential to soundness of trade.
BALANCE-SHEET. (2nd statement.) A
balance-sheet is a statement exhibiting the assets
and liabilities of a concern, the capital invested
in it, and the balance of profit and loss, or of
income and expenditure, accrued to date of the
account. If books of account are kept on a
proper Double Entry System the debit and credit
balances of the ledger will form respectively the
credit (right hand) and debit (left hand) sides
of the balance-sheet, and will agi-ee in total.
The capital of the concern will appear on the
left-hand side, representing, subject to any
balance of profit or loss, the excess of assets over
liabilities. If the liabilities exceed the assets a
balance of loss, which will more than absorb any
capital, will appear on the right-hand side.
The term balance-sheet is sometimes errone-
ously applied to what are really statements of
receipts and payments, as in the case of the
accounts of charitable institutions ; these last
naturally and usefully take the form of a state-
ment of income and expenditure for a period.
No account covering a period of time, and not
exhibiting the position of matters at a particular
date, can properly be termed a balance-sheet.
A form of balance-sheet appended to the
First Schedule of the Joint Stock Companies'
Act of 1862 is a suitable one for such companies
as have not special 2)rovisions with regard to
the form of their accounts laid down in their
articles of association. This form of account ia
as follows : —
J
BALANCE-SHEET— BALBI
89
Dr.
B A T. A.NCE-SHEET of the
Co. made
up
to 19 .
Cr.
Capital and Liabilities.
Property and Assets. i
I. Capital.
Showing :
£s.d.\£s.d.
III. Prop-
Showing :
£s.d.
£s.d.
1.
The Number of shares
erty held
7.
Immovable Property,
2.
The Amount paid per
Share
by the Com-
pany.
disling uishing —
(a) Freehold Land
S.
If any Arrears of
Calls, the Nature of
the Arrear, and the
Names of the De-
faulters .
8.
(b) „ Build'
ings .
(c) Leasehold „
Movable Property,
distinguishing —
4.
The Particulars of
any forfeited Sliares
{d) Stock in Trade
(e) Plant
11. Debts
Shoicing :
The Cost to be stated
AND Lia-
5.
The Amount of Loans
with Deductions
bilities of
on Mortgages or De-
for Deterioration
i
the Com-
benture Bonds .
in Value as churyed\
1
1
pany.
6.
The Amount of Debts
to the Reserve Fundi
owing by the Cuvi-
or Profit and Loss
pany, distinguish-
IV. Debts
Shoicing :
ing —
owing to
9.
Debts considered good
!
(a) Debts for which
the Com-
for which the Com-
A cceptances
pany.
pany hold Bills or
have been given
other Securities
(b) Debts to Trades-
10.
Debts considered good
men for sup-
for which the Com-
plies of Stock in
pany hold no Sectirity
Trade or other
11.
Debts considered
Articles .
doubtful and bad
(c) Debts for Law
Any Debt due from
Expenses
a Director or other
(d) Debts for In-
Officer of the Com-
terest on Deben-
pany to be separ-
tures or other
ately stated .
Loans
{e) Unclaimed Divi-
dends
V. Cash AND
Shotmng :
Invest-
12.
The Nature of Invest-
(/) Debts not en-
ments.
ment and Rate of In-
terest
The Avwunt of Cash,
umerated above
13.
VI. Re-
Showing:
where lodged, aoul if
serve
The Amount set aside
hearing Interest
Fund.
from Profits to meet
Contingencies .
VII. Profit
Shoioing :
AND Loss.
The disposable Bal-
ance for Payment of
Dividend, tfcc. .
Contin-
Claims against the
gent Lia-
Company not acknow-
bilities.
ledged as Debts
Monies for which the
Company is contin-
gently liable .
BALBI, Adriano (an Italian Economist of
the firat half of the 1 9th century). Author of
Saggio di una statistica d' Italia, published at
Vienna in 1833. He was also the author of
the following works : —
Bilancia politica del gloho o quadro geografico-
statistico delta terra, Padova, Zambeivari, coi tipi
delta Minerva 1833. — L'impero russo paragonato
alle principali nazioni del mondo (in .French),
Paris, 1829. — La monorchia francese covfrontata
coi principali Stati del mondo (in French), Paris,
1828. — Quadro politico-statistico dell Europa, net
1820 (in French), Lisbon, 1820. — Saggio statistico
90
BALDWIN— BANCO
sul Regno di Portogallo, paragonato agli altri
Stati di Europa (in French), Paris, 1822, 2 vols,
in 8vo, — Ragionamenti di statistica e geograjm
patria, Milano, Civelli, 1845, in 8vo. — Scritti
geografici, statistici e vari, pubblicati da diversi
giornali d' Italia, di Francia e di Germania, rac-
colti e ordinati per la prima volta, Torino, 1841-'42,
5 vols, in 8vo. M. p.
BALDWIN, LoAMMi, born in Massachusetts
1780 ; an eminent civil engineer ; died 1838.
In his Thoughts on the study of political economy
as connected with the population, industry, and
paper currency of the United States (Cambridge,
Mass., 1809, pp. 75) Baldwin advocated, as
a remedy for the evils of the irregular currency
of the time, that the state banks be consoli-
dated, and that the capital of the United States
Bank be extended. He favoured internal im-
provements in his country, and displayed more
than ordinary appreciation of the use of statis-
tics ; he also advised that the United States
census of 1810 should include a record of births,
deaths, and marriages. D. R. D.
BALSAMO, Paolo, born at Termini (Sicily)
in 1763, died at Palermo in 1816. He was a
priest who travelled for several years in Italy,
France, and England. In England he became
a friend of Arthur Young, from whom he learnt
a great deal. Arthur Young published some of
the writings of Balsamo in his Annals of Agri-
culture ; Broussonnet translated some into
French and enriched others with commentaries.
When Balsamo returned from England he be-
came professor of political economy in the
university of Palermo, and his teaching is clearly
based upon Young's doctrines ; he divides his
course into political, theoretical, and prac-
tical agriculture, considers agriculture as pre-
eminent, opposes state regulation of prices and
every other form of state interference with
production and commerce, and declares state
help for the poor a calamity. His lectures
exerted a great and salutary influence on his
countrymen, although it was some time before
he triumphed over their prejudices. His lec-
tures were not only technical, viz. concerning
methods of agriculture, but also political, as he
insisted strongly on the necessity of giving the
proprietor of the soil absolute certainty of pos-
session and personal security, and of putting
down brigandage and robbery. As to the
technical part of his lectures, Balsamo recast
it in conformity with the new doctrines of
chemistry which were being discovered in his
days. Having received an abbey from the
viceroy Caramanico, he entered parliament as
one of the clergy, and succeeded in passing a
plan of radical reform in the system of taxa-
tion. The basis of revenue consisted of rents
from properties of the crown, and of an intricate
list of taxes called donations, which parliament
had granted, and which weighed very differently
on the different classes, and had each a separate
machinery for collection. Balsamo succeeded
in substituting for all these taxes a proportional
income-tax. He was rewarded by the govern-
ment with a very rich abbey. A part of his
writings is perhaps lost ; a part was published
in 1802 at Palermo, under the title Memorie
economiche ed agrarie riguardanti il regno di
Sicilia ; another part was published after his
death in a review called Effemeridi scientiflche
e letterarie per la Sicilia, Nos. 8, 10, 11, 18,
24, 32. In 1804 he published a pamphlet on
diseases of sheep, and in 1816 his Principii di
Agricoltura e di vegetazione per gli agricoltori
di Sicilia. Noteworthy is also his journal of
a voyage through Sicily, published 1809, fall
of statistical information. In 1845 two
volumes of economical writings were published
at Palermo (tipogr. Muratori), under the title,
Memorie inedite di puhlica economia ed agri-
coltura. M. p.
BAMFORD, Samuel (1788-1872), son of
a weaver at Middleton, Lancashire, after being
a warehouseman in Manchester, and then a
sailor in the coasting trade, finally settled down
as a weaver at Middleton. His book, Passages
in the Life of a Radical, 2 vols. 1841, is a valu-
able authority for the history of the condition of
the working^ classes, and their political move-
ments in the years succeeding Waterloo. He
was all his life a strong radical reformer ; and
was more than once imprisoned for his part in
political movements ; but his maxim was al-
ways "hold fast by the laws," and he braved
the loss of popularity by a remonstrance with
the Chartists (To the Hand -loom Weavers of
Lancashire, and the persons styled Chartists,
1839). His poems, especially those in Lanca-
shire dialect, had a wide circulation. J. b.
BAN. Roumanian coin equal to 1 centime
(100 bans = l leu). f. e. a.
BANALITES. The name given to the ex-
clusive right of the lord in France to erect a
mill, bakehouse, or wine press, and to compel
his tenants or serfs to make use of them. As
he had a monopoly, he could make what charge
he pleased. The only provinces exempt from
hanalit6s were Flanders, Artois, and Hainault.
These petty oppressions were a great source of
discontent in the agricultural districts of France.
This right, with so many others, was abolished
in the famous session of the national assembly on
4th August 1789.
[De Tocqueville, France before the Revolution,
note Ixxvii.] R. L.
BANCO. The addition of this word to the
name of a coin implies that the coin designated
is an imaginary one representing only bullion of
a certain weight. Before the introduction of
the present German monetary system all large
payments in Hamburg were efiected by trans-
fers at the principal bank, the unit of which
was the mark-banco, a coin which did not exist,
but which was supposed to be containing silver
of a certain weight and fineness, and wortt
BANDINI— BANKING
91
Is. 6d. The aggregate deposits were held by
the Bank of Hambukg in bullion or foreign
coins. A similar system of transfers was for-
merly used in Amsterdam, and existed to a cer-
tain degree in the practice of the mediaeval
deposit banks in Italy. It is not used any-
where at present.
BANDINI, Salustio Antonio, born 1677,
at Siena, brought up as a soldier, preferred retir-
ing into the country and giving himself up to
agriculture. In 1705 he took holy orders, and
became an archdeacon in 1723. He was pre-
sident of the Physiocratical Academy, a society
intended to promote natural sciences rather
than literature.
In 1737 he wrote his famous essay on the
Sienese marshes, Discorso Econoniico, offered in
manuscript to the grand-duke Francis in 1739 ;
but not printed till 1775 {Prima edizione di
Firenze per Gaetano Camhiagi stampator gran-
ducale), fifteen years after Baudini's death
(1760). Asecond edition was issued by Custodi,
Scrittoi'i classici italiani di ec. polit., Milano,
1803, Parte modcrna, Tomo I. Bandini's
essay contains the following leading principles
of political economy. (1) " Human natm-e gives
its best when it can act unfettered ; conse-
quently, the fewer and simpler the laws the
better." — (2) As a corollary from the preceding
principle, "abolition of all vexatious taxes and
reduction of state officials to a mininmm." — (3)
Abolition of laws regulating prices ; "if proprie-
tors and peasants grow rich through high prices
of agiicultural produce, so much the better for
the consumers, because more produce will be
produced for them." — (4) "The want of com-
mercial and industrial liberty causes famines."
— (5) "Laws against monopolies (natural) and
3omers are based on prejudices." — (6) Rapid-
ity and facility of exchange, not abundance of
money, are the causes of wealth. — (7) A single
tax is easier and cheaper for all parties con-
cerned than a great many ; it ought to be im-
posed on land and farmed out.
The Sienese marshes, which Bandini hoped to
reclaim by the adoption of these maxims, con-
stitute the lower part of the province of Siena
and about two-fifths of the whole of Tuscany.
His maxims, neglected by Francis, inspired the
policy of the grand-duke Peter Leopold of Tus-
cany, but the Maremma benefited by it only
after the granduke had charged the mathema-
tician Leonardo Ximenes to investigate the hy-
drostatical problems of the case, and received a
favourable report upon Bandini's suggestions.
[Delia fisica riduzione della Maremvia Senese
di L. Ximenes, Firenze, 1769, nella stamperia di
Fr. Moucke, in 4°. And, reply to a critic in 1775,
Esame dell' esame d'un libro sopra la Mar&mma
Senese, Firenze, 1775, G. Carabiagi.] m. p.
BANFIELD, Thomas C. (first half 19th
century). The most important of Banfield's
writings is the Organisation of Industry.
Having lived some years in Germany, he was
led to study the works of continental econo-
mists, then little known in England, and his
book oAves special debt to Hermann and Rossi.
By the Organisation of Industry he means a
graduated scale of industries, corresponding to
a graduated scale of human wants, and depend-
ing on the axiom that the satisfaction of a
primary want at once gives rise to a secondary ;
e.g. "in proportion as food gi'ows abundant,
the other wants rise in importance, and a con-
stantly expanding series of desires is awakened,
which are classified according to their different
grades of pressure " (Lecture III. p. 60). The
cheapening of the means of satisfying the more
urgent wants creates savings, which are necessarily
spent in satisfying the second — an argument
for free trade. His criticisms of other econo-
mists {e.g. RiCAiiDo) are not always convincing,
and his own definitions are not always precise.
But his remarks on commercial history and on
the economical features of his own time are
often acute and suggestive.
Professor Jevons, in his Political Economy
(1871), has pointed out some passages where
13anfield has, in some degree, anticipated the
main theorems of that work.
Six Letters to Sir Robert Peel on the Dangerous
Tendency of the Theory of Rent advocated by
Ricardo, 1843. — Four Lectures on the Orga7iiHL-
tion of Lndustry, delivered at Cambridge, 1844,
])ublished 1845. Translated into French, by
jfiniile Thomas, 1851. — Tlie Progress of tlie
Prussian Nation, since 1805 (from Dieterici),
Journal of Statistical Society, 1848.— Tlie Sta-
tistical Companion for 1848, 1850, etc. (T. C.
Baufleld and C. R. Weld). — The Lndustry oj
tlie Rhine in Knight's Weekly Volumes, 1846,
1848.— .4 Letter to W. Brown, M.P., on his
system of Decimal Coinage, 1855. — Articles in the
Mining Journal. J. B.
BANKING
Bank of England, p. 92 ; Banks : England and Wales, p.
93 ; Scotland, p. 95 ; Ireland, p. 96 ; India and Colonies,
p. 97 ; Bank of France, p. 97 ; Banks : France, p. 98 ;
Bank of Germany, p. 98 ; Banlcs : Germany, p. 99 ;
Chartered Banks in Scotland, p. 100 ; Banks in Canada,
p. 100 ; United States National Banks, p. 102 ; Early
European Banks —Amsterdam, p. 104 ; Genoa, p. 104 ;
Hamburg, p. 105 ; Middelbnrg, p. lOG ; Rotterdam,
p. 106 ; Sweden, p. 104 ; Venice, p. 103 ; Land Banks,
p. 106; Do., Germany, p. 106; Popular Banks, Ger-
many, p. 109; Do., Italy, p. 109; Savings Banks, p.
110 ; Bank Notes, p. Ill ; Laws in different Countries,
p. 112 ; National Banks U.S., p. 113.
BANKS, United Kingdom. The business
of banking, generally speaking, consists in
taking money on deposit, and also, in issuing
notes and drafts, by which the transfer of
loanable capital is facilitated. The funds
thus obtained, together with those supplied
by the capitals of the banks themselves, are
employed in making advances, in the discount
of bills, and in investments in first-class securi-
ties, such as the public funds ; some part being
kept in cash to meet current requirements. The
92
BANKS, UNITED KINGDOM
proportion to he employed in these methods de-
pends on the circumstances of each individual
bank. No absolute rule can be laid down.
The judgment of the banker is shown in the use
he makes of the capital intrusted to him. In
a general way the maintenance of a reserve 6f
resources immediately available, to the extent
of a third of the liabilities, may be regarded as
adequate. The assistance which a judiciously
worked system of banking gives to the economic
development of a country is enormous ; it en-
ables capital to be transferred from those persons
by whom, and from those places where it is not
required lor active use to those requiring it.
Both sides, the borrower and the lender, gain
from the operation. The one obtains some
interest for his money when placed on deposit —
the spare cash which he does not need for im-
mediate use. The other obtains the aid of an
instrument of credit which enables him to carry
on his business, and which would otherwise be
out of his reach. The following observations
apply to tlie principal countries in which
methods of banking exist.
Bank of England. The Bank of England
was foimded in 1694 by act of parliament (Ways
and Means Bill) of 1694, 5 William and Mary
c. 20. It afforded an immediate and powerful
support to the government, and also to the
inland trade of the country. By its original
constitution it was authorised to deal in bullion
and bills, to issue notes, and to make advances
on merchandise. At that period, and for a long
time afterwards, the issue of notes formed a very
large part of the business of banking. To trace
the development of the Bank of England in
detail here would extend beyond the limits to
which these remarks must be confined. The
Bank has rendered very important services to
the government in times of war and difficulty,
and also to the trade and commerce of the
country.
The charter under which it was founded was
periodically renewed till it was superseded in
many respects by the Bank Act of 1844. In
the interval between its foundation and that
date the most important event which befell the
bank was the suspension of specie payments 1797-
1821 (see Bullion Committee, Report of).
A.t the present time the Bank of England forms
the centi'e of banking operations in the United
Kingdom. Three principal reasons have led to
its holding this position. These are, that it is
the issuer of the only note circulation which is
legal tender, that it is the banker of the govern-
ment, and also of the other bankers of the
country. Owing to the last-named circum-
stance the reserve of the Bank of England is,
practically, at the present time, the only un-
used money in the country available for any
sudden demand, either of a domestic or a
foreign character. The position which a bank
so circumstanced holds is unique ; and hence,
though less distinctly now than in former years,
the bank rate of discount is regarded as the
authoritative guide to the current rate of dis-
count. That it is less distinctly a guide now than
formerly is due to the fact that modern arrange-
ments have placed enormous sums, as deposits,
in the hands of other banks ; still the pre-
eminence of the Bank of England is generally
recognised, and in any time of difficulty or
distrust its actions are watched with the most
sedulous anxiety, and it is not too much to
say that at such times the fate of the com-
mercial prosperity of the community lies in its
hands.
The constitution of the governing body of
this powerful institution is very simple. The
court of directors numbers twenty-six. This
includes the governor and deputy-governor and
twenty -four directors, chosen from the old-
established firms in the city. Custom has ex-
cluded English bankers from this body, but
members of the powerful firms employed in
negotiating foreign loans and in foreign bill-
broking are considered eligible. The directors
are practically self-elected. The respect due to
the high position they hold has been well main-
tained by the high standard of character observed.
The Bank of England, acting as agent of the
government, naturally becomes the holder of the
bullion reserve of the country, as by law the
bank is bound to receive all gold bullion offered
to it of standard value, at the price of £3 : 1 7 : 9
an ounce, retaining the practical difference of
l^d. between this sum, and £3 : 17 : IO5 the mint
price (see Mint), as a remuneration for its trouble.
Importers may, if they prefer, take the Bullion
direct to the mint and receive new coin at the
rate of £3 : 17 : 10^ an ounce for it themselves.
But the trouble of doing so, and the delay which
always ensues, causes the bullion to be brought
to the bank by preference. Here it makes its
way to the issue department and forms the
basis of the note circulation of the bank for the
amount beyond that allowed to be issued on
securities. For the connection between the
bank note circulation and the other operations
of the bank (see Bank Note). As a bank the
Bank of England receives large amounts of
deposits, on which it allows no interest what-
ever. Suggestions have often been made that it
should do this, but, were the bank to compete
with the other banks in this manner, it is hardly
likely that the other banks would continue to
keep the large balances they do with it. These
balances are always large. No statement
respecting them has, however, been published
since 1877, but at times they have exceeded
the reserve. The balances of the London
bankers are held with the bank in connection
with the clearing house transfers (see Clearing
House). As a discounter of commercial paper
the business of the bank is largely exceeded at
present by other financial institutions, but it is
BANKS, UNITED KINGDOM
93
still the ultimate resort of al] who want to borrow
and find other banks clo%d to them.
The average minimuni rate of discount of the
Banks of England, France, and Germany for
1844-1912, was— ■
Year.
Sank of
Bank of
Bank of
^ f England.
France.
Prussia.
•
Per cent.
Per cent.
Per cent.
£ s. d.
£ s. d.
£ s. d.
1844
2 10 0
4 0 0
4 0 0
1845
2 13 8
4 0 0
4 7 0
1846
3 6 6
4 0 0
4 14 0
1847
5 3 6
4 19 0
4 17 0
184S
3 14 5
4 0 0
4 13 0
1S49
2 18 7
4 0 0
4 1 0
1S50
2 10 1
4 0 0
4 0 0
]S51
3 0 0
4 0 0
4 0 0
1852
2 3 0
3 3 0
4 0 0
*- 1853
3 13 10
3 5 0
4 5 0
1854
5 2 3
4 6 0
4 7 0
1855
4 17 10
4 9 0
4 2 0
1856
6 1 2
5 10 0
4 19 0
1857
6 13 3
6 3 0
5 15 0
1858
3 4 7
3 14 0
4 10 0
1859
2 14 7
3 9 0
4 4 0
1860
4 3 7
3 13 0
4 0 0
1861
5 5 4
5 10 0
4 0 0
1862
2 10 7
3 16 0
4 0 0
1863
4 8 2
4 13 0
4 2 0
1864
7 8 0
6 K) 0
5 C 0
1865
4 15 4
3 11 4
4 19 0
1866
6 19 0
3 14 0
6 4 0
1867
2 10 9
2 14 0
4 0 0
1868
2 1 11
2 10 0
4 0 0
1869
3 4 2
2 10 0
4 2 0
1870
3 2 0
4 0 0
4 17 0
1871
2 17 8
5 14 0
4 3 0
1872
4 2 0
5 3 0
4 6 0
1873
4 15 10
5 3 0
5 1 0
1874
3 13 10
4 6 0
4 7 0
1875
3 4 8
4 0 0
4 14 0
1876
2 12 1
3 8 0
4 3 Ol
1877
2 18 0
2 5 3
4 8 0
1S78
3 15 8
2 4 2
4 6 9
1879
2 10 4
2 11 10
3 14 3
1880
2 15 4
2 k; 10
4 4 10
1881
3 10 0
3 17 6
4 S 6
1882
4 2 S
3 15 4
4 10 3
1883
3 11 4
3 1 5
4 1 0
1884
2 19 1
3 0 0
4 0 0
1885
2 17 7
3 0 0
4 2 5
1886
3 1 0
3 0 0
3 5 8
1887
3 7 0
3 0 0
3 8 4
1888
3 5 11
3 1 11
3 6 6
1889
3 10 11
3 18
3 13 7
1890
4 10 5
3 0 0
4 10 5
1891
3 5 2
3 0 0
3 15 4
1892
2 10 7
2 13 11
3 4 1
1893
3 1 0
2 10 0
4 1 5
1894
2 2 3
2 lU 0
3 2 6
1895
2 0 0
2 2 0
3 2 7
1896
2 9 8
2 0 0
3 13 3
1897
2 12 8
2 0 0
3 16 3
1898
3 4 10
2 4 0
4 5 1
1899
3 15 0
3 15
5 0 5
1900
8 19 3
3 4 8
5 6 6
1901
8 14 4
3 0 0
4 1 11
1902
3 6 7
3 0 0
3 6 6
1903
3 15 0
3 0 0
3 16 9
1904
3 6 1
3 0 0
4 4 7
1905
3 0 1
3 0 0
3 16 3
1906
4 5 3
3 0 0
5 2 11
1907
4 18 5
3 9 3
6 0 7
1908
3 0 4
3 10
4 15 6
1900
3 ') 3
3 0 0
3 18 5
1910
3 14 5
8 0 0
4 6 11
1911
3 9 4
3 2 9
4 7 11
1912
3 15 6
3 7 5
4 18 10
Average from \
1844-1912 /
3 12 9
3 11 2
I
4 7 2"
The ten yearly averages are as follows
Years.
Bank of
Bank of
Imperial
Bank of
England.
Prance.
Germany.
£ s. d.
£ s. d.
£ s. d.
1S44-1S53
3 3 4
3 IS S
4 6 4
1854-1863
4 10 2
4 10 4
4 7 11
1864-1873
4 3 8
4 3 3
4 13 10
1874-1SS3
3 5 5
3 4 8
4 5 9
1884-1893
3 4 10
2 18 9
3 14 9
1894-1903
3 1 11
2 12 2
3 19 2
1904-1912
3 12 2
3 2 3
4 12 5
1 Since 1876 the Imperial Bank of Germany.
It appears hence that the London money
market has, on the average of sixty-nine years,
been cheaper than that of Berlin. Throughout,
with a few exceptions, especially for the last
fifty years, the value of money in England has,
on average, been dearer than in France.
England and Wales. The origin of banking
in Germany may be traced even further back
than the habit of depositing money with the
London goldsmiths, which was in full vigour by
the end of the 17th century. Banking in the
I)rovinces was at the outset more dependent on
the issue of notes than that of the metropolis,
which naturally resulted from the difference of
its field lor operations. The history of the
bank of Dundee may be taken as an illustration,
for in this the habits of Scotch arid of English
provincial banks may be regarded as a good deal
similar (see Banks in Scotland). The early
employment of credit in this manner led to
results which govern, or at least largely influ-
ence, the banking system of this country to the
present day. The value ascribed to the power
of issuing notes led to the act of 1708, Avhich
restricted the number of partners in banks of
issue, and vu'tually in all banks, to a number
not exceeding six during the continuance of the
Bank of England. This restriction lasted till
the year 1826, when the establishment of joint-
stock banks of issue was permitted ; it was
further modified by the act of 1862, which
allowed private partnerships, not being banks
of issue, to have ten members. The Act of
1833, however, prohibits any English joint-
stock bank of issue from jjossessing a banking
oflSce in London. The act of 1844 restricts
the privileges of issuing notes to those banks
whether private or joint stock, which possessed
the privilege at that date. The main object
of the early legislation was to secure a mono-
poly of issue to the Bank of England. In-
cidentally it has served to prevent English
banking from taking its proper develojmient.
In this the act of 1844, the latest of Sir Robert
Peel's acts dealing with monetary questions,
has also assisted. His object in this was to
cause the note issue of the country to centralise
on the Bank of England, and to provide that,
with the exception of the notes allowed to be
issued against securities, an equivalent value
in the precious metals should be held against
94
BANKS, UNITED KINGDOM
the amount in circulation in the case of the
notes issued by that bank (see Bank Note).
Through the restrictions imposed on dealing
with the power of issuing notes by this act,
the existence of a considerable number of com-
paratively small banks of issue was continued
in England long after the time when, judging
by the analogy of events in Scotland and Ire-
land, coalition into larger concerns would have
been desirable. It is not necessary to refer
here to the detail of our banking system. It
may be sufficient to remark that in hardly any
other country are the positions and circum-
stances of individual banks so widely different
from each other as in our own. It is to be
regretted that the attention of the legislature
in England has been directed mainly to the
note issue, with a view to centralise it, and
that so little has been given to other points of
more importance to the wellbeing of the bank-
ing system. Some provincial banks, both
private and joint stock, possess the privilege of
issuing their own notes, but this power can only
be exercised by those who possessed it before
the year 1844. Very few banks in England
and Wales issue tlieir own notes now. The
act of 1844 fixed the maximum circulation of
the country banks in England and Wales at
£5,153,417 (207) private banks,
reduced by amalgamation subsequently to 205,
and
£3,478,230 (72) joint-stock banks,
but of this amount
£4,818,802 (197) private banks,
3,307,643 (67) joint-stock banks,
have since lapsed from various causes, volun-
tary and other, so that the limit of the pro-
vincial issues now (1913) stands at
£334,615 (8) private banks,
170,587(5) j oint-stock banks.
The banking business of England and Wales
is now carried on by about 19 private and
44 joint- stock banks. The different banks
vary much in size and importance. By the side
of very large banks, wielding immense amounts
of capital and deposits, very small concerns,
possessing proportionally small resources, may
be found carrying on business to advantage,
and competing successfully with their more
powerful rivals. One result, and it is a very
peculiar one, of the manner in which our bank-
ing system has developed itself, employing the
Bank of England as the pivot of its transac-
tions, is that no bank in the country keeps any
large stock of the precious metals in reserve —
more, in fact, than habit has shown to be ade-
quate for daily requirements, except the Bank
of England. By this method economy in use
of metallic money has been greatly promoted,
with corresponding advantages to the com-
munity. The necessary drawback to this is
that in times either of panic or of foreign de-
V
mands for bullion, t'he strain on our banking
system becomes ex^emely sharp, and the
troubles of the time 'greatly intensified (see
Drain of Bullion and Crisis). - The reserve
of the Bank of England a^j^ears to- those outside
the business to be "idle mcAigy," but no portion
of our monetary resources reatiiv has so import-
ant a part to play, or is so entir^V ** employed "
as the bankers' balances, which flg^ft^'linit^at
reserve, and sometimes exceed it ' in , amoum;.* '
Through the agency of our system ''English
capital runs as surely and instantly where it is
most wanted, and where there is most to. be
made of it, as water runs to find its level."
The ramification of our banking system to every
small town and village enables our monetary'
resources to be economised to the utmost, thus
persons requiring advances, whose position jus-
tifies their being made to them, are enabled
to obtain the advantages which the use of
capital will afford, both in remote places and
in our larger commercial and industrial centres.
The extension of banking throughout the pro-
vinces of late years has been very marked.
The total number of offices of banks in England
and Wales which was 1927 in 1876, in 1913
reached a total of 6973. The deposits in the
banks of England and Wales are estimated at
the same date as about £958,000,000. The
aggregate number of banking offices in the
country generally was nearly 9116 at the same
date, while the deposits in the banks of the
United Kingdom, which were estimated as
being from £470,000,000 to £480,000,000
in 1879, were estimated in the Bankers'
Magazine as being about £1,065,760,000 in
1913, exclusive of the deposits held by
the Bank of England, which were about
£34,000,000 in 1879 and £62,500,000 in 1913.
The publication of accounts is still not uni-
versal though far more general than formerly.
Official statistics of the aggregate do not exist.
No doubt in some cases undue credit has been
given to those who have not been deserving
of it, with disastrous results (see Crisis). In
some, but fortunately much rarer instances, the
fraudulent have been assisted, or the banks
themselves been ruined, by bad trading. But
on the whole these results have but seldom
occurred, and the prosperity of the country has
probably been promoted fully as much by the
banking system it has possessed as by any
modern adaptation of physical science to the
comforts and conveniences of life.
Some banks in the provinces allow interest
at a low rate on the daily balances of their
customers in their hands ; but the more general
rule is to make an allowance of interest only on
sums placed specially on deposit. This interest
usually varies according to the "London" rate
for the time being ; but some banks allow a
fixed and uniform rate. The practice varies io
different localities.
BANKS. UNITED KINGDOM
96
Scotland. Considered historically, the dis-
tinctive pecnliirities of Ivanking in wScotland
arose froin the fact that, unlike their neigh-
bours in EugLiud, the .people were allowed by
the legislature al solute freedom to create what-
ever system of ba iiking they fouinl best suited
to their wants. Thereupon, before the days of
railways and steamboats, every district of the
country, however remote, apj^ears to have de-
veloped its banker by a process, as it were, of
"natural selection." He was the trusted cus-
todian of the savings of the thrifty. He was,
on the whole, the discreet and sagacious sup-
porter of the enterprising trader and adventurous
man of commerce. His promises to pay gold
on demand were readily accepted within his dis-
trict as a convenient medium of exchange.
There was no state bank, no corporation with
exclusive privileges. In this way, from the
end of the I7th century, there grew up through-
out the country substantial private copartneries
conducting the business of banking and serving
the important purpose of promoting industry
and thrift. At this time the currency doctor
had not yet appeared, and the subtle suggestion
had not yet been made that a one -pound
note, convertible into gold on demand, might
be of less value than the coin it represented
and for which it could at any moment be ex-
changed.
The range, however, of banking credit enjoyed
by these substantial copartneries was naturally
limited to the districts in which they were
known, and when facilities of communication
and of transit were increased and the scale of
commercial transactions became enlarged, it
became obvious that banking institutions of
more commanding importance and more widely
recognised stability were required to take the
place of the old local private banks. The three
old banks in EdinlDurgh — the Bank of Scotland,
Royal Bank of Scotland, and British Linen
Company — had not yet seriously set themselves
to serve the country districts. A new chapter
was accordingly opened early in the 1 9th century
when joint-stock banks were formed, having
their headquarters in Edinburgh, Glasgow, and
some of the other more important towns, with
numerous branches throughout the provinces.
This proved to be the knell of the private
banks, for by degrees these ancient institutions,
being free to transfer themselves in their in-
tegrity, were merged in the more powerful joint-
stock banks, and the system of banking as a
whole became adapted to the enlarged opera-
tions of commerce.
The movement thus described involved,
among other consequences, a reduction in the
number of banks in Scotland. In 1819 there
were 36 ; in 1844, 24 ; in 1873, 11 ; in 191:?
there were 8. All possess the power of circula-
tion, the limit to each of authorised note issue
is as follows : —
Name of Bank.
Amonnt of
authorised
Circulation.
1 Bank of Scotland ....
2 Royal Bank of Scotland .
3 British LineTi Company .
4 Commercial Bank of Scotland, Ltd.
5 National Bank of Scotland, Ltd. .
, 6 Union Bank of Scotland, Ltd.
7 North of Scotland and Town and
County Bank, Ltd.
8 Clydesdale Banking Company, Ltd.
Total .
£396,852
216,451
438,024
374,880
297,024
454,346
224,452
274,321
i;2,076,350
The average circulation of these banks,
allowed by the Acts of 1844-45 to exceed the
authoiiised limit (see Bank Note), was, col-
lectively, £7,784,185 in 1913, their deposits
about £127,000,000.
The development of banking in Scotland
was gi-catly assisted by the provisions of the
law, which placed no limit on the number of
partners, and allowed security to be taken on
land, all being registered, as well as on other
descriptions of a debtor's property, with great
facility. The private fortune of every partner
was also liable for all the debts of the bank
except in the case of the Bank of Scotland and
the two chartered banks. The effect of this last
provision has been restricted by the application
of the limited liability acts, but the sy.stem of
banking thus established, assisted by the power
of circulating small notes, has extended itself
over Scotland with great completeness. Hardly
any village is without the advantage of banking
facilities, provided by numerous branch offices.
The early history of the Bank of Dundee may
be taken as typical of the growth of Scotch
banking. Originally instituted, 1764, as a bank
of issue, it was not till 1792 that deposits were
received by it, and these were for some time
hardly equal in amount to the note circulation.
A similar system was no doubt the origin of
banking in the United Kingdom generally.
Though the branch offices of the Scotch banks
are numerous, the banks themselves, as stated
above, are few in number. Amalgamation for
the most part, failure in some conspicuous and
terrible instances, account for the diminution.
The credit of the remaining banks has never
been shaken. The deposits, 21 millions in
1826, were 30 millions in 1851. Since that
date the gi'owth has been most rapid. Includ-
ing capital, the resources Avere 63 millions in
1866, 92 in 1872, and nearly 158 millions
in 1913. The old practice of the banks in
Scotland of making advances on Cash Credit
{q.'o.), that is on the personal security of two
bondsmen, tended to develop the energies of
the country facilitated by the thriftiness of the
people. The system of note circulation in
Scotland (see Bank Note) has been of great
assistance to the banks in many ways, and has
provided the banks with "till money "free of
96
BANKS, UJ^JTED KINGDOM
cost. Through its existence the early prosperity
of the banking system of the country was
developed and fostered ; it has caused great
economy in the use of specie, and also it has
facilitated book-keeping by removing the necess-
ity for the use of small cheques in many direc*
tions. The vast network of branch offices, the
working of which, as previously mentioned, is
facilitated by the use of small notes, is also of
great service to the business. In those districts
which are poor, and where deposits are scanty,
the advances of capital required for the develop-
ment of business are easily provided from the
resources which the wealthier districts supply.
The small number of banks in Scotland, however,
is sometimes made the subject of complaints.
The habits of the people, which lead them to
prefer notes to specie in their daily transactions,
coupled with the other advantages which the
possession of a note circulation gives, have
practically restricted banking in Scotland to
banks of issue, and as no addition to the number
of issuing banks has been possible since Peel's
acts of 1844-45, the existing banks have such
a hold of the field that no increase has been
made since that time. The rates of discount
for advances, and those for the allowance of
interest on deposit are settled by agreement
among the banks ; hence they are practically
uniform over the whole of the country. While
complaints as to the monopoly of the existing
banks are thus heard from time to time, it does
not appear probable either that the rates of
interest charged, or allowed, would differ much,
if at all, from those which have been the rule
in Scotland under existing circumstances, if the
freest competition were established. Nor is it
at aU likely that any one to whom an advance
may safely be made is prevented from obtaining
such an advance through the limitation of the
number of the banks. Hence the public may
not gain wherever such competition is started ;
on the other hand competition, in the direction
of making advances on insufficient security, or
to those who employ them in rash speculation,
is one of the most disastrous things which can
happen.
Two bank failures in Scotland during recent
years have been on a scale so large as to deserve
special notice. The aggregate loss of the share-
holders of the Western Bank of Scotland, failed
1857, was upwards of £2,800,000. The failure
of the City of Glasgow Bank in 1878 involved
its shareholders in a loss of about £6,000,000.
In neither case were the general public losers
(see Banks, Chaeterkd ; Cash Credit).
Banking in Ireland has been conducted
generally on the same principles as in Scotland,
and hence requires no detailed notice. One
point, however, to the great credit of the Irish
ijanks, deserves commemoration, namely, that at
the present time of writing (1913) every bank
of issue in Ireland which was in existence in 1844
is still carrying oil business. The stability
which this indicates has. not occurred in either
England or Scotland. 'The. exceptions to the
general prosperity wei?e the stoppage of the
Tipperary Joint-Stock Bank (1856), and of the
Munster Bank (18.86),- since replaced by the
Munster and Leinster Bank, Limited. This
general soundness of recent banking in Ireland
may well be contrasted with its laxity, fre-
quently involving consequent failure, at an
earlier date. At the commencement of this
century, Ireland was overspread with a number
of small and principally very ill-managed banks,
each carrying on its affairs within a narrow
circle, and in a most irregular and unsound
manner. The appendix to a parliamentary
report (Report of the House of Commons
Committee on circulating Paper, Specie, and
Current Coin in Ireland, 1804) contains a list of
the names of fifty firms, all believed to be
engaged in the business at that time. Others
who issued notes for small amounts from 3^d. to
6s. each, who had really no pretensions to be
called bankers at all, undertook similar re-
sponsibilities. By the year 1820, however,
only six of the banks were left, the numbers
having been reduced principally by failures.
The over-issue of notes had led to great distress.
The want of confidence resulting from the fre-
quent failures was general, and even the notes
of the Bank of Ireland were for a time un-
negotiable. The act of 1820 which permitted
the establishment of joint-stock banks, gradu-
ally led to the sounder state of affairs mentioned
above, but it was not till the amending acts of
1824-25 allowed persons resident in any part
of Great Britain or Ireland to become share-
holders in these banks that their success be-
came established, as the previous exclusion of
English and Scotch capitalists had greatly re-
tarded their welfare (see History of Banking in
Ireland by Mr. Dillon). The experience of
Ireland in banking matters has been very
chequered, the injury caused by the earlier and
unsound banks having been very considerable,
while the assistance given in recent times by
the existing banks to the general prosperity,
has been equally marked. It only remains to
mention the Bank of Ireland. This bank was
originally projected 1695, but the plan was not
carried Qut then ; it was also rejected by the
Irish House of Commons 1721, and it was more
than half a century afterwards, 1783, that the
bank was established. It has been prudently
and successfully conducted to the present date.
The Suspension of Cash Payments, 1797,
extended to Ireland, and a very considerable
expansion of the note circulation — over-issue it
might more properly be termed — followed.
This, however, was soon reduced after the re-
turn to cash payments.
Considerable privileges were granted to the
Bank of Ireland — after 1820 no bank with more
BANKS, FRANCE
9>
than six partners was allowed to issue notes
within a radius of fifty (Irish) miles from
Dublin. After 1845 this restriction was re-
moved, and the arrangements as to the circula-
tion of notes practically assimilated to those in
force in Scotland (see Bank Note). There are
nine banks in Ireland, of tliese six possess the
power of circulation.
Name of Bank.
Amount of
authorised
Circulation.
1 Bank of Ireland
2 Provincial Bank of Irel.ind
8 Belfast Bankin.i; Company
4 Northern Banking Company ,
5 Ulster Bank
6 The National Bank ....
Total .
£3,738,428
927,667
281,611
243,44U
811,079
852,269
£0,354,494
The average circulation of these banks,
allowed by the Acts of 1844-45 to exceed the
authorised limit (see Bank Note), was, col-
lectively, £8,074,000 in 1913. The Hibernian
Bank, Limited, the Munster and Leinster,
Limited, the Royal Bank of Ireland, Limited,
have no issues. The total resources of the nine
banks were nearly £91,000,000 in 1913.
India and the British Colonies. British
India, our colonies generally, and the Australian
colonies in particular, possess well -developed
banking systems. These do not, however,
possess features calling for special notice from
an economic ])oint of view, except that with
other very similar associations these Colonial
banks, whose deposits collectively were, in
1913, about £797,000,000, have been, to a
large extent, the conduit pipes through which
British capital has been ditfused thi-oughout
the colonies. Their rapid development may
be cited as one of the advantages hence
resulting.
France. The Bank of France, the most im-
portant banking institution in the country, was
founded in 1800 as a private company, and
received the basis of its permanent constitution,
which made it practically a state bank, through
the law of 24 Germinal An. xi. of the First
Republic (14th April 1803). The law of 22d
April 1806 reconstituted the bank, which is now
regulated by the law of 1897. The governor,
who holds his office for life, and the two deputy-
governors, are appointed by the state. The
general council, consisting of fifteen regents,
by whom the business is mainly directed, and
three censors, who may be regarded as a per-
manent committee of audit, are elected by the
general assembly, which consists of the 200
largest shareholders. Of the regents, five must
be chosen from among the manufacturers,
itraders, and merchants (manufacturiers, fahri-
^eamiSf ou commergants) who are shareholders in
the bank, and three selected from amongst the
trisoriets-payeurs gdn&rav^, the treasury agents
VOL. I.
in the provinces. Thus the government is
strongly represented on the managing body.
The governor has to watch that "the bank per-
forms its duty to the state and towards the
commerce and industry of the country" (evidence
given by M. Rouland, then governor, before the
Enquite sur les princi2Jes et les fails g6neraux
qui r4gissent la circulation monktaire et fiduci-
aire, Paris, 1865, which see). The governor of
the Bank of France has usually been a man who
has held a high official position. Thus M.
Rouland had been a senator, a minister, and
president of the council of state ; M. Denor-
mandie, another governor, was a senator for life ;
and had M. Leon Say, whose name was freely
spoken of at a recent vacancy, and who has
been minister of finance, besides serving in other
high positions — for example, as ambassador in
England — been appointed, it would not have
been felt that this would have been a lowering
of his official standing. The regents and censors
represent the commerce and trade of the country,
to which, as well as to the state, the bank has ren-
der id great services. Ithas(1913) 143 branches
situated in the different departments of France ;
besides this about 439 places are, through
auxiliary offices and other similar arrangements
provided with banking facilities ; there are also
a certain number of district offices in Paris.
The rules of the bank with respect to its dis-
counts are somewhat strict, three signatures
being required, or a deposit of security to take
tlie place of the third name, but the wisdom of
the rules has been justified by the results.
Thus, with a discount in round numbers of
30,000,000 bills in 1913 for an amount of over
£800,000,000, a very small number remained
practically overdue, and of these the greater
part were sound. The part the bank occupies
in the general business of the country is shown
by these figures, and as more than 4,500,000
of the bills taken at Paris alone did not exceed
£4 in value, retail as well as larger trade shares
in the advantage. Business in France is,
however, not connected so intimately with
banking as in England. Thus the note circu-
lation of the Bank of France, sometimes 220
millions sterling, never now below 200 millions,
represents a business turnover which would be
conducted principally by cheques in England.
The Bank of France, however, endeavours to
extend the use of cheques among its customers.
Through the Bureau de Virements it performs
the functions of the Clearing House (which
see), and it likewise facilitates the transmission
of money between the towns in which the
branches are situated and the head office. The
Bank of France endeavours to keep an even rate
•of discount with as few alterations as possible,
as it considers a tolerable degree of certainty
in the charge for the use of money to be, as
is undoubtedly the case, of service to trade.
Thus for about twelve years, between 1901 and
98
BANKS, FRANCE
1913, there were 8 changes in its rate of dis-
count varying from 3 to 4 per cent, while there
were 61 changes varying from 2^ to 7 per cent
at the Bank of England during the same time.
The rate charged is uniform at Paris and the
branches, both for discounts and advances, 'the
fatter being from |^ to 1 per cent above the dis-
count rate. These rates are invariable, and no
addition is made for commission or otherwise.
Of the total, productive, operations of the
Dank, in 1913 about 1628 millions sterling,
much originates at the branches. At some
of these, particularly at Bordeaux, Lyons,
Marseilles, Havre, and Lille, the transactions
are large. Some of the smaller offices, how-
ever, occasionally do not pay their expenses,
and the cost exceeded the profits at 3 in 1910.
This fortunate position of affairs has not always
been maintained, but the deficiencies have
been comparatively small. The Bank of
France is at liberty to pay its notes and dis-
charge its obligations either in gold or in silver
of legal tender, that is, in silver pieces of 5
francs. It is argued that this facility assists
it to maintain a comparatively even rate of dis-
count, even in the face of a movement in the
foreign exchanges favourable to an export of
gold, as it is absolutely at liberty to give or
withhold gold so long as it has silver with
which it can cash its notes. This argument
can hardly be proved or disproved statistically.
As a matter of fact the number of alterations in
the rate of the Bank of France has been fewer
since the year 1844 than at either the Bank of
England or at the Bank of Germany. The
rate of discount has been on average less
than at the Bank of England during the last
seventy years, taken as a whole (see Table,
Bank of England), and it has recently tended
to be much lower. In making these observa-
tions, however, the great difference between the
condition of circumstances in the countries con-
cerned should be borne in mind. Besides assist-
ing commerce and the general prosperity of
France, the Bank of France has more than once
in its history had to support the weight of very
serious troubles, the proper handling of which
exceeded in difficulty almost any ordinary
financial crisis. Without going farther back
than the last forty years, specie payments have
been suspended twice owing to political disturb-
ances— in 1848 and again in 1870. The earlier
of these suspensions, which lasted only about a
year and a half, does not appear to have had
any marked effect on prices. The later one,
which was accompanied by the devastation
ensuing on the Franco-German "War, lasted about
five years, specie payments, suspended in 1870,
having been partially resumed in 1874 and com-
pletely in 1875. A suspension of specie pay-
ments may naturally be expected to produce the
ordinary result of inflation, shown in the foreign
exchanges and in the price of commodities. But
the course which the Bank of France took in
regulating its issue of notes, which became the
circulating medium and were inconvertible, was
so prudent and cautious that few, if any, of the
dangerous results of a forced circulation of paper
followed. There was, during the course of this
time, a slight, but not large variation from the
normal rate of the foreign exchanges, exemplified
in the rate between Paris and London on several
occasions, but it was slight, and if any alter-
ation in the prices of commodities followed it
was only small in extent. Great caution and
prudence must have been needed to carry on the
monetary affairs of a large country under such
trying circumstances without involving it in the
risks which usually follow on a forced circulation.
The following figures will give some idea of
the ordinary business transactions of the Bank
of France : —
1913. Aggregate of operations . £1,528,000,000
„ Bullion held— Gold . . £140,000,000
„ Silver . £25,500,000
, , Bills discounted in Paris and
branches . . . £800,000,000
„ Average note circulation . £226,600,000
„ „ current accounts £25,600,000
Besides the Bank of France, there are many
other large banks in the country, as the Comp-
toir d'Escompte, founded 1848, the Credit
Foncier, and Credit Mobilier, 1852, the Credit
Lyonnais, 1863, the Societe Generale, 1864,
besides others, and many very wealthy and
powerful private firms who carry on the practice
of banking and the traditions of the Haute
BaTujue, which rather corresponds to the busi-
ness of wealthy merchants and high financial
operators with us. The idea of banking, as
carried on in this country, in the United States,
and in several of our colonies, notably in the
Australias, is, however, gradually gaining ground
in France, and further developments in that
direction may be expected.
Germany. The Imperial Bank of Germany
occupies now quite as commanding a position
in that country as the Bank of France does
within its own sphere of labours and, with the
other powerful banks surrounding it, has
assisted greatly the prosperity of the Empire.
The present constitution of the bank of
Germany is defined by the Bank Act of 1875,
by which the Bank of Prussia was merged in
the Imperial Bank, and amended by the acts of
1889, 1899, 1901, 1902, 1906, 1909(see Annual
Reports in Bankers Magaziiu). In arrange-
ments for accounts, in number of offices, —
488 in 1913, — in closeness of relations with
the government, the working of the Bank of
Germany corresponds very much with that
of the Bank of France. There is, however,
an important difference in respect of the note
circulation (see Bank Note), to which, as the
arrangements are dissimilar both from those
in England and in France, it is desirable to
BANKS, GERMANY
99
refer. The Bank of Germany is permitted to
add to its circulation against securities the
issue of any other issuing bank whose circula-
tion drops, and also to exceed the legal limit,
at first (1875) by £12,500,000, extended 1899
to £22,500,000, 1902 to £23,500,000, 1906 to
£23,641,450 by lapse of issue of the Bank of
Brunswick, 1909 to £27,500,000 and at the
end of each quarter £37,500,000, on payment
of a tax of 5 ]^er cent per annum on the total
excess issue. The limit was exceeded nineteen
times in 1913, the rate of discount not rising
above 6 per cent. Those who have experienced
the effect of the suspension of the Bank Act
of 1844 in England, see in the smoothness
with which this arrangement acts a sign of a
corresponding absence of pressure on business
of great advantage to the industry of Germany,
and though the different circumstances of
business there do not admit of an exact com-
parison with England, the question deserves
more attention than is given it. The Bank of
Germany is a "state bank." The distribution
of the profits (laws of 1875, 1889, 1899,
1909) is as follows : 3^ per cent on the capital
(£9,000,000) to the shareholders; of the re-
mainder, the State receives three-quarters and
the shareholders one-quarter, after deducting
from these two portions 10 per cent {i.e. half
10 per cent from each portion) to be assigned
to the Reserve (£3,723,963 in 1913). Thus
the shareholders received in 1913 £758,750,
or a dividend of 8*43 per cent, and the
state £1,551,025 in addition to the Note
Tax £183,715. The capital £6,000,000 in
1900 was raised to £9,000,000 in 1905. The
German em]»eror appoints the president and
council of the bank directory, whose office
is for life, on the recommendation of the
federal council, and the Government, through
the Chancellor of the empire, exercises com-
plete powers of control. The shareholders
influence the management through a com-
mittee. As with the Bank of France, the
arrangements as to rates of interest are
uniform over the whole field of operation,
and the facilities given by this, and by the
action of the bank in the discount of commercial
paper, as well as by the transmission of cash,
etc., have given a great impetus to the prosperity
of the empire. There are many other banks in
Germany besides the Imperial Bank, four of
which issue notes. This privilege has been
relinquished by many banks once possessing
it, owing to the restrictions imposed on
banks of issue, which may not buy and
sell securities for delivery, either for their
own or for third account, nor may they accept
any bills nor (1913) in some conditions discount
below the Reichs-bank. The business of the
non-issuing banks in Germany, besides ordinary
account current transactions, consists in dis-
counts, buying and selling securities, granting
advances to customers and also in negotiating
loans for governments as Avell as private under-
takings, a business which in this country is
more in the hands of private bankers and
finance companies. The banks also hold large
deposits ; yet this branch does not attain the
same proportionate dimensions as in Great
Britain, the amount of uninvested capital being
smaller ; and as interest is allowed on almost
all balances, even if repayable on demand, the
profit from this source cannot compare with
the results obtained in this country.
The limits of space forbid detailed reference
to several other banking systems both in Europe
and elsewhere, but among these the Swedish
Enskilda Banks may specially be referred to as
possessing a very skilfully planned note circula-
tion, the usefulness of which compares favour-
ably with the systems of circulation in Scotland
and the United States. The system on which
the national banks of the United States,
established 1863, were originally based, was
connected with the financial measm-es necessi-
tated by the terrible struggle between "North"
and "South" which inflicted such heavy losses
on the Union. A safe circulating medium was
urgently required, and Secretary Chase recom-
mended an issue of bank notes, secured by de-
posit of United States bonds worked by local
banks, in preference to the issue of notes by the
Government itself (see Bank Note ; Banks,
National, United States of America).
[See Reports, Covimittee of Secrecy on Bank oj
England Charter, H. of C. 1^2,2.— Select Com-
mittee on Banks of Issue, H. of C. 1840. — First
and Second Reports Select Covimittee on Banks oJ
Issue, H. of C. 1841. — First and Second Ptcports
Secret Committee on Commercial Distress, H. of C.
1848. — Report Select Committee on Bank Acts, H.
of C. 1857. — Report Select Committee on Bank
Acts, H. of C. 1858. — Report Select Committee on
Banks of Issiie, H. of C. 1875. — Report from
Secret Committee of the House of Lords on the
Causes of the Distress which has for some time
prevailed among the Commercial Classes, and hoio
far it had been affected hy the Laws for regulating
the Issue of Bank Notes payable on demand,
Session 1847-48. (The information contained in
the evidence and report especially valuable.) —
Practical Treatise on Banking. — Logicof Banking,
J. W. Gilbart (title characteristic of the author).
— History and Principles of Banking, J. W.
Gilbart, London, 1866. — The Country Banker,
George Rae, London, 1886, and later editions. —
Notes on Banking, R. H. Inglis Palgrave, London,
1873. — British Banking Statistics, John Dun,
London. 1876. — Capital, Currency, and Banking,
James Wilson, London, 1847. — Lombard Street,
W. Bagehot, London, \B:'iZ,l'dlO— History of the
Bank of England, John Francis, London, 1847. —
'The First Nine Years of the Bank of England,
J. E. Thorold Rogers, Oxford, 1887.— TAe Scotch
Banks and System of Issue, Robert Somers,
Edinburgh, 1873. — History of Scotch Banking^
A. W. Kerr, 1884. — History and Development oJ
100
BANKS, CHARTERED— BANKS, CANADA
Banking in Ireland, Malcolm Dillon, London and
Dublin, 1889. — English Manual of Banking, A.
Crump, London, 1877. — Principles of Banking,
Thomson Hankey, London, 1867. — Practical Bank-
ing. A. S. Bolles, New York, l^M.—Bank Rate,
England, France, and Germany, E. H. Inglis Pg,l-
grave, London, 1903. — History, Law, and Practice
of Banking, C. M. Collins, London, 1887.— TAe
Practice of Banking, John Hutchison, London,
1883. — Bankers' Magazine, London. — Jov/mal
Institute of Bankers, London. — American Bankers'
Magazine, New York. — Dictionnaire des Finances,
Paris, 1889. — Chapters on the Theory and History
of Banking, C. F. Dunbar, New York, 1891.]
BANKS, Chartered (Scotland). 1.
The Bank of Scotland ; founded by Scots act
of parliament 17th July 1695, not by charter,
though frequently called one of the chartered
banks ; a monopoly of banking for twenty-one
years from 1695 ; a capital of £100,000 sterling,
since raised to £1,987,000 (£1,325,000 called
up), with power to issue £2,625,000 additional
stock. 2. The Royal Bank of Scotland ; first
charter 31st May 1727 in pursuance of the im-
perial statute, 5 Geo. I. c. 20 ; eighth, 30th
December 1829 ; capital £2,000,000, fully paid
up ; it is questionable how far a provision in the
original charter of 1727 that each share of £100
is liable in five farther calls of £10 each is applic-
able to present shareholders. 3. The British Linen
Company ; charter 6th July 1746 as linen traders
and manufacturers ; banking business developed ;
charter 1806 (5th June) as bankers, capital
£200,000 ; last charter 19th March 1849, au-
thorised capital £1,500, 000, whereof £1,250, 000
issued and fully paid up. The above three are
known as the chartered banks ; they claim
limited liability (see Company for purposes of
charter). The National and the Commercial
Banks have also charters ; the former 1825, the
latter 1831 (bank founded 1810); in both
charters liability stated to be unlimited. See
Mr. Fleming's "Memorandum as to Banking in
Scotland," Select Committee on Banks of Issue,
1875, reprinted in Henry Robertson's Handbook
of Bankers' Law (Scotch). The three oldest.
Bank of Scotland, British Linen Company, and
Royal Bank, have always had or claimed a
strictly limited liability : the two named above,
in common with the remaining three Scotch
banks, the Clydesdale, North of Scotland and
Town and County, and Union, have been
recently registered as limited liability companies,
and now use the word " Limited." a. d.
BANKS, CANADA. The history of currency
and banking in Canada may be divided into four
periods : (1) the French regime ;— (2) from
beginning of British government until establish-
ment of first banks in 1817-18 ;— (3) from
1817-18 until confederation of provinces, 1867,
banks being organised under provincial and
royal charters ; — (4) since 1867, the Dominion
parliament having exclusive jurisdiction regard-
ing banking.
A complete account of the first period, during
part of which beaver and moose skins were recog-
nised currency, wheat a legal tender, and the
''card money" of the French governors formed
the chief medium ; and the second period when the
coins of five other countries were legal tender, will
be found in the writings of Mr. James Stevenson
referred to below. During the second period un-
successful attempts were made in 1 7 9 2 and 1807-8
to establish banks, and in consequence during
the war of 1812 government was obliged to create
an army-bill ofiice or temporary bank of issue.
From 1817 to 1825, however, two banks
were established in Lower Canada (Quebec) and
one each in Upper Canada (Ontario), New
Brunswick, and Nova Scotia, all now doing
business except one. During the rebellion of
1837-38 the banks in Upper and Lower Canada
temporarily suspended specie payments under
permission of an order in council.
Before dealing with the fourth period it is
necessary to indicate the condition of banking
and currency at time of confederation, 1867.
There were thirty-nine charters, but only twenty-
seven banks doing business. The charters ex-
pired at various dates from 1870 to 1892 and
varied in accordance with views regarding bank-
ing in the different provinces. In Upper and
Lower Canada (Old Canada) shareholders were
liable for double amount of stock, except that
there was one bank en commandite, the "prin-
cipal partners " having unlimited personal lia-
bility. In most cases notes could be issued
equal to paid-up capital plus specie, and
government securities held. In New Brunswick
charters had been granted without double lia-
bility but the principle was being insisted on in
renewals, while in Nova Scotia in the opinion
of some there was no double liability. In Old
Canada and Nova Scotia as a rule total lia-
bilities were restricted to three times, and in
New Brunswick to twice the amount of capital.
There was also one bank with a royal charter,
head office in England, and shareholders not
under double liability. The situation was
further complicated by the "Free Banking Act,"
under which notes could be issued secured by
deposit of government debentures, and by the
legal tender issues of the governments of Old
Canada and Nova Scotia. In 1866-67 two of
the largest banks in Upper Canada failed,
resulting in a very severe financial crisis.
Under these conditions, and after tentative
legislation in 1867 and 1870, the first general
bank act of the Dominion was passed in 1871
(34 Vict. c. V.) It confirmed the special
features in the bank working under royal
charter, and that with "principal partners"
personally liable, and it will be understood in
any statements hereafter regarding banks as a
whole that these institutions are not referred to.
As the charters of other banks expired they
were renewed under the Dominion Act. Tho
BANKS, CANADA
101
first act extended all charters ten years, which
practice has been followed thus far. There
were various amendments during the first few
years, but since then changes have been
infrequent, except at the regular revisions in
1880 and 1890. The act hereafter referred to
is that assented to May 1890, and to come in
force July 1891 (53 Vict. c. xxxi.)
Constitution and Powers of Banks. — Banking
in Canada is not absolutely fi-ee as in the
United States. A charter must be obtained by
application to parliament, and this of course
could be refused. Practically, however, bank-
ing cannot well become a monopoly. The
minimum subscribed capital permitted is
$500,000 (say £100,000), of which $250,000
(£50,000), must be paid in, and the fact assured
by the money being deposited temporarily in
the finance department, after which, on com-
pliance with other important requirements,
the treasury board will issue permission to do
business. Shares are held subject to what is
known as double liability, i.e. in the event of
the bank's assets being insufficient to pay its
debts, a shareholder is liable for the deficiency
to the extent of an amount equal to the par
value of his shares, in addition to any amount
unpaid on such shares. Shareholders do not
escape the double liability by transfer, unless a
period of sixty days has elaj)sed before sus-
pension. There are elaborate regulations as to
the constitution and duties of the board of
directors, which cannot be fully explained here.
Directors become personally responcible if divi-
dends are declared impairing the capital, and
no division of profits in any shape exceeding
8 per cent per annum is permitted, unless
the reserve fund or rest equals 35 per cent
of the paid-up capital. The act prescribes
the form in which the directors' annual report
to shareholders shall be made, and requires
most comprehensive monthly returns to the
finance department, which are printed and dis-
cussed in the leading newspapers. The finance
minister may call for special returns from any
bank at any time. A list of shareholders in all
banks, with their holdings, is published by the
government annually. A return of all divi-
dends and balances unclaimed for five years is
required annually, and in the event of a bank's
insolvency such amounts must be paid over to
government to be held for owners. The
statute of limitations does not run as against
depositors in favour of banks. There are
numerous provisions as to a bank's power to
take securities for loans. Banks may not lend
upon security of real estate. The act abounds
mth heavy penalties for breach of its provisions.
Note Issues. — In the successive banking acts
of the Dominion parliament banks have been
empowered to issue circulating notes to the ex-
tent of the unimpaired paid-up capital. By
the first act the noteholders had no greater
security than other creditors. At the renewal
of charters (1880) the circulating note was
made a prior lien upon all assets ; and at the
last renewal the banks, at their own suggestion,
are in addition required to create in two years
a guarantee fund of 5 per cent upon their
circulation, to be kept unimpaired, the annual
contribution, however, if fund is depleted, to
be limited to 1 per cent. The fund is to be
used whenever the liquidator of a failed bank
is unable to redeem note issues in full after a
lapse of sixty days. Notes of insolvent banks
are to bear 6 per cent interest from date of sus-
pension, until liquidator announces his ability
to redeem. Banks are also required to make
arrangements for the redemption at par of their
notes in every part of the dominion. The
change in 1880 was caused by the failure of a
small bank with a circulation of about §125,000
(say £25,000), paying all creditors only 57^
per cent. The Bank Act of 1906 with the
amendments of 1908 was due to the demand
lor a currency which will pass over the entire
dominion without discount under any circum-
stances. The history of banking in Canada
since confederation shows no instance in which
depletion of the guarantee fund would have
occurred. Fines from $1000 (£200) to $100, 000
(£20,000) may be imposed for over-issue of
notes. The pledging of notes as security for a
debt, or the fraudulent issue of notes in any
shape, renders all parties participating liable to
fine and imprisonment. As the crown preroga-
tive to payment in priority to other creditors had
been set up on behalf of both dominion and
provincial governments, the act places the claims
of the Dominion second to the note issues, and
those of the provinces third. Notes of lesser
denomination than $5 (£1) may not be issued,
and all notes must be multiples of $5 (£1).
Notes smaller than $5 are issued by the
Dominion government. With a Circulation
Redemption Fund, Dec. 31, 1912, of $6,410, 103
(£1,282,000), and capital paid $114,881,914
(£23,000,000), tlie banks had in circulation only
$110,048,357 (£22,000,000). Besides these
assets, the double liability of shareholders gives
a further considerable security. The circulation
expands and again contracts during three months
in each year, greatly owing to the products of
Canada being still mainly of the forest and
field. This fact, and the necessity for till
money without cost at the branches, have
caused Canadian bankers to steadily oppose a
currency secured by special deposit of securities.
During the period since confederation the banks
have provided a currency readily convertible
into specie, the volume rising and falling with
requirements of trade, and this, apart from
legal tender notes of the Dominion, is almost
the only class of money in constant use. The
amount of Dominion notes (legal tenders)
held by the banks in March 1909, was about
102
BANKS, CANADA— BANKS, UNITED STATES
$670,000,000 (£13,400,000) and the actual
specie held was £5,361,000. The deposits
held by the banks were £140,300,000.
Beserves. — No reserves are actually required
by law. The cash reserve in gold and legal
tenders has averaged for some years abouf 10
per cent. Till money is almost entirely sup-
plied by the note circulation. The smaller
banks keep their available reserve in deposits
with the leading banks in Montreal. The
larger banks have their immediately available
reserves largely in security loans in New York
and Chicago. Forty per cent of whatever
cash reserve a bank may choose to keep must
be in Dominion legal tenders, a provision en-
tirely in the interest of the government.
Branch System. — Perhaps because the first
bankers in Canada were to a great extent Eng-
lish and Scotch, the branch system has become
so firmly established that there are no banks
without branches. Altogether there are nearly
3000 bank offices, including 181 city branches
in Toronto, administered by twenty-six banks,
the largest number by any one bank being
372, two others having 340 and 311. These
three have branches from Halifax on the
Atlantic to Vancouver on the Pacific, a dis-
tance of about 3500 miles. Any town of 1 0 0 0 or
1500 people may thus have a bank of deposit and
discount of high standing, and administered by
a trained bank officer. Slowgoing communities
where deposits accumulate thus provide the
means of satisfying the wants of new and enter-
prising localities, where the demand for money
is out of all proportion to local supply. As a
result of this economy in the distribution of
capital, and the advantages arising from till
money without cost, and the profits of circula-
tion, rates of interest in Canada are as low or
lower than in any country except the three or
four leading nations of the world, and Canadian
banks cannot go to Great Britain for deposits as
other colonial banks do, because they cannot
afibrd the rates paid by other banks. The pro-
portion of deposits to capital is still so small
(only two to one) that branch banking could
not have reached its present comparatively
perfect development, but for the note issues not
being specially secured. It has been argued
that if this power was taken away or replaced
by a specially secured issue, perhaps one-half
of the branches would have to be closed.
The growth of banking in Canada, 1856 and
1860 being for Old Canada alone.
Year.
Capital paid-up.
1856
$13,700,000, say £2,740,000
1860
24,400,000 „ 4,880,000
1870
32,000,000 „ 6,400,000
1880
60,500,000 „ 12,100,000
1890
59,500,000 „ 11,900,000
1900
65,154,000 „ 12,030,000
1910
99,676,093 „ 20,000,000
1912
114,881,914 „ 23,000,000
Year.
Note Issues.
1856
$10,500,000, say £2,100,000
1860
9,700,000 „ 1,940,000
1870
14,100,000 „ 2,820,000
1880
20,100,000 „ 4,020,000
1890
32,000,000 „ 6,400,000
1900
46,574,780 „ 9,315,000
1910
87,694,840 „ 17,639,000
1912
110,048,357 „ 22,000,000
Year.
Deposits.
1856
$8,600,000, say £1,720,000
1860
15,900,000 „ 3,180,000
1870
50,700,000 „ 10,140,000
1880
84,800,000 „ 16,960,000
1890
136,200,000 „ 27,240,000
1900
356,394,095 „ 71,279,000
1910
895,706,276 „ 179,140,000
1912
1,099,468,700 „ 220,000,000
The total deposits in chartered banks, post office and
government savings banks, Montreal and Quebec
savings banks, and real estate loan companies,
was 30th June 1887, $183,756,329 (£36,751,266),
in 1912 about $1,200,000,000 (£240,000,000).
The currency of Canada was declared by 34 Vict,
c. iv., to be dollars, cents, and mills, similar to
that of the United States, and British sovereigns
to be legal tender at $4.86§. United States gold
coins of $5 and over are legal tender. A branch
of the Royal, Mint is established at Ottawa.
[Trans. Literary and Historical Society, Quebec,
Stevenson (1874-75, 1875-77).— Statutes, orders in
council, gazettes of provinces before confederation.
— Dominion of Canada Gazette, 1908, acts respect
ing Banks with current accounts, Banking, Insolvent
Banks, Currency, Dominion Notes, Savings Banks
(Prov. of Quebec), Post Office. — Statistical Record,
Canada. — Garland, Banks, Bankers, and Banking
in Canada, 1890. Sir E. Walker, A History of
Banking in Canada, 1909.] b. e. w.
BANKS, National (United States of
America), were established by an act of 1863,
revised 1864, and amended by later legislation.
The essential features of the system are the issue
of bank notes by local banks under national
supervision, the deposit of United States bonds
as security for all notes issued, and the limitation
of the right of issue to the national banks. The
act was adopted, after repeated recommenda-
tion by Secretary Chase, as one of the leading
financial measures of the civil war of 1861-65,
partly as affording a market for the large mass
of bonds required by the banks for deposit
under this plan, but chiefly as a provision for
reforming the paper currency after the return
of peace. The direct issue of legal tender
notes by the United States treasury, which
had begun early in 1862, was regarded as a
temporary expedient, and the withdrawal of
the notes and restoration of specie payments
after the close of the war appeared not improb-
able. The national banks would then supply
a convertible currency, amply secured, of uniform
value throughout the Union, and there could
be no revival of the vicious systems of issue
under local authority from which the country
had suffered deeply. It was also an advantage
BANKS, UNITED STATES— BANKS, EARLY EUROPEAN
103
that in every state the banks of issue, having
their capital invested in United States bonds,
would find their interests identified with those
of the union. Part of these advantages were
lost by the delay in returning to specie pay-
ments (1879), the final recognition of the legal
tender notes as a permanent currency, and the
temporary decline of the national bank circula-
tion. The adoption of the system, however,
gave the United States a large class of banks in
high credit, which have been of the utmost ser-
vice to them. They carried on business under
strict regulations as to making advances, and
were required by law to hold a minimum reserve
in specie and legal tender notes against deposits
to the amount of 25% in the case of city, and
15% in the case of country banks. In case of
insolvency, shareholders were liable to an amount
equal to the face value of their shares. The banks
were required to publish their accounts five times
a year, and were under the official inspection of
the Comptroller of the Currency who had power
to enforce all regulations. Under this system
the national banks became the strongest class of
banks in the country, and grew ra]ndly. In 1 864
there were 139 banks, with capital 814,000,000
(£2,800,000) ; in Augustl913, 7488; capitaland
surplus $1,782,000,000 (£356,000,000); total
resources, §10,877,000,000 (£2,175,000,000).
In addition to these the state banks, private
banks, and trust and loan companies, under
varying degrees of official supervision, grew up.
These were 18.520 in 1913, with a total ca[>ital
of $1,039,930,000 (£207,986,000); surplus,
$956,000,000 (£191,200,000); and deposits,
$11,522,000,000 (£2,304,400,000).
A feeling that the system of national and
state banks was inadequate was brought to a
head by the crisis of 1907. A searching inquiry
resulted in the Federal Reserve Act, 1913, the
main points of which are as follows : — The
country is divided into not less than eight or
more than twelve Federal Reserve Districts,
in each of which a Reserve City is chosen ; in
this a Reserve Bank is established with capital
of not less than $4,000,000 (£800,000), sub-
scribed by National and such other banks as
choose to be *' member " banks. If the amounts
subscribed are insufficient, the public may con-
tribute amounts of not more than £5000, the
balance to be made up by the government.
Reserve Banks may issue notes to "member"
banks to such an amount that the Reserve Bank
holds a gold reserve of 40% against them. It
may exceed this amount for short periods by
paying a graduated fine to government and
when authorized by the Federal Reserve Board.
They may discount any bills enclosed by any
of its "member" banks except those drawn to
carry on trade in stocks or bonds other than
those of the government, to an amount not
exceeding in the aggregate half its capital and
surplus, and may fix the rates of discount to be
charged for each class of paper. They may
deal in government bonds, coin, and bullion, and
transact all business usual to banks, such as
establishing foreign agencies and discounting
foreign commercial paper. The banks are con-
trolled by a Federal Reserve Board composed of
the Secretary to the Treasury, the Comptroller
of the Currency, and five members appointed
by the President with the approval of Congress,
who are carefully guarded from undue outside
infiuences. Their powers are very wide, and
include the right to require any Reserve Banks
to rediscount the discounted paper of any other
Reserve Banks at rates fixed by itself, to sus-
pend reserve requirements specified in the act
for limited periods, to add to the central reserve
cities, and to enforce the act generally. It is
assisted by a Federal Advisory Council composed
of one elected member from each Reserve Dis-
trict. "Member" banks not in a reserve city
hold reserves equal to 12% of demand deposits
and 5% of time deposits, five-twelfths to be in
the Federal Reserve Bank. Banks in reserve
cities hold reserves equal to 15% of demand
deposits, 5% of time deposits, one-third to be in
its own vaults, two-fifths in the Reserve Bank.
Banks in central reserve cities hold 18% of
demand deposits, 5% of time deposits, one-third
to be in its own vaults and seven-eighteenths in
the Reserve Bank. Reserve Bank Stock bears
6% cumulative interest, surplus to be divided
equally between Reserve and the government,
the latter to be applied to redemption of Public
Debt or to a government gold reserve ; when
the reserve exceeds 40% of total paid-up Capital
Stock of the Reserve Bank the whole surplus
goes to the State.
[For account of United States banking down to
the Civil War, see Rept. of Comptroller of Cur-
rency, 1876, pp. 6 and 83-123.] c. F. D.
BANKS, Early EuROi'EAy. Banks founded
in early times in Europe carried on a rather dif-
ferent business than that known now as banking.
The Bank of Venice is traced by Anderson,
Origin of Commerce, vol. i. p. 156, to the forced
loans raised by the republic (1156, 1480, 1510),
the transfer of stock and the payment of interest
taking place at a public office, which was sub-
sequently made a deposit bank ; but Lattes and
Ferrara state that, though the stock, by its
transfer, became an important medium of ex-
change, deposit banking in Venice was thoroughly
established by private bankers in the 14th cen-
tury, and the first public bank, the Banco di
Rialto, was opened by decree of the senate in
1587, after frequent failures of private banks.
In 1619 the Banco del Giro, known as the Bank
of Venice, was established (see Lattes, Liherta
delle Banche a Venezia, p. 183), like its prede-
cessor, without capital, purely as a bank of de-
posit, under the management of public officers.
It received funds for the state and for indi-
viduals, making a small charge for holding
104
BANKS, EARLY EUROPEAN
private deposits ; transfers were made upon the
books by the order of depositors ; bills of ex-
change were paid by such transfers ; and the
tender of payment in bank for any sum not less
than 100 ducats could not be refused. It
became an important aid to commerce, and was
long famous throughout Europe. As it was not
properly a lender, the bank should never have
had less bullion than the amount of its deposits ;
but loans to the government compelled it to
suspend payment more than once, and with
some loss of credit. It kept its accounts in
ducats banco, which had no corresponding coin,
but were credited or redeemed by the bank, as
might be required, at an advance of 20 per cent
above the ducat effetivo of the mint. Whatever
the origin of this difference or agio, it seems finally
to have represented a mere difference of denomi-
nation, as if the Bank of England were now to
keep its accounts in guineas, using the current
coin in all receipts and payments. The Bank of
Venice declined with the republic, and fell, after
the invasion by the French, 1797. It is an indi-
cation of the financial skill of the managers of this
bank that they were able in 1766 to reduce "the
interest of their funds to 4 p6r cent, at the same
time offering payment of their principal to those
who were unwilling to accept that rate of in-
terest " (Macpherson, Annals of Commerce, vol.
iii. p. 444). Banking institutions are mentioned
by CiBRARio as having existed in Genoa in the
12th century. The Bank of St. George, which
dates from 1407, a bank of circulation and de-
posit, was the financial centre of the republic,
and carried on all the transactions in the public
funds of the state. Andeeson (vol. i. p. 319)
says that in 1345 Genoa had "run so con-
siderably into debt to her own citizens that in
this year four of them were elected to make
provision for those debts, and for the current
service of the year," and that in order to pay
the interest on the debts of the state the customs
were assigned to it. The council of the bank
were one hundred, and the governors eight in
number, " managing their stock prudently, and
having many rich men concerned with them,
they afterwards supplied the further necessities
of the republic ; and, for that end, had at length
most of the cities and territories of Genoa
pawned, or rather sold to them," . . . and
(p. 414) "In proportion as the wants of the
republic increased, so did the credit of this
house or bank, by having still more bonds,
rents, and important dominions assigned to it,"
The power of the Bank of St. George increased,
so that, according to De Mailly, there was ' ' seen
in the same city two independent sovereignties."
The appropriation of its property by the Aus-
trians, 1740, and by the French in 1800, de-
stroyed its credit, which till then had remained
unimpaired. The Bank of Sweden, founded,
1656, by a Swede named Palmstruck, claims
to have been the first established on modern
principles as a bank which issued notes payable
to bearer at sight. The first bank-note was
issued 1658. An "enquete" made by the
French government in 1729 declares the bank-
note to be an admirable Swedish invention,
designed to facilitate commerce (Palgrave, Notes
on Banking, p. 87). This bank became the
Riks bank (Bank of Sweden) 1688 ; it still
carries on business in Stockholm, and has always
been national property. The Bank of Amster-
dam, founded 1609, was established for a different
purpose, namely, to provide a common and per-
manently steady currency in which the foreign
bills of exchange domiciled there might be paid,
without the loss and inconvenience caused by
a fluctuating currency. The establishineut of
this bank is described by A. Smith {Wealth
of Nations, bk. iv. ch. iii.) " Before 1609 the
great quantity of dipt and worn foreign coin
which the extensive trade of Amsterdam brought
from all parts of Europe, reduced the value of
its currency about 9 per cent below that of good
money fresh from the mint. Such money no
sooner appeared than it was melted down or
carried away, as it always is in such circum-
stances. The merchants, with plenty of cur-
rency, could pot always find a sufficient quantity
of good money to pay their bills of exchange ;
and the value of those bills, in spite of general
regulations which were made to prevent it,
became in a great measure uncertain. "In
order to remedy these inconveniences, a bank
was established in 1609 under the guarantee of
the city. This bank received both foreign coin
and the light and worn coin of the country
at its real intrinsic value in the good standard
money of the country, deducting only so much
as was necessary for defraying the expense of
coinage, and the other necessary expense of
management. For the value which remained,
after this small deduction was made, it gave a
credit in its books. This credit was called
bank money, which, as it represented money
exactly according to the standard of the mint,
was always of the same real value, and intrinsic-
ally worth more than current money." Pay-
ments were made in transfers of "bank money,"
which were equivalent to cheques. For the
last century of its existence the bank adopted
the method, also described by Smith, of making
advances in bank money upon the pledge of
coin or bullion deposited, the owner paying
interest for the advance and receiving a rdcepisse
to enable him to withdraw the pledged metal
upon making repayment. This system, which
has been much misunderstood (as by M'CuUoch
in his edition of the Wealth of Nations, p. 215),
superseded the earlier practice of simple deposit,
but appears to have equally answered the pur-
pose for which the bank existed. The l)ank
of Amsterdam rendered great services to com-
merce for more than two hundred years, but
during the French occupation at the close of
BANKS, EARLY EUROPEAN
106
the 18th century it was found that the bank
had advanced very large amounts to the pro-
vinces of Holland and West Friesland, the
Dutch East India Company, and the city of
Amsterdam. The bank then became virtually
insolvent, but the city finally paid the holders
of bank money some time before 1802. At-
tempts were made to revive the bank, which
languished until 1820, when it was at last
closed.
The Bank of Hamburg was established
1619, for similar reasons to that of Amsterdam.
To the prosperity of the trade of Hamburg,
the most vigorous oflshoot of the once powerful
Hanseatic League {q.v.), the bank of that
city largely contributed. It carried on its
business under the protection of the state, and
was a place of deposit, or warehouse of the
precious metals — principally uncoined silver.
Silver in bars was the true foundation of the
bank's stock, coined silver, gold, and to a small
extent copper were merely received as pledges
with a margin. The "mark banco," or money
of account, represented the 59^ part of a metri-
cal pound of fine silver. Any quantity of fine
silver was received by the bank, and credit
given for it at the rate of 59-J mark banco for
one pound of fine silver, 1 per mill {\ per cent)
being charged to the person who sold the silver
to the bank. Accounts could only be opened
by a Hamburg citizen or corporation. In order
to avoid any risk of loss, no silver was received
under the fineness of ^VuV' ^^^ every bar had
to be assayed by a sworn assayer ( Wardcin) in
the service of the bank. In this manner the
payments to be made were merely transfers from
one account to another by persons who kept an
account at the bank. To transact their business
they had either to appear personally or to be
represented by an attorney. The person who
appeared, whether the owner of the account or
the attorney, had to hand over the check, which
may more properly be described as the order for
transfer, Avith a printed signature personally to
the bank. One list for all the separate sums
dealt with was handed in. Besides the business
based on bar silver, the Hamburg bank also
advanced bank money against silver coins, and
in a more restricted way on gold, under careful
regulations and for a limited time only. These
loans, however, could be renewed. The pledge
itself could only be taken out by the person
who took money for it, or by another one to
whom it was formally transferred (Palgrave,
Notes on Banking, p. 116). The Bank of
Hamburg continued to do business on these
principles for many years. Modern methods of
account, however, were gi-adually introduced.
On 15th February 1873 the old system of a
bank cuiTency based on uncoined silver came
to an end. The German currency was em-
ployed ; the development of the Bank of
Gei-many, and an establishment of a branch
of that bank in Hamburg, together with the
alteration in the currency of Qennany from a
silver to a gold basis, rendered the continuance
of the Bank of Hamburg no longer necessary,
and its business was merged in that of the Bank
of Germany. The bank had accumulated a
capital of about 1,000,000 marks, or £50,000
besides the value of its buildings. The latest
reference to its separate existence is found in
the transactions of the senate of Haraburg of
the 13th October 1875. In these, following
the ancient practice of the free city, the senate
formally communicates to the burghers its
resolution to sell the buildings of the "vener-
able institution which had performed such great
services to German trade " to the Bank of
Germany for 900,000 marks (£45,000). The
actual transfer took place on 1st January 1876.
An agreement was likewise made that the officers
and staff of the bank should be transferred on
a similar footing to that which they had previ-
ously held to the Bank of Germany — seven being
retained while five were pensioned by the State,
including the two TFardeine (assay officers) ;
and thus the bank which had carried on business
to a later date than any other of the banks,
established on what may be termed mediaeval
principles in Europe, closed its honourable
and useful career. Dr. A. Soetbef.r published
( Volkicirthsdmftlkhe Vicrteljahrschrift, 1866-
1867), a very interesting account of the Bank of
Plamburg {Die Hamburger Bank, 1619-1866),
which narrates its remarkable histoiy. The
soundness of the course of business followed, at
all events from 1770 onwards, was exemplified in
the strongest manner on the 5th November 1813.
When on this date the French took possession
of the bank treasure, 7,506,956 niaik 6 schill-
ing in silver, the con-esponding liabilities were
found to be 7,489,343 mark 12^ schill. only.
So unbroken was the confidence in the institu-
tion that its operations were hardly inteiTupted
even by this shock ; the removal of the treasure
by the French continued till 18th April 1814.
After a further period of disturbance the freedom
of Hamburg was re-established 1st June 1814.
The bank immediately resumed business and
the value of the mark banco stood as before.
The tardy reparation in the form of an inscrip-
tion of French rente of 500,000 fr. (equal to
7 fr. rente for every 100 mark banco taken
away), was not made till 1816.
This, though the most severe ordeal the Bank
of Hamburg had to pass through, has not been
by any means the only one. There was a severe
crisis in 1763, another in 1799, caused by
violent fluctuations in prices, another in 1857,
arising out of speculative business, the last-
named being only allayed by a loan from Vienna,
first of ten million mark, then of five mOlion
more in current silver (say £1,125,000). As
not unfrequently occurs in panics, the know-
ledge that the means to meet liabilities were at
106
BANKS, LAND
hand sufficed to calm the crisis, the identical
coins being, as Soetbeer informs us, returned to
the national bank at Vienna in the selfsame
boxes in which they had been despatched. This
loan was guaranteed by the senate of Hamburg.
The amount of indebtedness liquidated was very
large, the total beingl44,586,000mark banco —
(say £10,844,000 reckoning the mark banco at
Is. 6d.) This amount is made up by the commer-
cial failures m.b. 98 millions (say £7,350,000),
the sum, collectively m.b. 21 millions (say
£1,675,000), dealt with by the three Com-
mittees to which the State delegated authority
to grant loans on bills, merchandise, and other
securities, (1) the Belehnungs Kommission, m.b.
8,153,000 (say £611,475), (2) the Staats Dis-
coTiis Casse, m.b. 3,029,549 (say £227,215) ; (3)
the Vertrauens Commission for the first Austrian
loan, m.b. 10,000,000 (£750,000); and the
portfolios of the two joint-stock banks {Akticn
Banken), m.b. 25 millions (£1,875,000). The
loss which resulted to the state was compara-
tively small, being about 187,000 ijiark banco
(say £14,025), and to the two joint -stock
banks 200,000 mark banco (say £15,000).
That on the 98 millions was unknown although
no doubt this figure included some of the
engagements represented by the portfolios of
the banks. The interposition of the state alone
prevented a terrible catastrophe.
Nothing could be more sound than the busi-
ness of such a bank as that of Hamburg,
which consists under ordinary circumstances
only in transferring "value" from one holder
to another. The experience of the bank shows
that when severe pressure comes on, as in the
crisis of 1857, the support of the government
may enable these limits to be safely exceeded
for a time, with great advantage to the com-
munity. Dr. Soetbeer supplies statements
which show the rapidity and the fluctuations in
the operations of the bank. The amount held
by the bank was turned over during each year
from 1856 to 1866 as follows :
Average rate
Year.
No. of Times.
of discount
per cent.
1856
115
6i
1857
136
6i
1858
38
If
1859
59
2
1860
68
If
1861
88
2t^
1862
111
3
1863
111
3A
1864
135
4fV
1865
118
3i^
1866
119
m
The relation shown between rapidity of turn-
over and rate of interest is very remarkable.
The fact that this is the case has been noticed
by men of business, who would hardly have
expected so exact a statistical confirmation of
their individual observations.
Similar in many ways to the Bank of Ham-
burg was the Bank of Kottekdam (est. 1635) ;
one difference appears to have been that accounts
were allowed to be kept, either in ' ' bank money "
to meet bills drawn foreign on Rotterdam, or
in "current money" to meet bills drawn in
Rotterdam on foreign countries. Anderson
{Annals of Gomm,erce, vol. iii. p. 384) mentions
another point, namely, that " bills of exchange
are paid in large money, and only 10 per cent in
schellings." The Bank of Middelburg (est.
1616) appears to have practised lending upon
securities (Mees, Bankwezen in Nederland, p.
231), and so far to have departed from the usual
type of deposit bank. With this exception the
scope of the business of all these banks appears
to have been much the same, the management,
where necessary, as at Venice and Genoa, of the
debts of the state, and, further, providing
facilities for foreign commerce. Assistance to
local industry in the way of discounts and
making advances does not appear, at first, to
have been, at all events prominently, their
original occupation and intention.
BANKS, JjAND. There are two species of
advances which an agriculturist who owns the
land he cultivates may require : (1) to increase
the working capital needed to carry on cultiva-
tion, as wages, purchase of stock, seed, or
manures ; (2) for permanent improvements in his
property, as drainage, irrigation, or farm build-
ings. The return for the first should take place
within one, or, at most, a very few years ; for the
second it will be fully realised only after a long
period. A remarkable development in banking
institutions to give assistance of this kind has
taken place of recent years. Land Credit
Associations are now working in most countries
of Europe, in the British Colonies, North and
South America, Japan, etc. The record of the
work of these societies is The Monthly Bulletin
of Economic and Social Intelligence issued by
the International Institute of Agriculture, pub-
lished in Rome at the office of the Institute.
See also H. W. Wolff", Co-operative Banking,
1907 ; Co-operative Credit Hand-book 1909 ;
Peopy s Banks, 1910 ; Banker" s Magazine {Lou-
don), Jan. 1909, Oct. and Dec. 1910.
Germany. Distinct institutions have long
existed in Germany to meet the demands for
these two species of advances.
The first kind are supplied, in the case of
large proprietors, by ordinary banks. For
small proprietors there are in Germany, besides
ordinary banks, institutions on the basis of
mutual assurance. Such are the Raiffeisen
loan fund societies, particularly for small land-
owners in rural districts, to protect them from
the exactions of the local usurers. These render
effectual aid to the cultivators, lending somewhat;
larger amounts for long periods. They have
BANKS, LAND
107
had marked success in the Rhine-province of
Prussia, Westphalia, and Hesse-Darmstadt.
For permanent agricultural improvements
large sums become necessary, and loans can
only be repaid gradually during an extended
term. Germany was the first country in which
special systems of credit for long periods on the
security of landed property were organised.
The oldest institution of this kind originated
in Silesia in 1769, after the seven years' war,
under the auspices of Frederick the Great, who
gave it a subvention from the state of 300,000
thalers at 2 per cent. The plan was due to a
Berlin merchant named Biiring. The object
was to relieve proprietors who were overwhelmed
with debt, having suffered severely from the
war, from the high rate of interest and the low
prices of agricultural produce. Similar establish-
ments, known as Landschaftliche Credit-vercine
or Landschaften, were afterwards founded in the
other provinces of the Prussian monarchy, in
Wiirtemberg, Mecklenburg, Saxony, and most
of the other German states, and continue to in-
crease in numbers. They are voluntary associa-
tions of landowners, resting on the principle
of joint responsibility. Any proprietor who
borrows from an association becomes a member
of it. The security for the advances they make
to their members is the movable property of
the borrower, his land and buildings. The
position of the association is usually that of
first mortgagees. The associations carry on their
transactions within limited areas ; and this en-
ables them to adapt their operations to the
wants of the district, and, in particular, secures
that the valuation of lands pledged for advances
shall be made by persons thoroughly acquainted
with local conditions and possessing the con-
fidence of the agricultural community. They
lend at about 4 per cent, plus a small contribu-
tion (^ to ^ per cent) towards expenses of
management ; besides the annual jmyment ap-
plied to the extinction of the loan.
The associations in general do not pay the loan
in money, but issue obligations {Pfandhriefe)
for the amount advanced. These are negotiable,
and pass from hand to hand, bringing the holder
an interest paid by the association of 3 or 4
per cent yearly. Payment of the principal of
obligations cannot, in general, be claimed by the
holder, but the association may agree to accept
offers of them, and can call them in, usually by
drawings, on giving due notice by advertisement.
Not merely the property specially represented
by the Pfandhrief, but all the funds of the
association are liable for the regular payment of
the interest. Each of the coupons into which
an obligation is subdivided usually re[)resents a
very moderate amount, and is used as a medium
of exchange in small transactions. They have
maintained their value extremely well in com-
parison with other debentures. Thus, for ex-
ample during the shock to commercial confidence
caused by the revolutions of 1848, whilst the
3^ per cent Prussian public funds were quoted
at 69, and the shares of the bank of Prussia
at 63 per cent, the 3^ per cent Pfandhriefe
stood, in Silesia and Pomerania at 93, in west
Prussia at 83, and in east Prussia at 96 ; and
they have maintained their price well since.
In some cases these obligations are issued direct
to the borrowers, who themselves undertake
their negotiation. In others the association
charges itself with the negotiation and gives
cash to the borrower, this being furnished by
capitalists who invest in the obligations. No
dividends are earned by the association. The
receipts from the borrowers provide for interest
on the obligations, maintenance of a reserve
fund, gradual redemption of the obligations,
and cost of management. In case the borrower
fails to pay the interest on his loan, the associa-
tion can first seize his produce and other movable
effects, and if these are insufficient, can have a
receiver appointed over the mortgaged estate, or
can sell it by public auction. The debtor can,
in general, pay off" the debt at will, in full or
by instalments of not less than a certain fixed
amount.
The governments of the several German states
commonly prescribe the conditions {Normativ-
hedingungen) under which these societies can be
formed, and the rules to which they must con-
form. The minister of the interior exercises a
superintendence over their proceedings, usually
through a commissioner who presides at their
meetings, and frequently some of the directors
are nominated, or their nomination is required
to be approved, by the state.
Three conditions ai)pear necessary for the
safe and efficient working of such institutions.
(1) Public compulsory registration of titles to,
and charges on, land, so as to make the existing
liabilities of an estate easy to ascertain ; — (2)
ready and cheap legal methods for recovery of
debts and sale of the borrower's property pledged
for a loan ; — (3) the obligations must be capable
of easy and inexpensive transfer. — All these
conditions are satisfied in the countries where
such establishments have been successful.
Further, there must be due care in the manage-
ment of the institutions, especially in valuation
of mortgaged lands. When the Landschaftcn
are imder state control, it is usually provided
by law that the loan shall be made only on first
mortgage and to an amount not exceeding half,
or at most two-thirds, of the value of the land.
When application is made for a loan, if a previous
mortgage on the land is found to exist, it is first,
with the consent of the prior mortgager, paid off
in obligations.
These institutions offer great advantages both
to borrowers and lenders. To an agriculturist
who has sunk borrowed capital in improvements,
the liability to a sudden demand for repayment
of the loan is serious j and that step may be
108
BANKS. LAND
rendered unavoidable by the condition of the
creditor's affairs. To the capitalist who lends,
a more punctual payment of interest is assured
by the responsibility of the association than can
always be expected of a private debtor. And
he is saved the trouble of examining into the
security of the borrower, all risk on that head
being borne by the association.
All testimonies on the subject show that
these institutions have been socially beneficial.
They have lightened the burdens of proprietors,
have increased the market value of land, and
have determined a more liberal expenditure on
permanent agricultural improvements, thus
tending to diminish the immigration from the
country districts into the large towns. They
have also opposed a useful counterpoise to the
tendencj'^ towards excessive subdivision.
So far we have dealt only with institutions
which may be described as associations of
borrowers, who procure loans for themselves on
the security of the whole or a part of their
landed possessions, guaranteeing repayment of
the loans by their collective responsibility.
This was the type of the early German Vereine,
and new societies have been founded on the
same plan. But, besides these, other institu-
tions have come into existence since 1840 in
Germany, as well as elsewhere, which may be
distinguished as associations of lenders, for the
purpose of making advances for long terms
on the security of immovable property, land,
houses, factories or workshops, woods, mines,
etc. They have been created by capitalists as
modes of investment. The establishments of
this kind are more properly than the former
called land-banks ; they are known in Germany
as HypotheTcen-Banken. They possess a sub-
scribed capital, and pay dividends to their share-
holders. The bank is responsible, to the ex-
tent of its entire resources, to the capitalist
who purchases its obligations. The subscribed
capital bears but a small proportion to the
amount of the obligations in circulation, so
that the security to the holders of the latter
rests essentially on the value of the mortgaged
properties. The annuity paid by the borrower
consists, as in the case of the Landschaften, (1)
of the interest on the loan, with (2) a com-
mission, and (3) the sum required for the ex-
tinction of the debt in the fixed term. • The
profit of the bank depends on the difference
between the interest it pays to holders of its
obligations and that it receives from its debtors.
The issue of the PfoAwLhriefe of these banks is,
in general, limited by legislation, or by direct
action of the public authorities ; the accounts of
the banks are, in some states, required to be
periodically submitted to the government.
A special stimulus to the formation of land-
banks in Germany, as elsewhere, was supplied by
the success of the French Credit Foncier(5'.u),
founded 1852, which, after surmounting con-
siderable difliculties, obtained a position of stable
credit, and extended its operations over the
whole of France. Foreign financiers studied
with care an organisation which had yielded such
satisfactory results ; and a powerful impulse
was given to the creation of land-banks in the
other continental countries. In Germany, in
particular, a great number of them were founded ;
five at Berlin between 1864-72, three at Frank-
fort-on -the -Main between 1862-71, three at
Munich between 1869-71, and many in other
parts of the empire. In 1883 there were
twenty-four Hypotheken-BanTcen in the German
empire, with circulation of over 1700 millions of
marks (£85,000,jOOO) in Pfandhriefe, share capi-
tal of over 250 millions of marks (£12,500,000),
and holding over 1800 millions of marks
(£90,000,000) in mortgage.
"Whilst the Landschaften were instituted and
worked for the benefit of agricultural proprietors
exclusively, it is said that the business of the
Hypotheken-Banken has been principally in con-
nection with town buildings.
Besides the voluntary associations of which
we have spoken, the governments of some of the
German states have from time to time founded
land-banks, ehtirely under their own manage-
ment, for special objects. Thus in the parts of
the country where feudal institutions continued
longest in force, as for examjDle in Hesse-Cassel
and Hanover, they had been created (in 1832
and 1840 respectively) to furnish the proprietors
of the *' peasant lands " with the means of re-
deeming the seigniorial dues to which they were
subject. In recent times Landescultur-Renten-
hanken have been founded by the governments
of Saxony and Prussia, to assist landowners in
draining and irrigating their estates.
[A list of books on land credit will be found in
C. Knies's Geldund Credit, 2te Abtheilung (1879),
p. 395.— Theod. Frhr von der Goltz, Landwirth-
schaft, Theil 1, §§ 47, 48, in Schonberg's Handhuch
der Politischen Oekonomie (2d ed. 1886). V.
Borie, Etudes sur le credit agricole et le credit
fonder en France et d I'Uranger (1877). J. B.
Josseau, Traits du credit fancier (3d ed. 1885).—
Titre vii., ch. 2, Institutions de credit foncier dans
les divers itats Europeens. ] j, k, j^
The Landschaften have made great progress.
In 1914 there were 18 societies in Prussia which
issued £15,000,000 in land-bonds in 1912.
There are also Landschaften in Mecklenburg
with land-bonds in circulation amounting to
£2,053,000 ; in Brunswick, land-bonds in cir-
culation, £660,000 ; in VViirtemberg, with land-
bonds, £5, 192, 000 ; in Bavaria, with land-bonds,
£7,039,000; and two in Saxony, one with
bonds in circulation of £3,997,000 issued tc
384 large estates and 1358 peasant farmers,
the other with loans to land-owners amountinc*
to£9, 126, 000 and to Communes of £1 0, 990 000^
— all at the end of 1912.
The size of the peasant holdings on which
these loans are granted varies from under 2*
BANKS, POPULAR, GERMANY— ITALY
109
acres to over 250, the largest number concerned
being between 2^ and 25 acres. The loans
vary from under £100 to over £5000, the
most usual size being between £150 and £400.
The rate of interest varies from 3 to 4 per cent.
Advances are also made on the security of rural
holdings by the Savings Banks, — in 1912 they
invested £123,200,000 or 19% of their total
capital in this way, — and by the 38 Mortgage
Banks {Hyiwlhckcn - Banken) wliioh granted
£37,586,000 mortgages on rural holdings out
of a total of £564,335,100. See Deutscher
Okonomist (Sept. 1913); Monthly Bulletin of
Eco'iiomic and Social Intelligence, esp. Sept. 1910,
Nov. 1912, and Feb. 1914.
BANKS, Popular (Germany). Banks on a
co-operative principle have been established in
several countries in Europe, the most promi-
nent examples being in Germany and Italy.
The popular banks of Germany, which owe
their initiative to the efforts of Schulze-
Delitzsch, commenced operations in 1858-59
on strictly co-operative principles. No advance
fjan be made to any one except to a member.
Each bank is directed by an administrative
council consisting of nine members, elected at
the general meeting ; a committee is also electeil
to manage the detail. No one is admitted as a
member unless he is accepted by the administra-
tive council ; members pay an entrance fee, and
subscribe a certain share of the capital, no one
being allowed to exceed a fixed limit. Pay-
ments may be either by monthly instalments or
in one sum. Members have the right, as soon
as elected, to ask for a loan, the shortest period
for advances being a fortnight, the longest three
months. This may be renewed, but not for
more than nine months. Each member is re-
quired, before a loan can be granted him, to
have 60 per cent at least of the amount paid in
to his credit, or to be guaranteed by another
member of the society. The banks receive
amounts on deposit, on which interest averaging
about 4^ per cent is paid ; for these sums both
the capital and the members individually are
liable. The dividends to the shareholders aver-
age from 5 to 7 per cent. The advances are at
about 8 per cent, but part of this is returned to
the borrower by way of dividend.
The troubles which the revolution of 1848
brought on Germany letl Schulze-Delitzsch to
devote his attention to this great work. He per-
ceived, with the intuitionof a statesman and hrst-
rate financier, that state aid and charity would
never help those who sought assistance of that
kind to emerge from the grinding poverty, the
lot of too many, not only of the working-classes,
but of the small traders. Believing that ' ' man
has implanted in his nature, together with the
wants which are bound up with his existence,
the powers, the right use of which leads to the
satisfaction of those wants," he steadily per-
severed in his efforts to apply the principle of
"self-help" to a business usually supposed to
require a large fund of capital before it can be
set satisfactorily to work. The rate of interest
to the poor but hardworking borrower was re-
duced from a most usurious rate (60 and even
730 per cent are mentioned as rates which had
been given previously), while what the lender
received made the effort of saving worth while.
These banks take, to a certain extent, the
place of savings banks, and are of great service
in promoting the prosperity of the districts in
which they work. Besides the popular banks
( VoTschussvereine), Schulze-Delitzsch established
industrial syndicates {Genossenschaften in einzel-
nen Gewerbszweigcn) ; co-operative societies for
articles of consumption (A'b7isM?;n;ercwie) ; build-
ing societies {Baugenossenschaften).
There were 3481 societies in 1881, i.e. 1889
popular banks, 898 industrial syndicates, 660
co-operative societies, 34 building societies with
a capital of £30,500,000 (£9,500,000 being
payments of members and reserves, and
£21,000,000 borrowed capital). In 1859, 80
popular banks reported 18,676 members,
£6,100,000 advances made, and £41,000 funds,
capitals, and reserves. In 1887, 886 banks re-
ported 456, 276 members, £80, 000, 000 advances,
and £6,744,000 funds, capitals, and reserves.
The Schulze-Delitzsch banks were centralised
in 1864 under the German Co-operative Societies
Bank, which amalgamated with the Dresdner
Bank in 1903. There are 15,000 local banks
(1913), membership 1,500,000, loans abouu
£100,000,000. There are 5000 banks in the
Raiffeisen Federation, principally in villages of
under 2000 inhabitants.
[See Paper on " People's Banks," by A. Egmout
Hake, Journal of the Institute of Bankers, June
1889 ; who remarks on the opposition the system
received at first from the police — an opposition
which, if persevered in, must have caused the whole
movement, so useful to the country, to collapse.
— Vorsch%iss-U7id- Credit- Vereine als 1 'olksbanken
Praktische Anweisung zu deren Einrichtung und
Gr'dndung con Schulze-Delitzsch, Leipzig, 5tli ed,,
1876. This volume contains complete information
on the method of establishing the system, duties
of directors, officials, arrangements for general
meetiugs, amount of shares, etc., the act of 1868,
with forms of account, etc. The pains taken with
the detail, and the high standard of public spirit
incidentally shown, are beyond praise.
For history of these institutions, 1890-1910, in
Germany see C. R. Fay, Co-operation at Hmne and
Abroad, London, 1908, and List of Authorities
therein ; H. W. Wolff, Peoples Banks, Lontlon,
1910 ; Statistisches Handbuch fiir das Deutsche
Reich.]
BANKS, Popular (Italy). Co-operative
banking was introduced into Italy by Signor
Luigi Luzzatti, Minister of the Italian Treasury,
and " Presidente dell' Associazione fra le Banche
Popolari Italiane," who, in 1864, adapted the
organisation employed by Schulze-Delitzsch
no
BANKS, POPULAR, ITALY— BANKS, SAVINGS
for the use of his own country. The leading
principles of the Italian popular banks, as of
those of Germany, are co-operation, mutual
responsibility, and self-help. The system has
spread over nearly the whole of Italy. By
1887 there were 608 popular banks. Tl\e
method of organisation is, in the main, similar
to that employed in Germany. The manage-
ment rests on the intelligence of the share-
holders, working through different committees
which undertake separate portions of the ad-
ministration. The officers— president and com-
jnittee— are unpaid. To prevent undue power
from being accumulated in the hands of any
individual, the number of sliares any single
person may hold is limited ; and at the general
meetings of the society, no sliareholder has
more than one vote, whatever the number of
his shares may be. The advantages obtainable
from joining these institutions are gi'eatly
appreciated by the smaller shopkeepers and
traders, who form the largest class among the
shareholders ; next in number are the small
agricultural proprietors and farmers, working
men proper being about 10 per cent of the
whole. The transactions appear to be extremely
minute, loans even of 1 franc (lOd.) not being
unknown ; the largest number of loans being for
sums less than 20 frs. (16s. 8d.). The deposits
correspond, the largest number being below 50 frs.
(£2). Before these banks had been introduced
a most usurious rate had been charged for small
advances to petty traders and artisans, 30 to
even 60 per cent being paid, and even higher
rates. The local business done in these small
advances appears to have been generally sound.
Luzzatti quotes, with a very justifiable satisfac-
tion, the following figures of the popular banks
of Italy in his official publication of 1889.
The amount of loans and discounts in 1880
was £16,895,236, of which only -28 per cent
was overdue and unpaid. In 1886 those
overdue and unpaid were -22 per cent of the
total £45,902,837. In 1883, 250 popular
banks reported capital £2,566,880, deposits
£10,421,200 ; in 1902, 696 out of 736
banks reported capital £3,305,068, deposits
£19,261,240. The rural banks in 1902
numbered 1099. In Jan. 1911 there were 862
co-operative credit societies and popular banks,
1140 rural banks, 207 ordinary credit com-
panies, and 5 agrarian credit institutions and 7
credit foficier companies. The land certificates
amounted to £26,988,905 and the loans to
£24,296,367. In 1912 the 7 cridit fonder
companies granted about 1760 loans on mortgage
(for rural and urban land) for an amount of
about £3,235,000. In 1913 the 2094 rural
co-operative banks had a capital of about
£120,000, deposits nearly £4,000,000, amount
of loans passed about £10,000,000. In 1913,
on the suggestion of Signer Luzzatti, a Federa-
tion of Co-operative Credit Institutions of North
Italy waa formed with the view of making them
more useful and to protect their interests. The
Federal Bank of the Co-operative Credit
Societies was also formed to act as a central
bank for the Federation. This new organisa-
tion will give a great impulse to the work of the
people's banks. Rural banks in other parts of
Italy are being associated in the same way.
The practicability of the system turns on the
fact that the management is local, and the
characters of borrowers or shareholders concerned
well known, and "as each shareholder mutually
guarantees his fellow, every one has an interest
in preventing the bank from being defrauded"
(^Quarterly Review, Jan. 1887, p. 154).
\I.l credito Popolare in Italia, Relazione di Luigi
Luzzatti, Kome, 1882. — Manuale per le Banche
Popolari Co-operative Italiane, E. Levi, Milan, 1883.
— Statute delta Banca Mutua Popolare di Firenze ;
Societd Anonima Co-operativa, Firenze, 1883. —
Introduzione alia Statistica delle Banche Popolari
(1887), Gon una Relazione, di Luigi Luzzatti,
Rome, 1889. — Ualia Bancaria, Milan, 1908. See
Bibliography to art. Banks, Land, esp. Monthly
Bulletin {loc. cit.), Jan. and Feb. 1914.]
BANKS, Savings. Probably the earliest
instance of a savings bank in England was the
Charitable Bank at Tottenham, founded by
Miss Priscilla Wakefield in 1804. Six gentle-
men acted as trustees, and undertook to receive
the moneys deposited, allowing 5 per cent
interest on all sums of twenty shillings in their
hands for one year. This involved loss to the
trustees. In 1808 a similar society, opened at
Bath for domestic servants, allowed 4 per cent.
The Parish Bank Friendly Society of Ruthwell,
1810, was a genuine savings bank efficiently
organised. Its success being considerable, it
had many imitators. Six years later there
were nearly eighty sax.ngs banks in England
and Ireland, and in 1817 legislation was re-
sorted to. Acts 57 Geo. III. c. 105 and c. 130
encouraged and regulated banks for savings in
England and Ireland. Trustees were prohibited
from making any profit out of these banks. At
the same time they were bound to remit all
deposits when they exceeded £50 in the aggre-
gate to the office for the reduction of the
national debt, where "the fund for the banks
of savings " was opened, and interest was allowed
by that office of 3d. per cent per diem, or
£4:11:3 per cent per annum, whereas the
banks themselves mostly allowed their de-
positors 4 per cent. The amount deposited in
any one year was restricted to £50, though in
England a depositor was permitted to deposit
£100 in the first year. In 1824 another act
was passed limiting deposits to £50 in the first
year and to £30 in any subsequent year, and
when the deposits of any person exceeded £200
no interest was allowed on the excess. In 1828
an act was passed to consolidate and amend the
laws relating to savings banks, and this provided
that the rules and regulations of each such bank
BANKS, SAVINGS— BANK NOTE
111
should be approved by the commissioners for
the reduction of the national debt ; that the
interest allowed by that office should be only
2^d. per cent per diem (£3 : 16 : 0^ per cent per
annum) ; that only 2^d. should be allowed by
such banks to depositors (say £3:8:5-^ per cent
per annum) ; and that no depositor should be
permitted to deposit more than £150, although
the interest might be permitted to accunuilate
until the deposit reached £200. There were
(20th November 1833) amongst 385 savings
banks, 414,014 depositors in England, their
total deposits being £13,973,243 ; in Wales
there were 23 banks, 11,269 depositors, and
£361,150 deposits ; and in Ireland 7<) banks,
49,872 depositors, and £1,380,718 deposits;
making in all 484 banks, 475,155 depositors,
and £15,715,111 deposits. A further act was
passed in 1833 (3 Will. IV. c. 14).
In 1835 Act 5 & 6 Will. IV. c. 57 was
passed, extending the provisions of these acts
to Scotland, and military or regimental sa\ings
banks were established in 1843. In 1844
another act was passed (7 & 8 Vict. c. 83), re-
ducing the interest allowed by the national
debt commissioners to 3| per cent, and the
maximum interest to depositors to £3:0:10 per
cent. The recent reduction in the rate of
interest paid on consols must lead to further
modifications in this. Arrangements were also
made for the summary distribution of deposits
of deceased persons, and other regulations were
made in regard to the purchase of annuities,
etc. On 20th November 1844 there were 577
savings banks in the United Kingdom, their
deposits being £29,504,861 by 1,012,047 per-
sons, averaging £29 per head. It may be
gathered from the successive reductions in the
rate of interest allowed by the commissioners
that the government had not found the custody
of the savings banks' funds directly profitable.
In fact, as they had to invest the money in
consols and other home government stocks,
there was found to be an accumulated loss of
some millions. Various partial provisions Avere
from time to time made to cover this ; so late,
however, as 1881 there was a deficiency of
£2,144,562, which was finally extinguished
by the creation of an annuity of £83,673, ex-
piring in 1908. In the year previous (1880)
the interest allowed by the commissioners was
lowered from 3^ to 3 per cent, at which it now
remains, while the interest to depositors is
mostly 2^ per cent per annum.
But in 1861 a gi-eat development of the
savings banks principle was effected. Post
office savings banks (promoted greatly by the
efforts of the late Sir C. W. Sikes of Hudders-
field) were established by Act 24 Vict. c. 18,-
and at once became popular in England and
Ireland. The post office savings banks, how-
ever, have been less progressive in Scotland,
where, though the trustee banks were of later
creation, they have taken a firm hold. The rate of
interest provided under this act was 2^ per cent.
It is evident that since the establishment
of the post office savings banks throughout
the kingdom the security they can offer has
greatly influenced depositors, especially as the
advantage to be gained in a higher rate of
interest by depositing in the trustee savings
show the growth of these deposits
Savings Banks.
1S33— Trustees
1844
1800
Trustees
Post Office .
18'
■o{
,„„^ /Truslces
)fflce
Trustees
Postt
/ 'J'rustin^s
t Post Uflice .
/ Trustees
\ Post Office .
/ Trustees
\ Post Office .
>«»«{Somoe
1900
1910
1913
United Kingdom.
. £15,715,111
29,504,801
41,J.jS,308
37,958,549
15,0'.'9,104
43,970,447
33,744,037
43,050,000
07,034,000
50,022,000
, 131,91ti,000
51,503,000
104,092,000
53,558,000
180,240,000
The purchase of government stock through
the post office dates from 22nd November 1880.
The amounts remaining to the credit of stock-
holders at the end of the year 1880 was about
£128,000 ; Dec. 27, 1913, £29,000,000.
In British colonies the savings banks have also
become a considerable power both in the form
of general and post oflice banks. In Australia
in 1899-1900 nearly 25 per cent of the popula-
tion were depositors, their deposits, aggregating
£34,000,000, reaching £30: 11 : 9 per head.
The interest allowed being (1897) 3 per cent up
to £200, and 2h per cent on sums from £200
to £500. In Canada, on 30th June 1888 the
deposits in the savings banks of the dominion
reached $41,371,058 (say £8,481,066). The
total amount, 1895, in all the savings banks
was $57,500,000 (£11,500,000), $11-11
(£2 : 4 : 6) per head of population.
In many foreign countries also savings banks
are well established, and large sums are deposited
in them. In France the rate of interest has
lately been reduced from 4 to 3 j per cent by the
Caisse des Depots et Consignations, which is
stated in the Nouveau Dictionnaire if Economic
Politique, p. 924, article Caisses d'Epargne, to
have received in fifty years (1837-1887) about
£224,000,000 from the Caisses d':^pargne, to
have repaid £96,000,000, and to have invested
about £20,500,000 in the purchase of govern-
mente Rente. The Caisse Nationale d'^pargnCy
established 1881, is stated to have collected in
eight years about £13,000,000 belonging to
more than 1,272,000 depositors. In 1908 this
had become £61,000,000 with 5,291,000
depositors. The French Savings Banks {Bulletin
de Statistique et de Legislation Comparie), to
give another example of thrift in France, held
£186,000,000, 1905.
BANK NOTE. Kegulations in diffebbni
112
BANK NOTE
Countries. The arrangements respecting bank
note circulation are very different in different
countries.
. (1) In the United Kingdom the note circula-
tion is regulated by the Bank Acts of 1844-45.
Sir R. Peel, in conformity " with the principles
of the currency theory " (see Tooke's History of
Prices, vol. iv. pp. 373, 374), stated, in his
speech in the House of Commons, 24th June
1844, that one of the objects he had in view
was "that the paper circulation should conform
itself to gold, that it should fluctuate like
gold." To attain this the accounts of the
Bank of England were henceforth to be divided
into two parts, issue and banking departments.
The method adopted is shown in the return
which follows : —
The Bank of England.
An account pursuant to the Act 7 & 8 Vict.
c. 32, for the week ending on Wednesday,
Jan. 7, 1914 :
Issue Department.
Notes issued £54,469,065 Government
Debt . . £11,015,100
Other Securi-
ties . . 7,434,900
Gold Coin and
Bullion . 36,019,065
£54,469,065
£54,469,065
Banking Department.
Proprietors' Government
Capital . £14,553,000 Securities £13,098,974
Rest . . 3,414,436 Other Securities 32,092,407
Public Deposits 17,185,436 Notes . . 25,426,140
Other Deposits 46,544,175 Gold and Silver
Seven-day and Coin . . 1,091,344
other Bills 11,818
£71,708,865
£71,708,865
January, 8, 1914.
J. G. NAIRNE,
Chief Cashier.
The banking department of the Bank ot Eng-
land, though as entirely separated from the
note circulation as if it were under different
management, yet is most intimately connected
with it in one sense, for the amount of notes
held in the banking department represents the
available reserve of gold. The Issue Depart-
ment is concerned with the note issue, which
after 1844 was separated from the other busi-
ness of the Bank, and rigidly controlled so far
as the amount of notes allowed to be issued is
limited by the influx and outflow of bullion.
The Bank of England, while allowed to issue
part of its note circulation against securities,
either government or of an analogous descrip-
tion of a fixed character (£14,000,000, 1844 ;
£18,450,000, 1914), was compelled to hold
bullion, a fourth of the whole permissibly in
silver, against the remainder. The circulation
of notes was thus automatically linked to the
supply of bullion, and as the Bank has
ceased to hold silver bullion since 1853, to
1 Including Exchequer, Savings Banks, Commis-
sioners of National Debt, and Dividend Accounts.
the supply of gold bullion brought to it. "The
action of the public (said Sir R. Peel, 6th May
1844) will regulate the amount of that portion
of the note circulation which is issued upon
bullion." This arrangement has since been
carried out. The limit to the note circulation
of the Bank of England is thus the amount of
bullion it may hold. Three times since 1844
— in 1847, 1857, and 1866 — circumstances have
compelled a relaxation of the Bank Act, but in
1847 and in 1866 the note circulation did not
exceed the ordinary legal limit allowed. In
1857 an addition of £2,000,000 was made to
the " other securities" held in the issue Depart-
ment by authority of a letter addressed by the
First Lord of the Treasury (Lord Palmerston)
and the Chancellor of the Exchequer (Sir G. C.
Lewis) to the Governors of the Bank, dated
12th November 1857. Under the relaxation
of the act thus permitted, the note circulation
exceeded the statutory limit by £928,000 on
the 20th November 1857 {Proceedings of the
Select Committee on the Bank Acts, House of
Commons, 1858, p. xli). In 1847 and 1866,
though permission was given, the letter of the
act was not actually infringed. To continue the
history of the act of 1844 : the existing issuing
banks in England and Wales were allowed to
continue their issues, under conditions intended
to bring about the gradual extinction of their
note circulations, no security whatever being
required to be held against their issues. To the
note-issuing banks in Scotland and Ireland more
favourable terms were allowed, but under con-
dition that for every £1 in paper issued beyond
the limit fixed by the acts of 1845, £1 in gold
should be held, not as security, but as repre-
senting the addition to the currency circulating
in the country.
(2) In France an entirely different system
prevails. A limit is fixed to the note circula-
tion of the Bank of France (£96,000,000, raised
to £112,000,000, 1871 ; to £128,000,000,
1872 ; to £232,000,000, 1909 ; but provided
these limits are not exceeded, the bank is not
compelled by law to hold any special proportion
of bullion whatever. The bullion held is very
large in amount, thus it was, 2nd Jan. 1914,
£140,307,000 gold, £25,543,000 silver; the
average note circulation (1913), £226,600,000.
(3) In Germany a modification, with very
essential differences, of Peel's act is in force.
The German Bank Act of 1875 allows an amount
of issue against securities (1875, £12,500,000 ;
1909, £27,500,000 and £37,500,000 at the end
of each quarter). Against the remainder, cash is
held, thus: "current German coin, Reichskas-
senscheine (legal tender notes of the empire),
notes of other German banks, and gold bars
and foreign gold coin calculated at the rate of
1392 marks (£69 : 12s.) for a pound weight
(German) of gold." The Imperial Bank must
"have in its coffers at least one-third of the
BANK NOTE
lis
amount of notes in circulation, in German cur-
rency, as defined above. "The rest of the
amount of notes in circulation must be repre-
sented by discounted bills, due at latest in three
months, and for which generally three, but at
least two persons known to be solvent are re-
sponsible." Should the note issue exceed the
limits assigned, a tax of 5 per cent on the ex-
cess issue is charged (see "The German Bank
Act of 1875," R. H. Inglis Palgrave, Journal
of the Institute of Bankers, vol. vii. 1886). The
note circulation exceeded the statutory limit
on 19 occasions in the year 1913.
(4) In the United States the note circulation
of the national banks, which provides a large
part of the circulating medium of the country,
is arranged on different principles from those
existing in any of the countries previously men-
tioned. For a fuller description of this system
see BA.NK Note (United States of America),
By way of comparison with the arrangements
respecting bank note circulation in other coun-
tries it is sufficient to state here that bonds of
the United States are required to be deposited
against the note circulation which was not
originally allowed to exceed 90 per cent of the
full value of the bonds, but was permitted up
to the amount of the capital stock of the banks.
The proportion to the bonds was afterwards
diminished to 80 per cent, raised to 90 per cent
1898 and to i)ar value of the bonds March 14,
1900. The redemption of all the notes pre-
sented at the place of business of the bank is
required by law during business hours, in
"lawful money of the United States," towards
which a reserve of 5 per cent in lawful money
on the extent of the note circulation is required
. to be constantly kept on de])osit with the
treasurer of the United States. The safeguards
provided (1) by the government bonds being
10 per cent in excess of the circulation (par in
1900, see above) ; — (2) that the circulation is
limited to 90 per cent of the paid-up capital ; —
(3) that a reserve of 5 per cent on the circula-
tion in lawful money should always be forth-
coming,— furnished the United States with
a system of note circulation which for many
years after the establishment of the national
banks "was its most important feature : " (Re-
port of the Comptroller of the Currency, 1888).
Its decrease was partly attributable to the heavy
taxation imposed on it, partly to the diminishing
return obtainable from the bonds on which it was
founded, partly also to the movement of business
which economises circulation as banking facilities
extend. It has increased greatly, 1913 (see Ban k
Note, United States of America).
(5) In Sweden the notes of the " Enskilda
Banks" are protected by provisions which,
while permitting the use of securities more in
correspondence with those allowed by the Bank
If Germany, provide, practically, for the redemp-
lon of the circulation in an effectual manner.
VOL. I.
The instances given are examples of the dif-
ferent methods on which circulation may be
based. In the case of the Bank of England it
is assumed that a certain proportion of the total
issue cannot be presented for payment in specie ;
fixed securities are held against that part, while
bullion has to be held against the remainder.
The two departments, note circulation and bank-
ing, are entirely separate from each other. The
Bank of France is allowed gi-eater freedom
within the limit as to maximum issue prescribed
by the law. The Bank of Germany, with a
fixed proportion allowed to be issued against
securities, is compelled to hold good commercial
bills against the remainder, these securities
"turning themselves into money," in business
phrase, at fixed and not remote dates. The
national banks of the United States possess a
circulation as rigidly secured as that of the Bank
of England against bonds of the Government,
but applicable, through the working of local
banks, to the wants of each district. A maxi-
mum limit is fixed.
There are two schools of opinion with respect
to a bank note issue. The first, headed by
A. Smith and Ricaiido, holds "that im-
mediate convertibility into coin is all that is
loquisite to prevent the excessive issue of paper "
(speech of Sir R. Peel, Gth May 1844); the
second, led by Peel himself, assumes that unloss
issuers of notes "vigilantly observe the causes
which influence the influx or efilux of coin, and
regulate their issues of paper accordingly, there
is danger tliat the value of the paper will not
correspond with the value of coin." Hence the
principle of Peel's measure "was to make the
currency, consisting of a certain proportion ol
paper and gold, fluctuate precisely as if the
currency were entirely metallic" (speech 13th
June 1844, of Mr. Goulburn, who was chan-
cellor of the exchequer in the administration of
Sir R. Peel). It will be observed that neither
in the case of the Bank of France nor of the
Bank of Germany nor of the national banks of
the United States is this rule enjoined. It is
enforced as to the extra note issue of the Scotch
and Irish banks (Bank Acts of 1844-45), but
in their case the coin compulsorily held is not
security for the circulation (see Bullion Com-
mittee, Report of ; Circulating Medium ;
Convertibility of Bank Notes ; Currency
Doctrine).
BANK NOTE (United States of America).
— In the United States the note circulation of
the national banks, which alone are authorised
to issue bank notes, is regulated in the main by
the provisions of the act of 1863, bearing the
significant title, " An Act to provide a national
ourrency, secured by a pledge of United States
bonds, and to provide for the circulation and
redemption thereof." All notes issued had to
be secured by United States bonds deposited in
the treasury, the notes limited to 90 per cent
I
114
BANKRUPTCY IN SCOTLAND
of the market value, and the same proportion
of the par value, of the bonds (altered 1900
to the par value), no bank having an issue
exceeding its capital. The aggregate circulation
of all the banks was also limited originally to
$300,000,000 (£60,000,000); and in 187*0 this
limit was raised to $354, 000, 000 (£70, 800, 000);
but all limit upon the aggregate was removed
in 1875, by the act for resuming specie pay-
ments. The notes must be redeemed by the
issuing bank in "lawful money" (specie or
legal tender notes) upon presentation, and since
1874 are also redeemable at the treasury, every
bank being required to maintain a reserve of
lawful money, amounting to five per cent of
its circulation, in the hands of the treasurer of
the United States. The notes are not a legal
tender between individuals, but are by law
received and paid out by the government in all
payments except for custom duties and interest
on the public debt ; and every national bank is
required to receive in payments the notes of any
other. The ample margin of security afi"orded
by the deposit of bonds, the systematic re-
demption at the treasury, and the ability to use
any note in any part of the union where a
national bank is to be found, have given the
notes complete credit and an entirely unimpeded
circulation, which made the system for many
years " important to the banks, still more im-
portant to the public." At the close of 1873
the bank circulation stood at $341,320,256
(£68,264,051), nearly reaching the maximum
allowed by law. It fell, however, during the
long commercial depression which followed, and
of late years has declined rapidly, owing to the
diminished return now obtained from an invest-
ment in bonds, and to the tax of one per cent
on circulation imposed by the national govern-
ment. At the resumption of specie payments
in 1879, after the limit to the aggregate circula-
tion had been removed, the bank notes out-
standing were $303,500,000 (£60,700,000) ;
January 1885 they had fallen to $280,000,000
(£56,000,000) ; and in May 1890 to
$125,900,000 (£25,180,000). c. f. d.
Since that period the position of the national
banks has greatly improved. The circulation
of the 7514 banks carrying on business, 31st
Oct. 1913, was $758,900,000 (£151,780,000).
The Bank Act of 1913, however, makes drastic
changes. (See Banks, National.)
BANKRUPTCY IN SCOTLAND. In early
days the insolvent debtor in Scotland was
treated practically as a criminal, and was sub-
ject to the penalties of rebellion against a com-
mand from the crown enjoining him to pay his
creditor. From the Roman law there was, how-
ever, borrowed, a process of relief — the cessio
honorum — under which he gave up all his
property and thus secured liberation and im-
munity from imprisonment on the ground of
his debt, but was not discharged. Consequently
it was precarious for him to try to resume busi-
ness, and the tendency was for him to conceal
some property before creditors could take steps
against him. In 1621 an act of the Scots
parliament was passed directed against gratui-
tous alienations to "conjunct or confident per-
sons" on the eve of insolvency. In 1696
another act checked the giving one creditor any
unjust preference over others ; and it did so by
providing, in substance, that where a person
became notoriously insolvent or "notour bank-
rupt " — the evidence of which was to be that
proceedings had been taken against him for
debt, and that in consequence he had been im-
prisoned (or, afterwards, something legally
equivalent), or had absconded or resisted arrest
or retired into sanctuary — all unjust preferences
granted by him within sixty days prior to the
notour bankruptcy were to be annulled. It is
here to be observed that the effect of the notour
"bankruptcy " was not to bring about a distri-
bution of his estate ; it only limited his status ;
he might still continue in business, but thence-
forth— and indeed at common law from the
moment of actual insolvency — he must act as
steward (or rather negotiorum gestor) for the
whole of Ris creditors and he must use his best
endeavour to treat them equally. But the
creditors might be impatient ; they might press
their individual claims, and all the more so since
the law still allowed certain privileges to the
creditor first in the race for " diligence " or exe-
cution ; whence too often ensued the ruin of the
debtor, to the actual disadvantage of the general
body of creditors. In all this every creditor
fought for his own hand ; the debtor must, so
far as he could, treat them all equally ; but the
law did not provide any means of putting all
the creditors on an equal footing until 1772,
when the first Sequestration Act was passed, to
endure experimentally for ten years. Seques-
tration at common law (French mission en
sequestre) was a well-known proceeding in Scot-
land, analogous to appointing a receiver on an
estate in chancery ; a judicial factor was ap-
pointed by the Court of Session who managed
an estate for the benefit of those interested
until it was judicially ascertained who were the
parties entitled, or until the occasion for taking
the estate out of the hands of the administrator
had passed over. On this analogy, the person-
alty (but curiously not the realty, for it was
abhorrent to the ideas of the conveyancers of
the time that realty should pass without
feudal conveyances) became vested either in a
judicial factor proposed by the creditors, or else,
alternatively, in a trustee to be appointed by
the creditors as if under a voluntary settlement.
The judicial factor distributed the estate under
the direction of the court ; the trustee did so
cxtra-judicially. In 1783 the experiment was
felt, especially on the trustee system, to have
been a success ; a new experimental act was
BANKRUPTCY IN SCOTLAND
115
passed in which Sequestiiatiox was confined to
the estates of merchants and manufacturers, the
whole estate, real as well as personal, became
subject to division, the trustee reported to and
acted under the control of the Court of Session,
and those creditors who had acquired preferences
by taking proceedings against the bankrupt
within a certain time before the sequestration
were put on an equal footing. By successive
statutes this act was renewed with improve-
ments ; a permanent act was passed in 1839,
which introduced the sequestration of the
estates of deceased debtors ; and the present
leading statute is one of the year 1856(19&20
Vict. c. 79) in which the same guiding principles
are applied in detail, with these outstanding
alterations, that sequestration is not confined
to persons in trade, and that the procedure may
be (and in practice is) carried through before
the sheriff courts ; while the Court of Session
retains control of the whole bankruptcy adminis-
tration after sequestration has been granted,
through an officer of court called the Account-
ant in Bankruptcy, — now the Accountant of
Court, — whose diligent supervision of the reports
and accounts of trustees has been the key-stone
of the Scottish system.
Sequestration proceedings are initiated either
by a petition by the insolvent himself with con-
currence of creditors to a certain amount, or by
creditors to the same amount alleging notour
bankruptcy and Scottish jurisdiction. On
special application, or for special reasons, the
court may appoint an interim judicial factor,
or may in any case seal books, close premises,
and keep the key until a trustee is elected and
confirmed. Sequestration may be opposed by
the debtor himself, or by any creditor who has
a special interest ; and it may be recalled on
producing before the Court of Session a private
deed of arrangement agreed to by a majority of
the creditors in number and four-fifths in value
(rare in practice) or by showing the Court of
Session within three months that the bank-
niptcy procedure ought to be carried through
in England or Ireland.
Suppose the court grants sequestration ; a
meeting of creditors is appointed, six to twelve
days ahead, which is advertised in the Udinburgh
Gazette. At that meeting the creditors elect a
trustee (or trustees in succession), who must
not be the bankrupt or any relative or confi-
dential friend of his, or any creature of such,
or one whose interests are opposed to those of
the general body of creditors ; otherwise, the
court will not interfere with the creditors'
choice. The sheriff presides at this meeting if
two creditors call upon him to attend. Voting
power in the election is according to amount of
unsecured debt. The sheriff decides within four
days whether any candidate for trusteeship is
ineligible, and confirms the appointment of the
trustee on his finding security either for his
whole dealings or for a sum limited by the
creditors at their first meeting. The trustee at
once reports himself to the accountant in bank-
ruptcy. The trustee is assisted or supervised
by three "commissioners " — a committee of in-
spection chosen at the first meeting of creditors ;
they concur with him in compromises and refer-
ences to arbitration, they declare the dividends,
and they may report independently to the
creditors.
The trustee cannot resign, but may be re-
moved without cause assigned by a majority of
creditors. His first duty is to make up an in-
ventory and valuation of the whole estate and
to send that to the accountant. The bankrupt is
bound to afford him every assistance in prepar-
ing this ; if he does not, or if he obstructs the
administration by refusing to execute any
necessary deed, he may be imprisoned ; but he
is paid for his assistance. After confirmation
the trustee applies to the sheriff to fix a day for
public e:..amination of the bankrupt ; at that
examination the bankrupt may, if need be, be
committed to prison till he shall make full and
satisfactory answers to the questions put ; and
his relatives and friends (wife, etc.) may be
brought before the sheriff and examined as to
disposal of property.
The bankrupt may be discharged (1) on
acceptance of a composition by his creditors (four-
fifths in value on a first offer, or nine-tenths in
value on a subsequent oficr)at their first or second
meeting being reported to the court ; or (2)
without composition if the creditors are unani-
mous, or if a majority in number and four-fifths
in value concur after six months or a majority
in number and value after eighteen months or
without any consent after two years ; but in no
case can he get discharge without showmg the
court, either that he has paid or secured to the
creditors a dividend of 5s. in the £, or that his
not having done so was owing to circumstances
for which he could not justly be held respons-
ible ; and discharge may be withheld for miscon-
duct on his part.
Cessio bonorum has recently (1880 and 1881)
been so far assimilated to sequestration that it
is now in substance merely a cheaper form of
procedure for small estates. The trustee is
appointed by the sheriff ; and there are no com-
missioners, but proof of debts takes place, and
discharge is gi'anted or withheld as in seques-
tration.
The principal changes in the law since 1856
have been directed towards enabling discharge
to be withheld for misconduct (1860), towards
extending the preference of clerks and workmen
(1875), towards the abolition of imprisonment
for debt (1880 and 1882), towards the amend-
ment of procedure in cessio (1880), and grant-
ing discharge in cessio (1881), towards dealing
with fraudulent debtors and those who fail to
keep accounts (1881), and towards rendering
116
BANKRUPTCY LAW AND ADMINISTEATION (ENGLAND)
undischarged bankrupts incapable of holding
certain offices of trust and bringing them under
the criminal law if they take credit for more
than £20 without disclosing their condition
(1884).
With regard to liquidation by private arrange-
ment : the method is — (1) Conveyance by debtor
to trustee ("trust-deed for behoof of creditors") ;
(2) mutual contract by all the creditors to act
in common according to definite scheme (" deed
of accession "). The main point of weakness in
this is the inadequacT- of means to keep the
trustee up to his duty ; the contract should
provide machinery for this. If this be done the
method is regarded with favour. Extrajudicial
composition contracts between insolvent debtors
and their creditors are also not uncommon in
practice.
[Bell's Commentaries on the Law of Scotland,
1870. — Mr. Henry Goudy's Law of Bankruptcy
in Scotland, 1886.] A. D.
BANKRUPTCY LAW AND ADMINIS-
TRATION (England). A good bankruptcy
law must aim at the attainment of three dis-
tinct and sometimes conflicting objects ; first,
the speedy and economical distribution of
the debtor's property amongst his creditors ;
secondly, the release of the debtor from his load
of debt, so far as this may be justified by his
conduct ; and thirdly, the punishment of fraud,
reckless trading, and personal extravagance.
The policy of the bankruptcy laws has varied
considerably. Sometimes one, sometimes an-
other of the above-mentioned objects has been
the guiding principle of the enactment, and
various machineries have been devised for giving
effect to them. During the present century
some forty-six acts relating to bankruptcy have
been passed. Roughly, their eff"ect may be de-
scribed as follows : Before 1831 the full control
of the administration of bankrupt estates was
in the hands of the creditors, the result being
wholesale mismanagement and general dissatis-
faction. In 1831 an act, known as Lord
Brougham's Act, introduced a system of official
administration. Official assignees were ap-
pointed to the London Bankruptcy Court, but
not in the country districts. After some years'
trial of the system of official assignees in London,
and after a favourable report from a royal com-
mission, the system was extended in 1842 to
the country generally. The official assignees
were again favourably reported on by Select
Committees in 1847 and 1849. In 1861 opin-
ion had begun to turn against them, and an
act was passed considerably limiting their func-
tions. In 1864 a select committee, on what
seems inconclusive evidence, wholly condemned
the system of official assignees. These officers
were abolished by the act of 1869, and once
more a system of voluntaryism was inaugurated,
with the wonted result. Creditors were supine,
and estates were wrecked and plundered by the
rapacity of the lower class of trustees. Everj
facility was off'ered to fraudulent debtors, and
they were not slow to avail themselves of tlieir
opportunities. A few years' trial of the act
resulted in its general condemnation, but it was
not till 1883 that any legislative change was
effected. In that year Mr. Chamberlain, then
president of the Board of Trade, succeeded in
carrying the act which introduced the system
now in operation. The Bankruptcy Act 1883
(46 & 47 Vict. c. 52), which is amended in
some details by the act of 1890 (53 & 54 Vict.
c. 71), makes a fresh departure in banlcruptcy
legislation. In the first place it severs judicial
from administrative functions. Judicial func-
tions are necessarily left to the courts, but
administrative supervision and control are in-
trusted to an executive department of the state,
namely the Board of Trade. Creditors still
retain the general control over the debtor's
estate, but his conduct is subject to an inde-
pendent investigation with a view to his punish-
ment if his insolvency has been caused by
culpable recklessness or fraud. Trustees are
subjected to the supervision of the Board of
Trade, who require security from them, audit
their accounts, and exercise a general superin-
tendence over their dealings. The act of 1869
proceeded on the theory that the debtor and his
creditors were the only parties concerned in a
bankruptcy. The present measure recognises
the principle that bankruptcy is a matter of
public concern affecting the community at large.
Speaking broadly, the act establishes one en-
trance into, and two exits from, the state of
statutory insolvency. The receiving order, as
it is called, is the entrance gate. By the re-
ceiving order the debtor's property is put under
the charge of an official of the Board of Trade,
until the creditors, with the leave of the court,
have determined whether the debtor shall be
allowed to terminate his insolvency by a com-
position or scheme of arrangement, or whether
he shall be adjudicated a bankrupt and his
affairs be wound up in bankruptcy proper. In
either case there is a turnstile through which
the debtor must pass, namely, the public ex-
amination at which his conduct and financial
dealings are investigated in open court.
The courts which exercise bankruptcy juris-
diction are the High Court and the county
courts. For bankruptcy purposes England and
Wales have been mapped out into 135 districts.
The bankruptcy business of the London district
is allocated to the High Com't, while in the
country districts the county courts are the
courts of original jurisdiction. To secure uni-
formity of practice, one of the High Court
judges is specially appointed by the lord chan-
cellor to take bankruptcy business, and it is
provided that he shall always be a member
of the divisional court to which bankruptcy
appeals from the county courts are brought.
BANKRUPTCY LAW AND ADMINISTRATION (ENGLAND)
in
The bankruptcy department of the Board of
Trade consists first of local officers called official
receivers, and secondly of a central staff under
the inspector - general, who audit trustees'
accounts, and supervise the conduct and deal-
ings both of trustees and of the local officers.
Each bankruptcy district has its official receiver,
but the same officer may be appointed official
receiver for two -or more districts, or on the
other hand, two or more receivers may be ap-
pointed to one district according to local re-
quirements. An Official Receiver, besides
being an officer of the Board of Trade, is made an
officer of the court, having jurisdiction over
his district. The object of the latter provi-
sion is to give him free access to court docu-
ments, and to enable him to consult the judge
without the formality of a motion in open
court. His reports are made prima fade evi-
dence of the matters contained in them. His
duties are declared by the act to "have rela-
tion both to the conduct of the debtor and the
administration of his estate" (§ 68). As re-
gards the debtor, it is the duty of the official
receiver to investigate his conduct and to report
to the court thereon, to take such part as the
Board of Trade may dii-ect in his public examin-
ation, and also to assist when requisite in his
prosecution. As regards the estate, it is the
official receiver's duty to act as interim receiver
pending the appointment of a trustee, and as
manager when a special manager is not ap-
pointed ; to summon and preside at the Jirst
meeting of the creditors, to issue proxies, to
report to the creditors on any proposal by the
debtor for a scheme or composition, to advertise
the proceedings, and to act as trustee during
any vacancy in that office. In cases where tiie
estate does not exceed £300, the official receiver
becomes the trustee unless the creditors expressly
supersede him. In short, this office is made
the keystone of the present system, and the
success or failure of the act must mainly depend
on the efficiency or non-efficiency of the official
receivers.
Bankruptcy proceedings may be commenced
either by the debtor himself or by a creditor
whose debt amounts at least to £50. If the
petition is presented by a creditor it must be
founded on one of the overt acts of insolvency,
called acts of bankruptcy, which are specified in
§ 4. To prevent an influx of paupers a £5
stamp is charged on bankruptcy petitions, and
a deposit of £5 is also required to cover prelim-
inary expenses. The first result of a bankruptcy
petition, properly substantiated, is the making
of a receiving order by the court. This order
does not divest the debtor of his property, but
puts the official receiver in charge of his pro-
perty, and stays proceedings by unsecured
creditors. As soon as the receiving order is
made the debtor is bound to give the official
receiver full information as to his affairs and
failure, and to make out a formal statement of
his assets and liabilities for submission to the
first meeting of creditors. The first meeting
should be held within fourteen days of the
receiving order. Proxies must be on an official
form. A creditor can only give a general proxy
to a person in his regular employment or hold-
ing a general power of attorney from him, or to
the official receiver. At the first meeting the
debtor may propose to his creditors that his
insolvency should be terminated by a composi-
tion or scheme, thereby avoiding the disabilities
of bankruptcy proper (§ 3 of act of 1890). If
this proposal be not assented to, the debtor
must be adjudged bankrupt. If it be assented
to, the assent is provisional. The debtor must
still go through his public examination. At
the meeting the prowosal for a composition or
scheme must be accepted by a majority in
number representing three-fourths in value of
aU the creditors who have proved. When the
public examination is concluded the matter
then goes before the court for its approval.
The court, before sanctioning the composition
or scheme, hears the report of the official re-
ceiver, and has to consider whether it is calcu-
lated to benefit the general body of creditors,
and also whether the debtor's conduct has been
such as to justify his escape from the conse-
quences of bankruptcy. When the composition
or scheme is approved by the court it is binding
on any dissentient minority of creditors, the
receiving order is rescinded, and the debtor is
remitted to the full control over his affairs. If,
however, the provisions of the composition are
not carried out, the debtor is still liable to be
adjudged bankrupt. Section 23 of the act
further provides that a debtor who has been
adjudged bankrupt may propose a composition
or scheme under the like terms and conditions
as before bankruptcy. If the composition or
scheme is sanctioned by the court, the adjudica-
tion of bankruptcy is annulled.
When it has been decided that a debtor's
estate shall be administered in bankruptcy
proper, the first business of the creditors is to
elect a trustee. The trustee cannot, however, act
till he has received the certificate of the Board
of Trade. Before he gets his certificate he must
give security for the due performance of his
duties to the Board ; and the Board have
further the right to object to his appointment
if he is an unfit person, or if his interests appear
to clash with the interests of the creditors
generally. In the interim the official receiver
acts as trustee. As soon as a debtor is adjudged
bankrupt the whole of his property vests in his
trustee, and any further property which he may
acquire before he gets his discharge also vests
in his trustee. This rule does not apply to the
debtor's personal earnings, though, if he has
anything in the nature of a fixed income, the
court may make an order charging a portion of
118
BANKRUPTCY LAW— BANVIN
it for a specified time. It is to be noted further
that the trustee's title relates back to the earliest
act of bankruptcy committed by the debtor
within three months of the petition, and ex-
press provision is made for avoiding fraudulent
settlements and conveyances made by the debtor
on the eve of his bankruptcy (§§ 47, 48).
The main duty of the trustee is to realise the
debtor's estate with all convenient speed, and
to distribute it rateably among the creditors.
The bankruptcy laws, however, recognise certain
exceptions to the rule of equal distribution.
Priority is given within certain limits to rates
and taxes and to claims for wages or salary by
workmen, servants, and clerks (§§ 40, 51 &
62 Vict. c. 62). On the other hand, certain
debts are postponed ; for instance, a partner is
not allowed to prove against his co-partner's
estate in competition with the creditors of his
firm. The landlord's right to distrain for six
months' rent is preserved. The rights of credi-
tors holding security are also saved. A secured
creditor may either give up his security and
prove for his whole debt, or, subject to the
trustee's right to redeem under certain condi-
tions, retain his security and prove for the
balance of his claim. The trustee, as a rule,
exercises his functions under the guidance of a
committee of inspection appointed by the credi-
tors, but if no such committee be appointed,
their duties are performed by the Board of
Trade (§ 22).
As soon as a bankrupt's public examination
is concluded he may apply for his discharge.
Notice of this application must be given by the
official receiver to every creditor who has proved.
At the hearing the court receives from the
official receiver a report on the debtor's conduct
and the causes of his failure. The official re-
ceiver, the trustee, and any creditor who appears
are entitled to be heard on the matter. If it
appears that the debtor has been guilty of any
conduct amounting to a misdemeanour under
Part II. of the Debtor's Act 1869, the court
must ordinarily refuse the discharge. The
debtor then can only escape from banki-uptcy
and its consequent civil disqualifications (§§
32-34) by payment of his debts in full with
costs and interest (§ 36). If the debtor has
not committed a misdemeanour, but has been
guilty of minor misconduct, the court has a dis-
cretion either to refuse the discharge, or to sus-
pend it or make it conditional. A common
condition is to order judgment for a specified
sum to be entered up against the debtor. This
judgment can only be enforced by leave of the
court. Section 8 of the act of 1890 specifies
twelve classes of facts involving minor miscon-
duct which prevent the court from granting
an unconditional and immediate discharge ; for
instance, not keeping proper business boot?
(see Book-keeping), trading with knowledge
of insolvency, rash speculation, previous bank-
ruptcy, fraud, or fraudulent breach of trust, oi
not being able to pay 10s. in the £. Under
previous acts it was found that an undischarged
bankrupt frequently began to trade again and
to incur fresh liabilities with no means of meeting
them. To meet this evil § 31 of the act of
1890 makes it a criminal oftence for an undis-
charged bankrupt to obtain credit to the extent
of £20 or upwards from any person without
informing such person that he is an undis-
charged bankrupt. If the debtor's financial
conduct has been blameless he is entitled to an
unconditional discharge. The order of dis-
charge releases the debtor from all debts and
liabilities provable in the bankruptcy, with the
exception of certain crown debts and debts in-
curred through his personal fraud or fraudulent
breach of trust, and claims arising out of seduc-
tion or divorce court proceedings.
Such, briefly, is the general system of bank-
ruptcy established by the act of 1883. The
act of 1913 embodies suggestions of the Bank-
ruptcy Law Amendment Committee of 1906.
Thus, the Summary Jurisdiction Act can now
be applied to offenders under the Debtors Acts ;
e.g. failure to make full discovery of affairs,
concealment of debt, or mutilation of books are
punishable after summary trial before a Stipen-
diary Magistrate, or Justices of the Peace, the
onus of proving innocent intent falling on the
debtor, whereas previously, conviction could
only be by trial before a jury who had to bo
convinced that such offences were committed
with intent to defraud. Rash speculation other
than in the course of the debtor's business,
and unjustifiable extravagance, are included as
offences against the acts, while failure to keep
proper books for two years previous to the in-
solvency is a misdemeanour if the debtor has
previously been made bankrupt or effected a
deed of arrangement. Other clauses reduce the
amount of credit obtainable by an undischarged
bankrupt considerably, and penalise him for
trading under a name unknown to his credi-
tors, and give facilities for obtaining an order
against an alien living abroad who has carried
on business here either personally or through a
partner or agent. Under this act a married
woman may be made bankrupt even if not trad-
ing separately from her husband ; the latter's
claims for monies lent her for business purposes
are postponed to those of other creditors.
The administrative working of the Bank-
ruptcy Act is the subject of an annual report by
the Board of Trade to both houses of parliament.
For the law on the subject, see the treatises
of Baldwin, Chalmers and Hough, Robson,
Vaughan Williams, and Yate Lee. M. D. c.
BANVIN, Droit de. An oppressive seign-
orial right in France under the old regime. By
it a certain interval, generally a month or forty
days, was fixed after the ^vintage during which
the lord's wine alone could be sold, and a
BAKBARY COMPANY— BARBON
119
peasant had to pay large sums for leave to sell
his wine before the expiration of the period.
[De Tocqueville, France before the Revolution,
note Ixxvii.] R. L.
BARBARY COMPANY, The. See Turkey
Company.
BARBON, Nicholas, M.D. (1640 ?-1698),
probably the son of Praisegod Barebone, was
bom in London, studied medicine at Leyden,
graduated M.D. at Utrecht in 1661, and was
admitted an honorary fellow of the College of
Physicians in December 1664. After the great
fire of 1666 he was instrumental in establishing
the first fire insurance office in London (1681) ;
he was one of the most considerable re-builders
of the city. He was M.P. for Bramber in 1690
and 1695, founded a land bank, which was
united with that of Briscoe in 1696 and is re-
ported to have been successful, and was among
the projectors of the short-lived National Land
Bank. He died in 1 698, having appointed John
AsGiLL, the economist, to be the executor of his
will, and directed that none of his debts should
be paid.
Barbon's works were numerous and deserve
some extended notice, as his views were, though
with some failings which we shall have to notice,
remarkably in advance of his time, and even
approaching to modern views on value, interest,
rent, and foreign trade. He published in 1684 A
Letter to a Gentleman in the Country giving an
Account of the Two Insurance-Offices ; the Fire-
Offlce and Friendly Society, setting forth the
advantages of his own institution and the disad-
vantages of its rival. In 16S5 appeared (anony-
mously) his Apology for the Builder; or a
Discourse sho^ving the Cause and Effects of the
Increase of Building. He opposed the opinion
then prevalent that London was growing too large,
and that the building new houses there drained the
inhabitants from the country. He discussed ia
this pamphlet the theory of " rent." Its origin he
explains in the following passage : " When man-
kind is civilised, instructed with arts, and under
good government . . . the rich are fed, clothed,
and housed by the labours of other men, but the
poor by their own, and the goods made by this
labour are the reuts of the rich men's land (for to
be well fed, well clothed, and well lodged without
labour either of body or nund, is the true definition
of a rich man)." (Reprinted in A Select Collection
of Scarce and Valuable Econoviical Miscellaneous
Tracts. Reprinted for Lord Overstone, 1859, pp.
1-26 of that volume ; see M'Culloch, Literature,
pp. 350, 351). In 1690 Barbon published A Dis-
course of Trade. By N.B., M.D., London. Printed
by Tho. Milhourn,for the Author, 1690. In this
treatise (92 pp. 12°), which hitherto has been
scarcely noticed by those who have written on the
history of economics, he displays as much in-
jenuity as any one of his greatest contemporaries,
[n the preface he attributes the importance which
ascribed to trade to the invention of gun-
)wder, foreign trade being considered necessary
»n account of its furnishing the supplies re-
juired by the country. But he thinks that trade
has been considered from a too narrow point of
view, especially by merchants like Thos. MuN,
who " apply their thoughts to particular parts of
trade, wherein they are chietiy concerned in
interest." The first chapter treats ' ' of trade and
the stock, or wares of trade." Trade, according
to him (Barbon), consists in " the making and
selling of goods for another ; " its parts are handy-
craft trade and merchandising. Its aim is to make
a bargain ; in every bargain the wares to be sold,
their quantity and quality, their value or price,
the money or credit by which they are bought,
and " the interest that relates to the time of per-
forming the bargain " are to be considered. " The
Stock and Wares of all Trade are the Animals,
Vegitables, and Minerals of the whole Universe,
whatsoever the Land or Sea produceth " (p. 3).
Tliey are either natural or artificial wares. Both
are called staple commodities of the countries
where they abound, either native or foreign. The
native staple of each country consists of its actual
and unexhausted riches ; this shows the error of
Mr. Mun, who thinks that nations can get rich by
parsimony like individuals (p. 6). This native
staple is the basis of foreign trade, which is an
exchange of commodities (p. 7). Foreign
staples, even if carried on by monopoly, are un-
certain wealth ; this he illustrates by the changes
brought about by the possession of the East India
trade. The second chapter deals with "the Quantity
and Quality of Wares, " The third chapter, " of the
Value and Price of Wares " is one of the most
remarkable in this work. " The Value of all Wares
arises from their Use ; Things of no Use have no
Value, as the English Phrase is, they are good for
nothing." Thus he approached more closely
than any one of his contemporaries to modern views
on value and price. " The Price of Wares," he
says, " is the present Value ; And ariseth by Com-
puting the occasions or use for them with the
Quantity to serve that Occasion ; for the Value of
things depending on the use of them, the Over-plus
of Those Wares, which are more than can be used,
become worth nothing ; So that Plenty in respect
of the occasion, makes things cheap, and Scarcity,
dear" (p. IS), These elements being variable as
well as the Wants of the Mind, and most things
being useful through supplying the latter, "there is
no fixt Price or Value of anything for the Wares of
Trade" (p. 18). But, "There are two ways by
which the value of things are a little guessed at ;
by the Price of the Merchant, and the Price of the
Artificer ; the Price that the Merchant sets upon
his Wares is by reckoning Piime Cost, Charges, and
Interest, the Artificer's Price includes the Cost of
the Materials and the time of working them. The
Price of the Artificer is according to the Value of
the Art" and his skill (p. 19). "But the
Market is the best Judge of Value ; for by the
Concourse of Buyers and Sellers, the Quantity of
Wares, and the Occasion for them, are best known"
(p. 20). The next chapter, "of Money, Credit,
and Interest," begins with the following definition :
" Mony is a Value made by a Law ; and the DiflFer-
ence of its Value is known by the Stamp and Size
of the Piece " (p. 20). It has two principal uses :
" It is the Measure of Value, By which the Value of
all other things are reckoned," and " It is a Change
120
BARBON
or Pawm for the Value of all other Things. For
both reasons, "the value of mony must be made
certain by Law." Having " its sole Value from the
Law," its Metal, whether Brass (like in Spain),
or Copper (Sweden), or Tin (English farthings), is
not material (p. 21), " 6d. in Farthings will buy
the same thing as 6d. in Silver." Foreign coins,
upon which their country's law has no force, go
therefore by weight and are of no certain value
(p. 22). The chief advantage of gold and silver
money is to prevent counterfeiting, besides its
other uses for plate, etc., and its easy exportation,
which the example of Spain shows it is impossible
to prohibit (p. 23). It has no intrinsic value,
but two values ; one certain, because of the law,
another variable like the value of gold and silver
or other metals (p. 25). It is only time and
place gives a difference to the value of all things,
" Nothing in itself hath a certain Value." Credit
is " a Value raised by Opinion" (p. 27) ; Barbon
distinguishes two sorts of credit, the one grounded
upon the ability of the buyer, a short credit
mostly ; the other upon his honesty, a long one.
He defends the necessity of erecting a public
bank in London (pp. 28-31). Interest is, accord-
ing to him, " the Rent of Stock, and is the same as
the Rent of Land : the First is the Rent of the
Wrought or Artificial Stock ; the Latter, of the
Unwrought or Natural Stock" (p. 31). Barbon
notes that " Interest is commonly reckoned for
Mony, . . . but this is a mistake : for the Interest
is paid for Stock. ... No Man takes up Mony at
Interest to lay it by him, and lose the Interest by
it " (pp. 31, 32). The clear exposition of this
doctrine places Barbon, as an economist, above
both Petty and Locke, and it was not till sixty
years later that Joseph Massie (1750) and Hume
rediscovered the correct theory of interest. The
uses of interest are to measure, 1st, profit and loss in
trade, 2nd, the value of the rent of land ; the value
of the last being reckoned " by adding three years'
Interest more than is in the Principle (sic)."
Therefore interest must be fixed. The praise
which Barbon bestows on trade (foil, chapter " of
the use and benefit of trade,") forecasts the
celebrated passages on the consequences of the
division of labour in the Wealth of Nations,
especially his denying of the importance of In-
creasing money. " It is the Natural Stock that is
the Real Value, and Rent of the Land " (p. 37).
In a very interesting digression Barbon describes
the civilising influence of trade, and maintains the
chief causes which promote trade to be " industry
in the poor and liberality in the rich " (p. 61).
Against the mercantilist views of " sparing for
exportation " he maintains, that " by not con-
suming the Goods that are provided for Man's Use,
there ariseth a dead Stock, called Plenty, and the
value of those Goods fall. . . A Conspiracy of the
Rich Men to be Covetous and not spend, would be
as dangerous to a Trading State as a foreign War "
(p. 63). Clothing and building employ a great
variety of trades, and the luxury of town-life
increases the revenues (p. 70). In the last
chapter Barbon declares that " the Two Chief
Causes of the Decay of Trade are the many Pro-
hibitions and high Interest " (p. 71), his argument
being " that the Prohibiting of any foreign Com-
modity doth hinder the Making and Exportatior
of so much of the Native as used to be Made and
Exchanged for it. . . . The Native Stock for want
of such Exportation Falls in Value, and the Rent
of the Land must fall with the Value of the
Stock " (p. 72). This work of Barbon's contains
the ablest refutation of the theory of the balance
of trade previous to Hume and Adam Smith (see
Balance of Trade). Barbou refutes the com-
mon argument for prohibition that the consump-
tion of foreign commodities hinders the produc-
tion and consumption of the native ; for the
consumption of foreign wares arising from the
wants of the mind, the setting up obstacles to it
will not encourage the consumption of native
wares. A general prohibition would be the ruin
of all trading nations ; if the rare case should
occur that the use of foreign goods checked the
consumption of native goods, duties may be im-
posed to differentiate their consumption (pp. 75-78).
The rate of interest being higher in England than
in Holland, is a second obstacle to trade, for
through this the Dutch traders are enabled to
undersell the English (pp. 78-87). Any injury to
those persons who live upon the interest derived
from Money would be remedied through the rise
of land, the interests derived from which would
be hereby better secured. " For the Land is the
Fund that must support and preserve the Govern-
ment ; and the Taxes will be lesser and easier
payd " (p. 91^). Its support is the more important
" because it doth not Disturb, Lessen, nor Alter
the Value of any Thing else " (p. 92). The Dis-
course of Trade was attacked by an anonymous
author E. H., Reasons against Reducing Interest
to Four p&r Cent, 1694. Barbon answered in An
Answer to Paper Entituled Reasons against Re-
ducing Interest to Four per Cent, (2 sh. fol.,)
without, however, giving any further proof for his
proposal. In 1695, it seems, was written An
Account of the Land Bank, shounng the Design
and Manner of the Settlement, etc. (2 sh. fol.)
" Mostly collected out of my writings," says John
Briscoe, referring to it in An Account of the
National Land Bank. Brit. Mus. 816 m. 10 ;
with John Asgill he drafted the rules of the
National Land Bank ; The Settlement of the
Land Bank (Lord Somer's Tracts, vol. xi.), 10th
August 1695. The last work of Barbon is A
Discourse Concerning Coining the New Money
Lighter. In Answer to Mr. Lock's Considerations
about Raising the Value of Money. By Nicholas
Barbon, Esq., 1696. Referring to the definition
of money in his former work he advocates the
well-known project of "W. Lowndes of "raising
the coin." He thinks that a recoinage accord-
ing to the old standard would efiect a want of
specie, and that the steady rise of bullion made
a proportional raising of the value of coin
necessary. For "the Balance of Trade (if there'
be one) is not the cause of sending away the
I\Ioney out of a Nation : but that proceeds from
the difference of the Value of Bullion in several
Countries, and from the Profit that the Merchant
makes by sending it away, more than by the Bills
of Exchange" (p. 59). This passage, it has been
remarked by M'Culloch, anticipates the "currency
principle " as expounded by Ricardo in his
BARING— BARTER
121
pamphlet on The High Price of Bullion^ 1811
(Works, 1886, p. 267-8). In order to prove the
expediency of his proposal, Barbon repeats his
doctrine of money as given in the Discourse of
Trade (p. 20), laying stress upon the maxim, that
its value is not given by the quantity of silver in
each piece, but by the authority of government.
He supports this opinion by most incredible
sophisms. He ascribes the affluence of gold to
inadequate rating of the value of silver money (p.
77), and he advocates his position by the history
of English and foreign monetary policy and legis-
lation (pp. 74-94). Though in this point the
opinions of Barbon are erroneous he, liowever,
attacks very ably Locke's theory that the value
of money was the result of common assent (p. 9).
Barbon distinguishes, with great ingenuity, between
the value and the " vertue " of a thing, the latter
being the same at all places, the former varying
according to its plenty or scarcity (p. 7). His
refutation, in this work, of the doctrine of the
balance of trade, his remarks on the preference
given to yold and silver, which he compares with
the fable o' Midas, on the restraint on consumption,
and in coTise(|uence on prohibition of foreign goods
(pp. 35-49), are developments of opinions expressed
in his former writings. There is, according to him,
but one infallible symptom to know when Trading
Nations grow rich : by the increase of population
manifesting itself by tlie enlargement of towns and
also of the naval strength (p. 52).
[The Discourse of Trade is quoted by E. H.,
Reasons for the A batement of Interest to four in.
the Hundred, 1692, p. 6. — E. H. wrote : Decus H
Tutamen ; or our New Money as noxo coined in
full Weight proved to he for the Honour, Safety,
and Advantage of England — written by Way of
Ans^oer to Sir Richard Temple and Dr. Barbon,
1696. On the latter cp. M'Culloch, Literature,
p. 157. — M'Leod, Dictionary of Political J£conoviy,
pp. 232, 233.— K. Marx, Capital, vol. i. pp. 2-4.—
Cunningham, The Growth of English Industry
and Commerce, p. 351, 368, ed. 1882.— C. Walford,
Insurance Cyclopicedia, vol. i. p. 251, vol. iii. p.
459, and the present writer on Nicholas Barbon,
in "Ein Beitrag zur Vorgeschichte der Klassischen
Oekonomik," Conrad's JahrhiXcher fur National-
okonomie und Statistik, xxi. Bd. N.F. p. 561-590
(1890).] s. B.
BARING, Sir Francis, Bart., was born in
1740, of German extraction, the founder of the
famous financial house of Baring Brothers and
Co. Erskine styled him "the first merchant in
Europe." He died 11th September 1810.
He wrote —
The Principle of the Commutation Act Estab-
lished by Facts, London, 1786, 8vo (two editions ;
supports the reduction of duties on tea and other
commodities). — Observations on the Establishment
of the Bank of England, and on the Paper Circu-
lation of the Country, London, 1797, 8vo. — F^crther
Observations, London, 1797, 8vo (describes the
panic of 1793, and supports the policy of restric-
tion).— Observations on the Publication of W. Boyd
[entitled Letter on the Influence of the Stop>page
of Issues in Specie'], London 1801, 8vo. h. r. t.
BARNARD, Sir John, was born at Reading,
of Quaker parents, in 1685, and died at Clap-
ham, 1764. He entered the London wine trade,
was M.P. for London from 1728-1761, and was
knighted in 1732. He was chosen lord mayor
in 1737, and opposed Walpole ; ultimately he
became one of the foremost financial authorities
in England, and helped to abate the run on the
Bank of England in 1745. He wrote —
Reasons for the llepnesentatives of the People of
England to take advantage of the Present Rate oj
Interest for the more Speedy Lessening the National
Debt, London, 1737, folio (detailing an unsuccess-
ful jDroposal made by Barnard in parliament to
reduce the rate to 3 per cent). — A Defence of
Several Proposals for Raising of Three Millions
for the Service of the Government, with a Postscript
on PiMick Credit, London, 1746, 8vo. — Letter to
an M.P. on the Rejection of the Scheme, London,
1746, 8vo. — Considerations on the Propjosal for
Reducing the Interest on the National Debt,
London, 1750, 8vo (recommending Pelham's pro-
ject),— Some thoughts on the Scarcity of Silver
Coin, ririth a Proposal for Remedy, London, 1759,
folio (single sheet). h. r. t.
BARRATOR. One who incites to litigation
or quarrels. A person who is found to be a
common (habitual) bari'ator is guilty of the
oll'ence of barratry, which is punishable by im-
})risonment and fine ; and if the oUender's pro-
fession be in any way connected with the law,
lie may also be forbidden to practise for the
future. The word barrator in a now obsolete
sense also implied a deceitful person, and from
the word in this sense the expression barratry
as used in maritime law is probably derived.
In this application the word means a wilful or
grossly negligent act of the master of a ship by
which the owner is damaged. Barratry is one
of the risks generally excepted in bills of lading,
and it is one of the perils insured against on
ordinary marine insurance policies. e. s.
BARRINGTON, Shute (1734-1826), suc-
cessively Bishop of Llandafi', Salisbury, and
Durham. He established in 1795 one of the
earliest co-operative stores at ]\longewell (Ox-
fordshire). He was president of the Society for
Bettering the Condition and Increasing the
Comforts of the Poor (1796).
[Bishop Barrington's practical work is fully
described in G. J. Holyoake's Self-help a Hun-
dred Years ago, chs. i. iv. viii. xiv. xv. xxviii.
1888 (see Bernard, Sir Thomas). — Dictionary of
National Biography, vol. iii. p. 294.] s. B.
BARTER. In primitive states of society
exchange of commodities is efiected directly, and
without the intervention of money ; such a
method of exchange is called barter. It is
highly probable that loan preceded exchange,
at least as regards scarce articles, the more
plentiful commodities being distributed amongst
individuals in joint or separate ownership. In
the case of a loan to a stranger, an owner
^vould not have the same guarantee for the
return of the article as if the loan were made
BARTER AND EXCHANGE— BARTON
to a member of his tribe, and hence he would
require some equivalent in return. Thus we
reach exchange in the form of barter.
Jevoi^s has pointed out the inconveniences ot'
barter : (1) want of coincidence ; (2) want of a
measTU-e of value ; and (3) want of mean§ of
subdivision. (Money, and the Mechanism of Ex-
change, London, 1882.) These inconveniences
are avoided by the introduction of money (see
Money), which serves as a medium of exchange.
The metals prove to be the most convenient
commodities for effecting exchanges, and
amongst metals, gold and silver specially
possess the qualities essential in money.
But metallic money in bulk is weighty ; it
can be transmitted to a distance only at con-
siderable expense and risk ; whilst its use
involves loss by wear and tear. To avoid these
disadvantages representative moneys in the
form of promises to pay have been introduced.
When promises to pay came to be accepted
in return for commodities, it was seen that
wherever mutual dealings existed between two
persons, equivalent quantities of goods estimated
in money could be set off, so as to pay for
each other. The origin of this modern system
of set off may be traced to the Roman Law
(Hunter's Roman Law, London, 1885, p. 832).
But the system was perfected by the introduc-
tion of Bills of Exchange and Cheques, and
the development of the modern clearing system
(see Clearing House). In foreign trade
where two countries are constantly buying the
one from the other, bills of exchange enable the
goods passing in one direction to pay for those
going in the opposite direction, and even where
two countries do not have mutual dealings,
they will be able to obtain payment for their
exports by imports from other countries with
which both are accustomed to trade (see
Goschen's Foreign Exchanges, London, 1888).
In the home trade cheques are used as well
as bills. By means of cheques traders are
able to transfer portions of their book credit
at their banks to third parties in exchange for
commodities, and the institution called the
Clearing House balances the mutual indebted-
ness for the traders (Jevons's Money). Such a
method of exchange is really barter : metallic
money being used to compare the values of
commodities, and ceasing to effect exchanges,
except where a balance of indebtedness can be
discharged in no other way.
Barter underlies the distribution of the
annual produce of a nation amongst the various
classes who assist in production. Though the
landlord, the employer, the capitalist, and the
labourer, receive their respective shares in
money, yet to the economist such money repre-
sents only produce or its equivalent in other
commodities. For instance, the articles that
the labourer buys with his wages are the real
return he receives for his services, and his
services may be regarded as bartered for such
articles (see Sidgwick's Political Economy, bk.
ii. ch. i. ; Marshall's Principles of Economics, p.
395). See Truck Acts. j. e. c. m.
BARTER AND EXCHANGE. Barter, as
distinct from exchange, is defined by the
absence of money both as a medium of exchange
and a measure of value. In the absence of a
measure of value, complicated transactions
between several dealers are hardly possible ;
and accordingly barter is generally characterised
by the absence of competition. In the absence
of competition bargains are not determinate in
the same sense as in a perfect market. In the
former, unlike the latter, case you might sup-
pose the dispositions of the parties, their
demand curves or "schedules" (Marshall)
known, and yet even theoretically be unable
to predict what would be the terms of the
bargain (see Competition and Regulation ;
Value). As Jevons says of such a case^— -
with, in the context, unnecessary emphasis on
the indivisibility of the commodity exchanged,
— "The equations of exchange will fail. . . .
I conceive that such a transaction must be
settled upon other than strictly economical
grounds. The result of the bargain will
greatly depend upon the comparative amount
of knowledge of each other's positions and needs
which either bargainer may possess or manage
to obtain in the course of the transaction "
(Theory of Political Economy, pp. 130-134,
2d ed.) To which Mr. Price adds, "Nor
indeed, did they possess the gift of clairvoyance,
would the problem be necessarily solved " {In-
dustrial Peace, p. 54). It is important to
study this property of barter not so much on
account of the rudimentary transactions to
which the term is properly confined as for the
sake of their analogy to the dealings of mono-
polists and combinations in advanced societies.
[The subject in question is discussed in the fol-
lowing passages. Auspitz and Lieben, Theorie
des Preises, p. 381. — Edgeworth, Mathematical
Psychics, pp. 20-56. — "Observations on the
Mathematical Theory of Economics," Giornale degli
Economisti, March 1891. — Marshall, Principles of
Economics,"'^ oie on Barter," — '^&ag&c,GTundsatze,
ch. iv. — Price, Industrial Peace, pp. 14 and 54. —
Sidgwick, Political Economy, bk. ii. ch. x.
The formation of appropriate conceptions on
the subject is aided by those economists who, im-
proving on the ordinary "Robinsonnade," introduce
a second primitive economic man. Good examples
occur in Courcelle Seneuil's Traite theoriqiie et
pratique, and Mr. Gonner's textbook of Political
Economy,'] f. y. e.
BARTON, John, of Stoughton, the author of
several clever but somewhat unsound pamphlets.
Observations on the Circumstances which influ-
ence the Condition of the Working Classes, London,
1817, 8vo (see M'Culloch's Principles of Political
Economy). — Inquiry into the Causes of the Pro-
gressive Depreciation of Agricultural Labour in
BASTIAT
123
Modern Times, London, 1820, 8vo (stated to be
owing to the depreciation of the value of corn).
■ — Inquiry into the Expediency of the Existing
Restrictions on the Importation of Foreign Corn,
London, 1833, 8vo. H. R. t.
BASTIAT, FriSderic. This well-known
French economist, a friend of Cobden, born
1801 at Mugron, near Bayonne, died 1850 at
Rome. But for a few casual circumstances
which drew out his literary powers, Bastiat
would have died comparatively unknown, his
first book only appearing in 1845, five years
before his death. He had lived up to that date
in retirement, working hard, but producing
little. The son of a merchant in the Spanish
trade, he Avas left an orphan when nine years
old. As a man, he tried his hand, without gi'eat
success, first in business, in the establishment
of his uncle, then in farming at Mugron on the
estate Avhich he inherited at the death of his
grandfather, 1825. Appointed after the revolu-
tion of 1830yw</g depaix of his canton, he seemed
destined to die in the little town where he had
been born, limiting his ambition to the direc-
tion of a small scientific society whose discus-
sions appear to have been dc omni re scibili et
quibusdam aliis. His first pamphlets were little
memoirs on local matters, the interest of which,
notwithstanding the high qualities of style and
form they possessed, was necessarily limited to
a narrow circle ; their titles are A21X Electeurs
du diparteiiient des Landes (1830) ; Reflexions
sur les petitions de Bordeaux conccrnant les
douanes (1834) ; Le Fisc et la Vigne (1841) ;
La question vinicole (1843) ; La Repartition de la
contribution fonciere dans les Landes (1844).
To England belongs the honour of having
lighted up in Bastiat the sacred fire of thought.
An English journal to which he subscribed al-
most by accident, the Globe, informed him of the
foundation and progress of the Anti-Corn Laav
League, the existence of which was barely
known in France. The examples of Cobden,
Bright, Thompson, Moore, and Fox roused
Bastiat, who resolved to imitate them. A few
weeks later and the Journal des Economistes
received from the farthest end of the district
of the Landes a manuscript signed with an
unknown name, i)e V influence des tarifs franc^ais
et anglais sur Vavenir des deux peuples. The
article appeared October 1844, and excited a
good deal of attention. The author was asked
for more ; and the file of Sophismes Ecmiomiques
commenced, to the joy of the opponents, and the
confusion of the defenders, of privilege. Nothing
is more brilliant, nothing more French, in the
best sense of the word, than these amusing
pamphlets, in which the most delicate irony and
the most pitiless logic are combined, as in the
famous Petition des fabricants de chandelles,
bougies, lampes, chandeliers, reverberes, mou-
chettes, eteignoirs, et des producteurs de suif huile
r6sin£, alcool, et g4n6ralement de tout ce qui con-
cerne Viclairage. This petition of the candle
makers is a humorous complaint against the sun
for spoiling their trade, a petition based on pro-
tectionist lines. ''We demand," say the peti-
tioners at the close of their arguments,
" Qu'il vous plaise de faire une loi qui ordonne
la fernieture de toutes fenetres, lucarnes, abat-jour,
contre-vents, volets, rideaux, vasistas, oeils-de-boeuf,
stores, en un mot, de toutes ouvertures, trous,
fentes et fissures par lesquelles la lumiere du soleil
a coutume de penetrer dans les maisons, au pre-
judice des belles industries dont nous nous tiattons
d'avoir dote le pays, qui ne saurait sans ingrati-
tude nous abandonner aujourd'hui a une lutte si
inegale."
From a purely literary point of view several
of these satires are first-rate. At this time
Bastiat also wrote his first book, Cobden et la
Ligue ou V agitation anglaise pour la liberti des
echanges, and finally left Mugi'on for Paris.
He soon became the most active and dreaded
antagonist of the protectionist policy. The
war tariff's of the first empire had been con-
tinued after the restoration by the monarchy
of July (Louis Philippe). The first Association
pour la liberty des echanges was formed at Bor-
deaux, February 1846 ; another was established
at Paris the same year with Bastiat a^ general
secretary, and le Libre Echange as its journal.
This free-trade campaign was roughly interrupted
by the revolution of 1848 ; and the French
economists, and Bastiat among them, found
themselves compelled to direct their eff'orts and
their forces against the spread of socialism.
Bastiat harassed those who followed Louis
Blanc, Considerant, P. Leroux, Proudhon,
with epigrams and refutations, and thus assisted
in enlightening the country as to the perils with
which the revolutionary Utopia threatened it,
see Propri4t6 et Loi, Proprieti et Spoliation,
Justice et Fraternite, etc. His conflict with
Proudhon {q.v.) on La gratuite du credit, will
always be considered one of the most brilliant
passages of arms of French economic science at
this critical epoch.
At the elections of August 1848, the depart-
ment of the Landes returned Bastiat to the
Assemblee Gonstituante, and May 1849 to the
AssembUe Legislative. Here he rarely spoke.
He did not possess the physical qualifications
of an orator, and the extraordinary exertions he
had imposed on himself since he moved to
Paris completed the niin of his health, previously
much shattered. After having victoriously
refuted the errors of protection and socialism,
he thought it was time for him to formulate
what he considered the true economic doctrine,
and commenced the publication of his Harmonies.
In this brilliant work, unhappily never finished,
Bastiat shows the contrast between the internal
weakness of the artificial organisations which
are founded on constraint, and the prosperity
spontaneously arising in an economic condition
124
BASTIAT— BATBIE
in which the equilibrium of individual and
collective forces results from their free and
reciprocal balance. This is the fundamental
thought (id4e mere) on which the Harmonies
Economiques are based, and granted this as a
philosophic basis, it could not have begn
developed with more skill. Some of Bastiat's
opinions have been criticised — notably his theory
of value — and he may also be complained of as
being too much of an optimist. But for all
that no one has succeeded better in making
his readers admire the science which he himself
loved so well. Political economy has been
indebted to him, both during his short life and
after it, for some of its worthiest followers.
The first volume only of his Harmonies had
been published when Bastiat, wearied and worn
out, sought rest in Italy. He died in Rome
24th December 1850, as a Christian ; his last
words were la verite.
[For life of Bastiat, see speech on the occasion
of the inauguration of monument at Mugron by
M. Leon Say, 1878. Notices by MM. R. de
Fontenay, — F. Passy, — Paillottet, — De Molinari,
— Paul Gardelle, — Baunard, — De Foville, — A.
Courtois fills, Madame Cheuvreux published,
1870, part of the correspondence of Bastiat,
Lettres d'un habitant des Landes. ] a. de F.
BASTIAT AS A Theorist. The Harmonies
of Bastiat have not been re-echoed by economists
with one accord. According to Cairnes {Fort-
nightly Review, 1870), "all that is peculiar to
his scheme of speculation" rests on his doctrine
oi service ; "and, this failing, the entire fabric
inevitably collapses." By "the shifting uses
of an ambiguous term" Bastiat confounds
what RiCARDO and others had distinguished :
cases where value is, and is not, proportioned
to efforts and sacrifices (see Difficulty of
Attainment). Value in all cases, according
to Bastiat, represents service. "Such a
generalisation," says Cairnes, " is no generalisa-
tion in the scientific sense of the term ; it is a
mere confounding of unanalysed phenomena
under an ambiguous word." Describing all
commercial transactions as a reciprocity of
services, Bastiat attempted not only to explain,
but to justify the existing regime, and failed in
both attempts, which he never ought to have
combined {Fortnightly Review, vol. viii. p. 426,
et seq.) Dr. Sidgwick in the third book of his
Principles of Political Economy, has afforded
the most complete refutation of the economic
optimists, " of whom Bastiat may be taken as a
type" {ibid. ch. ii. § 1). Professor Marshall
says of Bastiat; "the lucidity of his style
caused him to have great vogue ; but he really
understood economic science, in the name of
which he professed to write, hardly better than
did the socialists themselves " {Principles of
Economics, bk. i. ch. iv. § 6, n. 2). Cournot also
should be referred to among the profound and
unbiassed thinkers who have exposed the un-
scientific character of economic optimism {Prin-
cipes de la tMorie des Richesses, 1863, livre iv.
I'optimisme economique, Cp. Revue Sommaire,
1874). A less temperate criticism of Bastiat'a
theories may be read with amusement in Las-
salle's Herr Bastiat- Schulze von Delitzsch . . .
oder Capital und Arbeit (1864) ; addressed to
Schulze-Delitzsch, but striking through him
at Bastiat. Lassalle fastens on the weak point,
the theory of services, and, with much humour
and more insolence, proves it to be "no economic
category " (p. 132, et seq.) but rather an " econ-
omic enormity without parallel" — "Yet this is
the only new thing which that clever windbag
{geistreiche blageur) has said in his primer
(Jihel)."
Severe as are these judgments, and in one
case at least exaggerated, they cannot be
wholly set aside. But the opinion that Bastiat
did not make any considerable contribution to
abstract theory is not inconsistent with grati-
tude to him for having popularised (in the best
sense of the term) the discoveries of his prede-
cessors. It is admitted that in the exposure of
economic fallacies Bastiat is unrivalled. The
same Cairnes who judges the Harmonics so
severely calls ^Bastiat to his aid when he is
combating economic sophisms {Leading Prin-
ciples, pt. ii. ch. ii.)
[See, in addition to the authors who have been
mentioned as critics of Bastiat, Bohm Bawerk,
Geschichte und Kritik der Zinsentheorien (1884).]
F.Y.B.
BATBIE, Anselme Polycarpe, born at
Seyssan (Gers) 1828, died at Paris 1887. He
entered the Conseil d'Uat in 1849, but left it at
the coup d'itat of 2d December 1851, to give
himself up to teaching. It was not long before
he became first supplementary professor 1857,
then full professor, 1862, at the £cole de Droit
at Paris, in " Droit administratif " and " ificono-
mie Politique. " Elected deputy to the AssembUe
Nation/lie in 1871, he found his place among
the monarchists, and was one of the foremost
opponents of the republican form of government.
It was he who invented the phrase the Gouverne-
ment de combat, a mot which had a great success.
In 1875 he was elected a permanent senator.
The delicacy of his mode of thought would
always have held him back from becoming the
champion of the reactionary party.
Besides his works on law, of which the most
important is his Traiti theorique et pratique de
droit public et administratif {1 vols, in 8vo, 1862-
66), we may mention his economic works, Le credit
popvlaire (1864, 1 vol. in 18mo) — Turgot, Philo-
sophe, Economiste, et Administrateur {1 vol. in 8vo,
1866) (couronne by the Institut), — Nouveau cours
d'iconomie politique, 1866 (2 vols, in 8vo), — and
finally Milanges d' econoviie politique {Mmioire sur
le pret d interet, coxironne by the Institut, and
Mevwire sur l'imp)6t avant et apres, 1789-1861,
1 vol. in 8vo). A. c. f.
BATE'S CASE— BAUMSTARK
125
BATE'S CASE, on the Case of Impositions.
The right of the crown to levy customs duties
without the consent of parliament had been
abolished — at all events in the case of wool — by
a statute of 1362, and had not been revived
until the 16th century. Mary and Elizabeth
had both imposed small duties on articles of
commerce, but this had been done with the
consent of the merchants, and had attracted no
attention. It was reserved for James I., relying
upon the subservience of the judges, to make
arbitrary customs an Important som-ce of re-
venue. Tonnage and Poundage, which had
been granted for life to every king since Henry
v., included a duty of 2s. 6d. per cwt. of cur-
rants. James by his own authority imjiosed
another 5s., and thus trebled the duty. John
Bate, a merchant of tlie Levant Co., refused to
pay, on the ground that the tax could only
lawfully be imposed by parliament. The case
was brought before the exchequer court, and
the decision of the judges is an important illus-
tration of the legal theories of the Stuart period.
They declared that the king's power is of two
kinds, ordinary and absolute. His ordinary
power is exercised in the interest of individuals,
and is limited by common and statute law.
His absolute power, on the other hand, is exer-
oised for the welfare of the whole state, and is
not so limited. Customs are the effect of com-
merce ; but commerce and all foreign relations,
such as war and pejice, belong to the king's
absolute power. He who has power over the
cause has power also over the effect. The sea-
ports are the king's gates, which he can open
or shut as he pleases. Hence the customs are
subject to the king's absolute power, and can
be levied or increased at his will. This decision
was acquiesced in at the moment, and enabled
James to issue a Book of Rates in 1608. In
1610 parliament took the matter up, and pro-
tested against the claim to levy impositions
without consent. But they failed to carry their
bill on the subject, and the decision in Bate's
case continued to be legally valid imtil all
arbitrary taxation was swept away by the
Long Parliament.
[State Trials, vol. ii. — Gardiner, History of
England, vol. ii. — Hallam, Constitutional His-
tory, vol. i.] li. L.
BAUDEAU, Nicolas, Abbe, born at Am-
boise in 1730, died, out of his mind, it is be-
lieved, about 1792. He gave up his ecclesias-
tic status to establish, at the end of 1765, the
Ephemirides du citoyen ou chronique de V esprit
natioTial, a periodical opposed at first to the
party of the Economists ; but which, by a
conversion most honourable to Baudeau, be-
came, after 1766, the most accredited organ of
the Physiocrats. For example, the cause of
humanity, and the abolition of negro slavery,"
were pleaded by him with great warmth. He
even invented, to keep these all together, the
word Humanisms. It was not long before he
altered the sub-title of his journal to that of
Biblioiheque raisonnee des sciences morales et
politiques. On accepting a canonry in Poland,
he handed over, May 1768, to Du Pont (De
Nemours) the chief editorship of his review,
which was suppressed by order in 1772 (69 vols,
in 1 2mo had appeared). Returning to France,
he brought his review out under the title of
EpJUmArides 6conx)viiques ou Bibliotheque raison-
nie de I'histoire, de la morale et de la politique (19
numbers in 12mo, from December 1773 to Jime
1776). His principal work, was the Premiere
introduction d la philosophie ^conomique ou
analyse des Stats policis, in which he refuted
brilliantly the Abbe Galiani (1771, in 8vo, in-
serted in the collection of the principal econom-
ists published by Guillaumin). This secured
him a high place among the economists of the
school of the Physiocrats. His restless spirit,
his changeable disposition, and the want of
financial order in his private affairs, brought on
him criticisms sometimes not undeserved.
A, c. f.
BAUDI, Carlo, di Vesme, was the author of
one of the best books on the history of landed
property in Italy from the fall of the Roman
empire up to the establishment of feudalism.
( Vicende della proprietcL in Italia dalla caduta
delV impcro romaTW alio stabilimento dei fcudi,
1836, Torino). The academy of Turin honoured
this work by a prize. Baudi di Vesme also
gained a prize from the Academie des Inscrip-
tions et Belles Lettres for a book on the
question of taxation in France under the first
two dynasties : Trihuti nelle Gallic durante le
due prime dinastie. He edited the Laios of the
Longobards, and WTote a book on the political
and economical condition of Sardinia : Con-
siderazioni politiche ed economiche sulla Sar-
degna.
Baudi was born at Cuneo 1809, and died
1877. He was educated by the Jesuits, and
became famous as a Latin and Greek scholar.
In 1837 he was made a member of the Academy
of Turin, and in 1850 a senator. m. ]>.
BAUMSTARK, Edward (1807-1889), an
eminent German economist, born at Sinzlieim,
became privat-docent in cameral science at
Heidelberg in 1823, was appointed professor
at Greifswald in 1843, and the same year was
made director of the economic academy at El-
dena. He was Geheimer Regierungsratli, and
sat in the Prussian Herrenhaus, acting in
politics with the national liberal party. He
died 8th April 1889. The earlier of his two
principal economic writings, Staatstuissenschaft-
liche Versiiche iiber Staatskredit, Staatsschulden,
und Staatspapiere, 1833, is founded mainly on
the Oeffentliche Credit of Nebenius, but contains
some independent investigations. His most
valuable work was his excellent translation of
RiCARDO's Principles — David Ricardo's Grund-
126
BAXTER— BAZAAR
gesetze der Volkswirthschaft und Besteueruny
ubersetzt und erldutert, 1838, which first made
that ^vrite^'s doctrines generally known in
Germany. Though strongly influenced by the
abstract method of his English master, he re-
cognised his inferiority to Adam Smith, and
saw the importance of the historical direction in
economic studies. He gave explanations on
profit, rent, price, taxes, paper money, an(^
public debts, which contributed to the right
understanding of Ricardo ; improved the lan-
guage in which his doctrines had been stated,
and corrected the exaggerations of his followers.
In 1835 he published a Cameralistiche Encydo-
pddie, which took rank as an instructive work
for the use of German officials. He was also
author of a treatise Zur Einkommensteuerfrage,
1860.
[Roscher, Nat. Oek. in Deutschland, p. 909.]
J. K. I.
BAXTER, Robert Dudley, an eminent
statistician, was born in Doncaster 1827, and
died at Hampstead 1875. He belonged to the
well-known legal firm of Baxters & Co. He
combined in a remarkable degree the pursuits
of business and literature, the character of a
man of science and a love of poetry. His
energy in obtaining and classifying information
was unbounded, as well as the goodwill with
which he imparted it to others.
Baxter's statistical work may be divided into
two classes (a) economical, and (b) political.
(a) To the first class belong — (1) The Budget
and the Income Tax, 1860. (2) Bailway Exten-
sion and its results, 1866 — read before the
Statistical Society, Dec. 1866, and afterwards
published separately ; it contains statistics of the
growth and distribution of railways, a state-
ment of their cost and estimate of their benefit,
both for the United Kingdom and other coun-
tries. (3) The National Income, ld68 — the
income of the United Kingdom is estimated as
£814,119,000; divided by "the equatorial
line of British income," £100 in tAvo nearly
equal portions, accruing respectively to those
who have more or less than that annual sum.
Baxter's estimate of the amount of income
which is derived from capital is approved by
Sir R. Giff'en with some reservation {Essay in
Finance, series 1 ; Essay on Recent Accumula-
tion, pp. 166-170). The distinction which
Baxter makes between productive and unpro-
ductive (ch. viii.), "the income that is an orig-
inal and fresh contribution to the common
stock from that which is merely derived from
the first," requires consideration (cp. Leone
Levi, Wages and Earnings of the Working
Classes, Reports of the British Association, 1881,
p. 275, and 1882, p. 299). (4) The Foreign
Cattle Market Bill, 1869. (5) The Taxation
of the United Kingdom. After a clear statement
of the amount of taxation, the writer estimates
itt distribution and pressure. He pronounces
on many delicate economic questions, e.g.
"Railways and public carriages are obliged to a
great extent themselves to bear the contribu-
tions levied from them, from the existence of
maximum charges limited by law or by the
public capacity of paying." He maintains that
taxes on property do not become rent charges,
and disputes »1ill's principle of taxing unearned
increment ot rent. He settles what proportion
of the rates on land and houses are borne by
landlord and tenant respectively. He finds
that the pressure of taxation on the manual
labour classes (eight and a half per cent of
workmen's earnings), is heavy in proportion to
the taxation of the larger industrial incomes of
the upper and middle classes (eight per cent).
To estimate the pressure of taxation on the
working classes he collected budgets of family ex-
penditure (see Workmen's' Budgets). Atten-
tion should also be called to his estimate of the
property of the United Kingdom (in 1869)
£6,000,000,000. (6) National Debts of the
World, 1871. Measured in four ways by: (1)
nominal capital ; (2) interest actually paid ;
(3) annual charge per head of population ; (4)
proportion of annual charge to gross income.
The last, which is the most correct method,
makes the burden in 1870 hardly greater than
in 1700, and less than in 1712. The progress
of the indebtedness of the world as compared
with the United Kingdom is shown by the
statement that, while in 1848 our debt was
nearly half, in 1870 it is just a fifth of the
total debt of the world. Absolutely, the debt
of the United Kingdom was reduced slightly
between 1848 and 1870. In respect of the
burden of debt there appears a remarkable
equality between the United Kingdom and
several of her great contemporaries.
The subject is brought down to a later date
in(7) "Recent Progress of National Debts," 1874
{Journal of the Statistical Society). (8) Local
Government and Taxation, 1874 ; containing a
criticism of Mr. Goschen's report on the increase
of local taxation.
(&) The rest of Baxter's statistical writings
are rather political than economical.
(1) The Volunteer Movement, 1860. (2) The
New Reform Bill ; the Franchise Returns, etc.,
1866. (3) The Redistribution of Seats and the
Counties, 1866 [with which should be read letters
to the Tivies on cognate subjects in the same and
the following year]. (4) Results of the General
Election of 1868, 1869. (5) History of English
Parties and Conservatism, 1870. (6) The
Political Progress of the Working Classes, 1871.
[A beautiful picture of Baxter's simple life and
a useful analysis of his elaborate works are given
in In Memoriam R. B. Baxter, by his widow.]
F. Y. E.
BAZAAR. A Persian word meaning a
market. In this sense it is employed in India,
Turkey, and other eastern countries. In Great
Britain the signification of the word has been
BAZARD— BECCARIA
127
corrupted, implying either a collection of shops
for the retailing of fancy goods or the temporary
opening by amateurs of some place for the sale
of such goods and for amusement, mostly for
the benefit of a charity. We need only consider
the term in the sense in which it is used in the
East. There every town of magnitude is pos-
sessed of its bazaar, which is the centre of mer-
cantile life, where business both wholesale and
retail is transacted, and where news is circulated.
The bazaar quarter of the town, is often a col-
lection of streets with shops entirely distinct
which constitute the bazaar, while in other
cases a square is devoted to the use of the mer-
chants and dealers. A very large amount of
business is carried on through the medium of
bazaars ; and they are a recognised institution of
oriental life.
BAZARD, Saint -Amand, born at Paris
1791, died at Courtry near Montfermeil, 1832.
He was one of the three founders of the society
of the Carbonari {q.v.) in France (1821), and
joined in the active work of the Saint-Simonians
after the death of Saint Simon, whom he had
never seen. He held an important position as
editor of the Produdeur (1825-26), of the
Organisateur (second of that nario, 1828-30),
and of the Globe (1831). With Enfantin he
became the centre of the Saint-Simonian relig-
ion ; but before long the opinions of Enfantin,
particularly on the state of "Woman in the
Family," caused him to leave it (January 1832).
To explain why he did this he published a
pamphlet called Discussions morales, politiques
et religieuses, January 1832. a. c. f.
BEAR. Under Backwardation the posi-
tion of a seller who is unable to deliver according
to contract has been shown. A Bear is a seller
in blank, and from settlement to settlement he
must borrow stock on the best terms which he
can make in order to arrange the Continuation
{q.v.) of his contract. The Avord, no doubt,
arose from the belief that one who sells in anti-
cipation of lower prices is a desponding, pessi-
mistic, and misanthropic person, but it has
been so long in use that there is no certain
knowledge of its derivation. In America one
who sells as a Bear of stock is said to be " sell-
ing short." The simple adjective "bare" may
be the origin of the expression, as, when the
time of settlement comes, the Bear seller is bare
or short of the security which he has contracted
to deliver. When he has ' ' bought back, " he
is said to have "closed" his "bear." A. e.
BEARER, Bonds to hearer, and sometimes
shares, are those which are negotiable instru-
ments on their face. Bearer securities are dis-
tinguished, on the stock exchange, from
registered securities inasmuch as the title of
the former passes from holder to holder, while
there is no legal title to a registered share until
the owner has had his name placed on the
register of the company in which he has acquired
a share or shares (see Commercial Instru-
ment), A. E.
BECCARIA, Cesare Bonesana (Marquis)
born 1735, at Milan, was brought up in a Jesuit
college at Parma. Through his interest in dif-
ferent sciences and the circumstances of his life
he was led to try his hand at very difterent
subjects, and succeeded marvellously in every one
of them. An able mathematician, he -wto tea note-
worthy treatise on the "nature of style," being
an analysis of the principles of aesthetics applied
to one of the branches of fine arts (IMilan, 1770
vol. i. ; the second volume never appeared).
He belonged for twenty-five years to the highest
magistracy, publishing for the Austrian govern-
ment excellent reports on corn stores, on the
reform of coinage, on measures and weights
(proposing a Metric System based on astronom-
ical magnitudes and physical properties, 1780)
on demogi'aphical questions, etc., marked by
gi-eat lucidity and precision and full of ideas
ahead of his times. His famous little pamphlet,
Dei dclitii e delle pene, published in 1764, has
been translated into twenty-two languages. In
1768 a chair of political economy was founded
for him by the Austrian government in Milan
(the second chair for this science founded in
Italy ; the first was founded in 1755 in Naples
by Bartolomeo Intieri for Gexovesi), and he
occupied it for two years. He died in 1793
without having published his lectures, which
were first published in 1804 by Custodi, and
certainly are very remarkable considering they
were written before A. Smith's Wealth of
Nations. Beccaria treats political economy as
an art to maximise the value of the produce of
work, regarding labourers as engines whose duty
has to be maximised. From tliis principle
he deduces the necessity of a division of labour,
a determination of the value of a labourer,
and the nature and function of capital. His
lectures are also remarkable for an exposi-
tion of the laws of growth of population in re-
lation to subsistence, now known as Malthus's
theory. Beccaria, however, is not correct,
according to our present standard, in sundry
other questions, allowing himself to be misled by
the prevailing French school, and is in this
respect inferior to his friend Verri, A special
mention must be made of a quite small pamphlet
Beccaria wrote in a newspaper {il Gaffe) in
1764 or 1765, under the title, Algebraical
Essay on Smuggling, in which he solves analyt-
ically the problem, "How much of a given quan-
tity of merchandise must merchants smuggle,
so as not to be winners or losers, although the
remaining portion of the merchandise be con-
fiscated ? "
The expression, popularised through Beccaria'e
influence, " the greatest happiness of the greatest
number " {la massima feliciia divisa net maggioi
numero, Preface of treatise, Dei delitti et delle pene)
is one of those phrases which have penetrated so
188
BECHER— BEDE
deep into the mind of civilised man that some
further observations on its origin are advisable.
Beocaria says, § 2 of his treatise Dei delitti et
delle pene (1764), that coldly (rigidly) examining
human nature we see that every man is absolutely
egoistic, and that on this basis alone legislation
can be established, if it is not to be knocked
over constantly. That nobody cares anything
for the universal happiness, or for the good
of otliers, and that "ogni uomo si fa centro di
tutte le combinazioni del globo," every man makes
himself the centre of all the things that happen in
the world. The principle which Beccaria announces
may have been suggested to him by his friend Verri,
who had written a special treatise on the Nature
of Pleasure and Pain. Italian economists, con-
temporary with Verri, were apparently led to give
great attention to this subject through the book
of De Maupertuis on Le principe de la moindre
action. They were also greatly influenced by Hel-
VETius, who says, Traiti de V esprit (1759), vol. i.
div. ii, ch. ii. "that the principle of interest is
for the moral world, what the principle of gravi-
tation is for the physical one. " The general idea
is found earlier than the writers cited {e.g. in Fr.
Hutcheson's Inquiry (1738), but it is of interest
to trace the channel, through which it reached
English economists (see Bentham). m. p.
BECHER, JoHANN Joachim (1625 ?-1685),
was the principal representative of Austrian
political economy under Leopold I. He was
born at Speyer, probably in 1625 ; he was son
of a Protestant minister, but, whilst still young,
became a Roman Catholic. He was medical
professor and court physician at Mainz. He
afterwards removed to Wiirzburg and Munich,
and in 1666 to Vienna, where he was employed
in the newly established Commerz - Collegium.
He was much busied in the foundation of East
and West Indian trading companies, the intro-
duction of foreign branches of industry, and the
negotiation of Austrian loans in Holland. Over-
whelmed with debt, he fled in 1678 to Holland,
whence he passed in 1680 to England, where he
died in 1685, having probably again become a
Protestant. Leibnitz describes him as "un
esprit excellent," " Vir summo ingenio," but as
morally worthless, insolent, vain, and men-
dacious. There was in him a large element of
the charlatan, but he had great ingenuity,
activity of mind, and fertility of invention.
He was the originator of potato cultivation in
Germany. His Physiea Subterranea contains
the fundamental ideas of the phlogistic system
of chemistry ; Stahl admitted his obligations to
it, and pronounced it to be "opus sine pari,
primum hactenus et princeps." His principal
economic work was his Politischer Diseurs von den
cigentlichen Ursachen des Auf und Abn^hmen
der Reiche, Stddte und Republiken, in specie wie
ein Land nahrhaft undfolkreich zu machen und
in eine rechte Societatem civilem zu bringen,
1668. It is written in the spirit of the mer-
cantile system, but avoids some of the exagger-
ations of that system, and shows occasional
insight into juster principles. As Roscher re-
marks, most of the German economists who
preceded him had been theologians, philologists,
or jurists ; he was a student of natural philo-
sophy, and this gives to his writings a special
freshness, a freedom from pedantry, and a practi-
cal character, which, with his lively and striking
style, fitted them to exercise a popular influence,
as they in fact did, both directly and stiU more
through his disciple Horneck.
[Roscher, Oesch. der Nat. Oek. in DeutscMand,
p. 270.] J. K. I.
BECKMANN, Johann (1739-1811). Beck-
mann, a native of Hoya in Hanover, became
professor of philosophy 1766, and then (from
1770 tiU his death) of national economy at
Gottingen, in his native country. Under
Beckmann, Schlozer, and others, Gottingen
became the leading university at that date for
the social and political sciences. Beckmann
has claims to be regarded as the founder of
scientific technology, and he had a wide know-
ledge of the industries, arts, and sciences.
Linnaeus was among his friends. He wrote on
commerce, agiiculture, botany, finance, book-
keeping, technology, etc., but the work which
has been o^ most use to economists is his
history of inventions, Beitrdge zur GescMchte
der Erfindungen (in five volumes) (1780-1805),
part of a series of "Beitriige zur Oekonomie,
Technologic, Polizei — und Kameralwissen-
schaften." The History of Inventions has
been translated into English, and is included
in Bohn's Standard Library ; prefixed to that
translation there is a good biography.
[For a general list of works, see Professor Elster's
article "Beckmann" in the n^yf Handworterbuchder
Staatsioissenschaften. For criticism, see Roscher,
Geschichte der National-Oekonomik in Deutschland
(1874), p. 912 and note ; cp. 582 note.] J. B.
BEDE (see Manor). A German term for
certain exactions paid to the feudal lord by
those of his tenants who did not hold by mili-
tary tenure, or who were not ecclesiastics.
Originally payable in kind and determined only
by the will of the lord, in most parts of Germany
by the 13th century the Bede had become a
fixed money payment. This quit rent con-
tinued in existence for a long period, and in
some parts of Germany was not disused even
in the present century. In some cases the rent
was paid to another person than the o\vner of
the land, forming thus a kind of rent-charge.
The Bede seems to be analogous to the "red-
ditus assisus " or fixed quit rents formerly paid
by manorial tenants in England. But it differs
from this in the fact that it could not be exacted
from military tenants, and in other way^s. It is
also analogous to the French Taille but has
no connection with any system of taxation. As
its name implies, - -Jgc^e, a request, a prayer —
it is a Benevolence extracted from the
tenants by their feudal chief. Compare the old
BEEKE— BELLONl
129
IHnglisli words "bederipe," a day's reaping due
from the tenants at the lord's request, boon-
erth, a day's ploughing, boon-days, a day's
labour, and the Latin phrases "preces," Pre-
caeIjE. Conrad, Ifandworterhuch der Staats-
wissenschaften, s.v. 1889. c. g. c.
BEEKE, Rev. Henry, born at Kingsteignton,
Devonshire, 6th January 1751, educated at
Cambridge, where he proceeded M.A. 1776 ;
D.D. 1300. He was professor of modern history
in 1801, Dean of Bristol, 1814 ; and died 1837
(see Arithmetic, Political. History of).
Observations on the Produce of the Income Tax,
pt. 1., London, 1799, 8vo ; new and coiTected
edition, with additions, London, 1800, 8vo (an
able defence of the tax, showing the economic state
of Great Britain at the time. An appreciative
account of Beeke's work is given by Mr. Giffen in
' bis Ch-owth of Capital, 1890). H. R. t.
BELDAM, reputed author of Considerations
on Money, Bullion, and Foreign Exchanges;
being an Inquiry into the present state of the
British Coinage, particularly with regard to the
scarcity of Silver Money, with a view to point
out the most probable means of making it x)lenti-
/wZ (London, 1772).
[Monthly Review, 1772, vol. xlvi. p. 243. See
also Jevons's Currency and Finance, p. 368.]
F. Y. E.
BELL, William (1731-1816), prebendary
of Westminster and treasurer of St. Paul's, was
a fellow of Magdalene College (Cambridge) ;
here he obtained one of Lord Townshend's prizes
by the work which entitles him to be con-
sidered as an economist — A dissertation on the
following subject : What Causes principally
contribute to render a Nation Populous ? And
what Effect has the Populousness of a Nation on
its Trade ? 1756. In 1751 Hume had main-
tained, in opposition to Montesquieu (Lettres
Persanes, cxii.-exxiii. a.Tid Esprit des loix, 1. xxiii.
chs. 17-29), the superior populousness of the
modern world (see Hume's Essay on the Populous-
ness of Ancient Nations, and Philosophical JForks,
vol. iii. p. 56, ed. Greene and Grose). In this
Hume had been criticised by R. Wallace
(1753), who asserted that modern arts and
institutions tended to diminish population.
Bell has probably been inspired by this writer.
Commerce and the arts have, according to him,
a tendency to diminish population, for there
are not "any bounds originally prescribed to
humane nature" (p. 2). They divert pro-
duction from being employed upon the neces-
saries of life ; make, through the influx of
money, the prices of provisions high, and
render the support of families difficult ; where-
as agriculture and the more useful arts, by
lowering prices, must cause a fall of wages, but
in what proportion the author holds to be "an
idle and useless curiosity" (p. 1 9). To secure agri-
culture and the more necessary employments.
Bell thinks that "of all political institutions
none seems more imipediately requisite . . . than
VOL. I.
an equal division of lands " (p. 24). He pro-
poses, therefore, that the right of Primogeni-
ture should be abolished and a more equal
division established between all the children of
a family " (p. 28). He recommends a republican
form of government, as most favourable to the
increase of population (p. 29). Only after a
considerable increase thereof should commerce
be introduced. This dissertation has been as-
sailed by William Temple, a clothier of Trow-
bridge, in A Vindication of Commerce and the
Arts, by J B , M.D., London, 1758.
It was translated into German under the title :
IVilhelm Bells, M.A. zu Cambridge, gekr'mte
Preisschrift von den Qucllen und Folgen einer
Starken Bevolkerung, 1762, and Vienna, 1768.
[M'Culloch's Literature, pp. 51, 52. — Diction-
ary of National Biography, vol. iv. pp. 176, 177.
— Macleod's Dictionary of Political Economy, p.
260. The Vindication is erroneously ascribed to
Bell.] S.B.
BELLERS, John, member of the Society of
Friends, born about 1654, became joint-lord of
the manor of Coin St. Aldwyn's, Gloucestershire,
and devoted himself to philanthropic projects, in
some of which he anticipated John Howard.
Died in London, 8th February 1725. Among
his numerous pamphlets are —
Proposals for Raising a Colledge of Industry,
London, 1695 and 1696, 4to (the rich are to pro-
vide the capital and derive profit from the college,
in which destitute men and women are to iind work,
and a resort in old age or illness ; reprinted in
R. Owen's New View of Society, 1818 ; see also
Eden's State of the Poor, i. p. 264 etc. ; K. Marx's
iJas Capital, and H. M. Hyndman's Socialism in
England, 1888, p. 65 etc.) — Essays about the
Poor, Manufactures, Trade, etc., London, 1699,
4to. — An Essay for Employing the Poor to Profit,
London, 1723, 4to. h. r. t.
BELLITTI, GiACiNTO, author of Consider-
azioni sulla libertd, delV annonxi e sulV abolizione
della assisa del pesce, Napoli, 1791, strenuously
defends free trade, much in the same way as
Cantalupo {q.v.) ("Domenico di Gennaro,
duca di Cantalupo") had done in 1785 in his
Annona. m. p.
BELLONl, Girolamo, was a Roman banker
who wrote, in 1750, an Essay on Commerce
(Dissertazione sopra il Comvurcio) which had an
extraordinary success. It was translated into
several languages (including English, London,
1752), and the pope Benedict XIV. (Lamber-
tini) made the author a marquis for it. In
1757 a second Italian edition appeared, and in
the same year a Letter on Imaginary Money.
In the Essay on Commerce Belloni does not
show himself possessed of any superiority over
economists who were his predecessors, like
Locke, Melon, Broggia and Galiani, and his
great success is the more difficult to understand
as his book is not tree from some very gross
errors, which even in his time ought to have
been avoided by an acute and lea-med writer.
K
130
BENEFICE— BENEVOLENCES
An example of such errors is his approval of
measures tending to prohibit the exportation of
coin. His writings have been collected by
CusTODi in his Raccolta degli Economisti classici
italiani. M. P.
BENEFICE (l). This term was applied
during the Early Middle Ages to lands held of
a person who retained the ownership by a
tenant who enjoyed the usufruct. A tenure of
this kind, revocable at the will of the owner,
and known as a jirecarium, was occasionally to
be found in the Roman republic. Under the
empire it appears more frequently ; and, where
the conditions of the grant are light, it is
naturally described as a heneficium. Under
the Merovingian kings the tenure became still
more common ; partly owing to the action of
the great ecclesiastical proprietors, who by
grants of this kind to dependant tenants
secured the cultivation of their estates ; partly
owing to the surrender of their lands by the
weak to the more powerful on condition of
being allowed to retain the usufruct. The
usual condition of a heneficium was a periodical
payment in money or in kind ; it was not
associated with military service until the 8th
century. At first revocable at will, and then
granted only for a short term of years, by the
middle of the 9th century heneficia had come
to be regarded as hereditary. By that time,
also, the beneficiary tenure had become the
almost universal form of land-holding by per-
sons above the rank of Villein ; a change which
was largely due to the action of Charles Marte]
and the early Carlovingian princes, who forced
the ecclesiastical proprietors to give up large
portions of their estates to secular hands, while
allowing them to retain the nominal ownership.
The conjunction of the beneficial system with
the vassal relation — with which originally it
had nothing to do — ultimately created feudal
tenure, such as it was to be found in the
greater part of western Europe.
[The clearest account of the early history of
precaria and benejicia is by Fustel de Coulanges,
" Les Origines du Eegime Feodal " in Eevue des
Deux Mondes for 15th May 1873. On the Mero-
vingian and Carlovingian heneficium, the standard
works are those of Georg Waitz, Deutsche Verfas-
sungsgeschichtey vol. ii. (2d ed. 1870), vol. iv. (2d
ed. 1885), and Paul Roth, Oeschichte des Benefi/^ial-
wesens (1850), and Feudalitat und Unterthanen-
verhand (1863), who, however, diflfer in important
points. For brief summaries, see Stubbs, Const.
Hist. Engl., vol. eh. ix. ; and Felix Dahn,
Deutsche Oeschichte (1888), bk. v. ch. vi.]
w. J. A.
BENEFICE (2). An ecclesiastical living or
promotion. The word heneficium was applied
to portions of land granted by a feudal lord to
his followers (see Benefice No. 1), but after-
wards it came to be restricted in a general sense
to church preferments and dignities, and in a
narrower sense to rectories, vicarages, and per-
petual curacies, which were endowed with lands
and tithes. The perpetual right of presentation
to a benefice is called an advowson and is
regarded as a hereditament of an incorporeal
nature. The right of next presentation is only
personal property. No one but a priest can
hold a benefice, and benefices to which the cure
of souls is attached cannot be charged with pay-
ments to other persons.
{The Ecclesiastical Law of the Church of Eng
land, by Sir R. Phillimore, London, 1873.]
J. E. c. M.
BENEFICIUM CEDENDARUM ACTI-
ONUM (Scots law term). Right of co-surety
to sue for contribution.
BENEFICIUM COMPETENTI^. A privi-
lege given by the Roman law to defendants in
actions brought by plaintiffs standing in certain
relations to them (e.g. to fathers in actions
brought by their children, to former masters
in actions brought by freedmen, etc.) If a
defendant availed himself of this privilege,
judgment was not given for the amount of the
claim, but for such sum as the defendant might
be able to pay without depriving himself of the
necessaries of life. e. s.
BENEFJCIUM DIVISIONIS (Scots law).
An implied right of a surety to be sued in the
first place only for his share.
BENEFICIUM EXCUSSIONIS. A privilege
given to sureties in the later Roman law,
which enabled them to postpone the payment
of the guaranteed debt until the principal
debtor had been sued for the amount, e. s.
BENEFICIUM INVENTARII. By the civil
law, the property of a deceased person goes to
one or more persons who have to pay all
legacies and debts, and who, after once having
accepted the inheritance, cannot plead in-
sujQicient assets, but are personally liable for
everything. A person taking an inheritance
in this way is called an heir (heres) (but it
must be remembered that the word "heir" in
English law has a totally different meaning).
Justinian introduced the heneficium inventarii
which enables the heir to have an official in-
ventory of the estate made before he accepts
the inheritance ; when this is done the inherit-
ance is said to be accepted "with benefit of
inventory," and the heir is answerable to the
extent of the assets only. The rules of law
here described are still in force in the countries
whose laws are based on the civil law (see for
instance the French Code Civil, art. 793).
E. s.
BENEVOLENCES. Voluntary grants made
to the king on application by him personally,
or by letter, or through commissioners. They
were first exacted by Edward IV. Though
they were declared illegal by 1 Ric. III. c. 2,
Henry VII. resorted to them in 1491 and
obtained an act (2 Henry VII. c. 10) for the
recovery of all sums promised but not paid.
BENTHAM
131
Henry VIII. demanded benevolences in 1528
and 1545, and many sums were given to
Elizabeth. During the struggle between the
Stuarts and parliament, the crown more than
once resorted to this method of raising money.
The Petition of Right (1627) expressly declared
that no man should be liable to any benevolence
or forced loan. J. E. c. M.
[Dowell's History of Taxation and Taxes in
England (London, 1889). — Constitutional Law, by
H. Broom, p. 398 (London, 1885).— 2 State Trials,
899.— 12 Coke, Reports, 119.]
BENTHAM, Jeremy, philosopher, reformer,
and economist, born at Houndsditch, London,
1748, was trained for the bar, but soon aban-
doned it for a life of study and travel, which
a considerable private fortune made possible.
Most of his voluminous works were first pub-
lished in French by his friend and admirer
Dumont. Bentham died at "Westminster 1832,
LQ his eighty-fifth year.
Bentham deserves a place in the history of
political economy, partly from his writings on
that subject, perhaps even more from the influ-
ence of his philosophy on his friends James
Mill and David Ricardo. His first import-
ant economical work, the Defence of Usury, is a
series of lively letters (written from Russia in
1787), in which he appeals to Adam Smith to
apply his principles consistently, and withdraw
his sanction from ** legal restraints on pecuniary
bargains." He contends that no man should
be forbidden to make his own terms in a bargain
relating to money, any more than in any other
bargains. He tries to prove, by closely reasoned
arguments, that, when the legislature fixes a
maximum rate of interest, it does not benefit
the right persons, while it corrupts the public
by multiplying temptations to law-breaking.
He proceeds on the general principle that every
man is the best judge of his own interest, and it
is for the public good that he should be left free
to seek it. Bentham was one of the first econ-
omical writers who were completely emancipated
from the old prejudices against lending of money
at interest ; and he combats not only the old
arguments against usury, but Adam Smith's
special plea that, without a legal maximum,
money would pass from the sober people to the
prodigals and projectors. The prodigals, said
Bentham, would not get it, and the projectors
ought to get it. As Adam Smith himself has
frequently remarked, all industrial progress de-
pends on the formation of new industrial
schemes, or in other words, on the work of pro-
jectors. In hindering projectors, therefore, we
are hindering the public good. So argued Ben-
tham ; and Adam Smith is said to have con-
fessed (before his death, in 1790) that in this
point the disciple had bettered the instruction
of his master. Both in style and in matter this
is one of the most masterly of Bentham's econ-
omical writings. The praise, however, must be
shared with t\iQ Protest against Laio Taices(1795);
and the Observations on the Poor Bill of Mr. Pitt.
In the latter, written 1797, he marshals a list
of objections expressed in his happiest manner,
and acknowledged by Pitt to be (in conjunction
with the Essay of Malthtjs) completely fatal to
the success of his bill. The relief of the poor
became an object of his thorough and dispassion-
ate investigation, and as a result he submitted
to government an elaborate poor-law scheme
which anticipated many features of the law ol
1834, and was within an ace of being accepted.
Bentham was quick to see the afiinity of the
new economical doctrines of Adam Smith with
his own political philosophy. Even in his econ-
omical writings he is evidently more guided
by his utilitarian conception of law and govern-
ment than by purely economical reasons ; but
he finds the two in harmony with each other ;
and, in those important cases where political
economy is inseparable from politics and legis-
lation, he is original only in tlie sense of being
a very intelligent disciple. His ovm construc-
tive (as opposed to his critical) work in political
economy is most fully presented in the Manual
of Political Econoviy. Dumont gave part of
this to the world in the Geneva Bihliotheque
Britannique as early as 1798, and rightly
remarks (in his introductory letter there) that,
unlike Adam Smith, Bentham is never the his-
torian but always the legislator, and that he laid
special stress on the limitation of labour by
capital. Whether much or little labour is to
be employed in any industry must depend on
whether much or little capital is devoted to
that industry. This was not a new idea, but
it was made more prominent than in the Wealth
of Nations, from which otherwise the Manual
diS'ersmore in method than in doctrine. Political
economy is treated as a science whereby much
can be known, rather than as an art whereby
government can do much for its citizens. The
part of government is, as a rule, to "be quiet"
and let self-interest have its perfect work, so
that, out of the three classes of measures, the
sponte acta by the citizens, the agenda by the
state, and the non agenda by the state, the
first, in economical matters, must play the largest
part. In the Manual, indeed, the non agenda
cover the greatest number of pages ; the various
forms of mischievous interference by government
are described at length, and treated very much
as by Adam Smith. They are, however, more
plainly declared by Bentham (as later by Cob-
den) to be not simply unwise, but unjust.
Colonisation is regarded as a loss to the mother
country and a gain to the world, a view which
led Bentham, in his capacity of French citizen,
to advise the French (in 1793) to emancipate
their colonies. Drawbacks and Bounties are
condemned ; but the granting of a patent to
inventors is strongly commended, and the ex-
pense of procuring one is denounced as unjust
132
BENTHAM
In a passage, which does not appear in the
Bihliothhque Britannique, and may have been
written after Malthus's Essay, premiums on
large families and similar encouragements of
population are condemned : "As well make in-
stitutions to punish men for not eating, or pay
them for eating, with premiums for them who
eat most and oftenest." In regard to iinance,
Bentham considers that the best tax is the
extension of escheats on failure of near relations
(which is also the subject of a separate pamphlet),
and the worst taxes are those on law proceed-
ings. " In law a tax is a prohibition to every
man who cannot pay the tax ; this is understood
in trade, but seems not to be imderstood in
anything else," he says in his Conversations.
He thinks well of the redemption of the national
debt by an (inviolable) sinking fund, consider-
ing that the money employed in reducing the
debt is, at the time of repayment, a positive
addition to the productive capital of the country.
This may be doubtful doctrine ; but no excep-
tion can be taken to the main reason given for
repayment, namely, that "sum for sum the
enjoyment produced by gain is not equal to the
suffering produced by loss. In this difference,
traced through all its consequences, lies the
mischief, and the sole mischief, of bankruptcy,
or of theft. " In dealing with special economical
doctrines Bentham is not, on the whole, in ad-
vance of his master, while we miss, throughout,
his master's continual illustrations from life and
history. His distinctions are often expressed
in philosophical terms, without thereby be-
coming either more subtle or more profound.
National wealth, as the total of the means of
subsistence or enjoyment, is distinguished from
national opulence or "relative wealth," which
varies inversely with population. He describes
the " final cause " of wealth as well-being, and
the "material cause" as "the matter of wealth
considered in respect of its possessing or being
capable of possessing value, namely, subservience
to well- being, the final cause. ' ' (We may compare
with this the casual remark in his Conversations,
"the value of money is its quantity multiplied
by the felicity it produces.") In regard to
machinery, he seems to have arrived at a con-
clusion similar to Ricardo's in its final form.
After an invention (he says in a passage which
is not given in the BihliotMque Britannique, and
may be later than 1798): " Without an addition
to the mass of pecuniary capital, which is a cir-
cumstance accidental and not belonging to the
case, the retaining of the same number of hands
would in no instance be possible, for the pro-
duction and keeping up of the machinery or
other auxiliary means would always require a
considerable quantity of labour, the payment of
which would be attended with a proportionable
mass of expense, by which a proportionable part
of the capital would be absorbed ; " and there-
fore the introduction of machinery may certainly
(he thinks) be an immediate evil to the labour-
ing classes. Bentham can hardly, in this case,
be said to give us both sides of the question.
But there are other economical problems on
which he barely 'touches at all. Kent is not
discussed, and the distinction of cost from value
is the subject only of passing allusion (in the
ConversatioTis). The assertion of Karl Marx
that Bentham was the author of the theory of
a wages fund rests on no stronger evidence
than the passage above quoted about machinery.
The statement that labour is limited by capital
does not by itself imply so much. It is difficult
to be certain how much of the Manual is of the
18 th century and how much of later date ; and
we cannot give its author the credit of every
novelty that distinguishes his treatise from the
Wealth of Nations. But it is clear that Bentham,
if not an economist of the first rank, was at
least well abreast of the times.
But Bentham's political philosophy has ex-
erted a much greater influence on political
economy than his own directly economical
writings. Through James MiU and Ricardo
political economy came to be identified (not
merely with utilitarianism, with which in some
degree it had abeady been identified by Malthua),
but with Bentham's peculiar form of utilitarian-
ism. How closely the two were associated in
the popular mind we may see from Carltle's
early writings, in which the monster " Utili-
taria " and the " dismal science " are constantly
presented as different phases of one and the
same deadly error. "The greatest happiness
of the greatest number," a neat democratic
formula used by Beccaria in his Treatise on
Crimes and Punishments (1764), and by Dr.
Priestley 1 in the Essay on Government (1768),
was announced by Bentham (in his Fragment
on Government) in 1776 to be the ruling prin-
ciple and chief end of the legislator ; and the
unhampered working of commercial ambition
and competition was very easily translated into
terms of this formula (see Beccaria). Whatever
distress free competition might inflict on indi-
viduals, it tended to the greatest happiness of
the greatest number. This was of course sub-
stantially the doctrine of Adam Smith himself.
The difi'erence between the two philosophers is,
that the latter applied the principle to economics
alone, and is not rightly described as being, in
philosophy, a utilitarian at all. In economics
he thinks he can show that individual men left
to follow their separate self-interest without let
or hindrance from the state will unintentionally
accomplish results that are for the public good.
1 " Priestley was the first (unless it was Beccaria) who
taught my lips to pronounce this sacred truth ; that the
greatest happiness of the greatest number is the founda-
tion of morals and legislation " (Commonplace Book, 1781-
85 ; Works, x. 142, cp. 567 note). The phrase occurs in
Hutcheson's Inquiry into Beauty and Virtue, etc., 1738,
p. 181. Comp. Mr. F. C. Montague's edition of the
Fragment on Government, introduction, pages 33, 34
(Clarendon Press, 1891).
BENTHAM— BEQUEST, POWER OF
133
namely, the greatest wealth and commercial
prosperity possible to their community. Adam
Smith, in short, abstracts, not very rigidly, and
in one class of actions only, from all motives
but self-interest. Bentham, on the other hand,
makes use of the same abstraction, not in one
class, but in the whole range of actions falling
under consideration of political philosophy. Not
only ill economical matters but in politics and
general life, "there is no true interest but in-
dividual interest." Man is under two masters,
pleasure and pain, and his action results from a
calculation of the balance of consequences in
favour of greater pleasure or less pain to himself
individually. On the other hand, the same
Bentham considers that the aim and intention
of all legislation (as distinguished from the un-
intended result of actions let alone by the law)
must be " the gi-eatest happiness of the greatest
number," which is a general and not an indi-
vidual interest. It is hard to reconcile this
regard to the general interest with Bentham's
extreme individualism. He tries to do so, when
he says it is imperative that the individual
interest of the ruler should be one with the
general interest of the ruled ; but he does not
explain how Bentham the legislator, being a
mere man, can rise to a view in which his indi-
vidual interest is certainly lost in the general.
This is not the place to discuss the philosophical
question ; and it must be gi'anted that, once
Bentham has made his logical leap from the
individual to the general happiness, he guides
himself strictly by regard to the latter even in
matters of trade, and has no faith in an abso-
lute "harmony" of unregulated interests. He
was an advanced free-trader ; but we can see,
from such proposals as those for the extension
of escheats and for the taxation of bankers and
stockbrokers, that his maxim of "greatest
happiness " had lifted him above the extreme
form of laissez-faire. The same maxim, when
interpreted as a claim for equality of treatment
for all members of the state ("every one to
count as one and no one as more than one "),
had much to do with the influence of the
followers of Bentham (" the Philosophical Kadi-
cals"), represented by the early Westminster
Review ; and the close association of Bentham's
politics with Ricardo's economics may therefore
have helped in many quarters to secure a hear-
ing for the latter during the crusade against
the com laws.
The philosophy of Bentham has influenvjed
political economy in another and very different
direction. The idea of a calculus of pains and
pleasures which is used by Jevons and others
in building up the economic theory of value is
founded (especially in the case of Jevons) very
largely upon the suggestions of Bentham ; and,
even if the theory of final utility can be stated
quite apart from any utilitarian psychology, it
was certainly in the language of this psychology
that it was first formally expounded by English
writers.
It should be added that, like all the great
modem economists, Bentham was devoted to
the cause of education, especially the education
of the labouring classes, whom he regards as the
most valuable part of the community. He took
shares in Robert Owen's factory in New Lanark,
when (in 1813) Owen bought out the old part-
ners. His waitings on education are hardly less
numerous than those on legislation.
[His Avorks and life, edited by Bowiing, with an
introduction by Hill Burton, fill eleven volumes,
of which the tenth and eleventh contain the Life
(Tait, Edinburgh, 1838 seq.) His chief economi-
cal works are : (vol. ii.) Protest against Law Taxes,
Supply without Burden, Tax loith Monopoly {i.e.
a tax on bankers and stockbrokers) ; (vol. iii.) De-
fence of Usury and of Projects in Arts, Manual
of Political Economy, Conversion of Stock into Note
Annuities, Invention and Discovery; (vol. iv.)
Hard Labour Bill, Emancipate your Colonies;
(vol. viii. ) Tracts on Poor Laws and Pauper Man-
agevient, Observations on the Poor Bill of Right
Hon. William Pitt. The treatises on r^.ewards and
Punishments (vols. i. and ii. ) have frequent econ-
omical references, though those of greatest length
in the original edition have, in the collected works,
been transferred to the Manual.
The Manual, together with the Principles oj
Legislation, has been in great part reproduced in
the volume on "Bentham" (ed. Ratt'alovich) in
the Petite Bibliotheque l^conoviiqne (Guillaumin,
1888).
Critical estimates of Bentham's general work will
be found in J. S. Mill's Dissert, and Discuss., i.
330 seq. (from Westminster Review, August 1838),
and in Adolf Held's Sociale Geschichte Englands,
article "Bentham" (1881), and in an article by
Prof. H. Sidgwick on "Bentham "in the Fort-
nightly Review, 1877 (comp. also account of
Bentham's first principle in Prof. H. Sidgwick's
History of Ethics). J, S. Mill's Autobiography
brings out the influence of Bentham on Mill and
Austin and the philosophical radicals in general.
See also Bain's Life of James Mill, 1882.] J. b.
BEQUEST, Power of. The power of be-
queathing property on death has descended to
modern nations from the Roman law, which per-
mitted three -fourths of the inheritance to be
willed away from the next-of-kin. The Koran
recognises a similar principle as regards two-
thirds of a man's property, and the Mishna re-
cognises gifts of property to take eflect on death ;
but it is probable that these provisions are trace-
able to the influence of Roman law.
Under the feudal system a vassal was not
permitted to substitute a stranger in his place
without his lord's consent (2 Coke, Inst. 7), and
the early English will was restricted to personal
property. At common law, a man if he left a
widow and children could bequeath one-thu'd
of his personalty ; if he left only a widow or
only children he could bequeath one -half;
and if ho left neither widow nor children he
134
BEQUEST, POWER OF— BERKELEY
could dispose of the whole (2 Blackstone's
Commentaries). Some writers think that the
above rules only prevailed when supported by
special custom (Williams on Executors). By
imperceptible degrees full power of bequest was
introduced, except in the province of .York,
Wales, and the citj of London, but bv the
4 & 5 W. & M. c. 2, explained by the 2 & 3
Anne, c. 6 for York ; 7 & 8 Will. IIL c. 38 for
Wales, and the 2 Geo. I. c. 18 for London, the
special customs prevailing in these places were
abolished.
As regards real property, the refusal of the
common law to permit bequests led to the in-
vention of uses and trusts by means of which
land was devised indirectly. After the attempted
abolition of uses by Henry VIIL the incon-
veniences arising from the want of testamentary
power resulted in the 32 Hen. VIIL c. 1, which
permitted a will to be made of all land held by
Socage and two-thirds of land held by knights'
service tenure. The 12 Car. II. c. 24 abolished
tenure by Knight's Service, and the 55 Geo.
III. c. 192 made Copyholds devisable.
The practice of entailing land by settling it
upon a number of life tenants in succession has
greatly curtailed the freedom of bequest, as the
estate of a life tenant must end with his death
(see Settlement). In the United States and
in Canada, Australia, and other English colonies,
freedom of bequest is the general rule, as their
legal systems are based on English law. In
Scotland and on the continent of Europe the
principle of the Roman law, — reserving a certain
portion of the inheritance (legitima portio) for
the heir has been followed. The law of Scotland
gives the widow one-half the movable property
if there are no children, one-third if there are
children ; one-third if there be a widow, one-
half if there be no widow is reserved for the
children ; what remains may be bequeathed.
The portion of the property that may be be-
queathed in the chief European countries is as
follows : —
In Austria : one-half if there are descendants,
two-thirds if ascendants only, the whole if neither
ascendants or descendants. AusL Civ. Code, par.
765, 766, 951.
In Bavaria : one-half if there are five or more
children, two-thirds if there are four or fewer
children. Bav. Civ. Code, § 15.
In Denmark : one-third if there are descendants,
the whole if no descendants. Dan. Civ. Code, 262,
263. Special provisions regulate the bequest of a
Soedegaard or "family seat," of a Bondergaard or
"estate let to peasants." New entails are pro-
hibited.
In France, Belgium, and Holland : one-half
if there is one child, one-third if there are two
children, one-fourth if there are three children, and
80 on.
In Germany : various regulations prevail, but
there is a universal rule that a proportion, vary-
ing in the different states, cannot be bequeathed
away from the nearest relatives.
In Greece : a share equal to that which on an
equal division would descend to each of his direct
heirs.
In Italy : one-half if there are descendants,
two-thirds if there are ascendants only, the whole
if neither descendants or ascendants. It. Civ. Code,
805.
In Norway : one-half if there are descendants,
the whole if no descendants.
In Portugal : one-third if there are ascendants
or descendants.
In Prussia : all the property, but this power is
greatly limited by the existence of settlements,
hereditary estates, and by the customs of particular
localities.
In Russia : (1) all acquired property ; (2) all
patrimonial property if there are no descendants.
By the Emancipation Act of 1861 the descent of
property of the peasants is to be governed by local
usage. The communal organisation still prevails
in Russia.
In Spain : one-fifth if there are descendants,
one-third if there are ascendants only, the whole
if there are neither ascendants nor descendants.
In Sweden : in towns one-sixth of the property
if there are children, one-half if there are relatives
only in the country, the whole if there are no
relatives living.
In Switzerland : each canton has its own
regulations,* see Les Legislations Civiles des Can-
tons Swisses, par C. Lardy, Paris, 1877.
[See Reports on the Tenure of Land in LIurqpe,
1869 c. 66 ; 1870 c. lb.— Succession Laws of Ch/rts-
tian Countries, by E. Lloyd (London, 1877).
Mill in his Political Economy, bk. ii. c. ii., and
bk. V. c. ix., discusses the extent to which freedom
of bequest should be permitted.] J. e. c. m.
BERKELEY, George, Bishop of Cloyne,
Ireland, born 1685, died 1753. Bishop Berke-
ley's principal contributions to economic thought
are contained in the Querist ; of which the first
edition appeared, in three successive parts, 1735-
37. A second edition, increased by a few queries,
and diminished by many, was issued in 1750.
The portions of the first edition which did not
reappear in the second are printed by Professor
Eraser as an appendix to the third vol. of his
edition of Berkeley's works.
Berkeley anticipates Adam Smith in conceiv-
ing wealth and weKare philosophically ; and is
free from the errors of the mercantile system
{Queries 556-561, and passim). He rightly
states several technical points, as that ** interest
measures the true value of land " (1st ed. part
i. 244), and that the worse currency expels
the better (27, 464, 2d ed., 1st ed. part i.
246). Among many eternal verities stand out
two or three doctrines which may appear to
our generation less certain, or less important,
than Berkeley held.
(1) Like Cantillon, Berkeley ascribes para-
mount importance to the direction which un-
productive consumption takes. "Whether the
industry of the lower part of our people doth
not much depend on the expense of the upper"
(395) ? Whether, by housebuilding and similar
BERLIN DECREES— BESOLD
135
expenditures, "much of that sustenance and
wealth of this nation which now goes to
foreigners would not be kept at home, and
nourish and circulate among our own people"
(402) ? " Whether an Irish lady, set out with
French silks and Flanders lace may not be
said to consume more beef and butter than a
hundred of our labouring peasants" (144) ? "of
how great consequences are fashions to the
public" (99) ? " Whether it may not concern
the wisdom of the legislature to interpose in
the making of fashions " (13) ?
(2) The wisdom of the legislature is also to
be employed in creating a national bank.
The scheme is explained more fully in the first
than in the second edition. Berkeley asks
"Whether the sure way to supply people with
tools and materials, and to get them at work,
be not a free circulation of money " (239) ? He
regards the "promoting of industry" as "the
true and sole end, the rule and measure, of a
national bank" (314). It may appear to us
more doubtful "Whether there be any diffi-
culty in comprehending that the whole wealth
of the nation is in truth the stock of a national
bank" (438) ? And it savours now of heterodoxy
to ask "Whether the true idea of money as
such be not altogether that of a ticket or
counter" (23, 441)?
(3) A less prominent, but still cardinal,
part of Berkeley's teaching is that the multi-
tude as well as the quality of population is an
element of well-being. "Whether the main
point be not to multiply and employ our
people" (352)? "Whether it would not be
delightful to live in a country swarming, like
China, with busy people" (359)?
Some of the suggestions made in the Querist
are found in the Essay towards preventing the
Ruin of Great Britain (1721), where, besides
inculcating moral reforms, Berkeley proposes to
encourage population and manufactures.
\_The Works of George Berkeley, forvierly Bishop
of Cloyne, edited by Professor A. C. Fraser,
Oxford, Clarendon Press, 4 vols. 1871. The
Querist, with notes, 1829.] f. y, e.
BERLIN DECREES. See Continental
System.
BERNARD, Sir Thomas, Bart. (1750-1818),
was one of the originators of the co-operative
movement in England. He was employed by
his father, Francis Bernard, the Governor of the
province of New Jersey, as his secretary, and
was called to the bar in 1780, but early devoted
himself to philanthropical pursuits. Assisted
by Count Rumford, Eliot, Wilberforce, and
especially by the Bishop Shute Barrington of
Durham, he founded in 1796 the " Society for
Bettering the Condition and Increasing the
Comforts of the Poor," the reports of which are
for the most part his personal work. The same
benevolent tendencies inspired him to publish
The Case of the Salt Duties, with Proofs and
Illustrations, 1817, in order to bring about
their repeal. Besides the above-mentioned
works his "Observations on the different Pro-
posals which have been made respecting the
Poor during the two preceding Centuries," are
very important, through their wealth of in-
formation. They are joined by way of an
appendix to : The Life of Sir Thomas Bernard,
Baronet. By the Rev. James Baker, his nephew
and executor, 1819.
{Dictionary of National Biography, vol. iv. pp.
387, 388.— G. J. Holyoake, Self-help a Hundred
Years ago, 1888, oh. iii. ch. iv. ch. vi.] s. B.
BERNHARDI, Theodor von, economist,
historian, and diplomatist, born at Berlin 1802,
died 1887. His youth was spent in Russia. In
1820-23 he studied at Heidelberg, and then,
after travelling abroad, settled in Silesia. He
was appointed a Prussian " Legationsrath " in
1865, and for some years was actively employed
in diplomatic work in Italy, Spain, and Portugal.
He is known as an economist by his Versuch
einer Kritik der Grunde welche fiXr grosses und
kleines Grundeigenthum angefiihrt werden, 1848.
" Under this modest title," says Roscher, ♦' is
concealed a series of thorough-going investiga-
tions on the questions which are most important
from a general point of view. The whole
belongs to the best of what has been wi'itten
against whatever is one-sided in the doctrines
of Smith, and still more of Ricardo. Were
Bernhardi WTiting in our day, he would with-
out doubt be spoken of as following the same
direction as the Socialists of the Chair."
The point Roscher finds most characteristic in
liim is the histm'ical spirit of his work, seeking,
as it does, to explain what are the views of
human aff"airs out of which the opposite doc-
trines on large and small properties have respec-
tively taken their rise, and with which they
must stand or fall. Bernhardi is also author
of several valuable works on political and
military history. (Roscher, Geschiehte der Nat.
Oekon. in Deutschland, p. 1041). j. k. i.
BESOLD, Christoph (1577-1638), the
greatest German master of political science in the
first half of the 17th century, was born at Tubin-
gen in 1577. After the battle of Nordlingen
he announced his conversion to Roman Catholi-
cism, entered the Austrian service, and was for
a time privy-councillor. So renowned was he
in his own day that the emperor wished him
to fill a chair in Vienna, the pope one at
Bologna, and the court of Denmark one in that
country. He died in 1638 at Ingolstadt, where
he was professor. He was characterised by a
many-sidedness which, says Roscher, reminds
us of Grotiijs and Salmasitjs. He was a most
voluminous writer on theology and philosophy,
law, history, and politics. In his De Aerario
(2d ed. 1620) he gives a full enumeration of the
questions to which statistics should furnish a
i-eply. His economic doctrines are stated in
136
BETTERMENT
his Synopsis poUticoe aodrinoe, and his Vitce
et mortis consideratio politica, 1623. His views
on usury are remarkable, especially when we re-
member that they long preceded the arguments
of Salmasius on the same subject. He denies
the Aristotelian doctrine of the unfruitfulness
of money, makes loans on Interest a case of
legitimate locatio, disputes the common inter-
pretation of the Jewish prohibition of interest,
and only asks for a legal limitation of the rate.
He agrees with the mercantile school as to the
necessity of preventing the exportation of money
and regulating the corn trade, and as to the
propriety of sumptuary legislation. His great
defect is the unsystematic character of his writ-
ings, which often consist merely of collectanea
from various sources, loosely connected and in-
terspersed with frequent digressions. Thomasius
attributes to him "multa diligentia, magnum
ingenium," but " exiguum judicium."
[Roscher, Gesch. der Nat. Oek. in Deutschland,
p. 195.] J.K.I.
BETTERMENT. A word imported from
the United States of America, and denoting an
improvement of property. It has recently
become familiar in England as the name for a
principle of taxation, the adoption of which,
for the purposes of local taxation is recom-
mended by some politicians — the principle being
that persons benefited by public expenditure
should contribute to such expenditure to the ex-
tent of the increased value of their property, and
this not only if the improvement effected by the
public authority was carried out for the purpose
of conferring a benefit on such property, but
also if the resulting benefit was purely acci-
dental, the expenditure having been undertaken
for a totally different purpose. The advocates
of the principle assert that it has been recog-
nised by previous legislation both in the United
States and in England, and that in extending
its application they, are introducing no new
system of taxation.
As regards England the following instances
are given :
(1) Various Sewers Acts, beginning with a
statute of Henry VI., by which Commissioners
were appointed for the purpose of constructing
sewers, drains, seawalls, and other works for
the prevention of floods, and for the purpose of
apportioning the cost of such works among the
owners of property within their respective areas.
The Commissioners were to ascertain by whose
fault any damage had previously been caused,
who was specially injured by the previous state of
things, and who would be specially benefited
by the new works. These facts were to be
considered in the apportionment (see the words
of the Commission as set out in 6 Henry VI.
c. 5, and 23 Henry VIII. c. 5).
(2) § 159 of the Metropolis Management
Act (18 & 19 Vict. c. 120), which enables
any vestry and any district board to impose
special rates on any part of the parish oi
district, or to exempt any part of the parish or
district from rates, with respect to expenditure
which has been incurred for the benefit of any
particular part, or has not been incurred for the
benefit of the whole of any parish or district.
(3) § 8 (8) of the Artisans' Dwellings Act
(45 & 46 Vict. c. 64 — now reproduced by
§ 38 (8) of the Housing of the Working Classes
Act, 1890 — 53 & 54 Vict. c. 70), according
to which the arbitrator appointed under that
Act has power, in the case of the compulsory
demolition of an obstructive building, to im-
pose a special rate on the owner of a building
previously obstructed, to the extent of any
increase in the value of such building resulting
from such demolition. Other statutory pro-
visions have also been relied upon, but they
are either exactly analogous to those mentioned
or obviously irrelevant.
It is not difficult to show that the principle
brought out in the first two instances is not
even superficially analogous to the principle
of betterment as defined above. Landowners
belonging to a district threatened by floods
must take common measures for their protec-
tion, and as some individuals are more careless
or more selfish than others, public officers are
appointed to ensure efficient measures and a
just apportionment of the expense. There is
here no public expenditure in the proper sense,
nor is there any apportionment, based on the
increase in the value of property. The Metro-
polis Management Act, in authorising the sub-
division of parishes and districts for rating
purposes, only recognises a principle which
underlies all local government and taxation ;
viz. that expenditure incurred for the exclusive
benefit of a particular area ought to be borne
by the inhabitants of that area. As it often
happens that a metropolitan parish or district
comprises parts widely separated from each
other, and public works undertaken for the
benefit of one part may be useless or even
hurtful to another part, it would be manifestly
unjust to recognise no other area for local
taxation except the arbitrary and frequently
fanciful area of the parish or district. The
Housing of the Working Classes Act seems, at
first sight, to come nearer to the principle of
betterment than the other statutes mentioned,
inasmuch as it expressly declares that the
increase in the value of improved premises is to
be considered for the purpose of the apportion-
ment of the contributions payable in respect of
the compensation to the owners of obstructive
buildings, and inasmuch as it introduces special
rates upon individuals as distinguished from
local areas ; but here the analogy ceases. The
demolition of an obstructive building is ordered
on the ground of its being injurious to an
adjoining house, and the primary object of the
demolition is, therefore, the benefit of that
BETTERMENT
137
particular house. The special rate to be im-
posed in such a case is to be levied like a
private improvement rate under the Public
Health Acts ; and, like a private improvement
rate, it is not a tax in the usual sense of the
word, but the repayment of a sum spent by
the local authority for the special benefit of
the party from whom it is to be collected.
In all these cases the expenditure is to be
incurred with the special object of conferring
benejfits on a particular area or particular
persons, and it is from that area or from those
l)erson8 that the rate is to be collected. As
Mr. Pember tersely says in his speech against
the Strand Improvement Bill (p. 2) : the
principle hitherto not departed from is ' ' that
the incidence of taxation should be determined
by the motive of the expenditure, and not by
its accidental results."
The American legislation on the subject has
been summarised by Mr. John Rae {Ccndem-
porary Review, May 1890, p. 644 seq.) He
defines a betterment tax as "the special assess-
ment of the expense (or part of the expense) of
a local improvement on the adjoining property
which is specially benefited by the improve-
ment." This definition is somewhat ambiguous,
as it is aot clear whether such an assessment
IS to take place irrespectively of the object of
the expenditure ; and the ambiguity is not
removed by the instances which are given of
the imposition of a betterment tax, many of
which seem explainable in the same way as
the English statutes to which reference has
been made. It is, however, quite clear that
the principle of betterment, even in a more
restricted sense, is not recognised in all tlie
States of the Union, and that where it is
recognised, the manner of applying it is by no
means uniform.
The argument from precedent does not, under
these circumstances, seem well founded, and
the question as to the advisability of introduc-
ing the principle of betterment must be decided
on the merits only. Before considering whether
the proposed new method of taxation is just or
expedient, it will be useful to ascertain how it
can be can-ied out in practice. For this purpose
the evidence taken by the Select Committee on
the London Streets (Strand Improvement) Bill
— a bill promoted by the London County
Council and withdrawn after the rejection of
its principal provisions — is highly instructive.
The object of the bill was the widening of the
Strand for the purpose of facilitating metro-
politan traflfic. This clearly appears from the
preamble, which begins : ** Whereas obstruction
and delay to traffic is caused by the narrowness
of the thoroughfare known as the Strand near
the Churches of St. Mary -le- Strand and St.
Clement Danes, and having regard to the
extent and character of the traffic using the
said thoroughfare, it is expedient that it should
be widened and improved," etc., but as it wag
believed that the improvement was likely to
cause an increase in the value of the adjoining
property, it was proposed to raise part of the
expenditure (not exceeding one-half) by con-
tributions from the owners or occupiers of such
improved property, which were to assume the
form of yearly rent-cliarges. The bill created
a betterment area, and provided that an arbi-
trator was to determine whether and to what
extent the improvement rent-charge Avas to be
imposed on each separate plot within that area.
The award was to state (a) the amount of the
increased value which would accrue to each
plot ; (h) the amount of the rent-charge to be
apportioned to such plot ; (c) the name of the
person or persons by whom such rent- charge
should be payable (being the owner of, occupier,
or person otherwise interested in such plot).
The following are some of the practical diffi-
culties disclosed by the evidence before the
Select Committee.
1. The area of betterment was settled before-
hand, and the arbitrator had no power to make
an assessment on any property outside the area.
At the same time the limits of the area were
not fixed on any intelligible principle. The
surveyor who made tlie plan almost admits this
in his evidence. To the question (p. 101)
"Why have you taken one side of Devereux
Court and not the other?" he replies: "I
am obliged to draw the line somewhere."
Later on when asked (p. 103) "AVhy have you
put it [New Court] in the betterment area ? "
he says : "You cannot always tell the reason
why ; " and similar answers are frequent. It
may be objected that these facts are damaging
to the proposed scheme, but not to the prin-
ciple of bettennent, but it is easy to see that
the difficulty is not due to the accidents of this
particular case. It is quite impossible to fix
an area beforehand which is not more or less
arbitrary ; and if it is left to the arbitrator to
find betterment wherever it exists without regard
to any area, the difficulty of his task becomes
insurmountable.
2. Even within a limited area the arbitrator's
work may be so arduous as to become practi-
cally impossible. If no time be fixed for the
making of the final award, great inconvenience
must result ; and if a time be fixed, the pressure
of time must interfere with the completeness of
the inquiry. Mr. R. C. Driver, one of the best
known estate agents in London, being asked :
"Now, apart from any machinery in this parti-
cular bill, do you think from your experience
as a surveyor you could deal with this question
of betterment ? " replies : " I do not know the
surveyor at the present moment amongst the
whole range of them who is competent to deal
with it " (p. 229). It might be said that the
difficulty of the inquiry in the particular case
was due to the large extent of the area, but it
138
BETTERMENT— BETTERNESS
would never be feasible to apply the principle
of betterment to a small area, as no appreciable
part of the total expenditure could be recovered
in such a case.
3. The arbitrator, before making his award
with regard to any particular plot, would Jiave
to hear the evidence concerning the whole area
(see Mr. Tewson's evidence, on p. 273). There
would, therefore, be a period of uncertainty
extending over several years, concerning every
piece of ground within the area, and as no one
would purchase land subject to an uncertain
contingent rent -charge, the whole property
would become unsaleable during the period of
suspense.
4. The arbitrator might find that only a very
small part of the area derived any benefit. It
would therefore be impossible to estimate before-
hand what proportion of the cost would eventu-
ally become chargeable to the Metropolis.
5. The metropolitan ratepayers are now pay-
ing interest on sums borrowed for other metro-
politan improvements which probably have con-
ferred benefits on particular localities. If some
inhabitants of the Strand district were made
to pay for part of the expenditure by which
they were specially benefited, they would be
justified in asking for a readjustment of metro-
politan taxation, so as to be relieved of part of
the burden borne by them for the benefit of
other localities.
Apart from these practical difficulties there
are serious objections to the proposed adoption
of the principle of betterment on grounds of
justice and expediency. These may be shortly
stated as follows :
1. There is hardly any public expenditure
which does not benefit somebody, and it would
be obviously unfair to give away these benefits
in some cases and sell them in other cases.
The erection of the New Law Courts has in-
creased the value of property in the neighbour-
hood to an enormous extent, yet the cost has
been paid entirely from imperial funds.
2. If public bodies may ask for contribution
from persons benefited by their expenditure,
irrespectively of the objects of the expenditure,
private corporations or individuals ought to
have the same right. A landowner who
rebuilds a particular plot of houses, or plants
trees or gardens for the benefit of his own pro-
perty, may thereby increase the value of property
within a whole district. A railway company
may open a new area for building purposes ; yet
the persons benefited are not required to con-
tribute to the outlay.
3. It is dangerous to establish a principle of
taxation, the incidence of which, instead of being
determined by definite general rules, depends
on the discretion of one or more individuals
whose fitness cannot be ascertained beforehand,
and upon a calculation of probabilities which
may and frequently will be erroneous.
4. If the effect of public expenditure on
private property is to be considered at all, irre-
spectively of the object of the expenditure, the
loss ought to be considered as well as the gain.
If those who benefit ought to contribute, those
who lose ought to be compensated. Some of
the advocates of betterment recognise this con-
sequence. Mr. James Beal, one of the wit-
nesses called on behalf of the London County
Council, in reply to the question (p. 199) : "If
you adopt that principle without regard to dis-
tance, would you also admit that to any distance
people might claim, on the other hand, from the
Council, for what you call an improvement doing
damage to their property?" answers "Cer-
tainly." "Can you give any idea to the com-
mittee of what the pecuniary ultimate result
would be, what your balance-sheet would look
like?" "No." "It might turn out to be a
very bad principle for you?" "When you
assert a principle follow it to the death ; do not
trouble about results." It should be remem-
bered in reference to the last remark that in
this case the persons who asserted the principle
were not the persons whom the result would
have affected.
The metropolitan authorities have hitherto
adopted a plan for obtaining the benefit of a
rise in the value of property, occurring in con-
sequence of improvements effected at the general
expense, which has produced satisfactory results,
and is free from the inconvenience of the better-
ment tax. This plan is known as the method
of recoupment, and is applied in the following
manner. The public authority acquires com-
pulsory powers to purchase land beyond the
immediate necessities of the contemplated im-
provement, at a valuation which does not
include the prospective increase in value which
will be due to improvement. Such land is resold
when the improvement is completed, and by
the profit on the re-sale a part of the cost of
the improvement is repaid. The principal
objection urged against this plan is that the
price of the compulsory purchase includes trade
interests which are destroyed, and that this
loss takes away the profit which would other-
wise have been obtained on a re-sale. There is
not much force in this objection, inasmuch as
most of the houses occupied for trade purposes
are held by the tenants on short leases, and the
public authority can therefore buy the freehold
without paying for any trade interests, and
allow the leases to run out before re-selling.
The duty to re- sell may be postponed for a
number of years, so as to allow for time for
longer leases to run off. This plan, which is
just and fair to everybody concerned, is free
from most of the objections against the better-
ment scheme, and answers every legitimate pur-
pose for which that scheme has been devised.
BETTERNESS, A term used m
E. s.
buUioL
BEZANTS— BIDDLE
13S
transactions. It is usual in the older metliods
of reporting tlie results of assays, which are still
retained side by side with the decimal system
of reporting, to refer the proportion of gold or
silver in ingots or bars to "standards" for the
respective metals. Standard gold contains
22 parts of gold and 2 of baser metal in 24
parts ; these parts are called carats, the gold
carat containing 4 grains, the grain being sub-
divided into 8 parts. The standard for silver
coin and plate consists of 11 ounces 2 dwts. of
silver and 18 dwts. of copper in the pound of
12 ounces troy. BcttevTiess, and worseness, are
merely conventional terms which have been
adopted for centuries to show how much gold
in *' carats " and " gi-ains " and " eighths," and
how much silver in ounces and pennyweights,
the mass of metal contains in addition to, or
in defect of, the legal standard, which standard
affords the basis for calculating the money value
of the metal. c. r-a.
BEZANTS. A name given to gold and silver
coins which were struck at Byzantium (Con-
stantinople), the capital of the Eastern empire,
and which circulated throughout Europe from
the 6th to the loth or 16th centuries. The
gold coins were current in England in Anglo-
Saxon and Norman times, and may be said to
have been used as international money.
Of the original bezants the chief gold coin
was called the ** Solibus " and the silver coin
the "miliarision." They were struck about
the year 500 A.D., in the time of Emperor
Anastasius, and were made of fine metal. They
were, however, gradually debased, and by the
15th century, when the Eastern empire fell,
they had become greatly reduced in fineness.
Their weight also did not remain constant, and
it is impossible therefore to say what was their
exact value. A gold coin, however, which was
probably the largest to which the title bezant
could correctly be applied, was issued in the
reign of Heraclius (615 a.d.) under the title of
' ' hexagram. " The weight of this coin was 105
grains (probably fine gold) and its value in
sterling therefore would be 18s. 7d.
The current rate at which gold bezants were
received throughout Europe has been estimated
at a ducat (9s. 4d.), so that they may be taken
as roughly equivalent to a Half-Sovereign ;
and this estimate would appear to be confirmed
by the fact that 200,000 bezants, paid for the
ransom of St. Louis of France (1250), were taken
as equal to 100,000 Livres (pounds). Bezants,
however, which were distributed at the corona-
tion of Henry II. of France (1547), three cen-
turies later, were equal in value to two Ducats.
As, however, it is certain that in the course of
time the word bezant came to be applied to any
gold coin in common use, quite apart from any
consideration of its value or of its place of ori-
gin, such discrepancies in their estimated value
cannot but be expected to occur. f. e. a.
BIANCHINI, LuDOVico, born at Naples
1803, died 1871, was an economist, statesman,
and historian of merit. Though much occu-
pied in the highest official positions of the
kingdom of Naples, he found time to write
many excellent works on economical, adminis-
trative, and historical subjects.
His principal ecouoniical writings are the follow-
ing : — Principii del credito pubblico, viz. Prin-
ciples of Public Credit, published in Naples in
1827 and 1831. — Delia injluenza delV amminis-
trazione pubblica sulla industria nazionale e sulla
circolazione delle richezze, viz. On the Influence oj
the State on Industry and Circxdation of Wealth,
Naples, 1828. — Delia storia delle finanze del
liegno di Napoli, viz. History of Neapolitan
Finance, 3 vols., Naples, 1834 and \%2,'d.—Sullo
stato delle ferriere nel Regno di Napoli, Napoli,
1S35. — Sidla conversione delle rendite inscritte
nel gran libro del debito pubblico, viz. On the
Conversion of the Public Debt, Naples, 1836. —
Principii delta Scienza del ben vivere sociale e delta
economia pubblica e degli Stati, viz. Principles of
the Science of Social Welfare ; the first volume,
containing the history of political economy, was
published in Naples in 1845 ; the second volume,
containing the principles, was published in Italian
iu 1855, and in French in 1857. — Storia econo-
mica di Sicilia, viz. Economical History of Sicily,
Naples, 1841. m. p.
BIBLIA, Fabrizio, of whose life nothing is
known except that he was born at Catanzaro, and
wrote in 1621, by order of the Viceroy Zapatta,
during one of the most serious monetary crises
of the time, a pamphlet having the title,
Discorso sopra V aggiustamento delta moneta e
cambii nel Regno di Napoli, in Napoli, 1621.
He proves himself to be much inferior to
Antonio Serra, who wrote in 1613 (see
A. Serra). m. p.
BIDDLE, Nicholas, born 1786, died 1844 ;
president of the Second Bank of the United
States. A graduate of Princeton College, and
later a student of law, he first became con-
nected with the bank as a government director ;
was its president from 1823 to 1836, and a
prominent figure through the eventful years of
its unequal struggle with President Jackson.
Biddle managed, on the whole with success, the
affairs of this gi-eat institution, ramifying with
its twenty -five branches through the United
States. Most of his theories of banking were
sound ; but his theory as to bank-note issues
was mischievous. Following the principle that
guided the conduct of the Bank of England
during the restriction, he believed there could
be no excess of issues so long as the bank's
advances were confined to good commercial
paper, arising out of real transactions. He
failed to distinguish between a bank-note proper,
redeemable on demand at any branch in coin,
and a draft, redeemable only at the branch ob
which it was drawn, and therefore practically
irredeemable. Nearly all the difficulties of the
bank can be traced to the vicious effects of this
140
BIEL— BILL BROKING
principle. Biddle's theories on banking are to
be found in the record of the actual operations
of the bank under his management.
N. Biddle's writings are few ; his best work was
Two letters to the Hon. J, Q. Adams ; embodying
History of the recharter of the Bank of the United
States, and a view of the Present Condition 'of the
Currency (London, 1837). a. c. m.
BIEL, Gabriel (1430 M495), sometimes
called the last of the scholastics, was born at
Speyer about 1430. He enjoyed the esteem of
the well-known Duke Eberhard of Wiirtemberg,
and was one of his chief agents in founding
(1477) the university of Tiibingen, in which he
became professor of theology. He was after-
wards a member of the order of the Brothers
of the Common Life. His principal work is
entitled CoUedorium Sententiarum, published
in 1501. He belongs to the history of political
economy by the portion of this work in which
he treats of money from the moral or casuistic
point of view. Though inferior to Oresme, the
other distinguished scholastic economist, in
penetration and clearness of thought, he shows
a sound understanding of the fundamental
principles of the theory of money. This part
of the work was published separately by John
Virdung at Mainz in 1541 under the title, De
monetarum potestate simul et utilitate tradatus.
It is also appended to the treatise of Marquard
Freher, De re tnonetaria, veterum Roma/norv/m
et hodiei'ni apud Germanos imperii, 1606.
(Roscher, Geseh. der Nat. Oekon. in Deutschland,
p. 21 seq. ; and H. Contzen, Gesch. der Volks-
wirthschaftliehen Lit. im Mittelalterf p. 161).
J. K. I.
BIGELOW, Erastus Brigham, LL.D., born
1814, died 1879, was an active and successful
man of affairs, the inventor of many improve-
ments in textile machinery, especially of the
power-loom for weaving carpets. As an advocate
of protection, and prominent wooUen manufac-
turer, he had much influence in shaping the
complicated system of duties on wool and
woollens adopted by the United States in 1867.
His writings on tariff subjects show force and
ability. He wrote also pamphlets and review
articles on the currency and on general economic
questions.
Among his pamphlets may be mentioned Re-
marks on the Depressed Condition of Manufactures
in Massachusetts, Boston, 1859, and Address on
the Wool Industry of the United States, New
York, 1869. f. w. t.
Bigelow was noted as a manufacturer in the
textile arts. He early gave attention to in-
dustrial subjects, and in particular to the tariff
question. His first printed treatise on the
depressed state of American manufactures ap-
peared in 1858. This was followed in 1862
by his best work, The Tariff Question considered
in regard to the Policy of England, and the
interests of the United States. With Statistical
and Comparative Tables, Boston, 1862, pp.
103. Appendix, pp. 242, quarto. The de-
scriptive portion is largely historical, and is an
attempt to show that the growth of English
commerce was not due to free trade, but to
other general causes, and that the removal of
duties by England was no sacrifice. The
statistical tables are valuable, and show a desire
to bring together a great mass of data m a
scientific way. The foregoing work is con-
densed and treated in a more popular form in
The Tariff Policy of England and of the United
States contrasted, Boston, 1877, pp. 61. Mr.
Bigelow also published an Address on the
Wool Industry of the United States, 1869 ;
Relations of Labour and Capital (Atlantic
Monthly, 1878). He was the first president of
the National Association of Wool Manufac-
turers, organised in 1864 ; and had much to do
in framing the tariff of 1867.
[See sketch of his life in Bulletin of Nat. Assoc,
of Wool Manuf, vol. ix. No. 4, 1879 ; also a
brief memoir by Delano A. Goddard in Proc. of
Mass. Hist. Soc, Oct. 1882.] d. b. d.
BILL BROKING. Names do not always
change with the things they describe. This is
true of what is called **bill broking." When
the business began early in this century the
biU broker was really a broker — an agent
between buyer and seller, procuring bills for
the buyer, receiving a small commission for his
trouble, but incurring no liability in respect of
the transaction. The so-called "bill broker"
is not now really a broker at all. Such
business is still transacted, and on a consider-
able scale, but those known as bill brokers are
reaUy a sort of bankers, receiving from bankers
and others large deposits which they invest for
the most part in bills of exchange, agreeing to
repay on demand or on short notice. They
do also sell bills, but, as they guarantee the
bills sold to the buyer, their liability remains
intact just as much as if they held them till
maturity. The bills are their own, and they
do not get rid of the risk of holding them by
selling them. Thus the character of the busi-
ness has entirely changed. That change was
no doubt gradual, and arose probably from
the fact that bankers wanted to employ surplus
money without the trouble and risk of selecting
biUs, and without the danger involved in lock-
ing up their funds in a security which could not
at all times be readily turned into cash. Here
a distinction must be made. So far we have
referred to what is popularly called bill broking.
But there is another large branch of the bUl
business which consists in the negotiation of
bills drawn by British houses on firms abroad in
payment for goods exported from these islands.
In dealing with such bills, questions of Exchange
{q.v. ) are all-important. The biUs are drawn in
the money of the country where payable, and
they have to be turned into English money foj
BILL BROKING
141
the convenience of the merchant who sells them. I
The bill broker makes his calculation as to the
currency of the bill, the rate of exchange, and
the contingencies of an exchange often altering,
and names a price at which he buys the bill and
takes all risks except that of non-payment.
The amount of bills thus dealt in must be
very large. But the bill broker proper has
nothing to do with such bills. He is com-
pletely ignorant on all questions of exchange.
The firms who deal in such bills are known as
"foreign brokers," not as bill brokers. Leav-
ing aside at present this special department of
business in bills, there is really nothing peculiar
in bill broking proper to distinguish it from
banking on a great scale, except that a far
larger proportion of the investments made by
the bill broker must be made in bills of ex-
change for two reasons : (1) That he requires a
large supply of bills of all dates to supply his
customers who desire to purchase them, or to
lend money on the deposit of bills as security,
and (2) that, as he holds such large amounts
{,ayable at call or short notice, he requires a
security which is perpetually revolving and
coming to maturity as cash, and no known
security answers this description so well as
bills of exchange. He takes them daily of all
dates, from a few days or weeks to run to six
months, and they are perpetually falling in and
supplying him Avith money.
It is a common observation that in banking
no reserve is so good as a store of bills of
exchange, and there is a constant demand for
them on the part of banks, both in town and
country, who cannot procure from their own
customers a sufficient supply. It is one great
part of the business of the bill broker to supply
banks with this necessary aliment. The profit
made on thus selling bills out and out is gener-
ally very small, but when once sold there is no
further thought about the bill, if it is good ; and
the seller has the money in hand with which to
make a fresh investment of the same kind. In
this way a bill broker may turn over his
"money" many times in a year, and in the ag-
gregate obtain a fair return, though his liabilities
on bills will be apparently enormous, but really
very small, as the proportion of unpaid bills in
a well -managed business is extremely slight.
The history of the business seems, at first sight,
to imply that the risks run are peculiarly
heavy, so many of the old firms having dis-
appeared through failure. As a bill depends
entirely on names, and not on property, except
occasionally where "document bills" are nego-
tiated, it is obvious that much knowledge and
experience are required in the choice of such
paper. And even where there is a certainty of
the ultimate payment of bills, there may be
a gi-eat risk of having to wait long for pay-
ment, and in the meantime of a heavy lock-
up of capital, a contingency which has otten
caused much anxiety and embarrassment. Sc
have passed away the gi-eat house of Overend,
Gurney & Co., the house of Sanderson, Sande-
man & Co., Bruce, Buxton & Co., and divers
houses of smaller repute. Such cases illustrate
the peculiar dangers of the business, but that
it can be maintained with safety and success is
abundantly proved by the history of some of
the companies who have conducted it during
the past thirty years, and of private concerns
of old standing still remaining vigorous not-
withstanding the severe competition Avhicli has
arisen, to say nothing of smaller houses Avhich
have sprung up and flourished since 1866.
Probably it may safely be said that, since that
famous date, banking and bill broking have
been conducted as a rule with more caution
than during previous periods, and that the abuse
of credit generally has been less rampant, so that
mere adventurers have had far more difficulty
than formerly in negotiating made-up (i.e. ficti-
tious) bills.
In this connection it may be proper to note
the prevailing impression that out of a given
amount of business far less is done on bills,
and far more by cash payments than was done,
say thirty years ago. As to the fact, there
seems no doubt when the figures as to inland
bill stamps are considered. From these it is
evident that with an enlarged business fewer
bills are created, i Again it is said that the
custom of obtaining loans from banks instead
of accepting bills has much developed — that
a man who owes money, instead of accepting
for the amount, takes a loan from his bankers
and pays cash. In this case there is credit,
only in another and less visible form. A bill
drawn and negotiated may pass into many
hands, but the loan cannot be transferred, and
remains a private afiair between the banker and
his customer.
In most cases there is an important advan-
tage to the debtor in paying cash, and banks
prefer loans within certain limits, because they
can generally charge a higher rate on a loan
than on the discount of a bill. Probably both
creditor and debtor prefer this mode of settle-
ment to the creation of biUs, because not only
are stamps saved, but the natiire of their rela-
tions in business is not in any way divulged
beyond the banker's room. Another important
cause of the diminution of foreign bills, that is
of bills dra^vn on London by traders residing
in foreign countries, is the development of the
system of Telegraphic Tuansfers, by which
very large sums are now paid without the creation
1 It is not so easy to account for this change as to
prove its existence. One cause, no doubt, is a great
increase of the actual wealth of those engaged in the
larger transactions of the country. Men who used to
accept bills now pay cash, and procure important ad-
vantages thereby. This is observed in all parts of the
country, and means of course that such traders have
largely increased their cash resources, and so are enabled
to dispense with Credit.
142
BILL BROKING— BILL OF EXCHANGE
of a bill. Formerly, for instance, almost the
whole of the enormous produce and credit busi-
ness between America and England was effected
by sixty days bills. Now, it is said that the
amount of bills of this description is not one-
third of what it formerly was. This alone
would mean a gi-eat reduction in the aggregate
of bills, and the same process is going on, more
or less, as to the trade with the East, etc. So,
from various causes, the creation of bills no
longer keeps pace with the extension of business ;
and complaints are frequent that "bills are
scarce," that "it is impossible to find bills
enough for the demand," and so on, the result
being that holders of bills often have the dis-
count market under control ; hence the bank
minimum rate no longer guides the market dur-
ing considerable periods, and the machinery of
the money market is dislocated, the bank being
compelled to have recourse to unusual and ex-
traordinary means of reducing the supply of
loanable capital in the market. It is perhaps
worth noting here that while thirty years ago,
the Bank of England was one of the largest
holders of bills of exchange, it is now believed
to be one of the smallest amongst the larger
holders. This change arises from the enormous
growth of the deposits of other banks, which
deposits are largely invested in bills, and as
these fall due, are re-invested in the same
security, so that there arises a continual de-
mand for bills, and a tendency to depression
of rates of discount. It is difficult for the bank
to counteract this tendency. The amounts in
question are too large, and as deposits seem ever
on the increase and bills are not increasing in
proportion, we have seen in recent years longer
periods of " cheap money " than have ever before
been known in the history of our commerce.
Other interesting observations arise in refer-
ence to the comparison of our own practice as
to bills and that of other countries of commer-
cial importance.
Take the case of France. It is said that
there is no trade in Paris in bills as there is in
London. The Bank of France holds always a
large amount of bills which she has discounted
for customers, but of course they are held till
maturity and are not dealt in. She, having
branches all over France, is the great French
collector of money. Moreover credit is not de-
veloped in France as with us, so that bills are
not created in sufficient quantity to support a
great trade in them. BiUs are of necessity
drawn from Paris on all parts of France, and
they are said to be mostly held by the Bank of
France, but the bill is not, as with us, the most
important of all banking securities (see Bank
OF France ; Clearing House).
Take again the United States. In Chicago,
for instance, the great distributing houses do
not generally draw on local centres for the
amounts due to them by smaller traders. They
hold these as book debts which they collect as
they can, in the meantime borrowing from
banks for what they may themselves require.
In England, on the contrary, such houses draw
bills even for very small amounts which they
discount in the market, thus avoiding a lock-up
of capital. It cannot be said that credit is not
fully developed in America, but in form it dif-
fers materially from our system. In some of
the great eastern cities the custom is said to
be different, and to resemble more that with
which we are familiar, and in New York there
is a limited market in bills, but not at all on
the London scale. Banks buy bills and hold
them, but there do not appear to be great houses
collecting and dealing in bills after our fashion.
Bill broking in fact may be said to be one
of those British institutions which are peculiar
to our country and arise from the peculiar
nature of our commercial operations. It is a
growth of that great expansion of credit which
has so long distinguished our country, and to
which we owe so much of our prosperity. The
system is liable to much abuse, and has at times
been grieviously abused, but it is not, therefore,
to be set down as mischievous and useless. It
is one of those means of economising the use of
loanable capital which are intrinsically valuable
and important, and are therefore certain to sur-
vive criticism, however severe. w. f.
BILL OF EXCHANGE. The word biU,
meaning generally a statement in writing, is de-
rived from bulla (Lat. ) Bills of exchange, which
may be divided generally between " inland" and
"foreign," those which take their origin in trans-
actions in one country only, and those which
arise from transactions beyond the limits of that
country in which they are payable, are among
the most important of Commercial Instru-
ments {q.v.) Bills, properly speaking, repre-
sent debts, they may be used, by negotiation, to
transfer these debts from one person to another,
and first-class bills form one of the best securities
which a banker can hold (see Bill Broking).
They sometimes, however, are drawn without
being based on any genuine transactions ; in
this case their standing is more doubtful (see
Accommodation Bill ; Cross Drawing ;
Kite). Foreign bUls sometimes originate in
exchange operations, and are hence often em-
ployed in connection with the financial liabilities
of governments. The amount of the bills of
exchange in existence at one time in the United
Kingdom is very large. It was estimated by
W. Leatham {Letters to Sir G. Wood, 2d ed. p.
13), as being £135,000,000 in 1841, by W.
Newmarch as not much less than £180,000,000
or probably £200,000,000 in 1856 (Tooke and
Newmarch, History of Prices, vol. vi. p. 588),
by E,. H. Inglis Falgrave, as being from
£300,000,000 to £350,000,000 in 1872 (Notes
on Banking, p. 36). The amount is probably
not larger now (1910).
BILL OF EXCHANGE, LAW OF
143
There are some varieties in form according as
bills are drawn in England on persons residing
in foreign countries or otherwise. A very usual
one is as follows :
Due Zd March 1891.
£500.
Liverpool, Zlst Jan. 1891.
One month after date pay to us, or order,
Five Hundred Pounds value received in goods,
as per invoice dated 25.1.91. A. B. k Co.
Messrs. C. D & Co.
415 Mincing Lane,
London, E.G.
[For further details see books named above, and
Goschen's Foreign Exchanges, in which foreign
bills especially are treated of.]
BILL OF EXCHANGE, Law of. The
law relating to bills, notes, and cheques, differs
from other branches o^ our mercantile law in
two respects. First, it has been codified by the
Bills of Exchange Act 1882 (45 & 46 Vict. c.
61), and secondly, the act in question applies
to the whole of the United Kingdom ; so that
with the exception of two Scotch rules which
are specially preserved, there is now a practically
uniform body of rules for England, Scotland, and
Ireland.
By § 3 of the act a bill of exchange is de-
fined as "an unconditional order in writing,
addressed by one person to anotlier, signed by
the person giving it, requiring the person to
whom it is addressed to pay on demand or at a
fixed or determinable future time a sum certain
in money to, or to the order of, a specified
person or to bearer." The person who gives
the order is called the Drawer, the person there-
by ordered to pay is called the drawee, and if
he signifies his assent to the order in due form
he is then called the Acceptor. An acceptance
must be in writing on the bill and be signed by
the drawee (§ 17). When a bill is payable to
a person named or to his order, it may be trans-
ferred by his endorsement. The person to whom
it is so transferred is called the endorsee. The
term " holder " includes alike the bearer of a bill
payable to bearer, an original payee, and an
endorsee.
Bills of exchange are said to have originated
with the Florentines in the 12th century.
From Italy their use spread to France, and
from thence to England, and throughout the
commercial world generally. A bill of exchange
in its origin was an instrument by which a
trade debt due in one place was transferred in
another, thereby avoiding the necessity of trans-
mitting cash from place to place. But in
England mercantile usage adopted into law by
judicial decisions has enlarged the original
idea, and has created, by means of bills and
notes, a perfectly flexible paper currency. Per-
haps the full force of the English definition
cited above is best brought out by contrasting
it with some foreign system. French law, which
adheres rigidly to the original theory of the uses
of bills, offers the best contrast. In France a
bill represents a trade transaction, in England
it is merely an instrument of credit. English
law gives full play to the system of accom-
modation paper (see AccoMMODATfON Bill) ;
French law endeavours to stamp it out. Thus
in England it is not necessary to express on the
face of a bill that value has been given, for the
law raises a presumption to that effect. In
Franci the nature of the value given must be
expressed, and a false statement of value voids
the bill in the hands of all parties with notice.
In England a bill may be drawn and payable in
the same place. According to French law,
though the rule is said of recent years to be dis-
regarded in practice, the place where a bill is
drawn must be so far distant from the place
where it is payable that there may be a possible
rate of exchange between the two. A false
statement of places so as to evade this rule voids
the bill in the hands of parties with notice. As
the French lawyers put it, a bill of exchange
necessarily presupposes a contract of exchange.
In England a bill may be drawn payable to
bearer. In France it must be dra\vn payable to
order ; if it were not so the rule requiring the
consideration to be expressed would be a nullity.
In England a bill payable to order becomes
payable to bearer when endorsed in blank. In
France an endorsement in blank merely operates
as a procuration. In England if a bill be re-
fused acceptance, a right of action against the
drawer and endorsers at once accrues to the
holder. This is the logical consequence of the
currency theory. In France no cause of action
arises unless the bill is again dishonoured at
matm-ity ; the holder in the meantime is only
entitled to demand secm-ity from the drawer
and endorsers. In England a sharp distinction
is drawn between current and overdue bills. A
person who becomes the holder of a bill after its
maturity, acquires and can give no better title
to it than the person from whom he took it had.
In France no such distinction appears to be
drawn (see Chalmers on Bills of Exchange, ed.
3, Introd., pp. xlv.-xlvii.)
In some foreign countiies any creditor is
entitled to draw on his debtor for the amount
of his debt, but in England the right to draw
arises only from special agreement. A reason
for the English rule may perhaps be found in
the fact that at common law, apart from special
agreement, it is the duty of the debtor to seek
out his creditor, as soon as the debt is due, and
to tender the money to him.
BiUs of exchange payable on demand may be
stamped with either impressed or adhesive
stamps, the stamp duty being one penny.
Foreign notes and bills must of course be
' stamped with adhesive stamps. Inland notes
of aU kinds, and inland bills payable otherwise
144
BILL OF EXCHANGE, LAW OF
than on demand, must be drawn on impressed
stamps. All notes and bills, other than bills
payable on demand, are subject to an ad valorem
stamp duty (Stamp Act 1870, §§ 45-55 and
Schedule). Section 72 of the Bills of Exchange
Act provides that when a bill or note is igsued
out of the United Kingdom it is not to be im-
peached because it is not stamped in accordance
Avith the law of the place of issue. This affirms
a general rule that the courts of one country
take no cognisance of the revenue laws of an-
other country. The enactment is clearly a fair
one, as the present stamp act requires bills
issued abroad to be stamped here, and makes
no allowance for the foreign stamp.
The acceptor is the party primarily liable on
a bill. By accepting it he "engages that he
will pay it according to the tenor of his accept-
ance " (§ 64). The holder is entitled to require
an absolute acceptance, but if the drawee will
only give a qualified or conditional acceptance,
the holder may either treat this as a refusal to
accept, or at his peril take the qualified accept-
ance (§§ 19, 44).
The drawer of a bill is in the nature of a
surety for the acceptor. He "engages that on
due presentment it shall be accepted and paid
according to its tenor, and that if it be dis-
honoured he will compensate the holder or any
endorser who is compelled to pay it, provided
that the requisite probeedings on dishonour be
duly taken " (§ 55). The endorser of a bill is
in the nature of a new drawer, and his obliga-
tions to subsequent parties resemble those of the
drawer. When a bill is dishonoured the holder
must, subject to certain specified exceptions
(§ 50), give notice of dishonour to the drawer
and endorsers he wishes to charge, and if the
bill be a foreign bill he must also protest it.
An inland bill may be noted, but no legal conse-
quences attach to this proceeding, except the
right to recover the noting expenses. When
the liabilities of the drawer and endorsers are
fixed by taking the proper proceedings on dis-
honour, the holder may either sue all the parties
to the bill concurrently, or he may sue them in
succession until he has recovered the amount of
the bill with his damages and costs.
Sometimes, when it is doubtful whether the
drawee will accept or whether he will be in a
position to pay when the bill matures, the bill
specifies some other person to whom the holder
may resort in case of need. This person is
sailed the "besoin" or "case of need." If he
accepts the bill he is called an "acceptor for
honour," and if he pays it he is called a " payer
for honour." He must not pay the bill till it
has been duly noted or protested for non-pay-
ment by the original drawee. On payment he
becomes entitled to exercise the rights of the
holder as against the party for whose honour
he paid and all parties antecedent to him
(§§ 65-68).
Comparing bills of exchange with other coi:
tracts, it will appear that the majority of the
peculiar rules relating to them are deducible
from the fact of their negotiability. A contract
or chose in action is not assignable at common
law, though in equity the benefit of it might be
assigned subject to all equities between the
parties. But a bill of exchange is part of the
mercantile currency of the country, and its
primary object is that it should circulate freely
from hand to hand and that every honest holder
should be able to deal with it like cash. A
bill payable to order may be negotiated by the
endorsement of the holder, completed by de-
livery. A bill payable to bearer, or endorsed in
blank, may be negotiated by mere delivery. The
consideration for its issue, acceptance, and ne-
gotiation is presumed until the contrary is shown
or d, prima facie case of fraud is made out, in
which case the onus of proof is shifted (§ 30).
If a bill gets into the hands of a "holder in
due Course" (§ 29), he gets an absolute title,
and no antecedent fraud other than forgery
affects him (§ 38). So strong is this rule in
English law that if a person puts a blank signa-
ture on stamp paper, it is treated as an authority
to any person to whom the paper is delivered to
fill it up as a bill for any amount the stamp wiU
cover, and if the bill, when complete, gets into
the hands of a holder for value without notice,
no objection that the paper was improperly
dealt with is allowed to prevail (§ 20). The
laws of all countries agree in the rule that no
title can be made to a bill through a forged
signature, but English law is peculiarly severe
on the party who pays the bill (§ 24). Except
in the case of a demand draft drawn on a banker
(§ 60) the person who pays a bill pays it at his
peril if the party presenting it claims under a
forged endorsement. Thus if the drawee of a
bill accepts it, payable at his bankers, after a
forged endorsement has been placed on it, the
bankers cannot debit his account with the
amount of such payment. Under the conti-
nental codes, a banker who paid such a bUl
without any notice of the fraud would be pro-
tected.
A further peculiarity of English law is the
compulsory allowance of three days of grace on
all bills payable otherwise than on demand
(§ 14). It is believed that aU the continental
codes now agree in abolishing this fictitious
maturity for bUls, but the holder is generally
entitled to wait one or two" days before the bill
is protested.
From the references to foreign law already
made, it appears that the practice of the mercan-
tile world, with reference to bills of exchange, is
by no means uniform. Rules, therefore, are
required for regulating this conflict of laws, and
they are provided by § 72 of the act, their
guiding principle being the maxim "locus regit
actum."
{
BILL OF LADING— BILL OF SALE
145
A Promissory Note is defined by § 83 of the
Act to be " an unconditional promise in writing
made by one person to another, signed by the
maker, engaging to pay on demand or at a fixed
or determinable future time a sum certain in
money to, or to the order of, a specified person
or to bearer." There are various statutory re-
strictions on the issue of promissory notes pay-
able to bearer on demand for less than £5, and
there are further restrictions on the issue by
bankers of either bills or notes for any amount
payable to bearer on demand. "When a promis-
sory note is made by two or throe makers, they
are liable, either jointly or jointly and severally,
according to the tenor of the instrument (§ 85).
In this a note differs from a bill, because if a bill
be accepted by two or more drawees, they are
only liable jointly and not jointly and severally.
But for the most part the provisions of the act
with reference to bills of exchange apply, witli
the necessary modifications, to promissory notes.
In applying those provisions, the maker of a
note is deemed to correspond with the acceptor
of a bill, and the first indorser of a note is
deemed to correspond Avith the drawer of an
accepted bill payable to drawer's order (§ 89).
The provisions of the act relating to present-
ment for acceptance, acceptance, acceptance si/^9?-«
protest, and bills in a set have no application
to notes. Moreover, protest of a foreign note is
unnecessary for English pm-poscs (ibid.)
For the economic opeiation of bills and notes
as instruments of credit, see Bill of Exchange,
Credit, Cross Drawing, Goschen's Foreign
Exchanges and Mill's Political Economy, bk. ii.
For the English law see Byles, Bills of Exchange ;
Chalmers, Bills of Exchange ; Chitty, Bills of
Exchange. For American law, see Story, Bills
of Excluinge ; Parson's Law of Notes and Bills ;
Daniell, Negotiable Instrnments. For French
law see Nouguier's Lettres de Change et Effets
de Commerce, ed, 4 (1875), summarising the
provisions of the various continental codes.
For Indian law on the subject see Indian
Negotiable Instruments Act 1881, as amended
by Act II. of 1885. Canada and some of the
Australian colonies have adopted the English
Bills of Exchange Act. The Conference
on Bills of Exchange (the Hague, 1910)
agreed to a general Act regulating sucli Bills
which it is to be hoped Avill be generally
adopted. m. d. c.
BILL OF LADING. A document by which
the master or some other agent of the shipowner
on his behalf acknowledges the receipt of certain
goods, and undertakes to deliver them to the
consignee at the port of destination, against the
payment of freight and subject to certain con-
tingencies releasing him from liability. The
consignee is either named in the bill of lading,
or it is simply stated that the goods are to be
delivered to the order of the shipper, in which
case the goods are delivered to the person to
VOL. I.
whom the document is indorsed, or to a subse-
quent indorsee. If the bill of lading is made
out to the consignee or his order, the goods are
delivered either to the consignee or an indorsee,
but if the consignee is named without any
additional words he is the only person who has
a legal right to the delivery of the goods. As
a general rule an indorsee acquires the property
in the goods as soon as a properly indorsed bill
of lading is handed over to him with that in-
tention, but this rule is subject to several excep-
tions, the most important one being the so-called
right of stoppage in transitu, which enables an
unpaid seller to stop the delivery of the goods
if the buyer has become insolvent before they
came into his power. If, however, the buyer
has in the meantime transferred the bill of lading
to a bona fide holder for valuable consideration,
the right is no longer available. It must also
be mentioned that a bill of lading is not negoti-
able in the same sense as a cheque or a properly
indorsed bill of exchange. A person who in
good faith gives value for a stolen current bill
of exchange indorsed in blank, or for a cheque
to bearer, acquires a good title, though the thief
from whom he bouglit it had none. This is
not the case with regard to a bill of lading, as
a subsequent holder of a document of this nature
cannot (except in so far as he is not affected b}'
the light of stoppage in transitu) acquire a
better title than a previous holder had. In
former times the contractual rights and liabilities
arising from a bill of lading (e.g. the right to
sue in case of loss) remained with the original
parties, notwithstanding the transfer of the
property in the goods, but the statute 18 & 19
Vict. c. Ill enacts that "every consignee of
goods named in a bill of lading and every in-
dorsee of a bill of lading to whom the property
in the goods therein mentioned shall pass upon
or by reason of such consignment or indorse-
ment, shall have transferred to and vested in
him all rights of suit, and be subject to the
same liabilities in respect of such goods as if
the contract contained in the bill of lading had
been made with himself." Bills of lading are
generally made out in sets of several identical
copies, which are forwarded by different mails,
so that one may serve in case of the loss of
another. The system is not free from danger,
as a fraudulent holder may negotiate each copy
separately. Occurrences of this sort have
happened on more than one occasion, and have
caused a considerable amount of litigation.
E. s.
BILL OF SALE. A document purporting
to assign the property in personal chattels
remaining in the possession of the assignor.
Assignments of this nature as a general rule
are not made for the purpose of a regular sale,
but merely by way of security for a loan. A
bill of sale is void as against execution creditors,
if it is not drawn up in the statutory form and
L
146
BILLON— BI-METALLISM
registered in the central office of the High Court
within seven days of the date of issue ; it must
also be renewed every five years. A charge of
personal chattels in a debenture need not
be registered as a bill of sale. The acts of
parliament now regulating the law of b^lls of
sale are those of 1878 and 1882 (41 & 42
Vict. c. 31 ; 45 & 46 Vict. c. 43). A bill of
sale given by way of security for the payment
of a sum under £30 is void. E. s.
BILLON. This conventional term, French
rather than English, is derived from a corrup-
tion of the low-Latin word Ullio, or buUio, from
which springs the English word bullion. In
French mint language it has certainly, from the
13th century, if not before, signified the degener-
acy of the pure contents of a coin through an
alloy, generally silver in the gold pieces, or copper
or lead in the silver pieces, giving them a par-
ticular degree of impurity, and thus debasing
their intrinsic value. In the old French coin-
age, down to the monetary reform in the first
revolution, the silver marc of a given weight
was imagined as divided into twelve parts
called deniers d'alloi, eleven of them pure silver
and one alloy. This mixture was silver of W,
or, in decimals, of '9166 fine, and was the old
standard. This was altered to ^, or, in deci-
mals, to -900 fine, from 1804 to the present
time. All degrees of fineness below it, or
below the standard at the time being, were
considered as changing the coin to billon.
That designation is also largely applied by
numismatists to ancient silver coins, and
notably to those of the Roman and Greek
series, when these are materially below what
ought to be the average standard fineness of the
metal, according to the scales laid down at the
best periods for purity of the silver coinage,
and it is even extended by them to what are
really false coins (although struck by state or
other ruling authority) of copper, or of brass,
plated or washed over with silver, and passed
with forced currency as silver coins. Thus the
term is made to cover a wide range of meaning,
varying from a comparatively small degree of
degradation in fineness down to the merest
pretence of having any actual intrinsic value of
precious metal in the composition of such coins.
It is noticeable that the term billon has not
been applied in France without some exceptions
in the case of gold below the standard. It
was so applied in the Middle Ages, but, in the
time of Louis XIV., when under twelve carats
out of the twenty-four carats were of pure gold,
the alloy was called ''silver holding gold," or,
if the proportion of copper to gold was of like
amount, the aUoy was called "copper holding
gold." The term billon has also been generally
used in France for all copper or bronze money,
even when it is of fall weight according to
mint indentures. In some points of view this
appears contradictory, but the use of the word
is probably intended to convey the meaning ol
a token coinage, the intrinsic value being so
largely below the nominal one. Whilst the
full-weighted five-franc silver pieces of France,
Italy, Belgium, Switzerland, and other states
which are allies in the now subsisting Latin
monetary union, continue to be coined ^
or '900 fine, their 2 franc, 1 franc, and ^ franc
pieces are still coined -835 fine, or just on the
borderland which divided silver of the old
standard from billon. But in England our
coinage of crowns, four shillings, half-crowns,
florins, shillings, sixpences, and threepences, is
struck of a higher degree of fineness, namely,
•925. In the general result it would seem that,
as standards vary in difierent countries, what
is locally billon in any one of them need not
necessarily be so in others, and that such a
variation prevents any precise general inter-
national agreement as to what the word
exactly signifies at different places or times (see
Bullion). f. h.
BI-METALLISM. This compound word is
used to describe the employment of two metals,
to form at the same time, in combination with
each other, the standard of value. The final re-
port of the Royal Commission on Gold and Silver
describes bi-metallism as follows : " A bi-metaUic
system of currency to be completely effective
must, in the view of those who advocate it,
include two essential features : (a) An open
mint ready to coin any quantity of either gold
or silver which may be brought to it. (&) The
right on the part of a debtor to discharge his
liabilities, at his option, in either of the two
metals, at a ratio fixed by law." It is usually
understood now to mean that the two metals
are used thus at a fixed proportion to each
other, as in the countries forming the Latin
Union {q.v.), in which the ratio of 1 gold to 15^
silver by weight forms the legal basis, or in the
United States in which the ratio is 1 to 16. Few
economic subjects have of recent years been dis-
cussed with more heat, owing partly to the fact
that some on the one hand have considered that
the adoption, or the retention, of bi-metallism
would confer certain advantages on particular
classes, and that some on the other hand think
that Monometallism profits other classes.
The main requisite in a standard is, that it
should be, as nearly as possible, constant in its
purchasing power. The selection, or the con-
struction, of a stable standard of value is, how-
ever, even more difficult than that of an undevi-
ating standard of time. In this connection it
is advisable, while considering here the possible
employment of two metals for this purpose, to
quote the words of John Locke on the advan
tage of employing one metal only, — as this quo-
tation sets forth the drawbacks to bi-metallism
without any reference to recent controversy, —
bearing in mind the circumstance that at the
date when Locke wrote international bi-metal-
BI-METALLISM
147
lism had never been thouglit of. "Two metals,
as gold and silver, cannot be the measure of
commerce both together in any country ; because
the measure of commerce must be perpetually
the same, invariable, and keeping the same pro-
portion of value in all its parts" {Further
Considerations concerning raising the Value of
Money, John Locke). On the principle thus
expressed the Standard of Yalije, understood
in the sense of the measure provided by the
government, through their engagement to coin
at a fixed rate the metal brought to them for
the purpose, has been based in this country by
legal enactment since 1798, in practice nearly
since the commencement of the 18 th century,
though a double standard remained legal till
the date mentioned. Gold became the general
medium of circulation in this country either
through choice or, what seems the more prob-
able, through the differing ratio of value in
foreign countries which made silver the best
export. In 1798, shortly after the suspension
of cash payments (1797), the government sus-
pended the coinage of silver. Up to 1783
every man might make his payments in silver
or gold at his option ; though after 1774 he
could only pay in silver up to £25 "by tale,"
but "by weight" up to any amount. There
was no restriction as to payments in gold.
The general practice of the country before the
restriction was confirmed by the distinct adoption
of a gold mono-metallic basis on the resumption
of specie payments in 1816. Silver was, how-
ever, allowed to be held as part of the reserve
of the precious metals against which the notes
of the Bank of England are allowed to be issued
by the 3d clause of the act of 1844 (see Bank
Note, Bank of England), which permits the
bank to retain in the issue department silver
bullion to an amount not " exceeding one-fourth
part of the gold coin and bullion at such time
held by tlie Bank of England in tlie issue de-
partment." Silver bullion was accordingly held
by the issue department up to large amounts
(the average for the year 1846 was £2,169,000 ;
see Bank Rate in England, France, and Ger-
many, 1844-78, Palgrave), but the practice was
discontinued in 1853, and has never since been
resumed. While this country became mono-
metallic, in France a standard fixed at the rate
of 1 mark of gold to 15^ of silver was definitely
established in 1785, and continued by the law
of 1803, gold and silver, in 5-franc pieces, being
equally legal tender for any amount. The Latin
Union, as the coinage treaty of 1865 was
called, which included France, Belgium, Switzer-
land, Italy, Greece, and Roumania, carried on
its mintage operations on the same basis as in
France till 1874, after which date the coin-
age of silver was restricted and practically sus-
pended. A considerable drop in the market
price of silver followed. From having been 4s.
11^. an oz. in 1344 it sank to 3s. 6d. both in
1886 and in 1889, though a recovery has taken
place since. The results of this alteration have
been widespread, the eflFect being particularly
seen on the rate of exchange between countries
with a gold and those maintaining a silver
standard ; and less distinctly on prices of com-
modities in general within the countries con-
cerned. Much discussion has hence ensued.
It may, however, be observed that a real mono-
metallism had not existed in Europe till 1873,
as the existence of the Latin Union counter-
vailed its effects both in gold and silver using
countries. The question has been treated with
great scientific power by Professor Jevons, who
explains in his book on Money "that a compen-
satory, or as I should prefer to call it, cquilihra-
tory action, goes on under the French currency
law, and tends to maintain both gold and silver
more steady in value than they would otherwise
be." He points out that when one metal be-
comes more sought for than the other there is
an inevitable tendency to import the cheaper
and export the dearer, and continues: "At
any moment the standard of value is doubtless
one metal or the other, and not both ; yet the
fact that there is an alternation tends to make
each vary much less than it would otherwise
do. It cannot prevent both metals from
falling or rising in value compared with other
commodities, but it can throw variations
of supply and demand over a larger area,
instead of leaving each metal to be affected
merely by its own accidents. Imagine two
reservoirs of water, each subject to independent
variations of supply and demand. In the
absence of any connecting pipe, the level of the
water in each reservoir will be subject to its own
fluctuations only. But if we open a connection,
the water in both will assume a certain level,
and the effects of any excessive supply or demand
will be distributed over the whole area of both
reservoirs. The mass of the metals, gold and
silver, circulating in Western Europe in late
years, is exactly represented by the water in
these reservoirs, and the connecting pipe is the
law of the 7th Germinal, An. xi. (1803) which
enables one metal to take the place of the other
as an unlimited legal tender." The theory on
which bi-metallism rests is completely explained
in these observations of Jevons. With respect,
however, to the advisability of a nation adopt-
ing a single or a double standard, Jevons ex-
presses himself in cautious terms, adding
(3Ion£y, p. 141), "The question seems to be
entirely one of degree, and in the absence of
precise information is quite indeterminate."
The final report of the Royal Commission
on Gold and Silver, 1888, expresses a decided
opinion that the bi-metallic system of the Latin
Union exerted a material influence upon the
relative value of the two metals (par. 193):
" So long as that system was in force we think
that, notwithstanding the changes in the pro
148
BI-METALLISM
duction and use of the precious metals, it kept
the market-price of silver approximately steady
at the ratio fixed by law between them, namely,
15^ to 1." "With respect to the position of the.
metals in two countries, in one of which silver,
while in the other gold, is employed, ^e may
quote from an article in the Economist of 2d
February 1878, which observes that the "rela-
tive value, the proportions in which the two
metals will exchange for each other, are continu-
ally fluctuating, and they must inevitably do
so unless it were possible to fetter the supply in
such a manner that only the right proportions
of each metal should be brought to market at
the same time. Two articles, of course, cannot
remain always at the same relative value to each
other unless the production of both is maintained
at the same proportion, and no excess or diminu-
tion of the supply exists. Nor can they do so
unless they are of identical utility, and are
capable of performing identical services to man.
When two commodities perform exactly the
same functions, and are equally capable of doing
so, being equally desirable in every respect,
they will continually tend to exchange for other
things in the same proportions. But this cannot
be said to describe the exact relations of gold
and silver to each other." The results of the
export of the one and the import of the other
metal are then refeiTed to : ''The loss arising
from these causes may not come home to the
inhabitants of the country where it occurs in a
clear and obvious way. The inhabitants may,
if silver is cheap and gold is wanted for export,
retain silver for their own domestic use and
employ it in their circulation till a fluctua-
tion in the exchanges renders it possible for
the gold to return. The banks which make
the remittances will, in this case, obtain a pro-
fit from the transaction, while the people who
employ the money will hold over the currency
they receive in the ordina^^y way of trade till
the tide sets in the contrary direction. Thus
the loss which the country really experiences
from employing a currency which is depreciated,
as compared with the currency of other countries
employing a more valuable standard, will be
veiled from view, though it really exists." One
metal out of the two is taken in this case for
export because it is profitable to the exporter to
send it rather than the other, but it would not
be sent unless its export were advantageous.
As the risks to any single country which employs
bi-metallism are obvious, the advocates of the
system recommend that all countries should
employ it, as this would, they consider, prevent
a preferential movement of either metal from
one country to another. Thus the work recently
published by Sir D. Barbour, The Theory of BU
metallism, recommends "the adoption of uni-
versal bi-metallism at a fixed ratio to be deter-
mined by mutual consent. " "■ Failing universal
bi-metallism," SirD. Barbour continues, it would
be desirable that bi-metallism should be adopted
by a group of countries sufficiently strong to
maintain the fixed ratio," Sir D. Barbour's con-
tention being "that the existence of this fixed
ratio for the purposes of the currency wiU. control
and regulate the market price of the two metals
so as to prevent it from varying in any material
degree from the fixed legal ratio of the currency."
Rochussen is of the same opinion. Quoting
the words of a Belgian writer in the Eevue
GiTdrale, October 1887, p. 653, "' Si le kilo-
gramme d'or vaut actuellement sur le marche
vingt kilogrammes d'argent, c'est apparemment
que le kilogramme d'or, pour Stre extrait de la
terre, coute autant qu'il en coute d'extraire
vingt kilogrammes d'argent,'" he comments on
them thus — ' ' ' Apparemment ' ! No explanation
of the market price can be more in conflict than
this is with all the facts of mining industry,
and all the principles of money. In the first
twenty years of this century the production of
gold stood in comparison to that of silver
(valued at 1 to 15^) as 2| to 8.- In the foUow-
ing period of twenty years, nearly as 4 to
8 ; thereafter from 1841 to 1850 as 8 to 8 ;
from 1851 to 1860, very nearly 28 to 8 ; in
the following five years, as 23 to 8 ; and from
that time ^onwards to 1870 the proportion fell
to 18 to 8, showing even at that rate an increase
of some 675 per cent in the proportion. Yet
in all this time there was no greater change in
the market price, now of one metal, now of the
other, than about 2 per cent.
" Or if we choose to look rather at the facts
which concern the demand, than at those which
concern the supply (aanbod), .we shall see that
the steadiness of price was not afiected, though
the demand for gold was greatest when the
supply was least, and the demand for silver
was greatest when the supply of that metal
was least.'* (Eochussen, Geld- en Muntwezen,
p. 287.)!-
The statement given above shows the main
features of the working of a bi-metallic system.
•Jevons remarks (see Letter from Jevons to M.
WoLOWSKi, printed in Jevons's Investigations in
Currency and Finance, p. 304) that the French
currency law has "no doubt assisted to keep
gold and silver at a nearly invariable price as
compared one witJi the other. " As mentioned
previously, the Gold and Silver Commission im-
animously concurred in supporting the same
opinion. Jevons also observes that "it is in-
dispensable to remember the fact, too much
overlooked by disputants, that the values of
gold and silver are ultimately governed, like
1 M. Rochussen held the position of minister for
foreign affairs in Holland 1879 and 1880, and is at the
present time (1890) a member of the council of state.
His father, it may be mentioned, was minister for the
colonies, — also for seven years governor-general of Dutch
India, and twice minister of finance. The circumstances
of Holland give those engaged in its administrations very
considerable opportunities for watching the fluctuations
^)f the standard of value.
Bl-METALLISM
149
those of all other commodities, by the cost of
production. Unless clear reasons, then, can be
shown why sUver should be more constant in its
circumstances of production than gold, there is
no ground for thinking that a bi-metallic gold
and silver money will afford a more steady
standard of value than gold alone" (Jevons,
Investigations in Currency and Finance, p. 318).
"Ultimately" is the governing word in this
quotation, and is frequently overlooked ; it may
mean an almost indefinite period. The reader
must be refen^ed to the works of Jevons here
cited for the whole of his arguments ; it is
hardly possible to express them fully by any
selection.
As a matter of history it appears that the
value of silver relatively to gold has tended
to diminish as ages have passed by. Mean-
while France and the Latin Union, after trying
the experiment of an international bi-metallism
on a very considerable scale, have abandoned,
or at least suspended the free coinage of both
metals at a fixed ratio. The United States,
after employing a bi-metallic ratio of 1:15 '25 in
1786, changed to 1:15 in 1792, to 1-16002 in
1834, to 1:15-988 in 1837, and adopted the gold
dollar only as the Unit of Value in 1873.
A limited coinage of silver dollars was directed
in 1878 (by the Allison or Bland Act), which
possess "full paying power, except in cases
where it is strictly stipulated otherwise in the
contract." A somewhat limited system of bi-
metallism was thus in force in the United States
from 1878 to 1890. In 1890 an act author-
ising a great extension of the coinage of silver
was passed by the legislature (see Bland Act ;
Silver Legislation in the United States),
The question of the advisability of adopting a
bi-metallic standard has been discussed by
many writers recently, but by none in so dis-
passionate a manner as by Jevons, who observes,
"It may be safely said that the question of
bi-metallism is one which does not admit
of any precise and simple answer. It is
essentially an indeterminate problem. It in-
volves several variable quantities and many
constant quantities, the latter being either in-
accurately known or, in many cases, altogether
unknown. The present annual supplies of gold
and silver are ascertained with fair approach to
certainty, but the future supplies are matter of
doubt. This demand for the metals again involves
wholly unknown quantities, depending partly
upon the coiu-se of trade, but partly also upon
the action of foreign peoples and governments,
about which we can only form surmises " (Jevons,
Investigations in Currency and Finance, p. 317).
The use of both gold and silver as standards of
value is obviously most important, and it equally
cannot be doubted that the disuse of either
must lead, as the disuse of silver has recently
done, to considerable fluctuations in the prices
of commodities. To recommend, however, a
country which is now mono-metaUic to become
bi-metallic, or a corresponding change on the
part of a bi-metallic country, requires a far
more complete inquiry than has yet been made.
The theory may be explained in comparatively
few words, but for any adequate statement of
the practical results the reader must be referred
to the following works, which are far, however,
from exhausting the subject.
[Bibliography. — The following list is derived in
part from the one at the end of Prof, W. S. Jevons's
Investigations in Currency and Finance, and that in
Appendix to Proceedings, etc., of the International
Monetary Conference of 1878, drawn up by Mr,
Dana Horton. The reader is referred to.these lists
for fuller information. The literature on the sub-
ject is very extensive, to a great extent in articles
and letters in newspapers and other periodicals.
The arguments on the subject will be found stated
in Jevons, Investigations in Currency and Finance,
London, 1884. — Money and the Mechmism, of Ex-
change, 1875, also by Jevons. — Jieports of Com-
mittee of House of Commons on Depreciation of
Silver, 1878. — Report of Commission on Trade
and Industry, 1886, and Api)endix B to 3d Re-
port, by K. H, Inglis Palgrave. — Report of Com-
viission on Gold and Silver, 1887. — Sir D. Barbour,
Theory of Bi-vietaZlism, London, 1885. — S. Dana
Horton, Silver as an International Question (an
address to Congress) ; also much information in
Proceedings of the International Monetary Confer-
ence of 1878, and other writings. — Conference Mone-
taire International, 1867. — Proces Verhaux, Paris,
1867. See also Prof. H, Sidgwick's observations
that " a double standard with a fixed ratio will be
stable against minor variations of supply," I'rin-
ciples of Political Economy, bk. ii. ch. v. ed. 1883,
— Prof. J. S, Nicholson, Money and Monetary
Problems, 1888, in which the arguments in favour
of bi-metallism are stated with great clearness and
force. — The Silver Question (paper published by
the Bi-metallic League, whose other publications
are numerous). — H. R. Grenfell and H. H. Gibbs,
The Bi-metallic Controversy, London, 1886, and
other works by these two writers. — Prof. Leon
Walras, Theorie de la Monnaie, Lausanne, 1886.
— Theorie Mathematique du Bi-metallisme, Paris,
1881. — Prof. Adolph Soetbeer, Materialien zur
Erldutenmg und Beurtheilung der wirthschaft-
lichen Edelmetalverhdltnisse und der Wdhrungs-
frage, Berlin, 1886. This is translated in the
Appendix Final Report Gold and Silver Com-
mission.— Also see American Reports from Con-
suls of the United States, No. 87, Dec, 1887. —
Ernest Seyd, Bi-metallism in 1886, London, 1886,
— R. Gili'en, Essays in Finance, 1880, and other
dates. Paper on "Some Bi-metallic Fallacies,"
Journal Institute of Bankers, June 1886, and other
works. — Prof. Emile de Laveleye, "The Economic
Crisis and its Causes," Contemporary Review, May
1886, and other papers, — Samuel Smith, The Bi-
metallic Question, London 1887. — Rt. Hon. G. J.
Goschen, " On the Profitable Results of an Increase
in the Purchasing Power of Gold," Journal of In-
stitute of Bankers, May 1883. — E. de Parieu,
" Situation de la Question Monetaire International"
{Journal des Economistes, April 1868), etc. — Henri
150
BIRTH-KATE
Cemuschi, M. Michael Chevalier et le Bi-m^tallisme,
Silver Vindicated, The Bland Bill, Bi-metallism
in England and Abroad, Bi-metallism at 15^ a
Necessity, The Monetary Conference, TheBi-metallic
Par, London, various dates, etc. M^moire sur le
Bi-mUallisme International et le moyen juste de la
realiser, W. F. Kochussen, La Haye, 1891. — Le
Prohlkne Monetaire et sa solution par O. M.
Boissevain, Paris and Amsterdam, 1891, translated
by Gr. T. Warner, The Monetary Question, London,
1891. — Also Journals of Statistical Society, Lon-
don, Institute of Bankers, London, Economist,
London, ^conomiste Frangais, Paris, passim ;
many detached articles and pamphlets by W,
Bagehot, P. Leroy Beaulieu, 0. Haupt, Prof. H.
Sidgwick, Sir R. Giffen, etc. The number of
writings on this subject has, in general, restricted
the reference given above to one of the works of
the authors named.]
BIRTH-RATE means generaUy the ratio
which the number of births per annum bears to
the number of persons in the population under
consideration. The rate thus defined depends
largely on another rate which has been called
fecundity, and has been defined as the ratio
which the number of births per annum bears to
the number of persons of reproductive age, or
of women of reproductive age (say 15-45) ; or
of married persons, or wives only, of that age
(see Bertillon, "Mouvement de la Population"
in Annales de Dimographie, vol. i. ; also
Quetelet, Physique Sociale, bk. ii. § 6). Some of
these relations are illustrated by the accom-
panying table which shows the average annual
births per 1000 in the kingdom of Bavaria
(1871-1872). It is taken from Mayr's Die
Gesetzmdssigkeit in Gesellschaftslehen, p. 244.
(Decimals have been omitted.)
Legitimate
births
per 1000
wives be-
tween ages
15-45.
Illegitimate
births
per 1000
unmarried
women be-
tween ages
15-45.
Legitimate
and illegiti-
mate births
per 1000
women
between
ages 15-45.
Legitimate
and illegiti-
mate births
per 1000
of the
general
population,
men and
women of all
ages.
368
45
182
41
Fixing attention on legitimate births, we
may regard the birth-rate as depending chiefly
on two factors : (a) the ratio which the number
of married persons of reproductive age bears to
the general population, and (h) the ratio which
the number of births per annum bears to the
number of married persons of reproductive age.
The first factor (a) varies with the number of
newly married persons ; this varies with pros-
perity, which (in many countries) varies with
the price of bread. Accordingly it has often
been observed that bad harvests are followed by
a decline in the birth-rate and vice versd. Thus
the year 1817, in which the price of corn in
Belgium rose to twice the average of the neigh-
bouring years, was followed by a great decrease
of births. Other instances are referred to by
Quetelet (Physique Sociale, bk. ii. § 6) and
Haushofer (Lehr- und Harvdhuch der Statistik).
The Swedish statistics, extending over more than
a century, have been arranged in such a way
as to bring out the connection between good
or bad harvests with many or few marriages and
births (see Journal of the Statistical Society,
1862, vol. XXV., p. 140, ''Vital Statistics oi
Sweden," by Mr. Hendriks' Table A ; tJ. 1885,
opening address of Sir Rawson Rawson, p. 586).
When several good or several bad harvests come
together the efiect is conspicuous in the case ol
Sweden. But this law is not universal. It
cannot be traced in the case of the United King-
dom of late years (see Journ. Stai.. Soc, 1890,
p. 257 et seq.) and in other cases where the price
wheat is not the main factor of prosperity.
(b) The fecundity of marriages depends partly
on the age of the parties. This subject has
been discussed by Dr. Ogle {Journ. Stat. Soc,
1890, p. 275), who shows that, to cause a
sensible alteration in the birth-rate, a very con-
siderable displacement of ages would be required.
That other causes beside age are operative is
evidenced ]?y the fact that in France and New
England the age of marriage is not remarkably
late, while the fecundity is remarkably small
(see the table at the end of this article).
Among causes which may affect the fecundity
of marriages are climate a.nd food. These and
other causes are discussed by many of the
authorities cited here.
As to the consequences of variations in the
birth-rate the most obvious is the tendency of
population to increase more rapidly when the
birth-rate is high (and vice versd). But this
tendency may be counteracted by a high death-
rate. That a high birth-rate is not a conse-
quence of a high death-rate, though to some
extent causally connected therewith, is main-
tained by Dr. Noel Humphreys in the Journal
of the Statistical Society, 1874. The two
phenomena frequently co-exist. Thus the
statistics of the Austrian empire compiled by
Hain {Statistik des Osterreichischen KaiserstaMs,
1852-3) exhibit birth-rates, marriage-rates, and
death-rates varying concurrently. Moving
through the provinces along a line in a south-
easterly direction you would find the three
factors constantly increasing together. The
increase of the population (the natural incre-
ment, abstracting the effects of emigration and
immigration), is therefore not in general pro-
portionate to the birth-rate. Thus the birth-rate
of Russia for the period 1865-1883, viz. 4-94
per 100 living, was much greater than the
birth-rate for England and Wales, viz. 3-51;
yet the annual excess of births over deaths per
cent of the whole population was the same for
the two countries, viz. 1"37 (see table sub-
joined). The natural increment for England
BIUNDI— BLACK DEATH
161
and Wales for 1871-1881 was greater than that
of the previous decade by about 10 per cent (of
the natural increment) ; while the birth-rate
increased very slightly, by about -3 per cent
(census for 1881 general report). There is
reason to think that the state of a country in
which a high birth-rate is matched by a high
death-rate is not satisfactory.
See in addition to the authorities cited Prof.
Marshall, Principles of Economics, bk. iv.
ch. iv. 5tli ed. Some examples of the statistics
quoted by him are here subjoined.
Mean Annual Birth-rates, Urban and Rural Arecus
Urban
20 large towns, with an aggregate population ol
9,742,404 persons at the date of the Census of 1901.
Period.
Calculated on the total population.
Rate per 1000.
Compared with rate in
1870-72 taken as 100.
1870-72
1880-8-2
1890-9:2
1900-02
36-7
35-7
32-0
29 -S
100-0
97-3
S7-2
81-2
11 URAL
112 entirely rural registration districts, with an aggre
gate population of 1,330,319 persons at the date of tin
Census of 1901.
1870-72
1880-82
1890-92
1900-02
31-6
30-3
27-8
26-0
100-0
05-9
ss-0
S2-3
BIUNDI, G. Known as the author of a
treatise on political economy ; La economia
esposta nei suoi principii ragionati e dedotti,
Milano, Maisner and comp., 1864.
Author besides of the following works and
articles : — "Dell' influenza che esercitano le priva-
tive neir industria," published in the review
Empedocle, Palermo, 1853, vol. iv. fasc. 7-10, p.
324. — "Sul credito agricolo e sull' istituzione d'
una banca territoriale in Sicilia," Palermo, 1854,
Empedode, vol. iv. — " Studii sulla pubblica bene-
ficenza," Palermo, 1855, Empedocle, vol. v. p. 187.
— I Porti franchi, riflessioni economicke, 1 vol.,
Palermo, 1857, Grimaldi. — "Delia proprieta in-
telletuale, e del diritto di copia," Palermo,
1859, Empedocle, nuova serie, vol. i. — "Popo-
lazione e miseria," Palermo, 1859, Empedocle,
nuova serie, vol. i. p. 299. — "Monti di Pieta,"
Palermo, 1859, Empedocle, nuova serie, vol. i. —
Sicgli asili infantili e sul mx>do di istituirli e rego-
larli in Sicilia; discorso, Palermo, 1860, Lo
Bianco. — Statistica del puMlico in^egnamento in
Sicilia, Palermo, 1861, in 8vo. — Sulla scienza
statistica e sue applicazioni alle forze morali e
materiali dei varii Stati d'Europa e specialmente
del regno d'ltalia, Firenze, 1867, in 8vo.
M. p.
BLACK, David (about 1700), a Scotch
writer, was the author of An Essay upon In-
dustry and Trade, shewing the Necessity of
the One, The Conveniency and Usefulness of the
Other, and The Advantages of Both, Edinburgh,
1706. This treatise shows very clearly the
state of economic opinion in Scotland before
Hume and Smith. The author repeats all
the traditional dogmas concerning the balance
of trade and the necessity of increasing the
quantity of money. He opposes, however, the
schemes of "credit upon a land security," by
maintaining that " the nation's industry is the
best fund of credit to support it " (p. 3). After
all his mercantilist views it is very remarkable
to find him saying ; " I do confess it is my
private Opinion that all Imposition whatsoever
should be taken oft Trade, and that there should
be no Taxes upon it. , . , For it's Evident,
when heavy Duties are upon Goods, some
Merchants run these Goods without paying any
Duty, and then they Undersel their Neighbours
who pay it. . . . Whereas, by an Exemption
of all Duty and a freedom of Trade, (with this
Caution alwise, That what is superfluous may
be Prohibit), then every Merchant will be on
equal footing ; and he who is most Capable to
manage a Trade, will have the most Advantage,
and all will redound to the Merchant's Interest "
(p. 27). Black proposes to remedy the de-
ticiency in the public revenue by an imposition
upon "probative wiits, except Bills of Ex-
change," or if this should not sufiice " the Land
tax should be thought the surest Fond." He
seeks to convince the landed interest that
the merchants, though advancing the amount
of the duty in the price of the goods, shift the
charge upon the buyers, and that the landed
men bear indirectly, through this course, a
heavier burden than by the way he proposes.
Black illustrates the advantages of a free trade
by the examples of the Grisons and Holland (pp.
29, 30), the first of which had been suggested
to him by Bishop Gilbert Burnet.
[See Bishop Burnet's work : Some Letters Con-
taining an Account of what seemed most remark-
able in Travelling through Switzerland, Italy,
some parts of Germany, etc. Rotterdam, 1687,
p. 306.] s.B.
BLACK DEATH, The. The pestilence or
series of pestilences known by this name took
place in the middle of the 14th century, and
was a partial if not the chief cause of very
vast economic changes in England. So far as
can be ascertained, the disease first manifested
itself in central China in 1333, and thence
spread in a westward direction towards Europe,
where its force was first felt in the southern
countries. Taking a northward course, it
reached England where, "about the 1st of
August 1348, it began in the seaport towns
on the coast of Dorsetshire, Devonshire, and
Somersetshire, whence it drew up to Bristol.
. . . whence it came to Oxford, and about the
1st of November it reached London, and finally
spread itself all over England " (Barnes, History
of Edward III., pp. 435, 436). There were three
great attacks of the pestilence, of which the
152
BLACK DEATH
first was much the most destructive — August
1348 to summer 1349; Augustl361toMayl362 ;
July 1368 to Michaelmas 1369. The period
dming which Europe was devastated by this
plague was remarkable for the occurrence of
great natural convulsions such as earthquakes,
with which contemporary opinion attempted to
connect it causally, and for other pestilences,
attacks of which took place in 1370, 1381-82,
1396. Of its nature many descriptions re-
main (Hecker, Ep'ldemics of the Middle Ages).
Whilst the name it bore in England was de-
rived from one of its symptoms, its terrible
destructiveness won it its Italian title of La
mortalaga grande (Hecker, p. 2).
It is of some importance when examining its
economic effects to attempt to ascertain the
extent of the mortality which it occasioned.
This is very differently estimated. The loss of
life in Europe has been roughly reckoned at
25,000,000 (Hecker). While, with regard to
England, accounts nearly contemporary give
estimates which cannot but be regarded as
exaggerations, e.g. Adam of Usk reckons the sur-
vivors as but one-tenth of the previous popula-
tion. In more recent times attempts have
been made to found conclusions on such statisti-
cal data as may be still extant. Arguing from
the clergy lists, Mr. Seebohm places the number
of deaths as at least one-half. He assumes that
the rate of mortality among the clergy was not
exceptional. Taking then an estimate of the
population living in 1377, drawn from the
receipts of the poll tax in that year, he con-
cludes that those who died numbered some
two millions and a half {Fortnightly Meview,
vol. ii. pp. 149, 268). On the other hand
Professor KoGEiis, having regard to the quantity
of wheat consumed, considers that the loss of
life was by no means so great. It is possible,
however, that this conclusion does not allow
sufficiently for the other cereals which entered
into the consumption of the gi-eat body of the
people ; and the data on which it rests seem
less certain than those by which Mr. Seebohm
•was guided (Fortnightly JReview, vol. iii. p. 191).
But whether the one or the other estimate be
accepted, there can be no doubt that a very
great loss of life was the consequence of the
Black Death. Equally there is no doubt as to
the magnitude and critical importance of the
economic change which it was instrumental in
producing.
For some time there had been in operation
two processes of widely differing tendency.
By slow but certain degrees fixed money pay-
ments were being substituted for the labour
rents or 'services originally due from the tenants
to the lord of the manor. Disproportion between
the money payment and the services had been
manifesting itself. It was to ensure the con-
tinuance of the former substitution that the
tenants began to form those ' ' alliances ' ' and ' ' con-
gregations " to which we find allusion in later
statutes (e.g. 1 Rich. II. c. 6). To a people
thus placed the loss of a very large portion of
the working population could not but be of the
utmost gravity. The force of the economic
laws of supply and demand in relation to wages
began to make itself felt. There was a demand
for much higher wages and an inclination to
enforce this demand by combination on the
part of the labourers, while the landowners on
their side found themselves in need of labour as
before, but unable to obtain it at the old rates.
The payments which they received in lieu of
labour services were insufficient for the hire of
the labourers who might perform these services.
As a matter of fact, this had natui-ally tended
to be the case even before, but if it had been
so before how much more was it the case now.
In one instance the tenant paid in commutation
^d. while the labourer who performed the work
received 3d. (Archceologia xi.)
But now legislation intervened. Hitherto
rates of wage, when determined, had been settled
in the manorial courts, or by Corpokations
and Gilds, but wages form the subject of
the royal ordinance of 1349 (23 Edward III.)
enacting "that all able-bodied servants should
serve their lords, or if not requii-ed by them,
any one so requiring them at the same wages as
were usual before the plague." There seems
little room for doubt as to the immediate con-
nection in which this ordinance stands towards
the Black Death. But legislation was in-
effectual. Wages did not diminish; even before
the pestilence they had been gradually increasing,
and the landowners were driven to seek a new
remedy. They made the endeavour to revert
to the old system of labour rents. Commuted
service on the land was to be done away with,
and the practice of earlier centuries was once
more to be followed, but now to be followed
by those who regarded its introduction as
an innovation. In some instances indeed it
would appear that attempts were made at
illegal exaction, for we find the customary
tenants appealing as against their landlords to
the record of Domesday. The whole country
was thrown into a condition of economic dis-
order, for the tendency toward resistance was
fanned by the efforts of the friars who carried
the news from shire to shire, playing the part
of the newsagents of discontent. So matters
stood just before the rising in 1381. Demands
were made with increasing persistence for the
reduction of the money payments ; the land-
. owners on their side, finding even these
payments insufficient, were striving to return
to the system under which the various classes
of tenants had to perform service in person or
by substitute ; while in the third place the
long French wars had increased the burden of
taxation under which the nation was gi'oaning.
The universality with which these three causes
BLACK DEATH— BLANC
153
were felt, and the part which the friars played
in enabling the inhabitants of the various
districts to enter into communication with one
another, explain the Peasants' Revolt, 1381.
The incidents of the rebellion and the mode in
which it was met and the means by which it
was suppressed are matters of political history.
What were the consequences of the rising ?
During the struggle the rebels had destroyed
many of the manor rolls, showing most clearly
their desire of blotting out all record of the
service wliich might be exacted from them ; and
despite the revocation- of the royal gi-ants made
to them, then- demand in this direction was
substantially conceded. The practice of com-
mutation was adhered to. In addition it is
probable that the money payments, which even
before the Black Death had been diminished,
on many estates underwent reduction. Thus
the second means of dealing with the economic
consequences occasioned chiefly by the mortality
owing to the pestilence had failed, and economic
laws asserted their streiigtli. There were, how-
ever, results consequent on the failure of these
two attempts at interference. The system of
cultivation had depended for its protit on the
existence of a large body of cheap labour. The
value of labour had been enhanced by no cause
more effectually than the diminution in the
supply. From this time we may date the
change from arable to pasture which assumed
such gi-eat proportions in the 16th century.
The last stage of the mediaeval system of cultiva-
tion was beginning.
It is somewhat difficult to determine the
eocact importance of the Black Death in bring-
ing about the change. As we have seen, causes
were already in operation wliich tended toward
change ; but that cliange was undoubtedly
precipitated by the great and sudden loss of
life endured by the nation in the middle of the
14th centuiy. This then is the reason
why the Black Death deserves so much at-
tention on the part of the economic student.
The causes of the events clustering around it
display the strength of economic forces ; the
attempts at regulation, the uselessness of
ignorant interference ; and in its consequences
we find the causes of the peculiar development of
Agriculture in England in the Tudor period.
[Kogers, History of Agriculture and Prices. —
Nasse, Ueber die mittelalterliche Feldgemeinschaft
und die Einliegungen des 16 Jahrhundert in
England. — Denton, W., England in the Fif-
teenth Century. — W. von Ochenkowski, Englands
loirthschaftliche Entvnckelung im Av^gange des
Mittelalters. — ^Fortnightly Review, vols, ii. iii. iv.
(1865-66). — Hecker, Epidemics of the Middle Ages.
— Barnes, History of Edward III.'] E. c. K. G.
BLACKLEG. (1) A card-sharper or forger ;
(2) a person who works for an employer whose
regular workmen are out on strike. These
persons are often exposed to gi'eat annoyance
from the strikers, but they are somewhat pro-
tected by § 8 of the Conspiracy and Protection
of Property Act 1875 (38 & 39 Vict. c. 86),
which enacts that a person who for the purpose
of preventing a lawful act (1) uses violence or
intimidation ; (2) persistently follows the person
concerned from place to place ; (3) hides his
tools or other property ; (4) watches his house
or the place in which he works ; (5) follows him
in the company of others in a disorderly manner
through a street, is liable to a fine of £20 or to
imprisonment for three months with or without
hard labour (see Strikes). e. s.
BLAIEIE, Droit de. A right of the French
lords to exact payment for leave to graze on
open or waste lands within their territories. This
right only existed in provinces regulated by
droit coutumier.
[De Tocqueville, France before the lievalidion
(London, 1873), note Ixxvii.J k. l.
BLAKE, William, F.R.S. ; author of—
Observations on the Principles which regulate
the Course of Exchange, and on the Present De-
jjreciated State of the Currency (London, 1810) ;
Observations on the Effects produced hy the Ex-
penditure of Government during the liestriction
of Cash Payments (homlow, 1823); ^juX of Observa-
tions in reply to a Pamphlet by the Rev. Pdchccrd
Jones, on the Assessment of Tithes to the Poors
Pate (London, 1839). F. T. E.
BLAKC, Jean Joseph Louis, born at
Madrid, 1813, died at Cannes, 1882. His first
work for some years after the Revolution of 1830
was in journalism ; he Avrote in Le Pr ogres du
Pas -de -Calais and in La Revue democratiquc,
then in La Nouvclle Mincrve, all republican
journals. Afterwards he became chief editor of
Lc Bon Sens, and then founded La Revue du
jrrogres social, in wliich ai)pcared, in the year
1 839, the articles which, collected and extended,
formed the volume entitled L' Organisation dit
travail, which made the reputation of Louis
Blanc as leader of the socialist school. He
afterwards employed his imquestioned talent
as a writer on two works, the one, Histoire de
clix ans, a pamphlet in five volumes, assuming a
historic form, and duected against the monarchy
of July ; the other, Histoire de la revolution
frangaise, three volumes of which had appeared
when the Revolution of February 1848 broke
out. Elected a member of the provisional
government, as he could not obtain the forma-
tion of a "ministere du progres," he was
appointed president of a ''Commission de
gouvernement pour les travailleurs," which ho
established in the palace of the Luxembourg in
the Chamber of Peers. This commission was
composed of delegates from the working classes,
supported from outside by 100,000 bayonets.
In its discussions he put forward with a too
feverish eloquence, considering what the charac-
-Cer of his audience, and of the unsettled period
then passing, was, the most revolutionary
and socialistic ideas. This did not hinder
154
BLANC— BLAND ACT
WoLOWSKi from having the courage to oppose
him face to face in debate. Did Louis Blanc
contribute to the formation of the atelieis nation-
mix of unhappy memory, the dissolution of
which brought on the insurrection of June 1848 ?
This has never been proved. Louis !^lanc
denied it vigorously. His powers expiring
with the opening of the National Constituent
Assembly, he became only an ordinary "repre-
sentative of the people ; " but he had to pay
for the rashness of his language during the
discussions at the Luxembourg, the consequences
of which he could not escape, and suffered in
reputation more from his speeches when presi-
dent of the "Commission des travailleurs "
than on account of his acts after he ceased to
hold that oflfice. When the invasion of the
chamber of the 15th May 1848 occurred, he
had to take refuge in England, whence he did
not return till 1870. Before doing this he had
founded a journal, Le Nouveau Monde, which
had only a very limited success (1849-51). He
then wrote in the French journal Le Temps (the
second of that name) letters on London, which
were much remarked on at the time. On
his return to France he was returned a mem-
ber for Paris to the National Assembly, and
subsequently of the Chamber of Deputies.
He w^as a rhetorician and a philanthropist
rolled into one. "C'etait un rheteur double
d'un philanthrope," said M. G. de Molinari,
of him. With a warm heart and a bad judg-
ment, Louis Blanc was not a man for action ;
he dreamed of the absorption by the state of
factories and shops in which work was sus-
pended at the time. He proposed to make use of
these by handing them over to the working men,
under the direction of the state, in order that
they might ruin by their rivalry the factories
and shops which still held on, so that, some
day or other, the state should become the sole
mainspring of industry. The division of profits
(no one imagined that losses could occur) was to
be made in the following manner. There were
to be no more any wages — wage - receiving
being abolished — ^but every one was to receive
"according to his wants." This very simple
method of division was the first proposed by
Louis Blanc. When he became president of
the "Commission de gouvernement pour les
travailleurs," he modified this method and re-
placed it by another more simple still ; an equal
division per head. Honour was in his eyes a
sufficient inducement to labour, and more effica-
cious than self-interest. He had less knowledge
of technical details than his brethren in social-
ism, and his proposals were always surrounded
by a mist of vague uncertainty which renders a
critical appreciation of them both difiicult and
at the same time little conclusive. The collec-
tivists in our days, though on the wrong path,
have gone more to the bottom of their subject.
[While in England he wrote, in English, his
book entitled, — ISIfS. Historical Revelations, in-
scribed to Lord Norrrwmby. By Louis Blanc.
Chapman and Hall, 1858.] a. c. f.
BLAND ACT. A law of the United States
passed 28th February 1878, which restored the
silver Dollar 0^4 12| grs., -^^ fine, to the list
of coins of the United States, and directed the
secretary of the treasury to purchase silver
bullion, and coin into such dollars not less
than two million dollars' worth (say £400,000),
and not more than four million dollars' worth
(say £800,000) per month continually. By
the Coinage Revision Act of 12th February
1873 the gold dollar of 25^^ grs., ^^^ fine, was
declared the Unit of Value in the United
States, and the silver dollar was omitted from
the list of coins authorised to be struck at the
mint. This act did not make mention of any
dollar, with the exception of the trade dollar of
420 grs., ^ fine, manufactured for the trade
with China ; it ordained that the gold coins
should have unlimited paying power, and that
the silver coins should have paying power up
to the amount of five dollars. That portion of
the act of 1873 which made the gold dollar
the unit of value was not altered by the act of
1878, but under it the silver dollar became
legal tender* to an unlimited amount, "except
in cases where it is strictly stipulated otherwise
in the contract." The act of 1878 likewise
authorised the issue by the treasury, on the
deposit of coined silver, of silver certificates of
deposit in denominations of ten, twenty, fifty
dollars, etc. Under this act $299,708,790 (say
£60,000,000) had been coined in silver dollars
upto30thJune 1888, but of these $243,879,487
(say £48,700,000) remained in the treasury on
that date. Against this stock of coined silver
certificates to the value of $229,491,772 (say
£45,800,000) had been granted, but of these
$29,104,396 (say £5,820,000) were in the
treasury (see Report of the Director of the United
States Mint, 1888, pp. 74, 203). The effect of
the Bland Act has been to cause a large portion of
the legal tender of the United States to be held in
silver ; the total metallic stock being estimated
on 1st November 1888 approximately as : —
Cost Value.
Gold $711,705,050 say £142,300,000
Silver $396,970,484 „ £79,400,000
$1,108,675,534
£221,700,000
The Bland Act is sometimes termed the
"Allison Act."
By an act of Congress passed 14th July 1890
the provisions of the Bland Act, which required
the monthly purchase and coinage into silver
dollars of not less than $2,000,000, and not
more than $4,000,000 worth of silver, were re-
pealed, and the secretary of the treasury was
directed to purchase silver bullion to the extent
of 4,500,000 oz. monthly at a price not ex-
ceeding $1 per 371^^^ grs. of pure silver, against
BLANK CREDIT— BLENCH
155
which silver treasury notes were to be issued.
It was left to the secretary of the treasury, at
his discretion, to redeem these notes in gold or
silver coin, it being, the act continues, "the
established policy of the United States to main-
tain the tw^o metals on a parity with each other
upon the present legal ratio, or such ratio as
may be provided by law." This legislation
has led to a decrease of the gold and an in-
crease of the silver coin and bullion held in the
United States, the amounts being approxi-
mately estimated in the Report of the Director
of the United States Mint, 1912, p. 64, as
follows : —
Total Metallic Stock, SOth June 1912.
Gold $1,812,856,241 say £362,571,248
Silver 741,184,095 ,, 148,236,819
$2,554,040,336
£510,808,067
[The lowest prices of silver in bars for the
years 1873 to 1889 inclusive, and for 1889
were:
1873-89.
M to Qth August 1886 42d.
(The higliest price during the whole mouth
of August 1886 was 42 ^d.)
IS^Ai/ai/ 1888 {the ojie day only) 41^d.
(For the whole of May to August 1888 the price
did not rise above 42|d., and at several different
dates in May, June, and July, stood at 4 2d).
1889.
31st May to 28th July 42d.
1900. 1913.
Average price ,..27i|'l 27^Kd.
[See Report on International Monetary Confer-
ence, Paris, 1878 (Washington Government Print-
ing Press, 1879).— Reports of the Director of the
United States Mint. — Reports of the Comptroller
of the Currency of the United States. Article by
F. W. Taussig, Quarterly Journal of Economics,
April 1890.]
BLANK CREDIT. Credit given by a banker
on the personal security of his client. One form
of blank credit which is frequently gi-anted by
continental banks and foreign banks established
in London consists in the acceptance of drafts
issued by the customers or for their account on
the understanding that they will cover the same
before maturity. The drawer of such bills can
discount them on the strength of the banker's
acceptance, and the banker can give credit with-
out any cash outlay. The system of granting
and using blank credits is liable to great abuses,
but on the whole it may be considered a useful
if not indispensable element m the machinery
of trade.
BLANK ENDORSEMENT. A biU of
exchange endorsed in blank, the meaning of
which is that a bill on which the endorser has
only signed his name becomes payable to bearer,
and is negotiable by mere delivery (see Bill of
Exchange). See also for further particulars
The Practice of Banking, by John Hutchison.
BLANK TRANSFER. A deed purporting
to assign the property in shares or other regis-
tered securities in which the transferee's name
is left in blank. A document of this nature is
frequently used in cases of sale or pledge, and,
if accompanied by the certificate relating to the
security to which it refers, generally authorises
the holder to fill in his own name, and to have
himself registered as owner of the security.
Difficulties may occur when the transferer
fraudulently executes several transfers relat-
ing to the same security, and in other cases,
and the holder of the transfer ought to exer-
cise great care (see Lindley, Comp)any Law,
p. 471 seq.) e. s.
BLANQUI, Jerome Adolphe, born 1798,
died in Paris 1854. The economist Blanqui,
who must not be mixed up with liis brother
L. A. Blanqui, the revolutionist, was, from 1830
to his death, the head of the Ecole de Commerce
of Paris, and in 1833 replaced J. B. Say as
professor of political (and especially of in-
dustrial) economy at the Couservatoire des Arts
et Metiers. He was elected, 1838, a member of
the Academic des Sciences morales et politiques,
and represented the department of theGironde in
the Chamber of deputies. Marshal Bugeaud,
witli whom he was very intimate, thouglit of
making him the civil administrator of Algeria.
Blanqui had travelled nearly over all Europe,
and only left olT travelling when his health
compelled him to remain at home. It may be
said that the whole of his life was spent in one
long and laborious inquiry, principally directed
to the solution of those questions relating to the
working classes, the importance of which he
had realised more clearly than most of his con-
temporaries. The brilliancy and vigour of his
language added an additional attraction to his
teaching.
Parts of the course of lectures delivered by
Blanqui were published by MM. Blaise and
J. Garnier. Blanqui also was the axithor of
several works. Of these the most important
are: Resume de Vhistoire du comraerce et de
Vindustrie, Paris, 1826, in 18mo. — Pr6cis
eUmentaire d'economie politique, Paris, 1826
and 1842, in 32mo. — Histoire de Viconomie
politique en Europe, depuis les anciens jusqu'd
nx)s jours, suivie d'une bibliographie raisonnec
des principaux ouvrages d'economie politique,
Paris, 1838, 1842, and 1845. This last work
has been translated into several languages.
We may also mention the notices written by
Blanqui of the French exhibition of 1827, and
particularly that on the great exhibition of
London 1851. His researches on the position
of French workmen have been continued by
M. Baudrillart. Blanqui left behind him
several manuscript fragments and studies which
it is hoped that his son-in-law, M. Maze, will
publish. a. de f.
BLENCH (Scots law term). Lands held
156
BLOCKADE— BOARD OF AGRICULTURE
blench are held subject to payment of merely
a trifling duty, which is exigible only if asked
within the year. Analogous to Petit Sek-
GEANTY.
BLOCKADE. A blockade may be defined
as the prevention of commercial intercourse .be-
tween a port or a portion of the coast in an
enemy's country and neutrals, by means of
vessels of war sufficient in number to render
any neutral vessel attempting to reach such port
or coast liable to capture. A blockade being a
belligerent act, must be instituted by sovereign
authority, and a naval force must be present to
maintain it. The extent of a blockade is deter-
mined by the efficiency of the blockading
squadron. Some continental writers, such as
Heffter {Das Europaische Vblkerreeht der Gegen-
wartf § 155), and Ortolan (Regies interTiationales
et Diplomatie de la Mer, ii. 328) maintain that
the blockading force should be anchored, a view
that lias not been accepted by the prize courts
of England and the United States. A blockade
is violated by any attempt at ingress or egress,
but whilst English and American prize courts
hold that the bare act of sailing for a blockaded
port is an act of violation, provided there is
reason to believe the captain knows of the exist-
ence of the blockade, the French practice is to
warn the captain on approaching the coast, and
only to seize the vessel if a subsequent attempt
is made to enter. The penalty for a breach
of blockade is the confiscation of the ship, but
the cargo is liable to be condemned if its owners
are in any way privy to the breach.
The prohibition of commerce with neutrals
involved in a blockade is based by Hautefeuille
{Des droits et des devoirs des Tuitions neutres en
temps de guerre maritime, 3d ed. ii. 178, 181)
on a supposed conquest of the enemy's territorial
waters ; by Ortolan {Diplomatie de la mer, 2d
ed. ii. 293) on an "occupation" of the sea,
which gives to the occupier "sovereign rights."
Historically the rules of blockade are a modifica-
tion of the old principle that war was " omnium
in omnia et in omnibus," and therefore he who
was a neutral was an enemy. All intercourse
with an enemy was unlawful. In process of
time neutral states made good their claim to a
distinct status, and it is now recognised that in
time of war the trade of neutral individuals
should be as free as in time of peace. This
principle, however, comes in conflict with the
long established right of a belligerent to cut off
commercial communications with the enemy,
and the modern rules of blockade are a com-
promise between belligerent and neutral rights.
The right of the neutral subject to trade is
recognised in the fact that, by violating a
blockade he does not violate the neutrality of his
state, and if the vessel escapes he suffers no
punishment. The belligerent right is recog-
nised by permitting the blockade to be estab-
lished, and by authorising the belligerent to
confiscate any vessel that may be caught in the
act of violation.
A blockade, if on an extended scale, may
inflict great injury on neutral states. During
the four years that the blockade of the Southern
States was maintained by the North American
States, the export of cotton to England ceased,
and those engaged in the cotton industry
suffered great privation, and the exportation of
wine from France to the United States became
impracticable. Hence the prohibition of com-
mercial blockades, and of the capture of all
private property at sea, has been advocated.
From an economic point of view it is certainly
desirable that the capture of private property
should be abolished, but as FauchiUe points
out {Du Blocus Maritime), every act of war
affects neutrals, and the arguments for the pro-
tection of private property are arguments
against the practice of war itself (see Inter-
national Law).
[See Calvo's Droit International, Paris, 1881 ;
Du Blocus Maritime, par Paul Fauchille, Paris,
1882. — Hall's International Law, Oxford, 1889.]
J. E. c. M.
BOARD. A body of persons officially con-
stituted for lihe transaction of some particular
business, so called from the "board" or table
round which meetings were held. Some govern-
ment departments are designated by this title,
e.g. board of trade, board of inland revenue,
local government board, poor law board. The
term is also applied to the directors or persons
charged with the management of a company.
J. E. c. M.
{Economic Opinion on Boards.) "Boards,"
said Bentham, "are screens," a phrase which
describes very well the extreme position of
economists who distrust governmental control
in industry. The term is applied to par-
ticular departments of the administration of
the central government, e.g. the board of
trade, the board of agriculture ; to similar
divisions of local government, e.g. board of
guardians, school board ; and also to various
permanent committees charged with the super-
vision of particular industries, e.g. the Scottish
fishery board. It was one of the main prin-
ciples of Adam Smith, that, if governmental
control were proved to be desirable, it was
better to throw the responsibility on the per-
sons and localities directly interested. The
constitution of boards of various kinds is the
logical outcome of this principle, the central
authority only laying down general rules for
guidance. J. s. n.
BOARD OF AGRICULTURE (1793). Seven
years after the reconstitution of the board of
trade, the House of Commons, on the motion
of Sir John Sinclair, voted £3000 a year to-
wards the expenses of a board of agriculture (1 7th
May 1793). The board was duly chartered ;
it was to consist of certain specified government
BOARD OF AGRICULTURE
157
officials and lay coadjutors, the latter including
Sinclair himself, who became the first president,
and Arthur Youkg, who became secretary.
Though the minority in the House regarded
the board as simply a new refuge for place-
hunters, the enthusiasm of president and secre-
tary carried it into good work at once, and, for
a time at least, falsified fears. On its first
meeting (4th September 1793) it drew up a
plan of inquiry on a large scale. Intelligent
farmers throughout the kingdom were to be
provided with a Hst of queries relating to their
business which they were to be invited to answer
and send to the board, for the general benefit of
the agiicultural interest. In the second place,
in every county some competent person was to
be chosen to draw up a survey of the state of
agriculture in that county, to be remitted to
the board for publication. This plan was duly
carried out, and the result was given to the
world in sixty or seventy separate publications,
of various degrees of merit. The survey of
Sussex was by the son of Arthur Young, and
the survey of Suffolk by Young himself, who
contributed also to the 3d and 6th vohimes of
CommunicatioTis published by the board between
1802 and 1806. These Communications include
also papers, letters, or speeches by George
Washington, Dr. Priestley, Sir Joseph Banks,
Sir Humphry Davy, Morris Birkbeck, Watson,
bishop of Llandaff, and Sir John Sinclair, Avith
others of lesser note, English and foreign. One
of the objects of the board was to keep England
alive to foreign improvements. Another of
course was to encourage improvements at home ;
and, as a matter of fact, the lectures of Sir
Humphry Davy, given before the board in 1802,
made an epoch in agricultural chemistry.
Prizes were given for agricultural essays and
experiments. Another object of the board was
more general, — to provide accurate statistics of
lands, produce, stock, and even population ;
there is, for example, in vol. ii. of the Co7n-
munications, an "abstract of baptisms and
burials " for four of the parishes in each of fifty
counties, drawn up in 1800. Both in the
Communications and in the several Reports
for the counties, there is a mass of information,
observations, and opinions, not only in regard
to the technical points of agriculture and pas-
ture, but in regard to the poor law, the con-
dition of the poor labourer and the farmer,
the incidence and amount of rent, rates, and
tithes, the progress and effects of enclosures,
the movements of population, and the working
of such experiments as the system of small allot-
ments. Accordingly these volumes contain
materials for the social and industrial history
of the country districts of the kingdom, which
are of undoubted value though they have been
little utilised.
A general view of the work of the board for
its first three years is given in the first volume
of the Communications, which contains also
the text of the Charter of Foundation, dated
23d August 1793. The grant of £3000 waa
withdrawn in 1817, a year of distress when
the government was much pressed to reduce ex-
penditure. No doubt the Smithfield Club, the
Highland Society, the Bath and West of Eng-
land Agricultural Society and other private
bodies were doing its work equally well ; but
it is not just to describe the board as simply
" the pet scheme of King George " with no life
of its own (Martineau, Tliirty Years' Peace, iv.
448). In 1889 it was re-established, and in
1903 assumed in addition the duties of the
Board of Fisheries then constituted (see below).
[Reports to Board of Agriculture from the several
counties (var. dates). — Communications to the
Board of Agriculture, 1802-6, 6 vols. — History of
the Progress of Great Britain, R. K. Philp, 1859
(specimens are given of the queries to farmers, p.
117). — M'Culloch's Literature of Political Econ-
omy, 1845 (a list of surveyors is given, but not
in a useful or accurate form, p. 215) — Corres-
pondence of Sir John Sinclair, vol. 1. 406-407, etc.
— Life of Sir John Sinclair, i. 253, etc. — Annual
Register, 1793, p. 118.— R.E. Vxoi\iQxo' a English
Farming, 1888, p. 69.] j.b.
BOAfeD OF AGRICULTURE AND FISH-
ERIES. A Board of Agriculture for Great
Britain was re-established 12th August 1889.
In 1903 certain powers and duties formerly
exercised by the Board of Trade with respect
to fisheries were transferred to this department,
the designation of which Avas at the same time
altered.
There are transferred to this Board the duties
of the Privy Council under the Destructive In-
sects and Contagious Diseases (Animals) Acts,
the duties of the land commissioners for Eng-
land under the Tithe commutation acts, the
Copyhold acts, the acts for inclosure, exchange
and improvement of land and other acts,
and those vested in the Commissioners of His
Majesty's works and public buildings under the
Survey Act, 1870. The Board undertakes the
preparation of statistics relating to agriculture
and forestry and the industry of fishing. It
may also undertake the inspection of any
schools, not public elementary schools, in which
technical instruction, practical or scientific, is
given in matters connected with tliese subjects,
and the aiding of any school which admits such
inspection and is qualified to receive such aid,
the aiding and inspection of courses of lectures
and instruction, and examinations in these
subjects, and the encouragement of such ex-
periment and research as they may think im-
portant for the purpose of promoting agricul-
ture, forestry, or the industry of fishing. The
muzzling and keeping dogs under control art
among the duties of the Board with the Con-
tagious Diseases (Animals) Acts, and it is also
stated that in the act establishing it, the ex-
pression "agriculture" includes horticulture.
158
BOARD OF TEADE
The Board are charged with the duty of
providing small holdings and allotments in
England and Wales (see Small Holdings Act,
1907), and of carrying out the English share
of the international investigation of the North
Sea. They have also important duties uijder
the Fertilisers and Feeding Stuffs Act, 1906,
and the Butter and Margarine Act, 1907.
Useful work has already been done in connec-
tion with agricultural education and small
holdings (see Agricultural Holdings Act,
App.). Instruction in dairying, in poultry
and bee-keeping, in horticulture, in the
management of orchards and fruit trees, and
in school or other gardens, has been pro-
vided at many centres throughout England
and Wales.
The president of the Board may have a seat
in Parliament.
[Board of Agriculture Act, 1889 ; do. of
Fisheries, 1903.]
BOARD OF TRADE. Great Britain pos-
sesses no ministry of commerce nor any depart-
ment specially charged with the superintendence
of industry. The home office has some super-
vision over factories and workshops, mainly as to
hours of labour of women and children, fencing
of dangerous machinery, and sanitary condition
of buildings. It publishes returns of the princi-
pal textile industries, but with no details of
quantities or values of what is produced, and
superintends coal and other mines in regard to
safety, and it is not concerned with other mat-
ters as important to them — namely, the rates
charged for conveying minerals by railway and
royalties payable to original owners. In con-
nection with manufacturing industries the
science and art department gives some assistance
through the South Kensington and other
museums, and technical schools. With these
exceptions there is little supervision over com-
merce and industry, except by what was origin-
ally the committee of privy council for trade
and is now known as the "board of trade."
Temporary councils had advised parliament con-
cerning trade matters since the 14 th century,
but no permanent department was established
until Cromwell instituted such a department to
foster trade and navigation, and check the
monopoly of the Dutch. This policy was con-
tinued after the Restoration, a committee of the
privy council being appointed, 1660, to ascertain
particulars of imports and exports and to improve
trade. Another committee was appointed a few
years later to assist the crown in forming and
managing ''foreign plantations," ^.e. colonies.
The Earl of Sandwich was president and John
Evelyn one of the ten members of this second
committee. In 1672 these two committees
were united as a standing council of trade and
plantations under the presidency of the Earl of
Shaftesbury, and, in 1673, John Locke became
secretary. The joint commission lasted, how-
ever, only two years, and was not revived till
1696. Locke then returned to office, though
unwillingly, as one of six unofficial paid
members of the board, eight principal officers
of state being unpaid members. The questions
referred to the establishment included inquiries
into hindrances to trade, employment of the
poor, and the silver currency, the great re-
coinage of which, 1695, was supported by
Locke's writings. The new board were hardly
settled in their rooms at Whitehall, altered
for them by Wren, when the fire of 1697
drove them to take refuge in the building
known as the Cockpit, on the site of the
present council office. In 1700 Locke was
compelled to resign through ill-health {Life
of Locke, by Fox Bourne). Locke's successoi
was Matthew Prior, well known in his literary
capacity.
The navigation acts and the mercantile
system were at this time the keystones of oui
commercial policy. Raw materials might be
imported free of duty, and with a bounty in
some cases, but heavy penalties usually pro-
hibited their exportation. In the case of wool,
even movement from village to village within
a few miles of the coast was prohibited. British
colonies werS favoured by Discriminating
Duties, but when conflicts arose between the
interests of home manufacturers and colonists,
the latter usually went to the wall. A secretary
of state for the colonies to undertake the con-
trol of the plantations was appointed 1760.
This control passed, 1782, to the home secretary,
1801 to the war department, 1854 to the pre-
sent colonial office. Addison was for a few years
one of the lords commissioners of trade previous
to his appointment in 1717 as secretary of state
to George I. Gibbon, the historian, was made
one of the eight lords commissioners in 1779
at a salary of £1000 a year, but was ousted
three years after, mainly through Burke's attack
on the public offices 1780. (Cobbett's Parlia-
mentary History, vol. xxi. p. 232.) The con-
test between Burke and the ministry was, as
regards the board of trade, whether unpaid com-
missioners of trade, chosen from time to time,
would not be preferable to a permanent highly-
paid council, which Burke described as "a sort
of gently-ripening hot- house, where eight mem-
bers of parliament receive salaries of a thousand
a year in order to mature at a proper season to
a claim for two thousand. " Burke's motion for
the abolition of the board of trade and the
colonial and other offices was carried in the
House of Commons by a majority of eight.
Reductions resulted of between £200,000 and
£300,000 a year, including £11,000 for the
board of trade. Another permanent committee
of the privy council was formed in 1786, by
order in council which still mainly regulates the
legal constitution of the office. The duties of
the revived board were chiefly as a century
BOARD OF TRADE— BOARDING-OUT SYSTEM
159
before, with questions relating to food supply
and restrictions on the exportation and im-
portation of corn.
Experience of difficulties in administering any
Sliding Scale of corn duties had much to do
with disposing the board towards a free-trade
policy. Mr, Husxisson's efforts in removing re-
strictions on foreign trade, followed by Mr. Glad-
stone's (1842) carrying out Peel's tariff reforms
were ably seconded by the permanent staff, in-
cluding Mr. G. R. Porter and Mr. Macgregor.
Porter was the founder of official statistics, the
accounts published by government before he be-
came chief of the statistical department, 1832,
having been merely crude and undigested masses
of figures. The Progress of the Nation made him
famous as an economist and he Avas made
secretary of the Board of Trade 1847. Sir R.
Giffen, afterwards an assistant secretary, be-
came chief of tlie statistical and commercial de-
partment 18 76. Meanwhile, as state supervision
over food supply and general trade became
obsolete, joint -stock companies, railways, and
shipping required supervision, and further
changes were made, the president being practic-
ally secretary of state for trade. The vice-president
became, 1867, a parliamentary secretary with
similar duties to those of a parliamentary imder
secretary of state. Efforts have been made to
change the title of the office into ''Ministry of
Commerce " presided over by a titular secretary
of state, but a more obvious improvement would
be to incorporate with the board some consulta-
tive members of technical knowledge and trade
experience, such as eminent shipowners, mer-
chants, and manufacturers, who could be called
in to advise the president.
The departments must be described somewhat
in detail.
1. The Commercial Department deals with
commercial questions generally. It provides the
statistical abstracts for the United Kingdom, the
colonies, and foreign countries : trade, shipping,
railway, and emigration statistics, including a re-
cord of price of corn, foreign and colonial cnstoms,
tariffs, and trade regulations ; keeps the standards
of weights and measures, and controls the registra-
tion of joint-stock companies. Labour statistics
have now special attention. A Monthly Journal
gives commercial information principally from
oflficial sources.
A separate Bankruptcy Department has been
organised since the Bankruptcy Act of 1883. The
principle of this act is administration of bankrupts'
property by or under a department amenable to
parliamentary control (see Bankruptcy Law ;
Deed of Arrangement).
2. The Railway Department, established 1840,
inspects railways before opened, reports on pro-
posed railways, accidents, by-laws, arbitrators, and
other duties under various railway acts. The Rail-
way and Canal Traffic Act (1888) in regard to rates
for conveying goods ; tramways, their by-laws, and
"provisional orders," i.e. omnibus bills approved
by some public department before being submitted
to parliament come under this department, with
gas and water schemes, electric lighting, and
copyright. The patent office, a subordinate de-
partment, has charge of Patents, designs, and
Trade Marks.
3. The Marine Department, established 1850,
regulates the survey of passenger steamers, com-
pulsory examination of masters and mates, shipping
offices for engagement and discharge of seamen, and
generally all questions relating to ships and their
crews, including the detention of imseaworthy ships
and inquiries into wrecks. It also deals with in-
ternational arrangements connected with the Police
of the North Sea and other fisheries, and matters
relating to fishing vessels;;;'and their crews. Certain
powers and duties formerly exercised by the Board
of Trade with respect to fisheries were in 1903
transferred to the Board op Agriculture and
Fisheries {q.v.).
4. The Harbour Department has charge of fore-
shores belonging to the crown, and protects navi-
gable harbours and channels, lighthouse funds,
Holyhead and Ramsgate harbours and Dover pier.
Wreckage and quarantine are also under the charge
of this department, and standards for weights and
measures, and hall marks.
5. The Finance Department deals with the
accounts of all branches of the Board of Trade, of
harbours, lighthouses, and mercantile marine offices,
merchant seamen's fund, consuls' accounts for dis-
abled seamen abroad ; marine savings banks and
seamen's money orders, life insurance companies'
accounts and bankruptcy estate accounts.
BOARDING-OUT SYSTEM. The boarding-
out system is one of several attempts to solve
the problem of training pauper children, and is
practised in the United Kingdom, in France,
Germany, Russia, Switzerland, Canada, and the
United States. In relieving adult paupers the
main object may be said to be, to make the
condition of the pauper as little enviable as
possible ; in the case of pauper children there
is a further aim, viz. to prevent the permanence
of a state of pauperism, and to train good
citizens. Various methods have been suggested
to attain these ends. It was at one time the
custom to keep children in workhouses, in a
separate part of the building from aged and
adult paupers, under instruction and discipline.
The evils of this system, which are possibly
exaggerated, lie in the danger lest a child
should acquire the so-called " pauper taint " —
that is, a predisposition to relapse into pauper-
ism. To this must be added a total ignorance
of the world, due to artificial surroundings^ which
not only unfits a child for any walk in life, but
makes him an easy prey to temptation. These
evils are now, as a general rule, modified by the
practice of sending children to the ordinary
parish schools. The first real reform in the
system was the establishment of district schools
in which the children of one or more unions are
boarded and educated. The results of the
training given in such schools are very favour-
able, a comparatively small percentage of the
children becoming paupers in later life. Against
160
BOARDING-OUT SYSTEM— BODIN
them it is urged that individuality is lost, that
the training given is too mechanical, that the
little incidents of daily life are wanting, so that
no sense of property is acquired, that they are
favourable to the development of certain diseases,
e.g. ophthalmia, and that the diet lacks variety.
A further modification is seen in the building of
villages, consisting of cottage-homes, in each of
which a small number of children form an
artificial family, but an objection to this system
lies in the cost. It is claimed for the boarding-
out system that, whilst avoiding the above-
mentioned evils, it has great advantages of its
own. Thus children are placed in ordinary
families, are adopted by foster-parents carefully
selected, who lodge, board, and clothe them in
return for a weekly payment by the guardians,
and who are under close supervision. Thus the
"pauper taint" is wholly absent, and the
advantages of home life are secured to the child ;
the relations between the foster-parents and the
children often develop into real affection, and
the tie between them is as strong or stronger
than that in ordinary families : the surroundings
are precisely those in which a child will find
itself in later life, for which therefore it receives
an appropriate training. Lastly, it is far cheaper
than any other system. Thus, the cost of
maintenance of a child in a workhouse may be
set at 4s. lOd. weekly, exclusive of the cost of
buildings, etc., the weekly cost in a district
school at 8s. 6d., in a cottage-home at 9s. 5d.,
on the boarding-out system at 4s. 3d. Two
kinds of difficulty suggest themselves. Fu'st,
the practical difficulty of securing adequate
supervision. The supervision is partly in the
hands of volunteers, partly of union officials,
subject to inspection by an official of the local
government board. The reports of this last,
Miss Mason, though on the whole encourag-
ing, show that lamentable shortcomings are
not uncommon, for instances are quoted of
neglect and even cruelty on the part of foster-
parents. To this may probably be attributed
the small extent to which the system has been
adopted, and its unpopularity among the poorer
classes. The second objection is one of prin-
ciple. Under this system the children of
paupers are placed in a better position than the
children of independent labourers, the amount
expended upon them being larger than these
last can possibly aff"ord. Hence the motive to
support his own family is weakened on the part
of the ordinary man by the sight of the superior
provision made for the family of his improvident
neighbour, and a du-ect incentive is given to
an increase of population by recklessly early
marriages.
The boarding-out system is regulated by two
orders of the Local Government Board, issued in
1889, which superseded the orders issued in 1870
and 1877. Under these orders orphan and
deserted children, or the children of permanent
inmates of a workhouse, and others who are
practically orphans, may be boarded out : (1)
outside the union to which they are chargeable,
in which case they are under the supervision
of a certified committee ; or (2) inside the
union, when the responsibility is shared by a
committee and the officers of the union. The
total number of children boarded out in Eng-
land and Wales on 1st January 1890 was
4366. In 1909 it was 8653 ; in 1911, 9669.
[The Association for promoting the Boarding-out
of Pauper Children has published numerous re-
ports, etc., on the system. Discussions upon it
are to be found in almost every annual report of
the Poor-Law Conferences, and the history of the
movement may be traced in the annual reports
of the Local Government Board, Part I.] l. e. p.
BOCCHI, Romeo, who came from Bologna,
published in 1621, at Venice, a book on money,
in two volumes, dedicated to the pope Gregory
XV. Delia giusta universal misura e suo typo.
The first volume has the sub-title Anima della
moneta, and the second Corpo della moneta.
Although very primitive in his views, this
author is not uninteresting. m. p.
BOCKH, August (1785-1867), the eminent
philologist, was author of the classical work on
the poHticat economy of ancient Athens, Staats-
havshaltung der Athener, 1817. This book was
translated into English by Sir G. Cornewall
•Lewis (1828, 2d ed. 1842). Another of Bockh'a
treatises is useful for the study of the economics
of antiquity, namely Metrologisdie Untersuch-
v/ngen iiber Gewicht, Munzfiisse und Maasse des
Alterthums, 1838. J. k. i.
BOCLAND. After the land of England had
been distributed among the original German
invaders, a considerable surplus remained un-
distributed, which was regarded as the property
of the tribe, and was known as foUdatid.
From this private estates were in subsequent
times given to individuals, as a reward for emi-
nent services, especially in war. Such grants
were made by 'hoc or charter, issued by the king
and his witenagemot or council of wise men : and
land so granted was called bocland. Bocland
could be freely alienated either during lifetime
or by will ; and we learn from a law of Alfred
that it could also be entailed, i.e. limited in
descent to a single family.
[Stubbs, Constitutional History, vol. i, ch. v. —
Essays in Anglo-Saxon Law (Boston and London,
1876), pp. 55 seg.'\ b. l.
BODIN", Jean, who was a rival of Machia-
velli and a precursor of Montesquieu, was born
at Angers, 1520, and died of the plague, at Laon,
1596. His principal work, De la Eipuhlique
(1577), published originally in French, then
translated into Latin by the author himself, has
not for its object, as its title might lead the
reader to suppose, a panegyric on the republican
form of government. While deriving every-
thing from the sovereignty of the people, Bodic
BODY CORPORATE— BOILEAU
161
admits that the only practical method is the per-
petual alienation of this sovereignty in favour
of a monarch and his heirs. He fixes no limits to
this alienation, but he desires a ** Gouvernement
tempere sans etre democratique. " States-General
like those at Blois (1576), in the deliberations
of which he had shared, with more courage and
ability than success, are, in his eyes, the proper
remedy for an excess of absolute power. This
was, in some respects, the representative mon-
archy of our days. He also supported the idea,
developed later by Montesquieu, that climate
has a dominant influence on the form of govern-
ment ; theocratic in the south and east, militaiy
in the north, free in the countries lying between
these. Maintaining resolutely, through con-
viction, liberty of conscience, he was also
a declared opponent of slavery. In political
economy he supported piinciples universally
admitted in our days against a sieur de Males-
troit, who, had it not been for two pamphlets
by Bodin, would be perfectly unknown at the
present time {R6ponse aux paradoxes de M.
de Malestroit touchant V encMrissem&rvt de toutes
les choses et des monnaies, Paris, 1568, in 4 to,
and Discourssurle rehaussementet diminution des
monnaies, pour reponse av/x paradoxes du sieur
de Malestroit, Paris, 1578, in 8vo). He also
published La Demonovnanie (1587), and other
similar works ; for, strange as the fact is, this
man, of such powerful intellect, was neverthe-
less a believer in sorcery and witchcraft.
[M. Ad. Franck, in his liifoi^mateurs et puUi-
cistes de V Europe (Paris, 1864, in 8vo), has
written on Bodin in eloquent terms ; but tlie
work through which both he and his books will
be best known is the volume of M. H. Baudrillart
{Jean Bodin et son temps, Paris, 1853, in 8vo).]
A. c. f.
BODY CORPORATE or Corporation is an
artificial or juristic person which preserves its
identity and the rights conferred on it through
a perpetual succession of natural persons. Cor-
porations are either sole where composed of one
person, or aggregate where composed of two or
more persons. They are also divided into
ecclesiastical corporations, and lay corporations.
Of lay corporations the most important are
municipal corporations and trading companies.
Corporations are created either by charter or by
act of parliament, but some base their exist-
ence on prescription. Their powers of acquir-
ing, holding, or disposing of property depend
partly upon the instrument calling them into
existence, and partly upon the objects for
which they were created (see Corporation,
Municipal ; and Companies).
[As to the extent to which a corporation can
enter into contracts, see The Principles of Contracts,
by Sir F. Pollock, London, 1888.] J. e. c. m.
BCECLER, JoHANN Heinrich (1611-1672),
a German writer, born at Cronheim in Bavaria,
was professor of history, philosophy, and politics
VOL. L
at Upsala and Strasburg. In his posthumous
Institution's politicae : accesseriont Disserta-
tiones Politicae ad Selecta Vetervm loca et
libellvs memorialis ethicu^, Argentorati, 1674,
Boeder assails the opinions of Grotius on the
original community (p. 61), and those of
Althusius (p. 104) concerning the original
sovereignty of the people. His economical
opinions on money, taxation, and population
are for the most part founded upon Botero,
Besold, Bornitz, and Gryphiander. The first-
named may have suggested his distinction
between the arts which assist or hinder the
increase of population, trade, schools, and
courts belonging to the former, false promises
and robberies to the latter (1. iv. c. v. p. 209).
Boeder's dissertation " on the science and study
of politics" (p. 503 ff.), in which he deprecates
the study of Plato and recommends Aristotle,
gives a curious example of what was the state
of the science in Germany in his time.
[See Allgemeine Deutsche Biographic, ii. bd.
pp. 792, 793. — Roscher, Geschichte der National-
Oehonomik in Deutschland, 1874, pp. 209, 262,
263.] 8. B.
BOILEAU (or Boyleau) Etienne (born
about 1200, died about 1272), is said to have
been of Angevin origin. He joined the Cru-
sades under Louis IX. (St. Louis), was captured,
and ransomed by that monarch at a high
price. At one time provost of Orleans ; he
subsequently became (1258-1270) provost of
Paris, by special appointment of Louis IX.
who sought a man of suificient strength and
integrity to maintain social and industrial order
in Paris. Up to that date the post of provost
had practically been farmed out to speculators,
who recouped themselves by exactions and the
receipt of bribes. Boileau, a man of noble
birth and incorruptible character, suppressed
venality, meted out vigorous justice, estab-
lished the police of Paris, and hanged his
godson for theft, and a friend for dishonesty.
St. Louis, as a mark of confidence and approval,
sometimes sat beside him at the Chatelet,
where he administered justice. But the great
work of Boileau was his compilation, about
1268, of the Livre des Mitiers, a code of the
regulations aflecting the various industries of
Paris. The exordium states the intention of
the compiler, to treat of (1) the trades
of Paris, their ordinances and the breaches
thereof, with the apjiropriate fines ; (2) fees,
tolls, taxes, and dues ; (3) justice and jurisdic-
tions in Paris and the neighbourhood. The
third part either was not written or has been
lost.
The iQ- defined privileges claimed by the
numerous industrial corporations of Paris had
become, in many cases, oppressive and en-
croaching. Boileau cited before his tribunal
representatives of the separate crafts in turn,
inquired into the grounds of their privileges.
162
BOISGUILLEBERT— BONA FIDE
and reduced their customs to vfriting in con-
sistent order. The Begistres so formed consti-
tute a highly valuable record of the condition
of industrial society at the time, and exhibit
the whole organisation of its hierarchy —
trade privileges, masters, apprentices, their
number, conduct, terms of service, holidays,
quality of work and of goods, prices, middle-
men, fines, dues, etc. This compilation has
been regarded as a landmark in the history of
economics. Blanqui devoted to it a chapter of
his Histoire de VEcoTwmie Politique (t. i., ch.
xix., 3me ed. 1845), in which, however, he
exaggerates the practical influence exercised by
Boileau's book. As a repertory of economic
police regulations it had, no doubt, great
administrative utility. But its place is rather
in the economics of history than in the history
of economics.
The text of the lAvre des Mitiers was published
at Paris in 1837 under the title of Registres des
MStiers et Merchandises de la ville de Paris, 4to,
edited by G. -B, Dapping, in the series of Docu-
ments inidits sur V Histoire de France. The best
edition is that of MM. Lespinasse and Bonnardot,
forming part of the Histoire gSnirale de Paris, of
Baron Haussman (pub. 1886).
[See also article Boyleau, by Isambert in the
Nouvelle Biographie Gin^ale, Paris, 1855, vii.
194.] H. H.
BOISGUILLEBEK.T, alias Boisguilbert,
Pierre le Pesant de, born at Rouen, 1646,
died in the same city, 1714. Few details of his
life are known. He purchased, in 1690, a
judicial office in the city where he was born.
An economist and precursor of the Physiocrats,
extremely energetic and persevering by nature,
he laid bare, with courage and much practical
good sense, the economic defects in the system
which prevailed up to 1789. He attacked Col-
bert with warmth, and not without reason, for
having put agriculture on one side, and shackled
the trade of corn. He proposed to Pontchar-
train, Chamillart, and Desmarets in succes-
sion reforms which are recognised as useful in
our days, but he was not listened to, and was
even exiled to Auvei^e for his publications.
His two principal works, Le DUail de la France
(1695 or 1697), and Le Factum de la France
(1707), are valuable from the evidence they
supply as to the real economic condition of France
during the most fatal part, the last thirty
years, of the reign of Louis XIV. His complete
works, omitting those of a purely literary char-
acter, appeared in 1707 (2 vols, in 12mo), under
the generic title of B6tail de la France ; in the
same year another edition, which appears to
have appeared without the author's consent, was
published in 2 vols, in 12mo, described as the
Testament politique de M. de Vauhan. Both of
these are without the name of the author. These
same works, omitting the Trait6 du mirite et des
lumieres des grandn financiers, form part of the
Collection Guillaumin {Eccmomistes finxmciers
du XVIIL Sikle), with a preface and notes by
M. Eug. Daire. All these works deserve to be
read even in our days. A. c. f.
BOLLES, John A., lawyer (bom in Con-
necticut, 1809 ; died in "Washington, 1878) ; he
wrote A Treatise on Usury and Usury Laws,
Boston, 1837, pp. 75, to show the mischief of
the usury laws which generally prevailed in the
United States at that time. The treatise con-
tains a history and discussion of principles ;
the author expresses the fear that his argument
will be regarded with prejudice and ill-will.
D. R. D.
BOLLMAN, Justus Erick, M.D. (born in
Hanover, 1764). He took part in the French
Revolution ; was imprisoned in Austria, and
became noted for his attempt to liberate
Lafayette, also in prison in the same country.
He afterwards emigrated to the United States,
and became implicated in Aaron Burr's con-
spiracy. He remained in the United States
for some years, then went to London, and
died in the West Indies in 1821. While in
the United States, in 1810, he wrote Para-
graphs on Panics and Banking, Philadelphia,
(pp. 122 ; 2d ed., 1881). In this he defended
the Unitjed States Bank as -a powerful agent
for strengthening the government, cementing
the union, and useful in diminishing and
augmenting the circulating medium according
to public necessities. The pamphlet is typical
as illustrating the acrimony of the bank dis-
cussion. In 1 8 1 6 he wrote Plan of an Improved
System of the Money Con^rns of the Union,
Philadelphia (pp. 62); in which he again de-
monstrates the superiority of bank money to
treasury notes ; also Strictures on the Theories of
Mr. Ricardo. The history of the greater por-
tion of his life is narrated in Justus Erick Boll-
man; Ein Leben^bild aus zwei Welttheilen,
by Friedrich Kapp, Berlin, 1880 (pp. 439).
D. R.D.
BON. A French word signifying a written
authority to pay a certain sum of money, or to
deliver a certain object or a certain quantity of
goods for account of the person signing the
authority. This is implied by the use of the
words ^'Bonpour" — (e.g. Bon pour irs. 1000 ; hc/x
pour pain, etc.) Such authorities, when issued
by government officials on the national treasury,
are called " Bons sur le Trisor." e. s.
BONA FIDE. Literally in good faith ; the
words are frequently used in connection with a
substantive when their proper meaning is
"genuine." A " bonS, fide traveller " is a man
who is a genuine traveller ; a " bon^ fide pur-
chaser " is a genuine purchaser — not a person to
whom a gift has been made in the form of a,
sale. The phrase "bona fide holder for value
without notice " is used in connection with
negotiable instruments. The Bill of Exchange
Act has by § 29 substituted the shorter form
"holder in due course." e. s.
BONA NOTABILIA— BONDED WAREHOUSES
163
BONA NOTABILIA. Formerly, if a deceased
person at the time of his death left effects of
such an amount as to be considered "notable
goods " (fixed by the 93d canon of 1603 at £5),
within a diocese other than that in which he
died, the will was required to be proved or
letters of administration taken out before the
metropolitan of the province, and not before
the ordinary of the diocese. The transfer of
jurisdiction over wills to the court of probate
by the 20 & 21 Vict. c. 77 has abolished the
legal importance of bona notahilia.
{The Lmo of Executors and Administrators, by
E. L. V. Williams and W. V. V. Williams, p. 292,
8th ed., London, 1879. — Bona Notahilia, by G.
Lawton, London, 1825.] j. e. c. m.
BONA VACANTIA. The term applied in
Roman law to the property of a deceased person
which, if not claimed by the legal or equitable
heir, went to the state, or in some cases to the
municipality, or to the curia, or to the corpora-
tion of which the deceased was a member (see
Hunter's Roman Law, p. 865). In English
law the term is sometimes applied to things
found without an apparent owner.
[Stephen's Commentaries, bk. iv. oh. vii.]
J. E. C. M.
BONCERF, Pierre -Francois, a French
publicist, born about 1745 at Ohasaulx, was
employed by Turcot, and published with his
consent, under the assumed name of "Fran-
caleu " a pamphlet : Les inconvinienis des
droits feodaux, 1776. In this he insists upon
the freedom of landed property from any feudal
impositions, and hopes the king will abolish
them. But the author was discovered ; the
pamphlet was condemned by the parliament to
be publicly burnt 23rd February 1776, and
Boncerf himself was saved only by the king's
intervention from being prosecuted. After the
downfall of Turgot, Boncerf retired to Normandy
and devoted himself to agricultural pursuits.
He was secretary to the Duke of Orleans when
the Revolution began ; he was appointed a judge
in 1790, but his sincerity led to his being
brought before the revolutionary tribunal, and
he escaped being condemned to death only by
one vote. In consequence of these persecutions
he died in 1794. In 1789 he had written
De la N4cessit6 et des Moyens d'oecuper
avantageusement totes les gros ouvriers. The
first creditors of the nation, he says, are the
hands, which demand work and the soil that
waits for the labour of the hands (p. 14).
Boncerf proposes to give work to the labourers,
for " everybody has a right to subsist, but this
right supposes a duty — labour " (p. 59).
Boncerf' s other writings are enumerated in the
Nouvelle Biographic, t. vi. p. 554. — see L. de
liavergne, Les Econoraistes francais du 18g siecle,
1870, p. 195. s. B.
BOND. Legal term for a deed by which a
person (called the "obligoi ") declares himself
bound to another (called the ''obligee") to
pay a certain sum unless he performs an obliga-
tion specified in the same instrument by a clause
called " the condition of the bond." Bonds are
generally used when security is to be given to
a public authority (bail bonds, security to keep
the peace, security for costs in actions, etc.),
and Contracts of Guarantee are frequently
made out in that form, but instruments
embodying mercantile contracts do not, as
a general rule, assume the form of bonds.
The word is also used for certain stock exchange
securities, and in that sense is equivalent to
"debenture" or "obligation, "meaning a promise
to repay a sum borrowed by the public authority
or company who issues the security (with or
without an additional premium), on a fixed date
or on a date depending on the operation of a
sinking fund {i.e. an annual sum to be applied
in the purchase of bonds or in the compulsory
redemption of some particular bonds, to be de-
termined by ballot), and to pay interest at a
certain rate on certain dates up to the time of
repayment. Bonds are sometimes secured by a
charge on special property (see also Lloyd's
Bonds). e. s.
BOND OF CAUTION (Scots law term).
See Caution.
BOND OF CORROBORATION (Scots law).
Bond given as further security.
BOND AND DISPOSITION IN SECURITY.
Scotch equivalent to mortgage.
BOND OF RELIEF (Scots law term). Bond
of indemnity given to a surety.
BONDED WAREHOUSES. Warehouses in
which articles are lodged under bond for the
payment of any revenue duties chargeable
thereon.
The payment of duties on taxable commodi-
ties at the time of importation or manufacture
tends to increase the price paid for them by the
consumer over and above that which the im-
porter or manufacturer can afford to take, if the
payment be deferred until the commodities are
about to be taken into consumption. Interest
on the money advanced must be charged, and
the quantities on which the duty is paid will
usually be in excess of those available for con-
sumption, when allowance has been made for
the waste arising from natural causes, and the
various operations which the commodities under-
go. Inasmuch also as a drawback of duty is
ordinarily allowed on exportation, the payment
of duty before the ultimate destination of the
taxed commodities is known, involves an un-
necessary expenditure of time and money in
the case of goods intended for a foreign market,
or of goods received for transhipment merely.
To prevent these disadvantages, and at the
same time to safeguard the revenue effectually,
Sir-R. Walpole, Turgot, and Adam Smith
proposed at various times that warehouses should
be established, either directly by the state, or
164
BONNET— BOOK-KEEPING
by pri^rate enterprise under state sanction, in
which taxed commodities might be stored until
required for delivery for home consumption, in
which case the duty would then be paid, or
until the goods were exported and transhipped,
in which case they would be delivered free of
duty. It was not, however, until 1848, when
spirits intended for home consumption were
allowed to be warehoused throughout the United
Kingdom, that the system can be said to have
been established in this country on a basis suffi-
ciently wide to meet the legitimate requirements
of trade. Between the years 1848 and 1880
the number of bonded warehouses was permitted
to increase at a very rapid rate, and in the latter
year it became evident that the cost of the
supervising staff was in excess of the expenditure
requisite for the benefit of the community as a
whole. A committee of inquiry was accordingly
appointed by Mr. Gladstone, the result of which
has been to effect a considerable economy under
this head, whilst the substantial advantages of
the system are fully maintained.
In order to prevent the payment of duty on
quantities in excess of the actual deliveries for
consumption, certain specific allowances from
tlie quantities warehoused are granted in respect
of the natural waste arising from leakage or
evaporation, and for the loss arising from pro-
cesses to which the commodities are allowed to
be subjected whilst still in warehouse. These
comprise the repacking and mixing of tea, the
racking, vatting, mixing, and bottling of wines
and spirits, the roasting of coffee, and the
manufacture of certain descriptions of tobacco,
and of certain preparations of that article for
farm and horticultural purposes.
The following table shows the quantities of the
principal articles imported, in bonded warehouses
in the United Kingdom on the 31st December 1912 :
Cocoa, Raw 20,308,000 lbs.
Coffee 18,480,000 „
Dried Fruits, Currants and Raisins 53,312,000 ,,
Spirits (Foreign) .... 8,935,000 prf. galls.
Tea 138,492,000 lbs.
Tobacco 213,129,000 „
Wine 4,876,000 galls.
Sugar 385,616,000 lbs.
Besides the above, there is always a large quantity
of home-made spirits in bond. On the 31st March
1913, 146,825,000 prf. gallons. t. h. e.
BONNET, Victor, born 1814, died 1889.
A financial publicist, he became a counsellor of
state and a member of the Institute. He
wrote in the Revue des DeiiM Mondes from 1860
to 1884, in favour of the monopoly of a bank
of circulation, a single standard (gold), indirect
taxation, and a reduction of the expenses of the
budget. His numerous articles in reviews and
similar works have been the basis of the follow-
ing publications. Questions dconomiques et fin-
ancier es di propos des crises, Paris, 1859, in 8vo.
— La liberty des hanques d' imission et le taux de
VmUrU, Paris, 1864, in 8vo. — Le credit et les
finances, Paris, 1865, in 8vo, — Etudes d'icon-
omie politique et financidre, Paris, 1868, in
8vo. — Etudes sur la monnaie, Paris, 1870, in
8vo. — Le credit et les banques d' Amission, Paris,
1875. — La question des imp6ts, Paris, 1879.
A. c. f.
BONORUM POSSESSIO. The Roman law
of inheritance, as derived from the xii. tables,
was full of hardships and technicalities, and
frequently caused inheritances to be forfeited to
the state. To mitigate these evils the praetors
introduced the " bonorum possessio," which con-
ferred on the persons designated by them all
the practical advantages of heirship, though
they were not heirs in the strict sense. As,
after the lapse of a year, the bonorum possessor
acquired an indefeasible title, and in the mean-
time was protected by the equitable jurisdiction
of the prsetors, the difference was not import-
ant. The practical result of this procedure
was that the formalities of testaments were
relaxed, the law of intestate succession was
made more humane and just, and various other
reforms were introduced. The praetorian
system of intestate succession was in its main
principles embodied in the rules laid down by
Justinian, which, with slight modifications,
have been introduced in most European
countries. e. s.
BONUS. A bonus on shares is sometimes
paid to proprietors as supplementary to the
regular dividend, and is generally derived from
undivided profits of former years, or from
profits derived from exceptional transactions.
It is often a difficult question to decide whether
a bonus on shares belongs to a person having a
life-interest, or whether it ought to be paid to
the person ultimately entitled to the shares.
Elaborate rules on this subject are laid down
by the House of Lords. Bouch v. Sproule,
Law Reports, 12 Appeal Cases, 385. The
word bonus is also used by insurance companies
to denote the additions made to the amounts
of life policies at stated periods from accumu-
lated profits reserved for the policy-holders.
A. E.
BOOK ACCOUNT CREDIT. As nearly all
the large transactions of business in most civil-
ised countries, and an increasing proportion of
the smaller ones, are now settled through pay-
ment by cheque, the circulation consists to a
gi'eat extent of entries in the books of bankers
and traders, and the importance of these trans-
actions is proportionally great. Credit is usually
afforded through book -entry, the privilege of
employing the capital of others being thus
given in the manner most convenient to those
who require the use of it.
BOOK-KEEPING, or the art of keeping ac-
counts, has for its object a systematic record of
transactions in money or in money's worth,
designed to show the financial position of indi-
viduals (included in this term "individuals"
BOOK-KEEPING
165
are all mercantile and other associations), both
as regards themselves, and also in relation to
others.
This object is carried into practice in all
tliorough systems of book-keeping on the lines
of an unvarying principle called book-keeping
by double entry, and which may be described
as follows : There are two aspects in every trans-
action, as regards the person recording, which
must be taken account of — its m-ujin and des-
tination ; in some cases the terms cause and
effect would be more applicable. This "taking
accoimt of" involves keeping an account in
these two aspects. Now an account may be
affected in two ways, there is the debit side and
the credit side ; a transaction may be chargeable
against an account, i.e. be placed on the debit
side, or it may be to the credit of an account,
i.e. be placed on the credit side ; for example,
money received must be placed to the credit of
an account in respect of its origin — the som-ce
from which it comes ; and it must also be placed
to the debit of an account in respect of its des-
tination— the till, the cash-box, the bank, as
the case may be, of the receiver. It will be
seen that these two accounts are affected by
this transaction in opposite directions. This
rule invariably holds in every transaction. If
in the one aspect it has to be placed to the
credit of an account, in the other aspect it will
have to be placed to the debit, and vice versa.
Thus, in the record of any number of transac-
tions the sum of the aggi-egate of the entries to
the debit of the various accounts will equal the
sum of the aggi-egate of the entries to the credit
of the various accounts ; and again, if only the
balance between the debit and credit entries on
each account be dealt with, the sum of the
balances to the debit will equal the sum of the
balances to the credit ; but, as these balances
are the combined outcome of the cause and
efifect of each and every transaction, they will
represent the net result of the whole of the
transactions recorded, and may be arranged so
as to show not only the altered financial position
brought about by these transactions, but also
the various causes by means of which this result
was obtained.
The methods used to carry out this principle
vary with the nature and circumstances of the
transactions, with questions of convenience, of
detail, and with many other considerations.
The primary record of transactions is made
in a book called the Day Book or journal.
The accounts of those transactions which are
derived from this record are kept in a book
called the Ledger.
A simple record of transactions as they occur
seriatim would give a Day Book in its crude
form. Applying method to such a record, the
entries at once fall into natural gi'oups ; those
relating to money received or paid may form a
Day Book by themselves ; such a Day Book is
called the Cash Book. Those relating to sales
of goods may form a Sold or Sales Day Book ;
and again, records of purchases may form a
Bought or Purchases Day Book, others, a Bill
Book, and so on, with any variety of subdivi-
sions desirable, but all springing from, and
forming part of, the original Day Book.
In the same manner, the Ledger may be sub-
divided to suit convenience, such subdivisions
being called by explanatory names, such as Sold
Ledger, Bought Ledger, Loan Ledger, Private
Ledger, etc.
Thus it will be seen that the Day Book, with
its subdivisions, contains the materials from
which tlie edifice, the Ledger, is built up.
The best systems of book-keeping are based
on the application of the principle of double
entry. Book-keeping by single entry would be
better described as incomplete double entry ;
there is no practical system to which the term
of single entry could be rightly applied. If a
person takes stock of his assets and liabilities,
and compares it with the stock taken at some
previous date, he arrives at what may be termed
a single entry balance sheet. He has before
him the result at two diflerent dates, and, by
inference, can argue that, as his property has
increased or decreased, such an alteration must
have been caused by his having made so much
I)rofit or loss ; but should he have made an
error in taking stock of his })roperty, such infer-
ence would be in error also ; whereas by double
entry, the steps by which such increase or de-
crease in his pro})erty was arrived at would be
shown, and the result would be open to demon-
stration and proof.
Skill in book-keepmg consists, not in forcing
the record of transaction through any particular
system, but in devising and selecting the
methods best adapted to the general nature of
the transactions to be recorded.
The omission of the keeping of proper business
account books is regarded as misconduct under
the bankruptcy law of this country (see Bank-
ruptcy Law). It is also punishable under the
French commercial code. Though good book-
keeping will not save an unsound business from
ruin, it may be regarded as one of the principal
corner stones in the edifice of commercial pros-
perity (see Balance Sheet).
[Among many books on this subject may bo
mentioned, Book-keeping, Hamilton & Ball, 1882.
—Double Entry Elucidated, B. F. Foster, 1881.]
J. p.
A new method of book-keeping now used in
Italy, whence many improvements in this art
have already proceeded, is Logismography (from
\oyi(Tfi6$ and ypd4)eLv) a system of keeping ac-
counts, based on double entry, for which it is
claimed that it is capable of a far more general
application than any other as yet known, and
can be applied equally to the domestic and
commercial affairs of private individuals, to
166
BOOK-KEEPING
I
the business of commercial and industrial
societies, or to the budget and the accounts
of the state. Logismography, invented by
Giuseppe Cerboni, director of the department
for government accounts in Italy, is taught in
all the technical schools of the kingdoip. and in
the three superior schools of commerce in Venice,
Genoa, and Bari. It is applied in all the
central departments of the state ; besides a
number of local departments {e.g. the provincial
administration of Parma and the municipality
of Reggio- Emilia) and of private societies {e.g.
the popular bank of Parma and the "Omnibus"
company of Florence). Logismography claims
to be superior to any other method in the exact-
ness and celerity of registration of the transac-
tions recorded, and shows nearly automaticaUy
any error which may have taken place. It
consists of four instruments called —
The Day-Book. I The Table of Accounts.
The Developments. | The First Draught.
The day-book is an account book kept on
two pages : on the first are three columns, of
which the first serves for the progressive number
every transaction receives, the second one for
the description of every transaction, the third
one for the amount of every transaction in
double entry ; on the second (opposite) page
there are two accounts in simple columns, ae
in the day-ledger book in the American system
(see Fig. I.) The first of these accounts has
the heading. Owner of the business, and has
the cypher A ; the second one has the heading.
Consignees and Correspondents, and has the
cypher B. At the end of these two accounts
(to the right) is situated a column headed
Compensations and Fermutations.
The two accounts A and B must always
balance each other, because the debit and credit
of the one must always be equal for every single
transaction, and their total sum must be equal
to the debit and credit of the other one. On
the credit side of A are inserted the sums
representing the capital of the owner, and every
increment it receives (gains, profits) : on the
debit side of B are registered the diminutions
of the capital (losses, expenses, consumption).
Sums indicating transactions giving no loss or
gain, — buying or selling for ready money, ex-
changes, paying of Ijills of exchange, — are
inscribed in the last column headed compensa-
tions and permutations, and are then transferred
to the book described as developments (of B).
The accounts of the day-book show at every
moment the net capital of the owner ; for this
purpose the amounts have only to be totalled,
and the debit subtracted from the credit in
each account.
The second instrument, called Developments,
consists of columns for the division and classifi-
cation of the sums registered in the day-book.
The first Development has the cypher A, and is
called Account of the Owner. It consists (1) of
a column for the progressive number of every
transaction ; (2) of two columns called Equiva-
lence Columns, because they are the reproduction
of the account A of the day-book and contain
the same sums it contains ; (3) of a column
called Fermutations, and, lastly, of a number
of accounts — generally ten or twelve — in simple
columns, which analyse the account A (see
Fig. II.) The sums inscribed in the credit
column of the account of equivalences A must
be retranscribed in one, or in several columns
— after due subdivision — of the Analytical
Accounts, viz. the series of accounts in simple
columns following (to the right) upon the equi-
valence columns. The sums registered in the
column of Fermutations must be registered on
both the credit and the debit side of the Arui-
lytical Accoumis.
The second Development has the cypher B, and
is called, "Account of the Consignees and
Correspondents," and is disposed of in the
same manner as the former development (see
Fig. III.)
These developments (first and second) are
called developments of first degree. Develop-
ments can be added of second, third, etc.,
degree. For example, in the B development
(Fig. Ilf.) there are the accounts for cash, for
storehouse or magazine, for debtors, etc., which
can be sub-developed. Supposing the account
"storehouse" to be sub-developed, it would
have the cypher Bl, which would be repeated
on a sub-development for storehouse, and might
contain, say, the accounts cloth, cotton, silk ;
and if "cloth" were to be subdivided again,
it would have the cypher Bla, and so on.
The completion of all the developments is the
ledger.
The account which is sub-developed must
always be repeated at the beginning of the
sub-development, so that all the accounts are
closely connected with each other. The ledger
can be divided in two volumes : Developments
A and Developments B.
The Table of Accov/nts is a statement which
contains the index of all the accounts, disposed
in such a fashion as to show how they are
placed in the accounts of the single develop-
ments, and how a development of a certain
degree depends on the development of superior
degree (see Fig. lY.) The Table is the instru-
ment by which an account is opened and
headed, and the first draught is shaped, and
shows the ramification of all the transactions.
A First Draught is a paper on which a transac-
tion is described with an indication of the
developments, and the columns in which it has
to be received.
Every transaction has its first draught (see
Fig. V.)
Logismography renders a minute division of
labour possible in the formation of first draughts,
or in the registration in the day-book, and iu
BOOK-KEEPING— BOOK OF KATES
167
the different volumes of
developments. Every
registration runs in a
horizontal line. By the
first draught the capital
is registered in the day-
book, and credit or debit
modifications in the de-
velopments.
The ascertaining the
correctness of accounts
is simple and rapid ; the
sums must be added in
all the accounts, and
the balance is registered
in the usual way. In
every development, therefore, the addition of
all the debit balances and all the credit balances
must be made, and the smaller of these sums is
written down in tlie column of compensations,
whilst the difference is registered in the first
account (of equivalences) of the development.
To close the accounts one must begin by the
developments of highest degree and go back to
those of first degree, and last to the day-book.
The day-book for the accounts of the State is
more complicated^ and has more accounts in it
than the one described ; but the form of the
developments and their arrangement is the
same. In accounts concerning the finances of
Fig.
III.-
—Developments B.
Accounts of Consignees and Correspondents,
1
2
P
1
B.
11
w
4
Cashier.
storehouse.
Debtors.
Creditors.
Debit.
2
Credit.
a
Debit.
Credit.
6
Debit.
7
Credit.
8
Debit.
9
Credit.
10
Debit. Credit.
11 1 12
1
2
3
4
5
10
••
4
SO
50
15
io
50
8
'4
25
••
;;
30
40
IS
4
14
70
15
10
5
58
••
4
54
25
25
.. 1 70
18
18 150
15
15
58
58
25
25
70 1 70
LOGISMOGRAPHY :
TRATIONS,
Type or Form of Regis-
wiTH AN Example.
Fig. I.
— Logismographic Day-Bool
Consignees
CO '
Owner.
and Corre-
to
Transac-
tions.
0
S
A.
spondents.
B.
|s.o
3^^
Q
<
^-^^
Debit.
Credit.
Debit.
Credit.
Ph cS
1
2
3
4
5
6
'
8
1
Capital .
40
10
10
SOB
2
Purchase
50
50 B
3
Profits .
S
8
8
4
Losses .
4
4
••
4
4
IS
IS
4
SO
5
Saldo .
92
14
••
14
IS
194
18
18
IS
18
158
Fig. lY.— Table of Accounts.
Day
Book.
First Draughts Column
Transactions .
Amounts
Owner ....
Consignees .
Permutations
. . 1
2
3
/debit 4\
\ credit 5/
/debit 6\
\ credit 7/
8
A
B
Develop-
ments.
A.
First Draughts Column
Equivalence Account .
Permutations
Capital ....
Profits ....
Losses ....
1
/debit 2
\ credit 3
'/debit 5
\ credit 6
/debit 7
1 credit S
/ debit 9
\ credit 10
Fig. V.-
First Draught No. 2.
Bought merchandise for £50, of which 10 paid
and 40 still owed.
Day Book.
Column 3 £ 50
8 „ 50
Developments.
Column 4 £ 50
6 „ 10
7 „ 50
12 „ 40
Fig.
IL-
-Developincnts A.
Accou
nts of
Owner
•
"2
?^
5.^
t
q
A.
-2 S<
Capital.
Profits.
Losses.
Debit.
Credit.
1"
Debit.! Credit.
Debit.
Credit.
Debit.
Credit.
1
2
3
4
5 1 6
"
8
9
10
11
12
1
10
10
3
..
8
8
4
4
4
4
18
10
8
4
5
14
8
14
4
8
••,
4
18
18
8
14 14
8
8
4-| 4
the State, logismography receives an extension,
and has an importance which can only be esti-
mated by financiers, and could not be explained
in so brief a description as this must necessarily
be.
[Bankers' Magazine-
June 1890.— For de-
scription of method, No
xvi. of the Mamiah
Hoepli - Logismografia,
Teorica ed Applicazioni,
by Celestino Chiesa, Ul-
rico Hoepli, Milan. For
large works, Trattato di
Ragionieria, by Gitti
e Massa, Milan, Troitato
di ContaUlita, by Mar-
chesiui. ] Q. K.
BOOK OF RATES.
Up to 1558 Poundage
was levied on the value
168
BOOM— BOSANQUET
of the goods as sworn by the merchant. But
in the year mentioned a book of rates was pub-
lished that specified the values at which goods
of different sorts were to be valued for custom
duties. A new "book" was issued by Queen
Elizabeth, 1586, in which the various com-
modities were stated in alphabetical ordef, with
their values, and valued according to the real
price. James I., after the decision in Bates's
Case, issued a " book of rates " with the object
not merely of rectifying values, but of increas-
ing the impost. A new book was subsequently
issued by Charles I. with the object " of better
balancing of trade in relation to the impositions
in foreign parts upon the native commodities of
the kingdom." J. E. c. M.
[See Dowell's History of Taxation and Taxes in
England, 1889, vol. i.]
BOOM. A slang word, which originated in
the United States, where it is used to describe
a rise of prices in any speculative market, accom-
panied by excitement often running to excess.
A. E.
BOOTY. Moveables taken from the enemy
on the field of battle or in storming a town.
All booty belongs to the state in whose name
and by whose authority it is made, the title
becoming complete twenty -four hours after
capture. Modern states have adopted regula-
tions by which the whole or part of captured
goods or their proceeds are distributed amongst
those concerned in the capture. By the 3 & 4
Vict. c. 65, § 22, the sovereign may refer ques-
tions of booty to the judge of the prize court,
now the court of admiralty. In the United
States the president has, in the absence of any
directions given by Congress, discretionary power.
[International Law, by W. E. Hall, Oxford, 1889.]
J. E. 0. M.
BOKNITZ, Jacob, was born (late in 16th
century) at Torgau in Saxony, and lived after-
wards at Schweidnitz in Silesia as imperial coun-
cillor. He appears to have possessed consider-
able influence with the Emperors Rudolf II.
(1576-1612) and Matthias (1612-1619). He
suffered much in the Thirty Years' War from the
violence of the soldiery, who robbed him of his
library. His economic writings are — (1) De
nummis in republica percutiendis et conservandis,
1608 ; (2) Aerariv/m, seu Tractatics politicus de
aerario sacro, civili, militari, communi et sacra-
tiori . . . conficiendo, 1612; (3) Tradatus politi-
cttsde rerumsufficientia in republicaet civitatepro-
curanda, 1625. In the last of these he professes
to give the results of observation and intercourse
with artificers in his journeys through Holland,
England, France, Italy, and Germany, treating
his materials, however, not from the technical,
but from the economic point of view. He was
the first who did for Germany what Montchr:^-
TIEN de Watteville had done a few years earlier
(1615) for France, namely, attempted to set
forth with systematic completeness the economic
knowledge of his time, which he illustrated with
much learning, though of a somewhat pedantic
and uncritical kind, and with many facts de-
rived from his own experience. He takes, saya
RoscHER, in his half-barbarous period, a similar
position to that of Rait in the later German
economics. On the theory of money he has
much that is sound and instructive ; he strongly
opposes any debasement of the currency. In
the spirit of the Mercantile System he favours
extensive and even minute interference with
private industry. He would prohibit the ex-
portation of money, and would prevent, by
means of Sumptuary Laws, the introduction of
costly foreign wares, whilst he would encourage
the importation of raw materials (Roscher,
Geseh. der Hat. Oek. in .Deutschland, p. 184).
J. K. I.
BOROUGH. Originally a fortified place, now
(1) a town having municipal institutions (see
Corporation, Municipal), (2) a town send-
ing representatives to parliament. As a
general rule a municipal borough is at the same
time also a parliamentary borough, but the area
of the one does not always coincide with the
area of the other. e. s.
BOROUGH ENGLISH. A local custom
prevailing in some boroughs according to which
lauds witLin the borough descend to the
youngest son. e. s.
BOSANQUET, Charles, governor of the
South Sea Company and an eminent London
merchant, was born in 1769 and died in 1850. 'M
He was the author of the following publica- m
tions : (1) A Letter on the proposition sub-
mitted to Government for taking the duty on
muscovado sugar ad valorem," probably written
in 1806. (2) A Letter to W. Manning, Esq.,
M.P., on the depreciation of West Indian
property, probably written in 1807. It con-
siders more especially the trade in sugar and
rum, as affected by the Navigation Act and
other of our commercial regulations. (3)
Thoughts on the value to Great Britain of
Commerce in general, and of the Colonial
Trade in particular (1807). This pamphlet
was answered by "William Spence in his Badi-
cal cause of the present distress of the West
India planters pointed out (1807). (4) Prac-
tical Observations on the Beport of the Bullion
Committee (1810).
The last is by far the most important of
Bosanquet's writings. The author uses the
term "practical" because (he tells us) it is his
belief that Ricardo's pamphlet (on The High
Price of Gold Bullion), which had led the way
in the bullion controversy, was " wholly theor-
etical " ; and the report of the bullion com-
mittee itself was expressly brought under the
same condemnation (see Canning). Bosanquet
contends that the bullion committee had laid
two distinct and opposing views before parlia-
ment, the one "theoretical" and embodied in
BOSELLIlsri —BOTTOMRY
169
their own report, the other "practical" and
embodied in the evidence of the "practical"
witnesses as given in the appendix to their re-
port. Proceeding to details, he sums up the
committee's views in the following six proposi-
tions : (1) The variations in exchange cannot
for any length of time exceed the cost of trans-
porting and insuring the precious metals ; (2)
the market price of gold bullion can never exceed
the mint price unless the currency is depreciated
below the value of gold; (3) so far as the custom-
house returns of exports and imports go, the
state of the exchanges ought at this time (1810)
to be favourable and not unfavourable ; (4) the
bank, during the restriction, possesses the ex-
clusive power of limiting the circulation of notes ;
(5) the circulation of country bank notes depends
on the issues of the Bank of England ; and (6)
the paper currency of England is now (1810)
depreciated in comparison with gold, and the
high price of bullion and low rate of excliange are
at once consequence and sign of the depreciation.
All these propositions are disputed by Bosan-
quet. He adduces, against the first, the state
of the exchanges and the cost of transmission
of specie in 1797, also between 1764 and 1768,
1775 and 1777, 1781 and 1783, and in 1804
and 1805. He considers that the facts show
that there is no "natural limit" of any kind
to the variations of exchange, and points to the
Swedish exchanges which were then favourable,
and to the premium on English paper which
then prevailed in the United States of America.
He attacks the other five propositions in a
similar manner, though, in giving his views of
the relation of the bank to the paper currency,
he is fain to use "theoretical" reasonings from
first principles, and even to appeal to the
authority of Adam Smith ( Wealth of Nations,
II. ii. 145, 1; M'Culloch's ed.) The "obvious
and practical causes " of high prices are (he says)
the recent vicissitudes of the corn trade and the
increase in our taxation ; to reach any other,
the bullion committee have had to adopt Avrong
principles and then mis-state their facts. In
"Supplementary Observations" annexed to the
2d ed. of his pamphlet, Bosanquet gives the
committee some riddles to explain by their
theory if they can, e.g. the fact that the ex-
changes, after being 6 per cent in our favour
from 1790 to 1795, fell to 3 per cent below par
in the next two years, though there had been
no change in the bank's cii'culation and no sus-
pension of cash payments. Ricardo deals with
these cruces and with the rest of Bosanquet's
case in his owm Eeply to Mr. Bosanquet's
Observations, with appendix, 1811. Bosanquet
has an idea that the standard value of a
pound note is the interest of £33 : 6 : 8 three
per cent stock. This is an illustration of the
danger experienced by those who, being con-
versant with details, believe that they thereby '
understand principles. |
[M'Culloch's Literature of Political Economy,
1845, p. 174, — Gentleman's Magazine, 1850, ne\»
series, xxxiv. 325. — Dictionary of National Bio-
graphy, art. "Bosanquet (Clias.)." — See Bullion
Committee ; Horner ; Huskisson ; Ricardo. ]
J. B.
BOSELLINI, Carlo (born atModcna, 1765,
died 1823), published in 1813 in Modena a
treatise on political economy in two volumes.
Although the title of the book is New Ey-a-
mination of the Sources of Private and Public
Wealth, it contains nothing which was new for
its times, and does not seem to have had any
particular success. m. p.
BOSTON PORT BILL. Among the events
leading to the revolt of the American colonies
none is more famous than the attack upon the
tea ships in Boston harbour (16th December
1773). This caused great indignation in Eng-
land, where the parliament resolved to resort
to coercive measures. A bill was introduced
and carried in 1774 by which, after 1st June, the
port of Boston was to be closed to all trade.
No vessels might be loaded or unloaded in the
harbour, and English men-of-war were sent to
enforce the act, which was to remain in force
until the East India Company had been com-
pensated for the destroyed tea and until the
king in council was satisfied that peace and
order was restored in Boston. This measure
was bitterly resented in America, where the as-
sembly of Virginia decreed that 1st June should
be observed as a day of fasting and humiliation.
The general sympathy with 13oston was one of
the prominent causes of the Congi-ess at Phila-
delphia (September 1774), which marks the
beginning of combined resistance to England.
[Mahon, History of England, vol. vi. — Lecky,
History of England, vol. iii.] b. l.
BOTERO, Giovanni, born 1540 at Bene in
Piedmont, died 1617 at Turin. A powerful
thinker, he opposed energetically the mercan-
tilist theories, and enunciated the law of in-
crease of population later known as Malthus's
law. He occupied some of the highest official
positions in his country.
His work, Delia ragione di Stato, published
for the first time in Venice in 1589, again there
in 1619, and in Turin in 1596, has been translated
into all the principal modern languages, and also
into Latin. It was translated twice into French,
once in 1599 by Choppins, Raison et Gouvernement
d'Mat, and once in 1606 by Pierre de Deymier,
Maximes d'i^tat militaires et politigues. Not less
remarkable is his book on the causes of the great-
ness of cities, Delle cause delta grandezza delle
cittdb, published 1598 in Rome. Botero Avas an
opponent of Macchiavelli. Having travelled a
great deal, he published his so-called Universal
lleports, a treatise on "The Strength of all the
Powers of Europe and Asia,' Rome, 1592 and
1695. M. P.
BOTTOMRY, Loan on. A contract in
writing in which the borrower recites the in-
170
BOTTOMRY— BOULAINVILLIERS
tended voyage by a ship therein described, and
the receipt of a loan upon condition that if the
ship escape disasters at sea, or from enemies, or
pirates, the lender is to receive back his advance
with a stated sum for interest on completion of
the voyage, but that the borrower is to be
released from his obligation if the ship bff lost
or fall into the hands of enemies or pirates.
The form of contract used is of time-honoured
antiquity. It stiU closely resembles in its out-
lines those of a specimen extant in the speeches
of Demosthenes. Traces of the loan on bottomry
are also found in some of the most ancient codes
of eastern nations. It finds a large place in the
early sea laws and ordinances of the commercial
nations and communities of Europe as well as in
their legal literature. Do^vn to very recent
times it was the sole method by which the
master of a vessel damaged by storms, or other
hazards at sea, in some distant port removed
from the ordinary channels of commerce and
from any possible speedy means of communica-
tion with the owner of the vessel, could raise
funds for the necessary repairs of his ship and
the resumption of her voyage. All this, how-
ever, has been much changed of late years. The
most distant corners of the globe have been knit
as it were into one country by the economical
revolution which science, and particularly tele-
graphy, have brought about, now enabling funds
to be laid down almost immediately from and
to the most widely separated places through the
electric wire. This is fast rendering the loan
on bottomry bill or bond obsolete in practice.
The bottomry loan differed only from the ordin-
ary loan on nautical interest of the Greeks
and Romans in its good faith, as it required
a pecuniary insurable interest to exist as the
foundation of the contract, which the Pcenus
Nauticum did not, the latter being resorted to
as a gambling or speculative wager by persons
frequently not interested in the ship whose loss
or safety was betted upon, a description of
amateur underwriting by means of which the
elder Cato and other wealthy Romans increased
their fortunes. The loan on bottomry would
seem to have furnished the ancient merchant
and shipowner with an effectual form of marine
insurance. In reality it supplied to the bor-
rower not only a trading capital but also what
was tantamount to a marine policy of insurance,
with this peculiarity about it that he needed to
be under no doubt about the solidity of the
Underwriter, as in this form of contract the
policy money was already in the borrower's
hands at the very inception of the transaction,
and applicable to make good any losses from the
perils of the sea in the event of a fair claim
arising therefrom. On the other hand, to the
lender and underwriter such contracts, so long
as the special interest or premium was fixed at
a high enough rate, afforded a profitable invest-
ment of funds on average, as there has always
existed a well-defined mercantile usage respect
ing such loans, generally including proper
control by public registry, power to appoint
a supercargo, and strict enforcement of other
regulations in his favour. Neither did the
pecuniary terms of such contracts present an
obstacle to their habitual use. The net premium
for sea-risk payable by the borrower, the ship-
owner, or merchant, was conditional on the
vessel coming safely to port. It was only the
difference between the extra rate allowed as
nautical interest and the ordinary rate of interest
on loan. The more modem system of marine
insurance, in which the premium paid is merely
the pretium pericuU without being mixed up
with a loan as ia the case of the bottomry bill
or bond contract, could scarcely in ancient days
have been so conveniently circumstanced, as
in the event of the disaster at sea, the under-
writer might or might not be found equal to
bear the burden of his bond. And the resources
of ancient commerce were even equal to those
instances in which the taking up of funds in
this form was resorted to by those who had
capital enough of their own. For these funds
might be, and doubtless were, used for the
relief of the borrower, who, when he did not
require the whole advance for the ship's im-
mediate purposes, could reinvest the balance in
a temporary way with an argentarius, or
banker, who allowed interest on its deposit at
the common rate, and thus diminished the
merchant's or shipowner's outlay to the bare
differential rate of interest between what he
borrowed and what he lent at. The balance
thus resulting would be neither more nor less
than the net premium of marine insurance, the
whole system of which was inaugurated many
centuries subsequently by a kind of commercial
evolution (see Insurance, Marine), f. h.
BOULAINVILLIERS, Henri de, a French
writer, was bom at Saint-Saire in Normandy in
1658, served some time in the army, but re-
tired soon to his country seat, where he died in ;
1722. He was an admirer of Feudalism, and
would have liked to restore "feudal liberty,"
the decay of which seemed to him the cause of
the miseries of the people ; but his chief merit
lay in the frankness with which he laid bare
the causes of the financial distress of France.
His works on finance were not published till after
his death. They were prohibited in France.
Boulainvilliers's works are as follows : Etat
de la France, published in 1727-28, 3 vols. fol.
This contains historical and descriptive accounts
of all the provinces of France, extracts from the
memoirs of the Intendants, and his own financial
projects. The latter have been published •
separately under the title of Memoires prisentis
d Monseigneur le Due D'OrUans, contenant les
moyens de rendre ce Royaume tres -puissant, et
d'augmenter consideraUement les revenus du Roy
et du Peuple, Par le Comte de Boulainvilliers,
BOUNTIES
171
2 vols, k La Haye et i Amsterdam, 1727.
Among these the second memoir, directed against
the "financiers" and proposing a state-treasurer's
office, the third against arbitrary taxation, the fifth
against the excessive salt-tax, the sixth against dis-
orderly financial administration in general, are still
of especial interest. His economic ideas (see pp.
215-225, vol. ii. of the last named work) are on
the level of the ordinary mercantilism of the day.
[Nouvelle Biographie, t. vi. p. 937 ; Montes-
quieu, Esprit des Lois, liv. xxx. ch. xi., Alphonse
Gallery, Les riformateurs de Vancienne France,
Boulainvilliers, 1883. Charles Smith ascribes to
him Les interets de la France mal entendus, 1756.
But this work is written by Ange de Goudar (see
Three Tracts on the Corn Laws, 1766, p. 161),
Levasseur, La Population Frangaise, 1889, p. 202,
and Dr. Stephen Bauer in an article, "Zur Entste-
hung der Physiokratie," Conrad's Jahrhucher fur
Nationalokonomie und Statistik, N.F. bd. xxi.
p. 151]. S.B.
BOUNTIES. A bounty is, in principle,
something received by producers in addition to
the price received from consumers through the
ordinary operation of the market. In political
economy the term is usually confined to such
additions as are given by governments. We
may distinguish (1) intentional bounties, de-
signed to encourage export or to stimulate pro-
duction ; (2) unintentional bounties, begun
unconsciously but afterwards recognised to be
such, e.g. the sugar bounties of to-day ; (3)
virtual or disguised bounties, neither intended
nor recognised, but actually operating as such ;
e.g. Great Britain's subsidies to the continental
powers last century — which really stimulated her
exports at her own expense, but were not de-
signed to do so ; endowments which enable
learning and teaching to be obtained at less
than actual cost price, prizes for inventions,
and premiums of many kinds.
Adam Smith criticises them severely, and,
after his usual manner, adduces detailed in-
stances of their failure. Eicardo joins in the
condemnation, but on somewhat different theor-
etical gi'ounds ; and he goes on to point out that
Adam Smith failed to go far enough through con-
fining himself to the case of supply not being
affected in amount. The effect upon supply is,
however, most important, and Ricardo shows
that the increased supply necessitates, in the
case of corn, recourse to less advantageous em-
ployment of capital, and so to increased prices
and to a rise in the rent of land. Since the
change in British industry from agricultural to
manufacturing, it is necessary to dwell upon
the working in manufactures of diminution of
cost as amount of supply increases, and an
important school of protectionists follow List, in
recommending bounties as stimulants to this
class of production only (List, NatioTial Political
Economy, trans. S. S. Lloyd, London, 1885 J,
Ricardo condemns bounties as the worst kind of
taxation, because they not only raise a tax but
divert capital perniciously. Against this have
to be set the considerations that a bounty is not
lost to the nation which pays it ; and it is often
advocated in cases where there is an amount of
capital or labour, or both, which cannot find
employment otherwise. All petitions for
bounties on the part of trades contain the as-
sumption that capital and labour will be rendered
inoperative unless assisted.
Many free-traders find justifications for
bounties in order to obtain other objects than
strictly economic ones, e.g. J. B. Say, who in-
culcates free principles as the rule, justifies
Louis XIV. 's bounties on shipping, their pur-
pose being to raise a body of sailors, and the
English bounties on refined sugar. He also
declines to follow Adam Smith in his general
rejection, so long as custom and legal restrictions
interfere with the free investment of capital,
and so long as artisans require training ; and
specifically commends "les sages encourage-
ments" of Colbert as having issued in the
French silk industry. Sismondi allows them
for "surete" or *'sante," and Roscher agrees
that they may be useful in a transitional stage.
J. S. Mill's remark (bk. v. ch. x.) that the
bribing of customers is going beyond what any
shopkeeper ever did, is neither accurate, as it
is often done, nor profound, as a nation is shop-
keeper, farmer, and manufacturer in one.
One advantage claimed specifically for boun-
ties is that the amount drawn from the national
purse is known, and it can be definitely accepted
as a definite subsidy, as one of the expenses of
national life for an end deemed desirable.
Against this it is urged that the amount so
raised does not measure the change caused. In
the complications of modem industry there are
no isolated changes ; production and trade are
disturbed, and it is because of the complication
of effects that economic theory is not able to
establish convincingly the limits of the effects
produced. Again, the manifest simplicity of
aiding industry by a dip into the national purse
must be regarded as a disadvantage. The
facility is a fatal one, until governments are
found both honest enough and wise enough to
resist the solicitations of particular industries,
A special advantage is claimed for bounties on
production, that there is nothing invidious in them
as against foreign nations : they are free from
the charges to which bounties on export and
prohibitory duties are liable, in that they
are purely domestic in intention ; and, how-
ever justly a foreign nation may resent having
our exports thrust upon it or its own produce
kept off, it can hardly protest against our tak-
ing what measures we please to develop our
power of supplying ourselves.
Recent history shows many examples in which
the whole subject of bounties may be effectively
studied. Adam Smith's caustic account of the
herring fishery bounties (bk. iv. ch. v.) is
172
BOUNTIES
well followed up by MHDulloch {Diet, of Com-
merce), and their nugatory character appears to
be demonstrated. The linen bounty affords
another good example ; Chambers of Commerce
pleaded in vain for its continuance, and the
event showed that on its suspension in 1834
export paused for a little while, but resumed Its
former volume in three years, and went on
steadily increasing until 1848, after which it
rushed forward under the impetus of the new
industrial policy (see Linen Trade, Ancient
and Modern, London, 1864, pp. 663-670).
The corn bounties are thoroughly discussed by
the English economists ; their interest might
again become actual if any foreign nations or
colonies should choose to stimulate their com
exports ; and a virtual bounty is claimed to be
in operation in favour of the Indian producer
through the fall in the value of silver in gold-
using countries. An instance of a temporary
bounty effecting its purpose in a way difl&cult
to deprecate is found in a bounty on the export'
of engravings given soon after the founding of
the Royal Academy (1769) ; of which it is said
that it called a number of talents into action,
e.g. WooUett, and attracted to London a crowd
of foreigners, Cipriani, Kaufmann, Pastel,
Moser, and Bartolozzi, and secured for English
engraving a permanent place among the arts.
(Cassell's History of Engraving^ London, p.
336). Bounties on shipbuilding and shipown-
ing have been in high favour with maritime
countries for reasons of state. France at this
time gives 1^ francs a ton for every thousand
miles run by ships both built and owned in
France, and half that premium for ships owned
at home but built outside (see Fawcett, Free
Trade and Protection, eh. ii.) The bounties
on sugar have a complicated history — begun
without this intention, their result has been to
revolutionise the production of sugar by giving
beetroot an advantage against cane which has
issued in the former being now the larger source of
supply (see Bounties on Sugar). The bounty-
giving countries expressed themselves unani-
mously in favour of abolition at the recent
conference, provided that united action can be
secured. Resistance is made by some English
free-traders who regard the cheapness in England
as the primary advantage ; and an obstacle is
interposed by the refusal of the United States to
enter into any undertaking not to begin a bounty
system. The foreign office (see statement by
under-secretary in parliament) knows of only
the following "considerable " bounties in opera-
tion in 1889 : on shipping, on sugar, and on
the Newfoundland fisheries (French).
The employment of a bounty by the state
may be justified as a measiu-e of equity when
industries are affected by the action of state.
When, for example, a treaty of commerce or a
general change of state policy alters suddenly
the industrial situation, there may be some
claim on the part of the owners of fixed capital
and the persons in whom there is fixed skill,
for some supplement to the lowered market-
price which will allow their industry to diminish
or die away gradually. But bounties are artificial
interferences with production, in the same sense
that protective duties are, from an opposite point
of view. A bounty has been happily called a nega-
tive tax (see Bounties, Abstract Theory of).
The question is discussed more or less in all the
standard works on political economy, and the
history of various bounties is given in the commercial
histories and parliamentary papers relating to the
different trades. a. c.
BOUNTIES, Abstract theory of. The
theoretical inquiry whether a country can pos-
sibly benefit itself by a bounty, may be sub-
divided according as the arrangement considered
is only temporary or more enduring. (1) The
arguments, by which Mill, in a well-known
passage (Pol. Econ., bk. v. ch. x. § 1), defends
temporary protection of nascent industries seem
applicable, mutatis mutandis, to bounties as well
as to duties. The same may be said of the con-
siderations in favour of temporary protection,
adduced by Dr. Sidgwick in his Political Econ-
omy (bk. iii. ch. v. § 1), and his Method and
Scope of Political Economy i^-^. 1-20). (2) The
arguments on the side of a less transitory
bounty are more abstract. Cournot argues that
a bounty to a monopolist might possibly cause
greater gain to consumers than loss to the
treasury {Recherches ... 1838 ; ch. vi.) In
this reasoning Cournot takes no account of those
consumers, who are induced by the fall of price
to increase their purchases. But of course,
when this circumstance is taken into account,
the argument in favour of a bounty becomes a
fortiori. The omission, however, seems fatal
to the arguments, which, in the case of free
competition, Cournot has urged in favour of
protecting duties and bounties {Ibid., chs. x. -xii.
and see M. Bertrand's criticisms in the Journal
des Savans for 1 8 8 3). Some presumption is per-
haps derivable from Cournot's principle that a
" bounty is in algebraic language a negative
tax, so that the same formulae should apply to
a tax and bounty"; taken in connection with
the proposition admitted by many economists
that it is possible for a country to benefit itself
at the expense of foreigners, by a duty on im-
ports or exports, in certain cases. Such a case
is stated by Mill {Pol. Econ., bk. v. ch. iv.
§ 6, beginning), and more simply by Dr. Sidg-
wick in the following passage : ' ' Suppose that
a 5 per cent duty is imposed on foreign silks,
and that in consequence, after a certain interval,
half the silks consumed are the product of
native industry, and that the price of the
whole has risen 2^ per cent. It is obvious
that, under these circumstances, the other half
which comes from abroad yields the state 5
per cent, while the tax levied from the con-
BOUNTIES ON SUGAR
173
sumers on the whole is only 2| per cent ; so
that the nation in the aggregate is at this time
losing nothing by protection, except the cost
of collecting the tax, while a loss equivalent to
the whole tax falls on the foreign producers "
{Pol. Ucon., bk. iii. ch. v. § 2, and context).
It seems possible to imagine a converse case, in
xvhich a bounty would not be detrimental to
** the nation in the aggregate." Professor Mar-
shall argues (Principles of Uconomics, bk. v, ch.
vii.) "that it might even be for the advantage
of the community that the government should
levy taxes on commodities which obey the law
of diminishing return, and spend part of the
proceeds on bounties to commodities which
obey the law of increasing return."
Such speculative considerations are not in-
consistent with a firm adherence to the practi-
cal principle of free trade. Thus Dr. Sidgwick,
while he regards it as "erroneous to maintain,
on the ordinary economic grounds, that tem-
porary protection must always be detrimental
to the protecting country," does not therefore
accept the practical conclusion which that re-
mark seems to favour. A decisive consideration
against it is that no government is wise enough
to discern in what cases protection would not
be detrimental, or strong enough to confine
itself to those cases (Method and Scope, p. 19).
It may be added that refined arguments on the
side of protection are useful as correctives to
exaggerations of the case on the other side. It
behoves not to accept even right conclusions
with more confidence than they deserve. It is
dangerous to exaggerate the preponderance of
evidence in favour of what we believe. The
balance of judgment may suffer a strain which
will be felt on some other occasion where nice
estimation is required. Thus Adam Smith's
contention that a bounty on corn cannot be
beneficial, because "the nature of things has
stamped upon corn a real value" (Wealth of
Nations, bk. iv. ch. v.), is of little moment as an
addition to the weighty practical considerations
in favour of free trade ; while it is apt to distort
the judgment on the delicate questions con-
nected with a Measure of Value. f. y. b.
BOUNTIES ON SUGAR. The operation of
bounties is best illustrated by a practical
example, such as the sugar bounties give.
France, Austria, and Germany supply collect-
ively rather more than two-thirds of the total
sugar production of Europe, at the present date
(1890). Each of these countries grants bounties
on export ; Austria openly, limiting, however,
the amount to be spent under this head ;
Germany and France (who have long had
boimties) in a more indirect but quite as
effective way. These two, Germany for half a
century and France since 1884, have adopted
the system of levying duties on home-produced
sugar on the weight of the beetroot when
delivered for manufacture. Even if established
with a purely fiscal object, this system is open
to the objection that it is only based on the
probable average saccharine richness of the root,
making no allowance for increased or reduced
yield caused by varying meteorological and
agricultural circumstances.
It had been admitted in Germany in 1840
that 20 centners of roots would give 1 centner
of raw sugar. Thirty years later the propor-
tions of 12*5 to 1 had been reached. Not-
withstanding the more stringent fiscal legisla-
tion which ensued, the factories continued to
spread wonderfully, and the production ol
sugar trebled between 1877 and 1884. From
1875 to 1884 the annual exports had increased
in an almost fabulous proportion.
About this time, although protected by a Sur-
taxe on foreign sugar, the French manufacture
rather declined ; the annual production had re-
mained stationary, but on foreign markets France
was beaten by German competition, and the ex-
ports had fallen from 327,000 to 184,000 tons.
Assailed by clamours of distress, the French
ministry resolved in 1884 to apply the system
which, as German economists boasted, had in
their country performed an "educational mis-
sion " (ein£. erziehende Mission as it is called in
Schonberg's Handhitchdcr Politischen Oekonomie,
article ' ' Zuckersteuer "). The French minister of
finance declared that the proposed law would
act as a law of progress, stimulating the im-
provement of agiiculture, the adoption of im-
proved machinery, and consequently ensuring a
considerable increase of the quantities of sugar
extracted. Up to 1st September 1887 the
factories were allowed an option between the
old and the new system, but, after that date
the duty was to be uniform, imposed on the
basis of a legal yield of 6 kil. 250 of refined
sugar for 100 kil. of roots, and this percentage
was to be gradually increased, so as to reach 7
kil. in the present year (1890).
It cannot be denied that what had been
stated to be the principal object of the law of
1887 has been fully realised. Everywhere the
"fabricants" have abandoned the antiquated
process of extraction by presses for the more
exhaustive system of diffitsion. To reconcile
their own interests with those of the farmers,
they have supplied the latter with seeds of
richer and less bulky varieties of beetroot, and
have agreed to pay higher prices for higher
saccharine degree. More land (about 200,000
instead of 120,000 hectares) is now employed
for this cultivation, and as beetroot affords the
opportunity of a better rotation of crops, it
promotes the growing of wheat, that favourite
of French farmers and landowners.
In Germany the task of the revenue officers
ends with registering the weight of the roots.
In France they are instructed to keep a strict
control over the whole fabrication and an
account of the sugar, raw or refined, which
174
BOURGEOIS— BOURSE DU TRAVAIL
leaves the factory. Government is thus enabled
to ascertain if a surplus is obtained which re-
mains "duty free" at the disposal of the
manufacturer. It was thus found that during
the three years since the law was passed (1887)
the real extraction had amounted to 7*27, 8-12
and 8-87 per cent, and that the quantities' of
duty free sugar have amounted respectively to
22-56, 31-21 and 36-44 per cent of the whole
French production. The treasury had been a
loser by 25, 43, and 92 million francs (saj'
£1,000,000, £1,720,000, and £3,680,000
sterling) in bounties to manufacturers and
refiners {Bulletin de Statistique, January 1888).
To counteract this drain the legal yield was
raised so as to reach 7 kil. 750 ; moreover
a special duty of 30 frs. (say £1 : 4s.) — the
ordinary duty being 60 frs, (say £2 : 8s.) — was
imposed on the surplus sugar. In Germany
the legal yield had already been increased in
1883, and the drawback has since been lowered
by about 5 per cent.
Although the joint production of France and
Germany doubled in the ten years 1880-1890,
there was only a temporary reduction of price
for the French consumer of loaf sugar (96 and
98 frs., say £3 : 16 : 9 and £3:18: 4, per 100
kil. in 1886 and 1887); in 1890, as in 1884, it
again cost him 104 frs. (£4 : 3 : 2). The foreign
purchaser alone had beyond question gained, and
the staunchest supporters of the factories con-
fessed that England obtained French sugar 6 frs.
(say 5s. ) per 1 0 0 kil. cheaper than it could be pur-
chased in France. Only they shifted the respon-
sibility on the bounties enjoyed by the French
refiners, the rival brothers of the " fabricants "
(PouUin, L'lmpdt sur les Raffineurs, Paris, 1890).
As the refiners were, however, henceforward to
be subject to the constant supervision of the
officers {exercice) and were to pay the duties on
the manufactured produce, there would not be
much left of disguised bounties for them. In fact
the system of the impdt d la consommation or
Fahrikaisteuer, already adopted in Austria and
Russia, alone gives all parties concerned a clear
insight in this maze of conflicting interests.
Bounties might still exist, as in Austria, but it
would be known to what extent. With the
actual French and German system, it is im-
possible to determine beforehand the amount
of bounty which will be awarded ; this varies
almost in every case, according to the soil, the
accidents of the season, and the skill and in-
dustry of the manufacturer.
[The Liste G^nirale des Fabricants de Sucre,
Paris, gives a compendium of the legislation in
France and other countries. No special book,
up to date, on the subject can well be named,
which can only be studied in the files of special
papers, as Le Journal des Fabricants de Sucre,
La Sucrerie Indigene, Licht's German Eeports ;
all these, however, are written with a strong bias.
See also Sir T. H. Farrer, Free Trade versus Fair
Trade, 2d ed., chapter on sugar.] e. ca.
The German Reichstag in the session May 1891
voted a law doing away with the system of taxa-
tion according to the weight of the beet roots. In
future the duty was to be levied on the quantities
of sugar produced. Direct premiums of 1*25 to
2 marks (say Is. 3d. to 2s.) were allowed during
5 years on every 100 kil. exported, the duty being
18 marks (say 18s.) per 100 kil.
BOURGEOIS (Fr.) was no doubt originally
citizen of a town in the wide sense, but (unlike
citoyen) it has been constantly narrowed into a
term of disparagement. So it means commoner
as opposed to noble ("Bourgeois Gentilhomme,"
in Moli^re's comedy of 1670, is really a playful
union of opposites), civilian as opposed to
military, rude as opposed to refined. At present
in the language of social agitation it means em-
ployer (patron) as opposed to workman (ouvrier) ;
and the title Citizen King, on which Louis
Philippe prided himself, would now be no com-
pliment, simply king of the middle classes. So
in the discussions of the Miners' Congress at
Paris, 1891, in regard to the proposed general
strike : "la bourgeoisie vous pousse h. la faire,
parce qu'elle est preparee k ce moment " (report
in Le Temps, 3d April 1891). j. b.
BOURSE. A French word for— (1 ) The meet-
ings of bankers and merchants for the transac-
tion of business ; (2) the place where such
meetings are held. The French Code de Com-
merce defines the Bourse de Commerce as the
meeting of merchants, masters of vessels, stock
and bill brokers (agents de change), and mer-
chandise brokers (courtiers), which is held under
the authority of the government (Code de Com-
merce, § 71). The same definition may be given
to this word and its etymological equivalents
(borse, borsa, bolsa, etc.) in most countries if we
omit the government authority, which is gener-
ally unnecessary. The word used in the sense re-
ferred to is in all cases also used for the place of
meeting. As to England, see Change, e. s.
BOURSE DU TRAVAIL, a labour exchange,
or registry, for the use of persons offering or
seeking employment. There is at present a
workmen's movement in France and Belgium
for the extensive establishment and intercom-
munication of such institutions, which have
long been advocated by M. de Molinari. The
muncipal council of Paris voted 1,200,000
francs (£48,000) to found a hourse du travail,
which was installed on 20th June 1887, at
35 Rue Jean- Jacques Rousseau, Paris, pending
the transformation of the old corn market. The
administration consists of workmen chosen by
different trade - unions. Employers are not
represented. Some irritation exists as to the
exclusion of several workmen's associations.
The bourse, it is alleged, is confined to a clique.
Bourses du travail have been formed at
Nimes, St. Etienne, Marseilles, and some
other places in the provinces of France. [See
Unemployed, App.] h. h.
BOWEN— BKANDS
175
BOWEN, Francis, bom 1811, died 1890 ; he
graduated from Harvard College in 1833 ; was
instructor there from 1833 to 1847, and pro-
fessor in Harvard University from 1853 to 1889.
Professor Bowen's interests and attainments
were great and varied. He wrote not only on
economic topics,* but on history, politics, the
classics, and most of all on the subject con-
nected with his professorship — philosophy.
He was editor of the North American Revieiv
from 1843 to 1854, and in that capacity, as
well as in independent publications, gave the
fruits of a vigorous intellect and a remarkable
industry. His economic writings in the main
are in the nature of text-books, stating and
illustrating the doctrines of the classic econo-
mists. But on the subject of international
trade he diverged, and reasoned in favour of
the doctrine of protection. He laid stress on
the need of national independence, and of aid-
ing young industries ; and he made application
also of Mill's reasoning as to the possible effects
of duties on the play of international demand.
On this subject, as on all he touched, he was
clear, positive, and effective, and his reasoning
is much above the level of that usually adduced
against the principle of free trade.
The larger writings of F. Bo wen on economics
were : Principles of Political Economy, Boston,
1856 ; American Political Economy, New York,
1870. P. w. T.
BOXHORN, Marcus Zuerius, bom 1602
(or 1612) at Bergen-op-Zoom (North Brabant),
was professor of rhetoric at the university of
Leyden, 1632 ; professor of history there, 1648 ;
and died 1653. He wrote no books exclusively
on economics, but dealt with economic subjects
in the following works : —
1st, Institutiones politicce, Lipsise, 1650 ; fol-
lowing editions (Hagse Comitis, 1668, Ultrajecti
1702). — Gum Commentariis eiusdem et dbservation-
ibus Oeorgii Eornii (his successor at the university).
— 2d, Disquisitiones politicce, i.e. 60 castis politici
ex omni historia selecti (Hagae Comitis, 1650). — 3d,
Commentariolits de Statu confoederatarum pro-
vindarum Belgii (2d. ed. 1650), and an extract of it :
lieipiiblicce Batavicce brevis et accurata descriptio.
— In a special work, Dissertatio de Trapezitis, vulgo
Longdbardis, qui infcederato Belgio Mensas fcene-
bres exercent (Lugd. Bat. 1640), Boxhom treated
the question of interest. According to him a
principal duty of government is the promoting of
industry, not only by indirect ways {privilegiis,
itinerum securitate, etc.), but by direct ones too,
guilds preventing merchandise from deteriorating,
and therefore trade from declining. A well-regulated
currency is also of extreme importance. His ideas
on taxes are, considering his date, remarkable.
Taxes should be levied conveniently, ought to be
proportionate to the wealth of the contributors,
and may be used as a means even to promote
morality. They should never be imposed on
articles of export except on those nowhere else
obtainable. a. f. v. l.
BOYCOTTING, an expression of recent
origin, and derived from the name of Captain
Boycott, who was the first known person sub-
jected to the treatment indicated by it. Cap-
tain Boycott (the name is sometimes written
Boycatt) was, in 1880, living at Lough Mask
House, County Mayo, as land agent to Lord
Erne, an Irish nobleman. The circumstances
which gave rise to the term occurred during the
land agitation of 1880-1881. A boycotted
person is cut off from all intercourse with his
neighbours ; nobody is allowed to take his
land, to work for him, to supply him with
goods, or to help or assist him in any way.
This treatment has in many districts of Ireland
been applied to landlords, who, in the opinion
of the agi-arian association by which it is
directed, have been harsh to their tenants ; or
to persons who have taken farms the former
tenants of which had been evicted ; or gener-
ally to persons who in their dealings with land-
lords have not conformed to the instructions
laid down by the association to the poAver of
which the tenant farmers of the district submit.
Persons who combine to compel or induce any
one to take part in the process of boycotting
may under the general criminal law be subject
to a prosecution for conspiracy, and, in so far
as this is the case, tliey may in a district pro-
claimed under the Criminal Law and Procedure
(Ireland) Act, 1887, be tried by a court of
summary jurisdiction (50 & 51 Vict. c. 20
§ 2 [1]).
[The word boycotting is now frequently used in
a wider sense, meaning simply avoiding, holding
aloof from, and in that sense it has also been in-
troduced into foreign languages (German, boykot-
tiren ; French, boycottier). For the boycott in
America see article. Economic Journal, vol. i.
No. 1. The Boycott as an Element in Trade Dis-
putes, by John Burnett.] e. s.
BRADLAUGH, Charles (born 1833, died
1891). Bradlaugh was best known as a radical
reformer, secularist, and neo-Malthusian. But
towards the end of his life, when he was
allowed to take his seat in the House of
Commons for Northampton, and his force of
intellect received fair scope, he confined him-
self mainly to political work, and especially to
questions affecting labour, finance, and Indian
government. Though he never read for the
bar, he had a wide and accurate knowledge of
law ; and, throughout his whole career as an
agitator, he always (like Cobbett) strove to
keep every movement in which he Avas con-
cerned within the bounds of strict legality.
He was a staunch free-trader and individualist ;
and his latest published writing was in opposi-
tion to the proposal for a legal restriction of
the hours of adult labour. J. b.
BRANDS and other CERTIFICATES OF
QUALITY, Government. The most im-
portant case in which the British government
gives a guarantee of the quality of an article of
176
BRASSAGE— BBAY
commerce is that of the crown brand on barrels
of herrings cured in Scotland. Till 1830 a
bounty was paid on barrels which were branded
as coming up to a certain standard of quality,
and after the bounty was abolished the practice
of branding baiTels which reached the standard
continued. In 1856 Messrs. Bonamy PfeiCE
and F. St. John, and Capt. B. J. Sulivan, were
commissioned to inquire whether it would be
better to abolish the brand or charge a fee for
it, as the Treasury was no longer willing to pay
for the inspection which it involved. Messrs.
Price and St. John (Captain Sulivan dissenting)
recommended that it should be maintained and
4d. a barrel charged for it. This plan was
adopted. In 1881 a committee of the House
of Commons made an exhaustive inquiry as to
its effects, and by a large majority reported in
favour of maintaining it. Opponents of the
brand say that it is inimical to improvements
in curing, that it encourages speculation, and
that, though it affords no real guarantee, curers
are obliged to apply for it by the unfounded
prejudices of their continental customers, which
would necessarily disappear with its abolition.
Its supporters maintain that it enables small and
little-known curers to compete with great houses,
and prevents frauds, and they add that as appli-
cation for the brand is purely voluntary, branding
would fall into disuse if it were really of no value.
The arrangements of the Cork butter market
necessitate the testing and branding of butter
by an oflScial inspector, a system condemned by
the royal commission on agriculture in 1881.
Under acts of parliament passed in 1864, 1871,
and 1874, all chain-cables and anchors sold for
British ships have to undergo an official test
and obtain the official stamp. Gun barrels are
subject to similar regulations, and many gold
and silver articles cannot legally be sold with-
out the hall mark. In all ordinary cases the
buyers are obviously the best judges of the kind
ol commodity they want, and their demand
suffices to cause its production and in many
cases its progressive improvement in quality.
" Caveat emptor {q.v.) is the sound general
rule economically and socially as well as legally "
(Farrer, State in Relation to Trade, p. 150). A
government certificate is likely to be of value
only when it certifies to quite definite facts
which are not easily ascertainable by the
buyers. It is admitted by nearly every one to
be useful in the case of coins, which are pieces
of metal certified by a government stamp to be
of a certain weight and quality.
(See Administeation ; Conditioning ;
Laissez faire.)
[Report on the Fishery Board of Scotland, Pari.
Papers, 1857 (65 Sess. 1), xv. 39.— Report on
Herring Brand (Scotland), Pari. Papers, 1881,
293, ix. 1.— T. H. Farrer, The State in Relation
to Trade, pp. 145 to 151. — J. S. Mill, Principles
of Political Economy, bk. v. ch. xi. §§ 7 and 8.]
B.C.
BRASSAGE. A charge made for coining,
sometimes called a seigneuriage. The word
means "strictly the stirring in the furnace ol
the molten metals, and next the allowance
made to the individual by whom the operations of
coining were farmed " (Paper by J. B. Martin
"Seigneuriage and Mint Chfirges" {Journal,
Institute of Bankers, April, 1884). No charges
of this description are made at the royal mint in
England, though they are made at the branches
of the mint at Sydney and Melbourne (see
Mint). In England the Bank of England, by
arrangement with the government, buys gold at
£3 : 17 : 9 per standard ounce, and sells again
at £3 : 17 : 10-^. In France, a charge exists of
6*70 frs. per kilo (= -0025) equivalent to about
■^d. per £ sterling, the corresponding expense in
England, covered by the arrangement made
with the bank named above, being estimated at
fVd. per £. The advisability, or otherwise, of
making such a charge appears to be an open
question which can best be decided by those
immediately concerned.
["Seigneuriage and Mint Charges," by J. B.
Martin, Journal of the Institute of Bankers, April
1884. — Seigniorage and Charge for Coining,
Ernest Seyd, 1868. — Arbitrages et Parit^s, Ott.
Haupt, 1883, — Report, International Coinage
Commission, 1868. — Mint Reports, etc.]
BRASSEY, Thomas (1805-1870), bom in
Cheshire, where his family had flourished for six
centuries, illustrated an ancient house by his
distinguished success in the new calling of
railway contractor. In his dealings with
labourers in different parts of the world — em-
ploying the English navvy at 3s. 6d., the
Indian coolie at 6d. a day — Brassey had an un-
rivalled opportunity of verifying the truth that
the cost of labour to the employer is not pro-
portioned to the amount of daily wages. He
is even said to have found "that for the same
sum of money the same amount of work was
everywhere performed " ( Work arid Wages, by
Mr. Thomas (now Lord) Brassey, ch. iii. ; Life
and Labours of Mr. Brassey, by Sir Arthur Helps,
ch. v., end). But this proposition, understood
exactly, is not only, as Cairnes points out
{Leading Principles, pt. ii. ch. iii. § 7) a priori
improbable, but inconsistent with several of
Brassey's experiences. With respect to many
other questions, the comparative efficiency of
labour in different countries, the effect of short
hours on efficiency, the alleged deterioration of
the labourer — the experiences of Brassey re-
corded by his son in the work referred to are
valuable to the economist. Mr. Frederick
Harrison's interpretation of the facts stated by
Lord Brassey is remarkable (Review of Work
and Wages in the Fortnightly Review for 1872).
[For the particulars of Brassey's noble and bene-
ficent life, see Sir Arthur Helps's Life and Labours
of Mr. Brassey.'] F. T. b.
. BRAY, Charles (1811-1 884) born at Coven-
try, was a ribbon manufacturer in that city, but
BRAY— BRECK
177
retired from that business in 1856. From his
youth upwards Bray had been active in social
and educational reforms ; and in his principal
work he proceeded on the lines of Owen and
Carlyle, advocating Co-operation and organ-
isation of labour against Competition.
See the 2d vol. of The Philosojphy of Necessity;
or, The Law of Consequences, as applicable to
Mental, Moral, and Social Science, by Charles
Bray, London, 1841, pp. 301-389, 2d ed. 1863,
3d, 1889. The appendix to this work has been
published separately in 1844 {An Outline of the
various Social Systems and Communities which
have been founded on the Principle of Co-operation) ;
this was written by his sister-in-law, Mary
Hennell {d. 1843), and gives valuable information
on socialistic doctrines in England. Bray's other
works concerning social economy ai-e : Address to
the Working Classes on the Education of the
Body, 1837 (see his autobiography. Phases of
Opinion and Experience during a Long Life, 1884,
ch. vi. and vii.) An Essay upon the Union of
Agriculture and Mamfactures, and upon the
Organisation of Industry, 1844, and two papers
read before the British Association for the Advance-
ment of Social Science, October 1857 : The
Industrial Employment of Women, and The
Income of the Kingdom, and the Mode of its
Distribution, in which he computes that one-
seventh of the population possess two-thirds of
the annual income.
[Holyoake, The History of Co-operation in
England, 1875, vol. i. p. I7,"329n.— A. Menger,
Das Recht anf den vollen Arbeitsertrag, 1886,
p. 58.] s. B.
BRAY, J. F., early in 19th century, is the
author of Labour's Wrongs and Labours
Remedy ; or, the Age of Might and the Age of
Right, Leeds, 1839. He was a follower of
Owen and Thomson ; his book tries to prove
" that all those who perform equality of labour
ought likewise to receive equality of reward "
(p. 30), and though he admits that even this
does not involve perfect justice, that "such
equality is infinitely more just than the mode of
rewarding labour under the present system " (p.
206). Impressed by the modern growth of joint-
stock companies. Bray proposes a "joint-stock
modification of society, admitting of individual
property in productions in connection with a
common property in productive powers" (p. 194),
and proposes a paper and pottery currency,
whose foundation is labour, in order "to secure
the public against any other variations in the
value of the currency than those to which the
standard itself is subject" (pp. 143, 198). This
book is, notwithstanding all illusions, written
in a remarkably lively style.
[Holyoake, The History of Co-operation in
England, 1875, vol. i. p. 224. — A. Menger, Das
Recht auf den vollen Arbeitsertrag, 1886, pp. 58,
94 (corrects the statements given in K. Marx, La
misere de la Philosophic, 1847, p. 62).] s. B.
In Bray's work, mentioned above, Labours
Wrongs and Laborers Remedy, or the Age
VOL. T.
of Might and the Age of Right (Leeds,
1839), the current economical doctrines were
examined with acuteness and force, and were
said to involve "that under the present
system there is no hope for the working man."
At present (Bray considers) no political or fiscal
reforms, and no Trade Unions or Savings
Banks, will permanently lessen poverty. So
long as property, whether in land or in the
instruments of production, remains as it is, one
man's gain is another man's loss ; the only way
to be rich is to seize the fruits of another man's
labour ; and the only permanent remedy is a
complete overturning of the present system and
an organising of production by the community
itself. In place of individual employers would
come groups of joint-stock companies under
general and local boards of trade. All men
would be workers, and would receive "the
whole fruits of their labour." The labour
necessary to life would gradually fall from 8 or
10 hours a day to 5 hours, production being
immensely increased by the new system, and
being likely to keep ahead of population " for
thousands of years." Among writers of his
school Bray deserves more recognition than he
usually obtains. His errors of theory (such as
the confusion of value with cost) are not
peculiar to him, but are shared by Karl Marx
and (j^^enerally speaking) the Ricardian school
of socialists. j. b.
BREACH OF TRUST (Scots criminal law
term). Fraudulent appropriation by trustee, or
failure in duty by oflicial, etc.
BREACH OF TRUST. Any act or omis-
sion on the part of a trustee violating the con-
ditions of the trust or the rules of law concern-
ing the investment or administration of trust
property. The liability of trustees for breach
of trust is a very stringent one, but the
Trustee Act 1888 (51 •& 62 Vict. c. 59) has
relaxed it to a certain extent. It is, for
instance, the rile that advances on mortgage of
freehold property must not exceed two-thirds of
the value of the mortgaged property. Accord-
ing to the former law trustees having once gone
beyond the limit were liable for whatever loss
might subsequently have been incurred ; since
the date of the new act they cannot be called
upon to replace more than the difference
between the amount which they would have
been authorised to advance and the amount
actually lent. The trustees are also placed in
a more favourable position with regard to un-
authorised investments made at the request or
with the consent of a beneficiary. In the case
of express trusts the trustees were not author-
ised to plead any statute of Limitations, but
they may now, in the absence of fraud or mis-
appropriation, rely on the statute. E. s.
BRECK, Samuel, was bom in 1771 in Boston
and afterwards settled in Philadelphia. He
wrote in 1843 a small -pamiplilettJIistorical Sketch
178
BREHON LAW— BREWSTER
of ContiTiental Paper Money, Philadelphia, pp.
40. In this he attempts to demonstrate that
the non-redemption of the paper money after the
revolution acted as a moderate tax by reason of
its gradual depreciation, and that the issue was
not so unfortunate as is generally claimed.
Throughout his life — in congress and in private
— he took a decided stand in favour of internal
improvements. For details see Memoir by J.
Francis Fisher, Philadelphia, 1863, pp. 45.
D. R. D.
BREHON LAW. The Brehons were a heredi-
tary class of judges in Ireland, to whom disputes
were referred for arbitration, and whose decisions
were regarded as binding, though there was
no sanction to enforce them. It is probable,
though by no means certain, that the Brehons
were descended from the earlier Druids, who
lost their priestly functions on the introduction
of Christianity, but retained their judicial
power. The decisions of the Brehons formed a
vast mass of customary law, a knowledge of
which was the exclusive property of the class.
Gradually this law was reduced to writing, and
has been preserved to us in the Senchus Mor
and the Book of Aicill, which have been pub-
lished in the Irish RoUs Series.
The Brehon law throws great light on the
important part played by consanguinity in the
formation of society. The unit of the social
system in Ireland was the tvMth or tribe, con-
sisting of the real or supposed descendants of a
common ancestor. The tribe owned a district
of land, which was unequally distributed for
occupation among its free members. Rank,
originally a matter of birth, had come to depend
mainly upon wealth, and wealth was estimated
not in land but in cattle. The authority of
the tribal chief belonged to him, not as lord of
the land, but because he supplied cattle to the
poorer occupiers of tribal land. For this grant
the recipient had to pay a rent either in kind
or in service. The more cattle belonged to a
flaith, or noble, the larger number of retainers
could he possess, and the higher was his social
position. The lowest freeman was the oc-aire,
who possessed a cottage, and a right over the
common pasture. If he could acquire ten cows
he rose to the rank of bo-aire, or cow possessor.
As time went on the nobles gradually seized the
unoccupied portions of the tribal land, and the
idea of private property supplanted the earlier
theory of joint ownership.
But a clear trace of the latter survived in the
rale of succession, known as Gavelkind (q.v.)
On the death of the occupant of land, the
estate passed neither to his eldest son nor to
the joint or separate occupation of his children.
On the contrary the land fell back into the
common property of the tribe, and the chief
made a redistribution of all the lands among
the members. This custom is unquestionabl}'
due to the original idea that a tribe constituted
a family, and that the whole kindred were
joint-heirs of any individual member. But
gavelkind did not apply to the succession to the
lands of nobles, which was regulated, like the
succession to the office of chief, by the custom
ofTANiSTRT. By this custom a successor or
tanist was elected by the members of the sept
or tribe during the lifetime of the chief or
noble. The object was to secure the succession
of the fittest member of a family instead of
merely the nearest blood relation.
Both gavelkind and tanistry were disliked
by the English rulers, as being less definite
and orderly than the rule of Primogeniture.
Under James I. they were abolished as ' ' lewd i
and damnable customs." From this time the
Brehon law was jealously suppressed, and the
English legal system, which had hitherto been
enforced only in the counties of the Pale was
now applied to the whole of Ireland.
[Ancient Laws of Ireland (Irish Rolls Series).
— 0' Curry, Manners and Otistoms of the Ancient
Irish. — Maine, Early History of Institutions. —
Richey, A Short History of the Irish People.']
K. L.
BREVI MANU TRADITIO. An expression
used by mediaeval writers on Roman law to
express tlie fictitious delivery which takes
place, when a person who is in physical posses-
sion of another person's property acquires the
ownership of the same by purchase or otherwise.
BREWSTER, Sir Francis (fl. 1674-1702),
was in 1674 lord mayor of Dublin, and in
1698 appointed commissioner to inquire into
the forfeited estates in Ireland. He wrote
Essays on Trade and Navigation. In Five
Pa/rts—The First Part, London, 1695. They
seem to be written with the design of supporting
the Dutch against the growing commercial
power of the French. He proposes a council of
trades, a national bank, hospitals, working
schools, and the naturalisation of foreign
protestants, especially in Ireland ; he makes
objections to the projects of erecting free ports
and recommends sumptuary laws. His state-
ment that England upon an average of six
years gained by Ireland two millions sterling ■
per annum, and his denunciation of the 9
oppressive treatment to which that country was ^
subjected (p. 15 ff.) were strongly controverted
by Davenant (see his Works, edited by Ch.
Whitworth, vol. i. p. 377). His New Essays
(sic) on Trade, 1702, make him rank among
those pessimistic authors who constantly
foresee the decline of trade (p. 2). Neverthe-
less he insists upon the necessity of allowing
the exportation of wool, England being not able
to work up two-thirds of its own, and forced
*' either to Burn or Export it " (p. 9). He
recommends manufactures as a means of
employing the poor (p. 124). ** I think him
a great Man tliat employs Twenty Men at his
Lpoms, and Five Hundred Spinners, and wondej
BRIGANTI— BRISSOT DE WARVILLE
179
we have no more such in Parliament " (p. 11).
He recognises the dangers of the money projects
(p. 20), and of the stock-jobbing mania of his
age (p. 30). In all other respects his mercan-
tilist views are the same as in his first essays
(see e.g. p. 41), and only his considerations on
the advantage of a union between England and
Ireland (pp. 66-115), with many statistical
abstracts, may be considered as valuable.
[Macleod, Dictionary of Pol. Econ., p. 284.]
S. B.
BRIGANTI, FiLiPPO, born at GallipoH 1725,
died 1804. In 1780 he published, in two
volumes, his Esame economico del sistema civile
(viz. Economical Analysis of Society), which is
really a refutation of the social doctrines of
Mably, Rousseau, and Linguet, particularly
of their paradoxes concerning the obnoxiousness
of commerce, industry, and intellectual progress.
Briganti was a profound thinker, and had a vast
fund of information. Discussing the advantages
of exchange and commerce, he anticipates many
of the views which are now advanced in this
connection concerning sensations of pleasure
and pain, and, in general the hedonistical
calculus, as the basis of economical activity.
In tracing the history of human progress and
following it up in the history of agriculture,
commerce, navigation, population, and intel-
lectual and moral development, he shows him-
self to be possessed of a great store of informa-
tion. His book, however, has lost its interest,
because its principal object, viz. the refutation
i of Rousseau's theories, has likewise ceased to
interest. m. p.
BRIGHT, John (b. 1811, d. 1889) M.P.,
president of the board of trade (1868-1870),
eminent orator and statesman. The creation
of a numerous proprietary in Ireland was
eloquently advocated by Bright. The clauses
in the Irish Land Bill of 1870, which facilitate
the sale of land to tenants, are ascribed to
his influence and associated with his name.
The part which Bright played in the abolition
of the corn laws is also memorable. But there
are limits to the application of the idea of non-
intervention which did not occur to him. He
carried the principle of Laissez-Faire so far as to
oppose factory legislation ; concerning which he
thus defines his position — " I was opposed to all
legislation restricting the work of adult men
and women. I was in favour of legislation
restricting the labour and guarding the health
of children."
[Speeches on Questions of Public Policy, edited
by J. E. Thorold Rogers, 1868 ; Hansard, Ixxiii.
I p. 1132, Ixxxix. p. 1136, exciv. p. 731, et passim;
: Public Letters, edited by J. Leech, 1885.]
F. Y. E.
BRINDLEY, James (born 1716, died 1772),
an emment engineer, celebrated for the con-
struction of canals, of which the earliest and
raost famous, connecting Manchester with
Worsley and Liverpool, was executed under the
auspices of the Duke of Bridgewater (1759-
1773), and called after his name. Almost
totally uneducated, Brindley owed his success
to the sheer force of genius. In thinking out
his mechanical designs he sought no aid from
books or models ; and would even, for the pur-
pose of greater abstraction, retire to bed for two
or three days. The saying that " the natural
use of rivers was to feed navigable canals,"
is characteristically attributed to Brindley.
[Bibliotheca Britannica. — Lives of the Engin-
eers, by Smiles.] f. y. e.
BRISCOE, John (17th century), ranks second
to H. Chamberlin among the projectors of
land banks who flourished in the latter part
of the 17th century. Briscoe's project is
set forth in his Discourse on the Late Funds
. . . (1694, third ed. 1696). An Abstract
of this discourse, and also a Dialogue (between
Freeholder and Philanglus) "explanatory"
thereof followed soon (1694) from Briscoe's
pen. He continued in a series of broadsheets
to repeat with variations his proposals for
setting up a land bank. A proposal which he
made for regulation of the coin (1695) is not
unconnected with his darling project. He
accuses J. Asgill (q.v.) of having appropriated
his ideas, see 3fr. John Asgill, his Flagiarism
detected, . . . 1696. Briscoe himself is accused
of plagiarising from Chamberlin, by the author
of A Rod for the Fool's Back, or Dr. Chamberlin
and his Proposals Vindicated, 1694, attributed
to Chamberlin. However, Briscoe appears
as the ** literary advocate of Chamberlin's land
bank " (Thorold Rogers) in a letter to the
doctor dated 1693, published in 1696 by
Chamberlin. In some remarks prefixed to this
letter Chamberlin speaks of the " great reputa-
tion Mr. Briscoe hath among some of our
senators." Chamberlin adds (at the end of the
letter), " As a stronger confirmation of the good
opinion Mr. B. had of the doctor's 100 years
proposal, he subscribed £200 per annum."
Briscoe shares with Chamberlin, in proportions
which it is not easy to assign, the responsibility
of having originated the land bank, which
proved such a complete failure in 1696 (see
Hugh CHAMBEPtLEN or Chamberlin).
[Macaulay, History of England, ch. xx. and
xxii. (vol. iv. pp. 496 and 701, large 8vo ed.) —
Tliorold Rogers, First Nine Years of Bank of
England, pp. 15 and 50. — Quarterly Journal of
Economics, vol. ii. p. 490. — Macleod's Dictionary,
sub voce " Briscoe. "] f. t. k.
BRISSOT DE WARVILLE, Jean-Pierre,
was born 1754, at Ouarville near Chartres. He
was executed in Paris in 1793. After having
been imprisoned in the Bastille, he went to
England and to the United States, and returned
to Paris at the outbreak of the Revolution, in
which he played a remarkable part, being accused
of federalism by Robespierre. After the revolu
180
BROGGIA— BROKER
tion of 31st May 1793, he was proscribed ; he
tried in vain to escape, but was arrested, and
died on the scaffold, 31st October 1793. In
his writings, Brissot de Warville advocated the
reform of the penal laws and attacked the slave-
holders in the colonies.
His works are collected under the title :
Bihliotheque philosophique du Legislateur du
politique et du jurisconsulte (10 vols., Berlin,
1782-1785). One of these works is remarkable
on account of its influence on later socialists :
Recherches philosophiques, sur le droit de
proprUti et sur le vol considirSs dans la nature
et dans la sociSti, 1780 (Biblioth^que, etc.
vol, vi. p. 260 ff.) The defence of the right of
property by the Phtsiockats as being founded in
nature, and the ridicule bestowed upon this axiom
by Voltaire in his Homme d quarante ^cus, induced
Brissot de Warville to inquire into the justifiability
of this doctrine in the natural and actual state of
society. He reasons thus : the natural title of
property being the human wants of self-preserva-
tion and freedom of locomotion (p. 274), there is
no property beyond these limits founded in nature.
But civil property reaches farther. " In the state
of nature everybody has a right to all ; in the
social state a man who has nothing left by his
parents has a right to nothing. The thief in the
natural state is the rich man, who possesses
superfluities ; in the social state he is called a
thief who steals them from the rich. What
an upturn of ideas!" (p. 382). The object of
this work was to mitigate the rigour of the penal
laws against theft. In this direction its efl'ect was
not inconsiderable, but its influence upon the
formation of the creed of Babeuf and Proudhon has
incidentally been distinctly greater (see Babeuf ;
Communism ; Proudhon).
[Villegardelle, Histoire des idees sociales, etc.
1846, pp. 124-129. — J. J. Thonissen, Le Socialisms,
1852, vol. i. pp. 286-291.— A. Menger, Das Recht
aufden vollen Arbeitsertrag, 1886, pp. 8, 40, 71.]
s. B.
BROGGIA, Antonio, a learned Neapolitan
merchant, also a politician and author of two
treatises, one on taxation {Trattato dei trihuti,
1743), which was translated into German, and
the other on money {Trattato delle Trumete con-
siderate nd rapporti di legittima riduzione, di
drcolazione e di depodto, 1743). Both treatises
are still interesting to read, as they contain a
great deal of what at the present time is still
taught and thought correct concerning these
subjects. As is natural for a writer living
when he did, Broggia is not free from physio-
cratic prejudices. In his treatise on taxation
he says the aim of the theory is the wealth of
the state ; wealth reposes on the development
of agriculture, industry, and commerce ; industry
in general ought to be left free and not ham-
pered by vexatious taxes ; the working classes,
and especially peasants, ought to have their
interests particularly considered, as on their
welfare depends much of the prosperity of the
state ; tithes are the least oppressive taxes and
the surest ; taxes ought not to be personal ;
care must be taken that taxes do not crush out
trades ; agiicultural animals and machinery and
tools ought not to be taxed. State monopolies
are unadvisable. Excise and custom duties
ought not to be leased out by the government.
The direct land tax, if necessary, ought to be
increased rather than custom duties imposed.
Notwithstanding his predilection for taxes on
rent, Broggia is not in favour of one single
tax. He shows the advantages of indirect taxes
as complementary ; he only insists strongly on
custom duties being moderate, so as not to
molest trade. In his treatise on money, a
cardinal point is that the wealth of a country
does not depend upon the quantity of money
existing in it or in circulation, but upon the
amount of the turnover in business. In 1754
Broggia was exiled from Palermo for having
written a pamphlet against the ministers. This
pamphlet (a volume in 4to of 136 pages) was a
criticism on their acts. He wrote also a treatise
on public hygiene {Trattato politico della sanitd).
This treatise and the two other ones before
mentioned constitute one single volume in the
original and only edition, which was published
before Custodi took up classifying, correcting,
and publishing Broggia's writings. The title of
the first edition is : Trattato dei trihuti, delle
monete e del govemo politico della Sanitd. In
Napoli, presso Pietro Palombo, 1743. As a
complement of his monetary doctrines must be
considered a pamphlet he wrote in defence of
them under the extraordinary title which
follows : Risposte alle objezioni state fatte da
varj Soggetti, intorno al sistema del prezzo cor-
r&rUe, che assolutamente dee tenersi per la ricom-
pensa degli arrendamenti, e similmente a quelle
state anche fatte intorno alia rinnovazio'/ie della
moneta di rame, che dee ancK essa avere tutto
quel valore intrinseco che di giustizia gli spetta ;
e tanta farsene che nan ecceda il puro hisogno
degli scambj minuti, Napoli, a dl 14 Novembre
1755. Of his life no particulars are known,
not even when he was born and when he died.
It is commonly maintained that he was born
in 1683, and that he died in 1767, but the
dates are contested. His works are included
in the CoUezione Custodi. m. p.
BROKER, General A broker may be
generally described as a go-between, who brings
buyers and sellers together ; not exactly face to
face, but acting as an intermediary who intro-
duces their bargains rather than their persous.
The position is a responsible one, inasmuch as
the principals who employ a broker very often
keep a rimning account and trust him, in goods
or money, to large amounts. As a rule, brokers
are under the rules of a syndicate or corporate
body of which they become members, and to
whose rules they are usually amenable on pain
of expulsion. There are tea brokers, cotiee
brokers, sugar brokers, and so on without end in
almost every wholesale trade, and their practice
BROKER— BRYDGES
181
varies with their standing, some brokers being
virtually factors or warehousemen, others being
simply agents, paid by fee, instead of by a
varying salary. a. e.
BROKER, Stock. A stock-broker may be
either a member of the stock exchange of
London, Dublin, Manchester, Liverpool, Glas-
gow, or elsewhere ; or only what is known as
an outside broker. His duty is to buy or sell
for a "principal." On the London stock ex-
change, nobody who is not a recognised member
is permitted to deal. A broker, having received
an order to buy say £500 stock, goes to any
member of the stock exchange, knoAvn indifter-
ently as a jobber or dealer, and asks for a quota-
tion. The dealer quotes two prices, say 80 j
to 80^, meaning that he will sell to the broker
at the higher price and buy at the lower quota-
tion. If the broker consider this fair he will
say, " I buy £500 at SOi," and the contract is
binding between these two members of the
stock exchange. Members, their admitted
clerks, or officials only are permitted to enter
the London stock exchange, therefore brokers
must be employed by all outsiders desii'oas to
do business there. a. e.
BROKERAGE. A charge made by a broker
on the purchase or sale of securities or other
property.
BROUGHAM, Henry (born 1778, died
1868), Baron Brougham and Vaux, lord chan-
cellor, touched nearly all subjects and adorned
some by his eloquence and dialectical skill.
The contact seems least superficial, the orna-
ment particularly solid, in the case of political
economy. Brougham's fii*st considerable work
was An Inquiry into the Colonial Policy of
European Powers, 1803. Criticising Adam
Smith, he maintains that the monopoly of the
colonial trade did not produce all the detri-
mental effects ascribed to it (bk. i. § 2, part
ii.) Refening to the slave colonies. Brougham
not only denounces the slave trade as iniquit-
ous— "not a trade, but a crime" — but also
argues that it is unprofitable. The argument
is renewed in A Concise Statement of the Question
regarding Hhe Abolition of Slave Trade (1804).
Slavery, as well as slave trade, was assailed by
Brougham's oratory {Speeches, published in
1838, voL ii.)
Free trade owes something to Brougham's
advocacy. He exposed the folly of retaliation,
as counsel (1808) for the merchants who peti-
tioned parliament against the orders in council
directed against Napoleon's continental system.
After Brougham's masterly speech in 1812, the
obnoxious orders were withdrawn (Speeches, vol.
i) In the speech on manufacturing distress
(1817) Brougham strikes at the complicated
taxes which fettered trade (ibid.) But in the
equally able speech on agiicultural distress
(1816) there is a good word for the corn law
{iMd. p. 533).
Other economic topics handled by Brougham
are : (1) depreciation of money, with reference
to Sir E. Shuckburgh's standard (article on
"Currency and Commerce," Contributions to
Edinburgh Revieio, published 1856, vol. iii. p.
22 ; E.R., Oct. 1803) ; (2) usury (Contributions,
vol. iii. p. 52 ; E. R., Dec. 1816) ; (3) over-
population (speech on the poor laws, 1834,
Speeches, vol. iii.) ; (4) combinations (I'ran^ac-
tions of the Society for promoting Social Science
for 1860, p. 51). Brougham is also to be
mentioned as a promoter of education and educa-
tional institutions — the London University, the
Society for the Diffusion of Useful Knowledge,
Mechanics' Institutes, and the Society for pro-
moting Social Science.
In addition to the works which have been cited
may be noticed : (1) ^ Manual for Mechanics'
histitutions, 1839 (by B. F. Duppa, with outlines
of lectures on political economy by Brougham) ;
(2) Political Philosophy, 1842 ; (3) Works, 1st
ed. 1855-61, 2d ed. 1873. In the 11th vol. of
the 2d ed. there is a list of Brougham's publica-
tions, numbering 133. F. T. E.
BROWN, John (1715-1766), was vicar of
St. Nicholas, Newcastle. He maintained that
" commerce in its first and middle stages is
beneficent, in its last dangerous and fatal";
that it is answerable for selfishness, luxuiy,
and want of religion ; and that by causing
a drain of money and by the invention of
machines it diminishes the population. He
asserts that the country parish registers prove
that from 1710 to his time the population was
at least stationary. See his book An Estimate
of the Manners and Principles of the Times.
By the author of Essays on the Characteristics,
etc., London, 1757, pp. 151, 185, 188.
[For a contemporary reference see : A Vindica-
tion of Commerce and the Arts. By J.-B., M.D.,
1758, p. xvi., and Wallace, Characteristics of iht
Present State, 1758, p. 193. — Brown's own book
Essays on the Characteristics, etc. is of no econo-
mic value.] s. B.
BRYDGES, Sir Egerton, Bart. (b. 1762,
d. 1837). To any one disposed to make a
psychological study of a defunct antiquary,
topographer, essayist, bibliographer, poet,
novelist, and critic, and who added to these
occupations the study of political economy and
occasional authorship in that science, Sir E.
Brydges would attbrd an excellent subject.
On the good side may be placed his industry
and power of research, considerable originality,
and a deep acquaintance with the ancient
literature of England and of foreign countries.
On the bad side should be ranged his excess-
ively morbid temperament, a craze about an
assumed right to an ancient barony, an in-
tense suspicion of the motives of those who
drftered from him, and an unfounded notion
that he was not sufficiently rewarded for his
services in the cause of learning. Much
182
BUBBLE ACT— BUBBLES
material bearing on all this exists in Ms
Autobiography and Letters from the Continent,
as well as in his voluminous published and
privately printed works, which in the course
of his long life extended to no less than one
hundred and forty volumes. We find in a
quantity of his letters, which have never been
printed, addressed, from 1818 to 1832, to Mr.
James S. Brooks, member of a firm of solicitors
who acted for him, and with whom, in a
characteristic manner, he often fell out, many
striking examples of Sir Egerton Brydges'
talent as a political economist. It is a curious
fact that in his most desponding and brooding
moments he would fly to political economy as
a relaxation of thought and as a favourite study,
just as many of our first-class English statesmen
have relieved tension of mind and the excite-
ment of political conflict by Homeric studies
or the composition of Greek and Latin verses.
His published works touching on economics
are : (1) Tests of the National Wealth, 1799,
8vo.— (2) Letters on the Poor Laws, 1814, 8vo. —
(3) Arguments for the Employment of the Poor,
1817, 8vo.— (4) Three Tracts on ''Copyright,"
1817-18, 8vo. — (5) The Population and Riches of
Nations considered, Geneva, 1819, 8vo. A second
edition of this was afterwards printed at the
author's private Lee Press. — (6) What are Riches t
Geneva, 1821, 8vo. — (7) Letter on the Com Ques-
tion, 1822, folio. — (8) Letter on the Proposed Plan
for reducing the National Debt, Florence, 1820,
4to. Although Sir Egerton Brydges' works, above
cited, contain flashes of insight into correct deduc-
tions, practical as well as theoretical, they are a
good deal disfigured by his want of study of the
statistics and practice of commerce, and his ignor-
ance of business generally. f. H.
BUBBLE ACT. Popular name for an act
passed in the reign of George I. with the inten-
tion of preventing the creation of joint stock
companies. The name is derived from the
fact that one of its objects was to protect the
privileges of the South Sea Company. It had
no practical effect, and was repealed in 1825.
E. s.
The phenomenon of bubbles (or joint-stock
undertakings the shares of which were "blown
up by the air of great words " ) first showed
itself prominently in England at the end
of the 17th century (see Anderson, Hist, oj
Commerce, esp. under dates 1695, 1697), when
the Royal Exchange became so crowded with
projectors and stock-jobbers that they were
provided with an exchange of their own, first
in Exchange Alley and later in Capel Court. An
act was passed in 1696 "for restraining the
practices of brokers and stockjobbers." It
limited the number of licensed brokers to one
hundred, and put difficulties in the way of their
dealingwith government stock and Tallies {q.v.)
The outburst of speculation a quarter of a century
later was associat'3d with the South Sea Com-
pany It led to more ambitious legislation.
The act specially known as the Bubble Act
was passed in 1720, principally to define the
privileges of the companies that were afterwards
known as the London Assurance and the Royal
Exchange Assurance Companies, but also to
punish bubble companies for trading (a) under
obsolete or forfeited charters, or (b) for purposes
not allowed in their charters, or (c) with no
charters at all. This act was not to apply
to undertakings established before 1718. The
South Sea Company had promoted it in the
belief that the bubble companies were rivals,
whereas they were really allies ; money was
gained in them to be invested in the greater
company. As the act and subsequent royal
proclamation proved ineffectual, the South Sea
Company procured a writ of scire fa/iias against
** those airy projects called bubbles ; " but the
effect was to bring down the credit of smaU and
great together (Anderson, ib. under date 1720,
esp. p. 101 seq.), and to cause the ruin of mul-
titudes of rich and poor subscribers. To relieve
the sufferers acts were passed (1721) to attach
the estates of the South Sea Company's directors,
to relieve subscribers from part of their obliga-
tions, and (1722) to enable the company to
improve its position by an arrangement with
the Bank 'of England. The act (1722) to
punish fraudulent transfers of stock may per-
haps be counted the last of the series, though
the affairs of the South Sea Company were a
frequent subject of legislation for some years
afterwards. J. B.
BUBBLES (History of). The term bubble
has been commonly applied since the 17th
century to any unsound commercial undertaking
accompanied by a high degree of speculation.
The first bubble of historical importance was
connected with the growth of varieties of tulips
in Holland. It reached its height in 1636 in
Amsterdam, and in the most of the Dutch cities
regular markets were established for speculation
in the roots. In the end tulips were bought and
sold like shares in a gold mine, for purely specu-
lative purposes, without any idea of actually
growing the flowers. Fabulous prices were
paid for single bulbs, e.g. 2500 florins for a
"viceroy," a "semper augustus" 6500 florins,
etc. The mania spread to some extent to
London and Paris, and tulips were dealt in by
the stock-jobbers of both cities.
In 1719 and 1720 occurred the greatest
speculative mania on record, arising from the
Mississippi scheme of John Law {q.v.) The
rage for speculation in Paris was incredible, and
affected aU classes of society. John Law's
schemes were not in themselves, according to
most modern writers, unreasonable, and in
many respects he only anticipated the natural
development of banking and credit, but his
whole system was ruined by the extravagant '
speculation with which it at once became as-
sociated. The extent of the mania may be
BUBBLES— BUCHANAN
183
indicated by the fact that for a time John Law
became the most powerful man in France.
In England, however, the word bubble is
generally associated with the South Sea Bubble
which burst in 1720, and was the English
counterpart of the Mississippi scheme. The
South Sea Company was originated by Harley,
Earl of Oxford, in the year 1711. The original
idea was to found a company which should take
over the floating debt of nearly ten millions,
arising from the expenses of the army and navy.
The company was to receive interest from the
government at the rate of six per cent, and
for this purpose certain duties were allocated.
In addition the monopoly of trade to the
South Seas was granted, and the company be-
came known by that name ; as a matter of
fact, owing partly to the opposition of Spain,
the trade with the South Seas, or ratlier South
America, produced very little revenue at any
time. But the directors of the company thought
that they might imitate the success of John
Law by other operations in finance, and they
competed Avith the Bank of England in offers
to undertake the reduction of the national
debt, which amounted to about £30,000,000.
After a debate in the House of Commons the
proposals of the South Sea Company were
accepted in preference to those of the Bank of
England ! Sir Robert Walpole was almost
the only prominent statesman who spoke against
it, and warned the House of the dangers of
stock -jobbing as carried on in France. During
the time the bill was being passed through the
House of Commons the most extravagant
rumours were set afloat, especially by the chair-
man. Sir John Blunt, as to the trading possi-
bilities of the company, with the view of forcing
up the price of the shares. Before the bill
reached the Lords the price of the stock had
reached 400. It was opposed by several peers
of good standing, but was hurried through with
unexampled rapidity. By this time, 7th April
1720, the whole nation had begun to be in-
fected with the stock-jobbing mania. Exchange
Alley and Cornhill were almost impassable with
the crowds. The South Sea stock, which curi-
ously enough suffered a momentary fall on the
passing of the bill in favour of the company,
was soon subjected to all kinds of adroit mani-
pulation. In consequence the directors were
enabled in a few days to issue a million of stock
at £300 for the nominal £100, and a little later
another million was issued at £400, for which
"in a few hours, a million and a half was
subscribed."
In the meantime, numberless other joint-
stock companies were started, which soon began
to be called bubbles. The highest persons in
the state, including the Prince of Wales, were
interested in one or more of those companies.
Some of them only lasted a few days, and the
infatuation was at length carried to such a
pitch that one project was advertised in the
newspapers as follows: "For subscribing two
millions to a certain promising or profitable
design, which will hereafter be promulgated."
It is hardly credible that the bold projector of
this scheme, in a few hours, sold 1000 shares
on which he received, by way of deposit, £2 per
share, and was able to decamp with £2000.
The South Sea stock continued to rise for
nearly two months, and at the end of May
reached about 550. At this time it took a
tremendous leap of 340 per cent, and was
quoted on the 3d of June at 890. On this
day, however, it fell as rapidly, but was again
bolstered up by the directors getting their
agents to buy. The speculation continued
during the summer, the stock at one time
reaching 1000 ; but by the beginning of Septem-
ber a serious fall had commenced, and the
directors became alarmed. Negotiations were
attempted ■with the Bank of England, but a
panic had set in which nothing could check.
Thus the bubble burst after a run of eight
months. The greatest popular indignation was
aroused against the directors, and found expres-
sion in parliament. An inquiry was instituted
and pushed on rapidly. In the sequel upwards
of two millions was taken, in the shape of fines,
from the estates of the directors, and they were
allowed to retain only a small residue.
[Full details of these bubbles are given in Mac-
pherson's Annals of Commerce, under the years
named. Popular accounts are given in Mackay'a
Memoirs of Extraordinary Popular Delusions,
London, 1852, and Francis's Chronicles and Char-
acters of the Stock Exchange, London, 1849. See
also Tavereel.] J. s. n.
BUCHANAN, David (1779-1848). A
journalist and economist, was a son of David
Buchanan, a printer, and was born at Montrose
in 1779. At an early period of his life he
commenced his career as an economist by a con-
tribution to Cobbett's Political Register. He
contributed articles to the Edinburgh Review,
publislied a pamphlet on Pitt's volunteer system
(1807), contributed to the seventh edition of the
Encyclopcedia Britannica, and edited the Edin-
burgh Gazetteer. As a journalist, his experience
was varied, since he was editor successively of
the Weekly Register {1^0^-1^0^),t\iQ Caledonian
Mercury (1810-1827), the Edinburgh Courant
(1827-1848). As an economist, in 1814 he
edited an edition of Adam Smith's Inquiry into
the Causes of the Wealth of Nations in four
volumes, the last volume consisting of addi-
tional matter supplied by himself by way of
illustration and correction (this edition of Adam
Smith was translated into French in 1843). In
1844 he published a work entitled Inquiry into
the Taxation and Commercial Policy of Great
Britain, with Observations on the Principles of
CurrcTicy and Exchangeable Value. To a large
extent this latter work is a mature reproduo-
184
BUCHEZ— BUCKLE
tion of the matter contained in his additional
volume of comments of 1814. While he goes
beyond the theories laid down by Adam Smith,
his final treatise does not indicate any develop-
ment due to the study of those economic works
which had been published since he began to
write in 1814. He displays a consid^able
understanding of the causes which determine
prices, and brings out with great lucidity the
effect of the interaction of supply and demand.
Thus he performed no little service to economic
theory by disentangling the many important
elements underlying the work of Adam Smith.
On the other hand he failed altogether to
understand the main basis of the Ricardian
theory, recognising no distinction between an
"increase in wealth" and an "increase in
valioe." In consequence he is unable to com-
prehend the technical use by Ricardo of the
term "profits," and will not allow that that
author was right in asserting that a fall or rise
in profits depended on a rise or fall in wages.
This was owing to his misunderstanding the
interpretation applied to these terms by Ricardo.
Of a somewhat similar nature is his attack on the
theory of rent. He confuses the theory with its
practical application ; while he further failed to
understand the treatment by Ricardo of the
case of a country where all the soil is under
cultivation, but where the difference of quality
as to retm-n to respective "doses" renders the
law of rent like to that obtaining where cultiva-
tion has not yet covered the whole surface.
He does not give Ricardo sufficient attention
in this instance, while in another he accuses
him — again no doubt through misconception —
of having thought and said that the high price
of corn was the effect of the higher expense of
cultivation, urging on his part that this high
price it was which caused people to be willing
to encounter the high expense. Again he
asserts that in theory the tithes are paid out of
the rent.
For these and other reasons it is impossible
to attribute to his treatises any great value on
the side of theory. On the other hand his
treatment of taxation is sensible and very
practical.
{^Dictionary of National Biography. — Montrose
Standard, 18th August 1848 ; works as cited
in text. ] E. c. k. g.
BUCHEZ, Philippe Joseph Benjamin,
bom 1796 at Mattaigne (Belgium, at that time
a department of the Ardennes), died 1865 at
Rodez. Left dependent on his own resources
at twenty, he commenced life with the study of
natural science. In 1821 he established, in con-
junction with Bazard and Flottard, the society
of the Carbonari {q.v.) in France. Devoting
himself to the service of this secret society with
the fury of youth, he barely escaped, 1822,
being sentenced to death. Altering then the
scope of his operations, he worked after the
death of St. Simon, whom he never had
known, on the Producteur (1825-26). About
this date he began to be detached from the
followers of St. Simon, with whom, however,
he did not definitely part company till 1829.
He then published several works on medical
science, and, during the revolution of 1830
attended, with gi-eat courage, the wounded
imder fire. Taking his pen up again, he pub-
lished his Introduction d la Science de VHistoire
(1833, reprinted 1842), and afterwards, in con-
jimction with Roux Lavergne, the work by
which he is best known {Histoire parlementaire
de la E4volution Frangaise, 1833-38, 40 vols.,
reprinted — the first seven alone 1846). In
this work, without approving the violence and
bloodshed, he rehabilitated the principal per-
sonages of the first revolution. This was
followed by his Bssai d'un traite complet de
Philosophic au point de vue du Catholicisrm et
du Progr^s (1838-40, 3 vols.), in which he
sought, in harmony with his St. Simonian
views, to reconcile philosophy with Catholi
cism. He had founded (May 1847 to July
1848) the Eeime Nationale when the Revolution
of 1848 broke out. Appointed Maire-adjoini of
Paris, he took great part in the suppression of
the disturbances in the streets, particularly of
the socialist manifestation of 16th April.
Elected by 135,000 votes a representative of
the people, he was chosen, 4th May, president,
on the opening of the Assemble Oonstitvmite,
and was in the chair, 15th May, when the
chamber was invaded by the revolutionary
socialists. The firmness and dignity of his
conduct brought him respect from all. He
continued actively to fulfil the duties of his
post, but was not elected a member of the
Assemhlie Legislative. He was arrested at the
Coup d'6tat, December 1861, but was soon set
at liberty, and occupied himself in writing,
1856, the Histoire de la formation de la Nation-
ality Frangaise, 2 vols, in 32mo, reprinted 1859
under the title of Les Mdrovingiens et les Car-
lovingiens. He was the first to speak in France
in favour of Associations Ouvri^res, which he
desired to establish under a form approaching
that of a religious order, not only to secure pro-
priety of conduct, but perpetuity and increase
of capital. His disciples and friends MM. L.
Cerise and A. Ott published, in 1866, after his
death, a posthumous work, TraitS de Politique
et de Scien/ie Sociale, preceded by a notice of his
life and works by M. A. Ott. a. c. f.
BUCKLE, Thomas Henry, born 1821, led
a student's recluse life, devoted to the great
historic work which he left unfinished on his
death in his forty -first year (1862). In
the introduction to this work, the principle
that human actions obey laws verifiable by
statistics, was, as Mill says {Logic, bk. v. ch. ii„
§ 1), " most clearly and triumphantly brought
out " by Buckle. Mill does not however agree
BUDGET
185
in the opinion tliat the moral qualities of man-
kind are little capable of being improved, and
conduce little to the progress of society {Ih. % 2).
Dr. Venn has protested more strongly against
Buckle's fatalistic interpretation of statistics
{Logic of Chance, 2d ed. pp. 235-241). An
erroneous impression of the futility of human
effort is conveyed by such statements as
'* suicide is merely a product of the general con-
dition of society, and the individual felon only
carries into effect what is a necessary con-
sequence of preceding circumstances" (Venn,
Logic of Chance. 2d ed. ch. xviii. § 14 ; Buckle,
History of Civilisation, vol. i. ch. i.) The
same disposition to underrate the force of human
will appears in Buckle's theories as to the in-
fluence of pliysical conditions on wages and
population: "There is a strong and constant
tendency in hot countries for wages to be low,
in cold countries for them to be high. The
evil condition of Ireland was the natural result
of cheap and abundant food " (History of Civil-
isation, ch. ii.) He here maintains that
"potato philosophy of wages," which Prof.
Walker stigmatised {Pol. Econ., bk. v.
ch. iii.) Buckle's economical reflections are
indeed not always sound, but they bear the
impress of originality, enhanced by copious
learning and recondite references. His account
of the discoveries made by political economists
is masterly (ch. iv.) The remarks on the lead-
ing economists, in particular Adam Smith and
Hume, are instructive, even when disputable.
The description of Adam Smith's method
as deductive, is a half-truth cliaracteristic of
Buckle.
History of Civilisation in England, vol. 1.
1857, vol. ii. 1861.— New Edition (with index)
1869. — Miscellaneous and Posthumous Works,
edited by Helen Taylor, 1872 ; with a biographi-
cal notice by the editor. (Among the posthuiuous
works are fragments, some of which relate to
economical topics : e.g. History of Money, p. 438 ;
Wages, p. 459 ; Statistics, and Political Economy,
pp. 526, 528). [Life and Writings, by A. H.
Huth (1880). — Pilgrim Memories, by J. S. Glennie,
1875 ; 2d ed., with a preface, 1880.1 f, Y. e.
BUDGET, The,i is the statement of the
nation's accounts, drawn up and presented once
a year to parliament by the chancellor of the
exchequer. In opening his budget, the finance
minister first lays before the House the complete
accounts of the past financial year, with its
actual revenue and expenditure, and the realised
surplus or deficiency. For this purpose, and
to enable an accm-ate estimate of the revenue
of the coming year to be made, the budget
is never, except under peculiar circimistances,
taken until a week or two after the close of the
financial year, which now runs from 1st April
1 From the Old French "bougette," diminutive of
" boulge," a purse. The term and method of a Budget
are used in other countries, see R. Stourm, Cours de
Finances: le Budget, 2d ed., Paris, 1891, 8vo.
to 31st March. 2 On the other hand, the budget
is seldom postponed for more than a short time
after that date, so that the period of disturb-
ance to trade, due to the uncertainty of the
financial proposals of the year, may be as far
as possible curtailed.
The result of the finance of the past year
having been stated, the chancellor of the
exchequer proceeds to detail the expenditure of
the coming year, as estimated by the different
departments after review and criticism by
cabinet and treasury. These estimates are
divided into two parts — the Consolidated
Fund (q.v.) and the Supply services.^
The amount of the expenditm-e for the
coming year is generally known before the budget
is introduced, for the estimates of the supply
services have as a rule already been presented
to the House ; and portions of them, or "votes
on account," have probably already been taken.
Against the total of the estimated expenditure
(" ordinary" or " extraordinary," the latter term
being now usually applied to war expenditure
of any kind) it becomes necessary to jirovido
the " ways and means " ; and this is the budget
proper. The taxation in force dming the year
just come to a close is almost invariably as-
sumed as the basis of the estimate of the revenue
for the coming year, any variations which are
likely to ensue being, especially since 1874,
taken into account.'*
On a comparison of the estimated revenue
with the estimated expenditure, a surplus or a
deficit, as the case may be, appears. Since
Peel's time it has been the almost invariable
custom, except under great stress of war charge,
for the chancellor of the exchequer to take care
that, in his final budget estimates of revenue
and expenditui-e, an estimated surplus of three
2 The tinancial year used, till 1S3'2, to run Ironi 1st
January to Slst Deeeinber. The budget is usually
taken about the middle of April. In 1860, in con-
sequence of the necessity of an early ratification of the
Fi-ench commercial treaty, the budget waa introduced
on 10th February. In 1S59, in consequence of the
change of government, it was not introduced until 18th
July. In 1880 there were two budgets, one on 11th
March (Northcote's) before the dissolution, the other on
10th June (Gladstone's) after the assembling of the new
House.
3 The Consolidated FtJND — created by Pitt in 1787, for
the greater security of the Debt and other fixed charges,
and the more certain maintenance of his Sinking Fund —
includes the Civil List, debt charge, certain pensions,
judicial and other salaries, constituting an annual charge
fixed by statute, and only to be altered by statute.
The Supply services include thp rest of the ordin-
aiy expenditure of the country, — the army, the navy,
the civil service and the revenue departments, which
last include the post office and the cost of the collection
of the revenue. These supply services are annually
voted item by item in committee (the money being now-
adays very strictly " appropriated "), and the amounts
can be criticised and reduced, but not increased, by the
House. The accounts are subsequently audited, and
go before the Public Accounts Committee.
4 This is almost invariably the case. In 1868 and in
1885, however, the special taxation imposed in the
previous year was eliminated from the estimate, and in
1858 Mr. Disraeli took the income tax at 5d. in accord,
ance with the arrangement of 1853, instead of at the 7d
of the previous year.
186
BUDGET
or four hundred thousand pounds shall be
shown. This he does for the twofold object of
providing for unforeseen contingencies to ex-
penditure or diminution of revenue; so that,
if possible, the year shall not end with an
addition to the national debt, in other words a
deficit, but rather that something shall renlain
in hand to go towards its further redemption.
This policy has become especially essential since
1874, in which year the system of close estimates
was finally adopted ; for under the old system,
in which practically no account was taken of
the normal annual increase of revenue, a sur-
plus was ready to hand if the revenue of the
year exceeded that of its predecessor. Unfore-
seen circumstances may indeed, affect the surplus,
but a surplus ought distinctly to be allowed for
in the budget — a chancellor of the exchequer,
according to Mr. Lowe's definition, being "an
animal who ought to have a surplus."
The "ways and means" of the year include
the whole of the sources of national revenue,
and not only those derived from actual taxation
— not only the so-called "tax revenue," but
the gross receipts from the business depart-
ments (post office, etc. ), the net revenue derived
from the crown lands, and miscellaneous
receipts of different sorts. The continuation of
the annual taxes, together with any alteration
that may be proposed in them or in the per-
manent taxes with the view of either distribut-
ing the surplus or filling up the deficit, are
embodied in resolutions which, in order to
obviate possible evasion, are almost always
provisionally confirmed on the night of the
introduction of the budget.
The resolutions agreed to, they are annually
embodied in one bill — the customs and inland
revenue biU — which goes through the House of
Commons in the ordinary course, and is liable
to amendment like any other bill. After
passing the Lower House, the bill goes up to the
Lords, who can, if they choose, reject, but are
precluded from amending it.
The system of including all the Ways and
Means proposals of the year in one bill dates
from 1861. In the previous year the govern-
ment had proposed to repeal the paper duty,
and this proposal had been embodied in a bill
separate from the other budget proposals ; and
this bill the House of Lords rejected. To pre-
vent the House of Lords from in future dis-
criminating between the different budget pro-
posals, it was decided that in future they
should be all included in one bill.
Occasionally — especially under stress of war
expenditure — it becomes necessary for the
chancellor of the exchequer later in the year to
introduce a supplementary budget, and to pro-
vide further ways and means to meet additional
expenditure. This additional taxation is voted
in the same way as the ordinary taxation of the
year, though sometimes it is made retrospective,
or a double amount is placed on the last hall
of the year.
During the last twenty years — since the
system of more strict appropriation has come
into force — supplementary civil service esti-
mates have become a permanent institution,
though additional money is seldom or never
voted for them, and on balance they are (or
ought to be) met by savings on other items of
expenditure.
The nature of the sources of " supply " is de-
tailed elsewhere (see Taxation ; Customs),
but the policy that has more or less actuated
successive chancellors of exchequer since the
first quarter of the century, and its effect on the
financial resources of the nation, may be briefly
summarised. The modern era of fiscal and
financial reform dates from the time of HusKis-
SON, mainly between 1824-1828; intermittently
followed by his immediate successors, his policy
was zealously adopted and carried distinctly
further by Peel between 1842andl846. Taken
up with vigour by Gladstone in 1853, and, as
far as the principle was concerned, finally
adopted in 1860, it has since in detail been
carried ever farther and farther.
This policy, thus gradually and slowly brought
to completioa, has been as follows : first, the
abolition of all petty, vexatious, and unremuner-
ative duties ; secondly, the repeal of all prohibi-
tive, protective, differential, and discriminating
duties, and the introduction of perfect equality
and unrestricted competition between home,
colonial, and foreign goods in regard to the rate
of taxation ; thirdly, the general reduction of the
duties to a minimum, and the choice for taxation
of those articles from which the necessary revenue
can be raised most evenly, most easUy, with the
smallest cost and discomfort to the consumer
and taxpayer, and in the manner least burden-
some to trade. And, in the case of the duties '
stiU retained, for the most part to carry out the
seeming paradox, as Pitt once called it, "in-
crease by reduction" — to increase the yield of
the tax by decreasing the duty, and thus at the
same time encouraging consumption and mini-
mising fraud and evasion. In the case, how-
ever, of one branch of revenue, that namely
derived from intoxicants, these principles only
partially prevail ; such taxation being governed
by politico-moral even more than by fiscal
considerations. The practical result of this
policy has been to reduce the articles or sub-
divisions of articles on which import or export
duties were charged, from 1046 in 1841 to less
than half that number in 1846, to 400
in 1859, and to 143 in 1860. They now
number but 47, and even of these only 12
yield an appreciable revenue, the rest being
duties retained either in order to counter-
vail excise duties, or levied on articles which
bear such a resemblance to those charged with
duty that evasion and fraud would take place
BUDGET
187
if tliey were not also taxed. Staple articles of
commerce such as timber, sugar, cotton-wool,
silk, woollen goods, " fancy " goods, corn, and
other articles of food, which in early days were
either prohibited or heavily charged with duty,
now go free. Similarly, a great deliverance has
come to many important articles of home pro-
duction formerly hampered and injured by
heavy and vexatious excise duties, such as those
on glass, paper, soap, candles, printed calicoes,
and cottons. Indeed practically every article
of home production is now free except those
connected with the manufacture of intoxicants. ^
No one nowadays would probably venture
to assert that the general adoption of free trade
in fiscal matters, and the abolition of all small,
vexatious, or unremunerative duties has not been
of infinite advantage to the country ; but it may
well be argued that the policy of concentration
has been carried somewhat too far in the re-
linquishment of considerable taxation on articles
of general consumption, raised with ease and
producing considerable revenue, — such taxes,
for instance, as the "nominal" duty on corn
abolished in 1869 ; the duty on sugar abolished
in 1874, though the uneconomical reduction of
1873 made final abolition inevitable- ; and the
horse duty abolished in the same year.
But the fact was that these three duties,
probably the only duties about which any
question of expediency can arise, were relin-
quished at a time when the expenditure was
almost stationary, while the revenue was so
buoyant that the difficulty of the chancellor of
the exchequer was not, as now, to make both
ends meet, but to know what to do "with all
the money that persisted in pouring in upon
him. " Perhaps our chancellors of the exchequer,
in the heyday of their financial prosperity
between fifteen to twenty years ago, ought to
have realised, on the one hand, that the national
expenditure would increase and could not be
diminished ; and, on the other, that the
1 In 1840, according to the Report of the celebrated
Import Duties Committee, import customs duties were,
in 1838, charged on 868 articles (exclusive of subheads),
the yield from which could be divided as follows : —
17 articles produced 95 per cent . . £21,700,000
29 „ „ 4 ,, . . 899,000
144 „ „ 1 ,, . . 363,000
531 „ . . 80,000
loss, deduct
In 1888.
3 articles produced 90 per cent
3 „ „ 9 „
47 „ ., 1 ..
53
£23,042,000
5,000
£23,037,000
£18,100,000
1,800,000
200,000
£20,100,000
The 47 are principally nominal.
2 The duties on sugar were reduced in 1873 to the
moiety of what they had been in 1870. In that year
also there had been a reduction, so that they were in
1870 but the quarter, speaking generally, of what they
stood at in 1867.
"ravages of temperance " would play havoc with
one of the principal branches of the revenue.
But this they did not foresee, and hence they
lightly relinquished the many millions of
revenue that the aforementioned three taxes
would probably now be producing — taxes, two
of which at least could never be with advantage
re-imposed.
One chief result of this policy of abolition
has been, no doubt, that the income tax, intro-
duced forty-six years ago for a temporary pur-
pose, and now finally a permanent tax, is ever
more and more looked to as a source of revenue
to make up a deficiency. But, after all, the
Income Tax has the advantage of being a direct
tax, and the additional advantage of being more
or less a tax on wealth. Moreover, in con-
sequence of the relinquishment of so many
indirect taxes (to the advantage of trade and
the taxpayer), though the total gi-oss receipt
from the income tax stands at a figure which
would have astounded our fathers, the pressure
on each individual taxpayer is less than in the
old days.
A word or two may be said in reference to the
most famous of English budgets of the last
hundred years. Pitt's gi-eat budget of 1798,
wherein he unfolded his scheme for financing
the life and death struggle with France, is
memorable for the first imposition of the income
tax, and the Huskisson-Kobinson budgets of
1823-26, for the first beginning of fiscal reform.
Althorp's first budget, that of 1831, was re-
markable in that it attempted so much and
accomplished so little. The Whigs in their
abortive budget of 1841 — the first budget pro-
fessedly based on free-trade principles — proposed,
in addition to dealing with the corn laws, greatly
to reduce the protective and diff"erential duties
on the two most important articles of general
consumption — sugar and timber. Then followed
Peel's budgets,^ each more progi-essive than its
predecessor. Beginning with that of 1842,
which involved the re-imposition of the income
tax (swept away in 1816), and ending with that
of 1846, the proposals they contained, together
with the repeal of the corn laws, made the
practical adoption of free trade only a question
of years.
The Whig budget of 1851, like Althorp's of
twenty years before, and that of Lowe twenty
years later, is chiefly remembered for its
failures. In that year the House, for the
first time since the re-imposition of the income
tax, refused to renew it for a term of years, and
voted it for a single year only ; a precedent
which (except during the Crimean War) has ever
since been followed.
The free-trade budget of December 1852 — ■
3 As a matter of fact, Goulburn was chancellor of tha
exchequer, but the budgets were those of Peel ; and he
himself (as prime minister) introduced those of 1842 and
1845, as well as the bill for the repeal of the corn laws
in 1846.
188
BUDGET— BUILDING SOCIETIES
brought forward by Mr. Disraeli as chancellor
of the exchequer in Lord Derby's protectionist
ministry — marked the total collapse of the pro-
tectionist party, while it brought about the
defeat and resignation of the Government. The
following year saw Mr. Gladstone's famous
budget of 1853 which, together with those* of
1842-46, and that of 1860, formed a series of
fiscal measures which resulted in the complete
emancipation of trade from prohibitive, pro-
tective, and differential duties. The budget of
1853 dealt also with the income tax, the
chancellor of the exchequer proposmg gradually
to extinguish it in seven years. The Crimean
War frustrated the plan ; and the income tax
also surviving the subsequent attempts to ex-
tinguish it, made by the same hand, under the
scheme of 1864 and again in 1874, is now
unquestionably a permanent institution. The
budget of 1860 — also Mr. Gladstone's — was
additionally marked by the fact that it was
contingent on the negotiation of the French
commercial treaty, a treaty which was adopted,
and, to the great benefit of England and France,
remained in force for twenty years. The budget
of 1860 was followed by a succession of Glad-
stonian budgets, marked by much financial
ability. Mr. Lowe's budgets of 1869-73 were
chiefly remarkable for the extraordinary leaps
and bounds of the revenue, which enabled him
greatly to reduce taxation, as well as consider-
ably to reduce the national debt. The budget
of 1874 — the "six millions surplus" budget —
was not so far-reaching or satisfactory as it
probably would have been if the chancellor of
the exchequer. Sir Stafford Northcote, could
have had a longer time in which to consider
and develop his financial schemes. Sir Staflbrd
Northcote's three last budgets, 1878-80, were
chiefly memorable from the fact that no real
effort was made to provide a surplus of revenue
over expenditure.
The budget of 1880 (Mr. Gladstone again)
was marked by the commutation of the malt
tax into a beer duty. Under that of 1883 (Mr.
Childers) an arrangement was made for prevent-
ing any break or diminution in the annual sum
applied to the redemption of the debt, by replac-
ing on a sound and satisfactory basis the large
amount of Terminable Annuities that other-
wise would have lapsed in 1885. Under this
scheme, without any addition to the debt charge,
some 123 millions of debt were to be redeemed
in twenty years. The Liberal budget of 1886,
under which it was proposed to meet a deficit of
14 millions by the imposition of 7 millions of
additional taxation and the temporary suspension
of the sinking fund, was rejected ; and, for the
second time in the century, a defeat on a budget
was followed by the resignation of the Govern-
ment. The year 1888 was noticeable for the
reduction of all the 3 per cent stocks to 2j per
cent, a rate which was to fall to 2^ per cent in
fourteen years (see Conversion of BritIkSh
National Debt). The most important budgets
of the last 150 years are those of 1798, 1842,
1846, 1853, 1860, and 1911. By Mr. Lloyd
George's budget of 1910-1911, the Death
Duties {q.v.), first imposed by Mr. Gladstone
in 1863, were heavily increased, and, by means
of a valuation of the land throughout the
country, a foundation was attempted to be laid
on which increment arising from any increase
in its value should be taxed. This source of
revenue has, however, up to the present proved
unremunerative. The observation of J. S. Mill
was not borne in mind that the market value
of land at the time should be offered to existing
owners to obviate injustice.
[The authorities — ^historical, fiscal and financial
— that could be quoted are innumerable. Financial
works — Dowell, History of Taxes and Taxation. —
M'Culloch, writings. — Porter, Progress of the
Nation. — Levi, History of Commerce. — Tayler,
History of Taxation. — Northcote, Twenty Years'
Financial Policy. — Buxton, Finance and Politics,
an Historical Stvdy, 1786-1886. Also the speeches
of the chancellors of the exchequer (Hansard) ;
parliamentary blue-books, reports of committees
and commissions, the annual " finance accounts "
and " statistical abstracts " ; the large blue-book
published in 18&8, Public Income and Expenditure
Return ; Report of the Import Duties Committee of
I84O. — See also Bernard Mallet, British Budgets,
1887-88 to 1912-18, London, 1913.] s. c. b.
BUILDING SOCIETIES. Bmlding societies
are societies formed " for the purpose of raising
by the subscription of the members a stock or
fund for making advances to members out of the
funds of the society, upon security of freehold,
copyhold, or leasehold estateby way of mortgage"
(37 & 38 Vict. c. 42, § 13). Societies of this
nature existed for some time before they be-
came the subject of legislation. "There were
certain persons who had saved or were saving
money and were desirous of investing it at a
higher rate of interest than the usury laws
enabled them to obtain at the time, and other
persons who were desirous of either building or
buying houses for their own habitation. These
two classes came together : the persons who
had saved money or were saving money paid
it into the society, and it was lent to persons
who were desirous of building or buying houses
on the security of the houses, and on terms
which compelled the borrowers to pay a larger
sum by way of interest than 6 per cent per
annum . . . Under these circumstances the
act 6 & 7 William IV. c. 32, for the regula-
tion of building societies, was passed " (Sir
George Jessel, in re Guardian Benefit Building
Society, Law Reports, 23 Ch. Div. p. 457).
The Act of William IV. provided for the
registration of building societies and gave
them certain privileges, but the liability of the
members remained unlimited, and no corporate
rights were given to such societies (whose
BUILDING SOCIETIES
189
property was therefore required to be vested in
trustees, a circumstance causing much practical
inconvenience). The act of William lY. was
repealed by the Building Societies Act, 1874
(37 & 38 Vict. c. 42), which, together with
several amending acts, now regulates the law on
the subject. There are termxTiating and per-
manent buUding societies, the latter being of
more recent growth than the former. A ter-
minating society is one which by its rules is to
terminate at a fixed date, or when a result
specified in the same is attained ; while a
permanent society is one which has not, by its
rules, any such fixed date or specified result at
which it shall terminate. The amount of the
shares in either case is raised by periodical
(generally by monthly) subscriptions ; any
member may, on the security of freehold, copy-
hold, or leasehold property, obtain loans from
the society, in which case the amount of the
subscriptions is raised so as to provide for
interest and repayment of capital. It is a
common practice for persons to become members
for the sole purpose of borrowing. The liability
of investing members is limited to the amount
actually paid, or in arrear, on their respective
shares, while the liability of borrowing members
extends to the total amount of the subscriptions
payable by them under the particular mortgage
deed, or under the rules of the society. Mem-
bers may generally withdraw their shares on
terms specified in the rules. The societies
called Bowkett societies are terminating societies,
making advances to their members which are
repayable within a fixed time without any
interest. The rotation of the members is
determined by ballot. It is obvious that this
system gives an undue advantage to those
members who obtain advances in an early stage
of the society's progress, and this inequal-
ity has been modified by the Starr -BowJcett
societies. Every building society is regulated by
rules which must contain certain particulars
enumerated in the act of 1874. These rules
must be examined by the registrar of friendly
societies, who, after being satisfied that they
are in accordance with the requirements of the
law, grants a certificate of incorporation. The
act authorises building societies to take de-
posits and generally to obtain loans within
certain limits, it requires that every deposit-
book or acknowledgment, or security of any
kind given for a deposit, or a loan by a society,
shaU have printed or Avritten therein or thereon
the sections of the act relating to the liability
of the members, and the regulation of the
borrowing powers. Building societies may
hold land as far as it is necessary for their
purposes ; summary remedies in the county
court are given against defaulting ofiicers, and
there are special facilities offered for the
criminal prosecution of persons defrauding such
societies. On the repayment of a loan by a
member no formal reconveyance of the mort-
gaged property is necessary. Building societies
are, when necessary, wound up by the county
court of the district in a manner similar to
that directed by the Companies Acts for joint-
stock Companies. Building societies registered
under the act of 1836 were authorised to take
out certificates of incorporation under the new
act, and most of them have availed themselves
of this privilege, but some unincorporated
societies are still in existence. Besides these
there are also co-operative building societies,
which are not essentially diff'erent from other
co-operative societies. The diff'erence between
building societies and joint-stock companies
is pointed out in a very lucid manner by the
royal commissioners (whose report, published
in 1872, preceded the passing of the act of
1874). They poiiit out that, while in a
joint - stock company the leading idea is
capital, membership is the essential principle of
a building society. " In the building society
the capital is never fixed. The number of
shares is always indefinite, and the share has
no permanence. The capital is constantly
increasing by the addition of new shares, or
decreasing by the withdrawal of existing ones.
... Its membership remaining always open, it
knows no share jobbing, fattens no brokers,
and needs no settling day on the Stock Ex-
change. . . . The two forms of undertaking,
we venture therefore to think, have an equal
right to subsist, the one for the use of them
who seek to make capital, the others for those
who, having made it, seek to use it." The
antithesis of the last sentence is not quite
accurate from the economical point of view ;
it might be more correct to say that the
building society gives an opportunity to invest
savings which are gi-adually accumulating,
while the joint-stock company as a general
rule does not offer the same facilities for that
purpose ; but the main point is that the
building societies absorb the savings of a class
of investors who, as a rule, could not invest
in the shares of joint-stock companies. It is
right that societies established for this purpose
should enjoy certain facilities not accorded to
ordinary joint - stock companies, but special
care should be taken, on the other hand, that
the funds so provided should be managed by
competent, prudent, and honest persons, and
that the safety of the capital should be con-
sidered of greater importance than a high
return of interest. Recent judicial decisions
have established the principle that the directors
of building societies have, in the absence of any
special rules, the same freedom of action as the
directors of financial companies. This principle,
though it may be in accordance with the words
of the statute, does not harmonise with the
ideas expressed by the commissioners, which
the Building Societies Act was intended to
190
BUILDING SOCIETIES— BULL OF BOEGIA
embody, and the interference of tlie legislature
would be clearly desirable. The following
figures illustrate the growth of building societies.
Those of 1870 are derived from the com-
missioners' second report, and are partly based
on estimate ; later figures are from the annjial
reports by the chief registrar of friendly societies
(building societies). Some societies do not make
returns, or only return certain items. The num-
ber of these is added in square brackets :
Ko. of
Members.
Annual
Societies.
Beceipts.
England .
1888
2444
682,866
[1940]
£19,480,489
[2146]
1908
1691
581,026
39,898,872
England
[1665]
[1665]
and "Wales
1912
1503
573,212
[1474]
21,407,405
[1474]
,^1870
88
20,685
1,000,000
iS88
50
8,968
[37]
403,617
[44]
Scotland -
1908
138
30,970
[132]
681,292
[132]
1912
119
27,814
617,062
[114]
[114]
flS70
17
3,836
no estimate
1888
51
12,310
[44]
531,751
[44]
Ireland
1908
90
10,618
[67]
445,034
[67]
1912
81
8,908
330,769
[49]
[49]
Due to
Liabilities on
investing
Loans and
Total Assets.
Members.
Deposits.
ri870
£9,000,000
£6,000,000
£17,000,000
1888
34,705,963
14,734,511
61,218,823
Eng. -
[2157]
[2157]
[2157]
19081
42,154,539
24,929,500
70,957,594
[1665]
[1665]
[1665]
J9121
43,073,924
16,464,309
62,126,159
ri870
823,282
474,916
1,500,000
1888
729,970
242,198
1,011,961
Scot. J
[45]
[45]
[45]
19081
1,430,092
377,584
1,933,374
[132]
[132]
[132]
. 19121
1,429,763
399,183
1,962,133
f 1870
419,984
147,139
no estimate
1888
680,816
248,314
991,514
Tt'pI
[4]
[4]
[4]
"®^- ■ 19081
764,775
275,206
1,150,973
[67]
[67]
[67]
1 19121
581,575
212,254
883,499
1 1908 and 1912, holders of shares. 1912, number of
societies making returns : England, 1474; Scotland, 114 ;
Ireland, 49.
Number of Societies whose returns show amounts
exceeding £100,000 under any of the heads named
[England and Wales].
Annual
Beceipts.
Due to
investing
Members.
Liabilities
on Loans
and
Deposits.
Total
Assets.
1870
1888
1908
10
26
33
8
44
64
8
17
24
13
64
94
It will be seen that in England the number
of members has decreased, as also the number
of societies, while the business done has in-
creased. The figures seem to point to the fact
that a much wealthier class of shareholders
has come in since the passing of the act. In
Scotland the figures have followed the same
variations. In Ireland the progress is by no
means uniform. The act of 1894 required all
the societies established after 1856 to be incor-
porated under the act of 1874. e. s.
BtJLAU, Friedkich von (1805-1859), a
German economist of note, Mas born at Freiberg ;
he studied at Leipsic, where he became, in 1833,
professor of philosophy, and in 1840 of political
science, filling the latter chair till his death.
He held from 1837 the censorship of the periodi-
cal press. He took a prominent part in the
propagation of the doctrines of Adam Smith in
Germany. His principal economic writings are
— Encydopedie der Staatswissensehaften, 1832 ;
Der Stoat und der Landhau, 1834 ; Der Staat
und die Industrie, 1834 ; HaTidhuch der Staats-
wirthschaftslehre, 1835 ; Die Behorden in Staat
tend Gemeinde, 1836. He was a writer of no
mean ability, though taking only a second rank
among the economists of his time. "He has
not," says Roscher, "the keen analysis of
Hermann, the learned thoroughness of Kait,
nor the exact observation and creative fancy of
Von Thijnen. Even such of his books as were
intended as manuals for instruction have the
tone of essays or good leading articles ; and he
devotes himself rather to the discussion of the
practical questions of the day than to the
examination of fundamental principles." He
advocated the most unlimited freedom of the
individual in the economic sphere, and insisted
that the state must not interfere with com-
petition, or prescribe to citizens the way in
which they should pursue their own interest.
He thought the most important office of
political economy was to reverse the mistaken
policy of the past, which impeded the opera-
tion of natural laws. He was, in particular,
strongly in favour of removing the legal fetters
which, in his time, in Germany restricted the
alienation of land. (Roscher, Nat. Okon. in
Deutschland, p. 902). j. k. I.
BULL. A term usually applied to a buyer
on borrowed money. The term on the stock
exchange distinguishes the speculator for the
rise from the pure investor. The latter buys a
stock, pays at the date of settlement ; the
bull pays a rate of interest in order to " con-
tinue" his bargain till the next settlement.
"Bull" is the opposite to a "Bear" (see
Bear; Continuation or Contango.) a. e.
BULL OF BORGIA. A bull issued in 1493
by Pope Alexander VI. professing to grant to
the crown of Castile and Aragon all lands dis-
covered, or to be discovered, beyond a line drawn
from pole to pole, 100 miles west from the
Azores — the crown of Portugal to have all lands
eastward of such line. All lands previously
occupied by any Christian king were excepted.
The object of the bull was to confer a monopoly
BULLION— BULLION COMMITTEE
191
of trade with the new world on Spain and
Portugal. J. E. 0. M.
[For copy of the bull, see Bullarium Magnum
Romanum (Luxembourg, 1727).]
BULLION. The precious metals Gold and
Silver {q.v.) are generally spoken of as bullion
when at or near the standard fineness accepted
at the mints of the different countries of the
world (see Standard). The term is sometimes
applied, with some qualifying epithet, to ores
containing only a very small portion of the
precious metals, which are called "dore bullion"
or "base bullion," etc. A statement in the
report of Mr. J. P. Turnbull, director of the
U.S. mint, on the production of the precious
metals in the United States, pp. 14-15 (1887),
will explain this. The reference in it is to
certain ores found in Mexico more or less
argentiferous, the value of which "has been
generally estimated in Mexico by the assay of
the precious metals, or of silver to the exclusion
of the minute proportion of gold " contained
in the ore ; the base metals not entering into
the estimated value. The report then refers to
** the small tenor of gold extracted from dore
bullion." The metallic compound is then
termed "dore bullion" or " base bullion " ac-
cording to the proportion of the metals of
which it is composed — mainly silver or lead,
but the term bullion is properly applicable to
the precious metals alone (see Billon).
[See Eeports of the Deputy Master of the Mint,
London. — Reports of the Director of the Mint,
United States, Washington. — Reports on the Pro-
duction of the Precious Metals in the United States,
Washington, etc.]
BULLION COMMITTEE, Report of. The
Report of the Select Committee of the House of
Commons on the High Price of Gold Bullion,
ordered to be printed 8th June 1810, deserves
notice from (1) the circumstances which led to
the appointment of the committee ; (2) the
information and opinions expressed in the
Report ; (3) the controversy which the publica-
tion of the Report called forth ; and (4) the
influence which resulted on the financial policy
of the country. (1) The note circulation of
the Bank of England had expanded from an
average of about 10 to 11 millions in 1795 to
nearly 20 millions in 1809. Specie payments
having been suspended 1797, and the paper
circulation having been increased, the foreign Ex-
changes became unfavourable to this country,
and the paper circulation was depreciated in com-
parison with gold (average depreciation of value
of currency 13-5 per cent 1810. — Mushet) ;
gold in bars being at the price of from £4 : 10s.
to £4 : 12s. per oz. in the early months of 1810,
at that date about 15|- per cent above the
mint price of £3 : 17 : lo| per oz. (2) The
Report expressed the opinion that the divergence
then observable between the gold and the paper
was caused by an over-issue of the latter, and
that it was "difficult to resist the inference
that a portion at least of the great fall which
the exchanges lately suffered must have resulted,
not from the state of trade, but from a change
in the relative value of our domestic currency."
The remedy then suggested was "That the
system of the circulating medium of this Country
ought to be brought back, with as much speed as
is compatible mth a wise and necessary caution,
to the original principle of Cash payments at the
option of the holder of Bank paper." (3) A
sharp controversy was excited by these resolu-
tions of the committee. The directors of the
Bank of England had stated to the committee
"a doctrine, of the truth of which they pro-
fessed themselves to be most thoroughly con-
vinced, that there can be no possible excess in
the issue of Bank of England paper so long as
the advances in which it is issued are made
upon the principles which at present guide the
conduct of the Directors, that is, so long as the
discount of mercantile Bills is confined to paper
of undoubted solidity, arising out of real com-
mercial transactions, and payable at short and
fixed periods " (Report, High Price of Gold
Bullion, § 3). The Report of the Bullion Com-
mittee was printed 20th June 1810, the day
before the prorogation, hence it was not con-
sidered till the next session, when it "was made
the gi'ound for a set of sixteen resolutions,
moved in the House of Commons 6th May
1811, by Mr. Horner, the chairman of that
committee ; the last of these resolutions being h\
pursuance of the recommendation in the Report,
to make it imperative on the Bank to resume
cash payments at the end of two years. A
counter set of resolutions Avas moved by Mr.
Vansittart ; the third of them being the
memorable one * That the promissory notes of
the Bank of England have hitherto been and
are at this time held to be equivalent to the
legal coin of the realm. ' The rival resolutions
of Mr. Vansittart, including this last, which,
has been a standing topic of ridicule ever since,
were canied on the 9th of May, by a majority
of 151 to 75" (Tooke, History of Prices, vol.
iv. p. 99). The vote on this occasion was
doubtless influenced far more by a belief that
it was inexpedient to bind the Bank to resume
cash payments in so short a period, irrespective
of the question whether peace were restored at
the end of that time or not, than by any con-
viction as to the truth of the opinion which
Mr. Vansittart maintained, contrary to the
evidence given before the committee. (4) The
influence of these proceedings on the financial
policy of the United Kingdom was considerable,
as they had great weight with Sir R. Peel in
1844, when introducing the Bank Act of that
year. He referred to the appointment of this
committee in his speech, 6th May 1844, as
follows — "In 1810 men of sagacity observed
that the exchanges had been, for a considerable
192
BUONARKOTI— BUREAU OF LABOUR
period, unfavourable to this country, more un-
favourable than could be accounted for by the
balance of trade or the monetary transactions
of this country." Sir R. Peel, after defining
the pound sterling and the standard, continued
his observations on the Measure of Value «,nd
the coinage, stating "that in using the word
money, I mean to designate by that word the
coin of the Realm and promissory notes, payable
to bearer on demand," addiag, " I think experi-
ence shows that the paper currency, that is, the
promissory notes payable to bearer on demand,
stands in a certain relation to the gold coin and
the foreign exchange in which other forms of
paper credit do not stand. There are striking
examples of this adduced in the Report of the
Bullion Committee of 1810." Sir R Peel pro-
ceeded to argue, basing his theory on facts
shown to exist during a period of suspension of
specie payments, contrary, as he admitted, to
"the high authority of Adam Smith and of
RiOAKDO," that " convertibility into coin at the
will of the holder " was * ' not an adequate security
against the excessive issue of promissory notes."
Hence we may trace the theory on which Sir
R. Peel based the act of 1844, to the interpre-
tation he put on the Report of the Bullion Com-
mittee (see Bank Note ; Bank of England ;
CUEEENCY DoCTEINE, ctc.)
[Report, together with minutes of evidence and
accounts, from the Select Committee on the High
Price of Gold Bullion (ordered by the House of
Commons to be printed, 8th June 1810). For the
history of the controversy mentioned see The High
Price of Bullion a Proof of the Depreciation of
Bank Notes, D. Ricardo, London, 4th ed,, 1811,
with Appendix, the most complete edition. In
this pamphlet Ricardo showed conclusively that
the value of the note was depreciated from excess
of issue. — Practical Observations on the Report of
the Bullion Committee, Chas. Bosanquet, London,
1810 ; the ablest of the pamphlets in opposition
to the Report. — Reply to Mr. Bosanquet' s Practi-
cal Observations on the Report of the Bullion Com-
mittee, D. Ricardo, London, 1811 ; a complete
answer, based on a knowledge both of the theory
and the practice of the subject. — The Question
respecting the Depreciation of the Currency t^ated
and Examined, by William Huskisson, M.P.,
London, 1810, and included in Private Reprints,
by Lord Overstone, 1857, with other "Select
Tracts on Paper Currency." — History of Prices,
1792-1856, Tooke and Newmarch, London, v.d.,
see particularly vols. i. and iv., specially interesting
.as contemporary history. — Thoughts and Details
on the High and Low Prices of the Thirty Fears
from 1793 to 1822, London, Thomas Tooke, 2d
ed., 1824 ; to a great extent incorporated with the
preceding, but also interesting. — A Series of Tables
Exhibiting the Gain and Loss to the Fundholder
arising from the Fluctuations in the Valu^ of the
Cwrrency from, 1800 to 1821, Robert Mushet,
London, 1821 ; the standard work of reference on
this subject.]
BUONARROTI, Philippe (1761-1837), com-
munist conspirator and writer, was bom at
Pisa. He became a student of literature, and
was for a time in high favour at the Tuscan
court. His enthusiasm for the French Re-
volution led, however, to his banishment.
He retired to Corsica, and served French
interests so well there that when he came to
France the Convention created him a French-
man by decree. He associated himself with
the Jacobins, and became one of the chief
leaders of the conspiracy of Babeuf {q.v.).
For this he was condemned to transportation,
but the sentence was never canied out, and,
after imprisonment and detention in several
places, he was allowed in 1806 to leave France.
He established himself first at Geneva, and after-
wards in Belgium, where he supported himself
by composing and teaching music. In 1828
he published at Brussels his Conspiration pour
V6galit6 dite de Babeuf, suivie du proems auquel
elle dovma. lieu et des pieces justijicaiives, etc.,
which contains the most complete scheme for
the actual establishment of communism, as dis-
tinguished from the description of a mere ideal
state, that has ever been put forward. The
author ascribes the whole scheme to Babeuf,
but there can be little doubt that this is to a
great extent a literary fiction, and that the
scheme is mostly his own (see Communism).
He returned to Paris in 1830.
A letter from him to J. Bronterre O'Brien com-
paring the schemes of Babeuf and Owen is quoted
in Holy oake's History of Co-operation, vol. i. p. 258.
A translation of his Conspiration was published by
O'Brien in 1836, and had some circulation among
the Chartists (Holyoake, Hist, of Co-operation, vol.
i. p. 44). E. c.
BUQUOY, Georg Franz, Count, was born
at Brussels 1781, and died at Prague 1861.
Proficient in several sciences, Buquoy en-
deavoured to apply mathematics to political
economy in his —
Theorie der Nationalwirthschaft, 1815 ; supple-
mented by Da^s national-udrthshaftliche Princip,
1816. — Erlduterung einiger eignen Ansichten,
1817. — Begrilndung des Begriffs von reellem
Werth, 1819. — (The author's ethical and poli-
tical principles are set forth in SMzze, 1819. —
His views on currency, in Einauf echten National-
credit fundirtes Geld, 1819). — See Wiu-zbach,
Biographisches Lexicon des Kaiserthums Oster-
reichs. p. t. e.
BUREAU OF LABOUR. In large industrial
communities the establishment of a department
of government dealing specially with the
numbers, movements, and condition of the
working classes has been recommended for two
reasons : (1) in the interest of the state itself,
to furnish information which may guide the
legislature ; (2) in the direct interest of the
working classes, that employers and employed
may be brought together, and workers may go
where they are most wanted and best paid (see
Bourse du Travail). The existing bureaus
BUREAU OF LABOUR, UNITED STATES— BUREAUCRACY
193
confine themselves to the first object. The
second seems better secured by well-organised
trades societies than by a bureau of labour,
which might be used against them in labour
disputes. Even a purely statistical bureau, if
its figures are to be full and trustworthy, must
be above suspicion of collusion with employers ;
and this requisite seems best fulfilled by the
appointment of a representative of the working
classes on the staff of officials. England since
1886 has had a "labour correspondent," under
the board of trade ; and the present holder of
the office was a well-known trades unionist.
SAvitzerland has not only a bureau of labour, but
a labour secretary of state, in close connection
with the trades societies of the republic.
Germany has no separate labour bureau, but
the collection of labour statistics is carried on
by the general statistical bureau with great
carefulness, in view of the administration of the
workmen's insurance acts. The experiment is
being tried on a large scale in the United
States (see below), where there is a national
bureau at Washington (established 1884), and
more than twenty of the states have also estab-
lished bureaux, the earliest being JSIassachusetts
(1869) and Pennsylvania (1872). The forma-
tion of an International Bureau of Labour was
suggested in connection with the Labour Con-
ference held at Berlin in March 1890 ; but the
project remains as yet unrealised. For recent
developments of Labour Bureaux see Unem-
ployed, Appendix.
[See Report, Board of Trade, Relation of Wages
in certain Industries to the Cost of Production
(T. H. Elliott), 1891.] J. B.
BUREAU OF LABOUR IN THE UNITED
STATES. Histonj. — In 1869 the state of
Massachusetts established a bureau of statistics
of labour. In 1872 Pennsylvania organised a
bureau of industrial statistics. Neither of them
seems to have been owing to any demand on
the part of labour organisation. But after the
great railroad strikes of 1877, bureaus were
established in rapid succession in Ohio (1877),
in New Jersey (1878), in Illinois, Indiana, and
Missouri (1879). A little later the powerful
organisation known as the Knights of Labour
made the establishment of such bureaus one of
their "demands," and they were organised in
New York, California, Michigan, and Wis-
consin (1883) ; Iowa and Maryland (1884) ;
Kansas and Connecticut (1885) ; Maine, Min-
nesota, Colorado, North Carolina, Rhode Island,
and Nebraska (1887). A national bureau of
labour was established 18th January 1885,
which became the department of labour in
1887. Its head (commissioner of labour) is
not, however, a cabinet officer.
The main ohject of all these bureaux is to inves-
tigate the condition of the labouring class. The
Massachusetts statute, which has been followed
in most of the other states, reads as follows :
VOL. T.
"The bureau shall collect, assort, arrange, and
present in annual reports . . . statistical details
relating to all departments of labour in the
Commonwealth, especially in relation to the
commercial, industrial, social, educational, and
sanitary condition of the labouring classes," etc.
In many of the states [e.g. N. J., Penn., Ind.,
111., Wis., la., Kan,, and Neb.) the bureau is
also a bureau of industrial statistics, and is
expected to collect and publish information
relating to the chief industries of the state.
In Wisconsin and Missouri the commissioner
of labour is also the chief factory inspector, and
in Illinois the board of labour commissioners
appoint the inspectors of mines.
The financial resources of most of the bureaus
are extremely meagre ; the officers consist of a
chief and one or two clerks ; and only a few
hundred, or at most a few thousand, dollars are
allowed for the work of gathering statistics.
The legal powers are not extensive ; for
although in many states penalties are prescribed
for refusal to give the information demanded
by the bureau, yet these penalties are seldom
enforced. Most of the bureaus simply send out
circular schedules to employers of labour, a
large proportion of which are never answered.
The scientific value of the reports of the
state bureaus is very unequal. Those of Massa
chusetts (twenty -three in number) form an
extremely valuable series, and contain the best
information we possess in regard to the condi-
tion of American labour. The New Jersey and
Illinois reports also contain valuable informa-
tion. The others are of little consequence.
The national bureau (department) of labour
is better equipped than any of the state bureaus.
It undertakes special investigations and has
published reports on The Depression of Trade
(1886) ; Strikes and Lockouts (1887) ; Convict
Labour (1888) ; Marriage and Divorce (1889) ;
Working- women in Great Cities (1889) ; Cost
of Production (1890) ; and Condition of Rail-
road employes (1890).
[Reports of the various bureaus (generally
annual, in some cases biennial). — Proceedings of
convention of the chiefs of labour bureaus (annu-
ally since 1883). — Political Science Quarterly,
vol. i. 1886, pp. 45 seq. and 438 seg.]
R. M.-S.
BUREAUCRACY. The administration of
many branches of business, public and private,
by functionaries centralised in bureaux (whence
the name is derived), is the rule in most of the
important countries of Europe. It is less the
case in Great Britain and Ireland than on the
continent, — but the complex character of the
requirements of modern life, and especially the
aggregation of large masses of the population
in cities, have called, in recent times, for
increased superintendence in matters of health,
police, education, etc. W. Bagehot, in his work
on The English Constitution, describes the advan-
o
194
BUKEAUCRACY— BURKE
tages a7id the defects of a liiglily organised
bureaucracy very clearly. The necessity for
organisation requires no explanation — on the
other hand, as Bagehot remarks, the defects of
bureaucracy are well known : " It is an inevit-
able defect, that bureaucrats will care more
for routine than for results ; or, as Burke put
it, that they will think the substance of business
not to be much more important than the forms
of it." Their whole education and all the
habit of their lives make them do so. Men
so trained must come to think the routine of
business not a means but an end ; to imagine
the elaborate machinery of which they form a
part, and from which they derive their dignity,
to be a grand and achieved result, not a work-
ing and changeable instrument.
An over -organised "bureaucracy tends to
under-government, in point of quality ; it tends
to over-government in point of quantity." The
risk is that it comes to be considered that ** the
functionaries are not there for the benefit of
the people, but the people for the benefit of the
functionaries." Yet, though this risk is well
known — the weakness of separate individuals
when dealing with the organised forces of
powerful companies and corporations, has been
felt to be so dangerous and the necessity for
providing for the health, the protection, and
the instruction of the masses, the feeble, and
the young, to be so great, that the tendency of
the day is towards increasing the power of
official superintendence and inspection. In the
words of JEV0Ns(7%e State in Relation to Labour,
p. 166), " there can be no royal road to legisla-
tion in such matters. We must consent to
advance cautiously step by step, feeling our
way, adopting no foregone conclusions, trusting
no single science, expecting no infallible guide.
"We • must neither maximise the functions of
government at the back of quasi-military
officials, nor minimise them according to the
theories of the very best philosophers. We
must learn to judge each case upon its merits,
interpreting with painful care all experience
which can be brought to bear upon the matter."
The gradual growth of this opinion is character-
istic of modern thought. H. Sidgwick (bk. iii.
of his Principles of Political JEconomy, ch. ii.
"The system of Natural Liberty considered in
relation to Production "), while weighing carefully
the advantages and disadvantages of govern-
mental interference, observes " first, that these
disadvantages are largely such as moral and
political progress may be expected to diminish ;
so that even where we do not regard the inter-
vention of government as at present desirable,
we may yet look forward to it, and perhaps
prepare the way for it. And, secondly, even
where we reject governmental interference, we
may yet recognise the expediency of supplement-
ing or limiting in some way or other the results
of private enterprise." Again, on the cognate
subject of Laissez-Fatre, we find Cairnes,
in his essay on " Political Economy and Laissez-
faire," Essays in Political Economy, Theoretical
and Applied, saying, "the maxim of laissez-
faire has no scientific basis whatever, but is at
best a handy rule of practice, useful perhaps
as a reminder to statesmen on which side the
presumption lies in questions of industrial
legislation, but totally destitute of all scientific
authority." Compare with this the sterner
teaching of J. S. Mill {Principles of Political
Economy, bk. v. ch. xi., "Limits of the Pro-
vince of Government") — " Even if the govern-
ment could comprehend within itself, in each
department, all the more eminent intellectual
capacity and active talent of the nation, it
would not be the less desirable that the conduct
of a large portion of the afiairs of society should
be left in the hands of the persons immediately
interested in them. The business of life is an
essential part of the practical education of a
people, without which book and school instruc-
tion, though more necessary and salutary, does
not suffice to qualify them for conduct, and for
the adaptation of means to ends" (see Laissez-
Faire).
BURET, Antoinb Eugene, born at Troyea
1810, died»at Paris 1842. He wrote in the
Courrier franqais, and the Journal des econom-
istes. But what, during his short career, won
for him chiefly the esteem of the economic world,
is, notwithstanding the manifest tendencies the
book contains towards the opinions of the then
rising socialist school, his work, De la Mishre des
classes lahoriev^es en Angleterre et en France (2
vols, in 8vo). This book is the expansion
of an essay which obtained for the author the
sum of £100 — the half of the quinquennial prize
(F^lix de Beaujour), in 1840 awarded by the
Acaddmie des Sciences morales et politique ;
it is written with vigour, and in a conscien-
tious spirit, and is attractive to read, though
the author, by representing exceptional cases
as the general rule, has drawn too gloomy a
picture. Buret also revised, in conjunction
with J. A. Blanqui, the translation of Smith's
Wealth of Nations by G. Garnier, in the
"Collection Guillaumin." a. c. f
BURGH, a word used in Scotland for the
same purposes as the wcrd Borough {q.v.) in
England. e. s.
BURGHER. See Citizen.
BURIDAN", Jean, rector of the university
of Paris in 1327, alive in 1358, a celebrated
philosopher, discusses the "commutation of
moneys " and interest in his —
Qucestiones super decern libros ethicorum Aris-
totelis. F. T. E.
BURKE, Edmund, born 1728 or 1729, died
1797. A rich vein of economic wisdom,
mixed with other precious materials, runs
through the whole vast tract of Burke's
political writings. The mine is deepest, oi
BURKE— BUSCH
195
at least the ore purest, in the Thoughts on
Scarcity, dated 1795. Here Bui'ke enunciates
general principles worthy of the Wealth of
Nations, though perhaps not derived from
that source, if it be true, as Prior relates, that
Adam Smith described Burke as "the only
man he had met with who thought as he did
on the chief topics of political economy with-
out previous communication." Bm-ke says,
" Labour is a commodity like every other, and
rises or falls according to the demand." The
rate of wages thus determined "has no direct
relation" to the price of provisions. "The
balance between consumption and production
makes price. The market settles, and alone
can settle, that price. . . . Nobody, I believe,
has observed with any reflection what market
is without being astonished at the truth, the
correctness, the celerity, the general equit}^,
with which the balance of wants is settled."
Burke extols "the laws of commerce which are
the laws of nature, and consequently the laws
of God." He condemns the "political canting
language " of those who speak compassionately
of the "labouring poor." Similar reflections
occur in the third letter on a Regicide Peace.
There Burke says "to force any market is of
aU things the most dangerous." And again,
"the love of lucre is the grand cause of pros-
perity to all states." Just views as to the
nature of foreign trade are to be found in
several places. Two Letters to Gentlemen in the
City of Bristol denounce the restrictions on
Irish trade. In a letter on a ])roposed Irish
Absentee Tax, Burke says, "No man living
loves restrictive regulations of any kind less
than I ; at best, nine times in ten, they are
little better than laborious and vexatious
foUies." The fallacies of the mercantile theory
did not ensnare Burke. "To state the whole
of the foreign import as loss is exceedingly
absurd." Wealth "consists in the stock of
useful commodities as much as in gold and
silver" {Observations on a Late State of the
Nation). However, Burke seems not alto-
gether to disapprove of the laws restricting the
commerce of America. "I am sure they are
still, in many ways, of great use to us ; and in
former times they have been of the greatest"
{Speech on Conciliation with America). In-
deed he appears to treat the Balance of
Trade as not absurd (Third Letter on a Regicide
Peace). He is no bigoted preacher of laissez-
faire. He says : — " It is one of the finest
problems in legislation . . . what the state
ought to take upon itself to direct by the
public wisdom, and what it ought to leave,
with as little interference as possible to indi-
vidual discretion. Nothing, certainly, can be
laid down on the subject that will not admit of
exceptions, many permanent, some occasional "
{Thoughts on Scarcity). In fine, Burke never
forgets that wealth is but one element of well-
being, and not to be separated from "the great
contexture of the mysterious whole."
The Thoughts and Details on Scarcity were
published posthumously in 1800, with an inter-
esting preface by the editors. The groundwork of
the TJioughts and Details consists of a memorial
addressed to Pitt in 1795 ; with which the editors
in 1800 have incorporated fragments of a letter
addressed to Arthur Young concerning " rural
economics." Tlie Thoughts and Details are to be
found, along with the other writings referred to
above, in the collective editions of Burke's works ;
of which there are several, the best perhaps being
that of 1852, "Works and Correspondence" in
eight volumes. f. t. e.
BURLAMAQUI, Jean Jacques {h. 1G94,
d. 1748), professor of law at Geneva, has some
striking remarks about the dependence of price
on rarity and utility in his Ll^mens du di'oit
Naturel, 1775 (part iii. ch. xi.) The sub-
stance of this work appeared in another form
under the title Principes du droit de la Nature
et des Gens, with matter added by the editor,
Prof, de Felice, 1766 ; new edition, 1820.
The remarks of Burlamaqui on value have been
quoted by Walras, lillements de Vl^conomie
Politique, 2d ed. Legon xvi. f. y. e.
BURTON, J. HILL. See Hill Burton, J.
BtJSCH, JoHANN Georg (1728-1800), was,
as Roscher says, the best representative of
liberal tendencies among the German eclectic
economists in the last thirty years of the 18th
century. Materials for the history of his life
are supplied by his autobiography {Ueber den
Gan^ mein£S Geistes u/nd meiner Thdtigkeit).
He was bom in the territory of Liineburg, and
accompanied his father in 1731 to Hamburg,
where he resided, except dm-iug his student-
years at Gottingen and occasional absences, till
his death. He is described as an excellent
man, disinterested, independent, frank, modest,
and industrious, and a good citizen, devoted to
the interests of his adopted city. He was pro-
fessor of mathematics in the local gymnasium,
and conducted a trade academy at Hamburg
which celebrated its centenary in 1867. He
had a very high reputation in Germany ; LiJDER
speaks of him as " our greatest political writer,"
but this is a somewhat exaggerated estimate,
Roscher characterises him as "a cultivated,
experienced, and right-minded man, disinclined
to all doctrinaire one-sidedness and practical
extravagance." He is an original wTiter, but
has not the art of orderly arrangement and clear
exposition. His views were formed rather by
experience and observation than by the study
of books. The economic theorist whom he
most valued was Steuart ; he shows a certain
captiousness and even bitterness towards Adam
Smith, whom he considered to be popularly
over-rated. He is, however, more favourable
to Free Trade than most of his German prede-
cessors, and protests against the "hot-bed culti-
vation " of certain branches of production at the
196
BUSCHING— BY-LAW
cost of the community. He unfortunately fell
into the mistake (indicated by the title of his
principal work, Ahhandlung von Geldumlauf,
1780) of regarding economic phenomena with
reference not to wants and their satisfaction,
but to the circulation of money, a view which
dominates the Avhole circle of his ideas. * This
confuses much of his reasoning, obscures the
deeper and more essential facts of economic life,
and tends to lead him back into the errors of
mercantilism, from which, accordingly, he is
only partially free. His most permanently
valuable writings are probably his treatise on
universal commerce {Entwurf einer Geschichte
der merkiviirdigsten Welthdndel neuerer Zeit,
1781) and his history of the trade of Hamburg
(Gesch. der Hamhurgisdmi Handlung, 1797),
in which he shows a thorough familiarity with
the course of trade and the commercial relations
of diflFerent countries (Roscher, Gesch. der Nab.
Oek. in Deutschland, p. 559). j. k. i.
BUSCHING, Anton Friedrich (1724-
1793), was one of the two most distinguished
German statisticians of the 18 th century,
AoHENWALL being the other. Like the latter,
he belongs, as regards his economic opinions,
to the more liberal branch of the mercantilist
school. The work on which his reputation
chiefly rests is his VorhereituTig zur Europdischen
Lander- und Staatskunde, 1759. He rendered
an important service by initiating in his Neue
Erdheschreihung the new "politico-statistical"
method in geography, which supplies full infor-
mation on the natural resources and capabilities,
the industry and trade, the political system
and general culture of each of the countries
described. j. k. i.
BUTEL - DUMONT, George Marie, was
bom at Paris in 1725, and died towards the
end of the 18th century. By profession he
was an advocate, and was appointed secretary
to the French embassy at St. Petersburg.
His works are chiefly concerned with colonial
and commercial history. He is said to have
^sisted GouRNAY in translating Child's New
Discourse of Trade (1754). He translated and
enlarged the Discourse on Trade of John Gary
(Essai sur I'^tat du Commerce d' Angleterre,
2 vols. 1755). The best known of his works
is the TMorie du Luxe, ou traiU dans lequel on
entreprend d'itablir que le Luxe est un ressort
non-seulement utile, mais mSmeindispensablement
nicessaire A la prospirite des lEtats, two parts,
1771. This does not, however, merit the praise
sometimes bestowed upon it ; it is a superficial
apology for luxury without any originality,
attacking the " Tableau hieroglyphique " of the
economists, and their theory of the detrimental
influence of luxury (pt. ii. p. 36), ridiculing
the definite sense they give to it, though con-
fessing their merits in other respects (p. 39).
His other works are : Memoires historiques
sur la Louisiane, 17 5S.—Histoire et Commerce
des Colonies Angloises dans VAmirique Sep'
tentrionale, 1755. — Histoire et Commerce des
Antilles Angloises, 1758. — Acte du Parleijient
d' Angleterre, connu sous le nom Acie de Naviga-
tion, traduit de I'Anglois, 1760. — Conduite des
Frangais par rapport d la Nouvelle-JiJcosse traduit
de I'anglois (of Jeffreys), 1765. — And Recherches
sur V administration des terres chez les Remains,
Paris, 1779. (See M'Culloch, Literature, pp. 34, 46,
223. ) A Traite de la circulation et du credit, is
sometimes ascribed to Butel-Dumont, Amsterdam,
1771. But the author of this tract is Isaac de
Pinto, who, like Butel-Dumont, had written an
Essai sur le luxe. s. B.
BUTLERAGE. A commuted toll or tax,
paid in specie, from about the year 1302 on-
wards, at a fixed rate upon every cask of wine
imported into England by alien traders — part
of the additional duties termed the new or
small customs, as opposed to the ancient or
great customs granted in 1275 — nova sive parva
custwrn/i — as opposed to antique sive magna
custuma. This duty, as such, ceased to be
levied 5th July 1809, by the Customs Con-
solidation Act, 49 Geo. IIL c. 98, § 36. The
duty was in commutation of the rights of the
king's butler (see Prisage).
[Dowell, History of Taxation, 2d. ed. vol. 1.
p. 80; voL^ii. p. 237.— H. Hall, The Customs
Revenue of England, ed. 1885, vol. ii. p. 92.]
BUYING IN. A transaction known only to
the stock exchange, where, if a member haa
sold stock, shares, or other securities, which he
fails to deliver on a stipulated date, the buyer
is at liberty to purchase from any other mem-
ber of the stock exchange, and to claim against
the original seller the difference between the
two prices, supposing the latter to be higher
than the original contract price. This is the
process : the buyer who claims stock, employs
the official broker of the stock exchange to
"buy in" against the member failing to deliver.
That is, open tenders of stock are invited ; and
he who sells must be prepared to deliver im-
mediately. A. E.
BY-LAW, BYELAW. A regulation of a
municipal or other local authority, or of any
corporation, for the management of its internal
affairs. The word is also, but much less fre-
quently, used in the sense of additional or
secondary law. It is probably derived in the
same manner as the archaic word byr-law, which
is still to be found in some dialects in the
original sense of law or custom of a Township
or Manor, "byr" (Swedish and Danish = by)
being the old Norse word for dwelling-place,
township, etc. The power of municipal cor-
porations to make by-laws is now regulated by
the Municipal Corporations Act, 1882, § 23, and
that of local authorities under the Public Health
Act, 1875, by§§ 182-188 of that act; those made
by the former bodies may be disallowed by order
in council ; those made by the latter must be
confirmed by the local government board
BY-PRODUCT— CABET
197
The Local Government Act of 1888 gives county-
councils the same power of making by-laws in
relation to their county as borough councils
have in relation to their borough (§ 16).
There are several statutes dealing with the
power of railway -companies to make by-laws,
among which the Railway Regulation Act,
1840 (§§ 7-9) and the Companies' Clauses Act,
1845 (§§ 124-127) are the most important.
The by-laws made by railway companies may
be disallowed by the board of trade. e. s.
BY-PRODUCT. A by-product is one which
is obtained incidentally, together with the pro-
duct which it is the main object of a particular
process to secure. Such products are met with
in almost every industry ; those connected with
metallurgy will alone be considered, as they will
serve for the purpose of general illustration. It
is, however, often difficult to separate the results
of a particular operation or process into the main
and the fty-products. For instance, in the con-
version of coal into coke by certain modern
methods, the tar, ammonia, benzol, and other
organic substances are collected as by-products,
but their value is very gi-eat when considered
in relation to that of the coke which is the main
product of the coke ovens. In the case of the
metallurgical treatment of certain kinds of ii'on
pyrites, or sulphide of iron, the mineral, which
contains small quantities of copper, silver, and
gold, is treated mainly with a view to the con-
version of the sulphur it contains into sulphuric
acid. The residue may then be considered to
be a poor ore of copper, gold, and silver, but it
is rich in iron, and is useful for certain metal-
lurgical purposes. The iron can, however, only
be considered to be a by-product, as it certainly
would not have been possible to treat profitably
the iron pyrites with a view to extract the iron
it contained.
In the metallurgy of copper, gold, silver, lead,
nickel, and cobalt, the associated metals are
extracted as by-products, and during the ex-
traction of silver from certain ores of lead and
copper, small quantities of gold pass into the
silver, and conversely a small quantity of silver
is always associated with gold. The separation
of a small amount of one precious metal from a
large mass of another in which it is hidden may
be effected very cheaply, and both the gold and
the silver, in the respective cases, must be con-
sidered to be by-products. It has been estim-
ated that no less than 500,000 ounces of silver
are annually extracted from gold, the silver
being entirely a by - product, but, on the
other hand, it would be a very difficult question
to determine how far the 30,000,000 ounces of
silver obtained by the desilverisation of lead
ores, and the 7,000,000 ounces obtained during
the treatment of copper ores, are by-products.
The whole question of by-products is so exten-
sive that it is not possible to do more than
indicate its general nature.
[The specialimportanceof the subject in reference
to the production of the precious metals, and in
particular of silver, is shown in great fulness of
detail in the Memorandum by Professor Roberts
Austen, F. R. S. , Chemist to the Royal Mint, on the
Cost of Production of Silver, laid by him before
the Gold and Silver Commission, 1886.]
w. R.-A.
BY-PRODUCTS, Theory op Yalue of.
By-products may be considered as a special
case of Joint-Products (g.f.) ; that in which
one of the joint-products is of relatively small
value. This incident does not invalidate the
general theory that the prices of joint-products
are such that (1) the supply of each commodity
just meets the demand ; (2) the net ad-
vantages of the producer are equal to those of
any other occupation between which and the
occupation under consideration there exists
Industrial Competition. It is conceivable in-
deed that the gains incident to the by-product
may be so small as not to exercise any influence
in determining the flow of capital and labour to
the occupation. Since the mobility of labour
is subject to considerable friction, a very small
motive which is not sufficient to overcome
friction may produce not so much a small effect
as none at all. Upon this view the prices of
by-products would be determined only by the
first of the conditions above stated. Their
value would be altogether market as dis-
tinguished from normal value. This hypothesis
hardly admits of verification. The ** equation
of net advantages" in different occupations
(Marshall, Economics of Industry) is not in
general fulfilled so exactly that it is possible to
determine whether small items are, or are not,
taken account of. It is at least safe to say that
it is even more difficult to predict price in the
case of a by-product as here defined than it is
(Sidgwick, Pol. Econ. bk. ii. ch. ii. § 10) in the
case of joint-products generally. f. y. e.
CABET, Etienne, born at Dijon 1788, died
at Saint Louis (Missouri), 8th November 1856.
The son of a working man, he received in his first
youth an education to correspond with his posi-
tion in life. He soon, however, broke through
these early trammels, and at the age of twelve
attended the lectures of his fellow townsman,
Jacotot, well known for his method of instruc-
tion, his own invention, which at the time was
greatly in vogue. Here Cabet made such pro-
gress that he was able at fourteen to enter, as a
teacher, the Lycee of Dijon. Public instruction
appeared at that time to be the occupation he
was likely to follow ; but changing his course,
he turned first to medicine, then to the study
of the law, passed, 1812, as doctor en droit, and
198
CABET
took a distinguished position among tlie bar of
the department of the Cote d'or. He became,
1815, founder and director of the FMiration
Bourguignonne for the defence of the national
territory, and mixed himself up with the party
of the Carbonari {q.v.) He appears to* have
derived his republican convictions from his
father, who was a fiery patriot. About 1820-22
he fixed himself at Paris, and was specially
appointed director of the Vente Suprenu — the
name given by the Carbonari to their political
meetings. The Revolution of 1830 naturally
found him in the first line of its adherents, and
urging strongly, but in vain, the convocation of
the Assemblee Constituante. Abandoning this
cry, he consented, 1st August 1830, to be
appointed general secretary to the ministry of
justice, then, a few weeks later, Procureur-g4n4ral
in Corsica. Having offered himself as a candi-
date at the election for the legislature, he pub-
lished a statement of his opinions which the
government looked on as an attack on established
institutions. His old comrade in carbonarism,
M. Barthe, then minister of justice, dismissed
him from his office. Two months later he was
elected deputy for Dijon, and immediately made
himself conspicuous among the democratic opposi-
tion. He published, among other things, a His-
toire de la revolution de 1830 ; for this he was
tried before a jury which acquitted him. After
escaping a second time, when tried before
another judge, he was less fortunate on a third
occasion ; and, in 1834, was condemned to two
years' imprisonment for an article in which he
accused the government of July of watching
with anxiety for the moment when it could
cannonade Paris. After a moment's delay he
fled, first to Brussels, then to London, whence
he did not return till 1839, when the period of
his penalty had expired. He composed, in the
last-named city, several historical compilations
more or less revolutionary in tone, such as his
JSistoire de la revolution fran^aise, in which the
most advanced adherents of the "mountain"
were glorified, and their acts excused if not
approved. Up to this date politics had absorbed
him ; he was converted to communism by read-
ing the Utopia of Sir T. More ; and he shortly
became the most accredited high priest of that
school of Socialism, though his communism
was not so thorough-going as might have been
logically inferred from his principles.
He proposed, in the first place, a transitional
period of fifty years between the actual regime
and that which he dreamed of. The acts of the
administration and the laws especially were to
be framed so as to permit the definitive establish-
ment of communism at the end of a half century.
Successions to property, gifts, and transfers
were to be severely scrutinised. Taxation
was no longer to be levied on the poor, nor
on objects of primary necessity, nor on labour.
Wealth and superfluity, on the other hand, were
to be subject to Progressive Taxation. The
pay of working people was to be fixed by law,
and in a sense favourable to them. An amount
of 500 millions frs. (20 millions sterling) was to
be employed in supplying occupation to the
working classes and dwellings for the poor.
The army was to be suppressed as far as possible
— the men dismissed from the ranks being in-
demnified and employed on public works till
the whole of the force could be disbanded.
Marriages among the working classes, the in-
struction and education of the rising generation,
were to be encouraged and aided by an annual
charge of 100 millions frs. (4 millions sterling)
on the budget.
When the half century mentioned above had
gone by every one of the age of sixty-five was
to be exempt from work, and provided with a
retiring allowance. At this date also complete
communism was to begin — at least Cabet's
communism. As it would be impossible to
attain direct government on account of the ex-
tent of the country, resort was to be had to
representative government, liberty of the press
was to be absolutely suppressed, one single
official journal being allowed to appear.
Work, according to his plan, is obligatory,
according to strength and capacity, for all — for
men from eighteen to sixty-five — for women from
seventeen to fifty. "Work is, besides, so agree-
able in Icaria, as this fortunate country is
named, that no one is ever lazy there. All
working people are separated according to pro-
fessions, and then employed in common work-
shops. Hence beyond question an abundance
of products would result, marvellously diversi-
fied, and necessarily adapted to the various
wants of the community, — made with the mini-
mum of effort, rather only with pleasure, for
such is the nature of work in the communism
of Icaria, — and divided equally, regard being
had to age and sex, among all the citizens, at
least up to the point first of what was necessary,
then of what was useful, finally of what was
agreeable. What is the necessary, the useful,
the agreeable ? Cabet forgot to define all this.
But the family ? Our communist is not able
to suppress that, he maintains it. Less logi-
cal than Plato, he thodght he might abolish
property and respect the rights of the family.
Children were to know who was their father and
their mother ; to the mother the education of
her child was absolutely entrusted up to five
years old. It was only after this age that the
state took charge of it to make of it a complete
communist. Concubinage was forbidden, vol-
untary celibacy was branded as an act of in-
gratitude worthy of suspicion. All these
attractive things and many more are to be found
in a stout volume of from 500 to 600 pages
called the Voyage en Icarie, which Cabet wrote
in London, and published in Paris first in 1840.
This ran through many editions.
I
CABET— CADASTRAL SURVEY
199
The Voyage en Icarie is a romance into the
web of which the whole of Cabet's peculiar
system is interwoven. Everything is mixed
up in it — political reflections, administrative
decisions, the cleansing of the streets side by
side with the laws concerning the organisation
of labour. Municipal reforms come side by side
with the solution of social problems. The city
of Icaria is described with the utmost detail, and
is, as may be supposed, a model city such as is
not beheld in this individualistic world. Every-
thing in it is polished, clean, and dusted.
It is perfect down to the minutest detail ; " the
very dogs (p. 44) cause no scandal." The
deputies who are late are to come in through a
door specially set apart for them, and provided
with a bell so that their entrance should be
marked to their more exact colleagues. All these
charming arrangements inflamed the imagina-
tions of those unhappy wretches who trusted their
lives to Cabet's system. For after having dis-
seminated, ever since 1841, through the journal
the Populaire, his dangerous doctrines, Cabet,
to whose good faith we desire to do full justice,
convinced in his own mind of the advantages to
be derived from his system, bought a million
acres of land in Texas, and sent forward sixty-
nine trusty followers to carry out the Icarian
doctrines in this domain. This first exodus
took place 3d February 1848. The colonists
reached New Orleans the end of March, and hear-
ing there the news of the revolution of 24th
February at Paris, hesitated for a moment to go
forward, but finally resolved to make their way
to the appointed rendezvous. This first attempt
tm-ned out most disastrously, and the disciples
of Cabet, decimated by disease, made up their
minds to return to the capital of Louisiana,
marking their way with the corpses of many of
their number, who sank victims of fatigue and
disease. On reaching New Orleans they met
Cabet, who had quitted Paris December 1848
to join them. The interview was stormy ;
bitter reproaches were addressed to the high
priest of communism, who, however, was not
disconcerted. In March 1849 the Icarians,
numbering two hundred and eiglity, including
the new-comers, and having this time Cabet at
their head, turned their steps to Nauvoo in
Illinois, where they met with fewer trials than
in Texas.
Meanwhile Cabet had been condemned to
two years' imprisonment on a charge of fraud.
There was obvious exaggeration in this charge.
Cabet was a fanatic, not a rogue. He was in-
dignant at the accusation ; returned for a short
time to France ; appealed against the sentence,
and had the good fortune to see it reversed by
the court of appeal in Paris, 26th July 1851.
On his return to Nauvoo he found his colony
making progress ; the numbers mounted up to
five hundred in 1855.
Divisions, however, existed in this population,
which had few bonds of coherence. Many times
a separation was thought of. At last it came ;
Cabet left Nauvoo at the head of some two
hundred of his partisans, and soon after died at
St. Louis. The cause of the s})lit appears to
have been that Cabet desired to induce the popu-
lation to submit to an over-severe discipline,
analogous to that of some convents of the Middle
Ages. The colony of Nauvoo continued to exist,
surroimded by difficulties of many kinds, up to
1880, after which date we have lost sight of it.
With respect to Cabet himself we may add,
to complete what has been said as to his opin-
ions on matters of a social character, that he is
distinguished from communists of other schools
in that he gives a quite peculiar religious form
to his opinions. He connected his communistic
convictions with the earlier ages of the church,
and wrote on this subject several books, of which
the most important has for its title the words,
Le vrai ehristianisTne suivant Jdsus- Christ (1846),
and for its conclusion, " Le communisme c'est le
christianisme " (see Communism). a. c. f.
[For a fuller account of the Icarian colony in
America, see Dr. Shaw's Icaria (1874) and Nord-
hoff s Communistic Societies of the United States
(1875), pp. 333 et scq^.]
CABLE TRANSFER. A telegraphic order
from one banker to another to make a payment
to a person or firm indicated in the cablegram.
Cable transfers are most frequently used in the
commercial intercourse between England and
the United States of North America. Those
bankers who are in the habit of transacting this
class of business take very elaborate precautions,
by means of codes and keywords, to avoid fraud.
An ingenious chancellor of the exchequer a few
years ago remarked that the revenue from bill
stamps had fallen off on account of the frequent
use of cable transfers, but this can hardly be
borne out by the facts, as the bills which were
formerly remitted by the persons who now make
their payments by means of cable transfers are
now used by the bankers to cover their friends
for the payments they effect on their telegraphic
order. e. s.
CADASTRAL SURVEY. A survey made
for the purpose of compiling a public register of
the quantity, value, condition, and ownership
of the real property of a country. But the
term is loosely applied to every official survey of
the surface of a country. Thus Domesday
Book and the Ordnance Survey have alike been
referred to as, in a sense, cadastral surveys. The
purposes served by such surveys include the
determination of the sums to be contributed to
the revenue, or to any other common fund, by
individual owners and occupiers of property, or
by the community resident within any prescribed
area ; the registration of boundaries and of
changes of ownership ; the division and sub-
division of a country into administrative and
representative areas ; and the arrangement o/
200
CADET— CAGNAZZI
schomes for public works, or drainage and other
local improvements.
In the United Kingdom the general survey
known as the ordnance survey was intended at
first for purely military purposes, and, in par-
ticular, to provide plans for purely military
purposes (hence the name the ordnance depart-
ment) ; but as the real value of the work and
the various uses which it might serve were per-
ceived, the scheme expanded, and in England
and Wales it is now proceeding on the following
scale : Towns having 4000 or more inhabitants
are surveyed on a scale of 1*500 of the linear
measurement, which is equivalent to 126*72
inches to a mile, or 41f feet to an inch ; parishes
(in cultivated districts) 1*2500 of the linear
measurement, equal to 25*344 inches to a mile,
or 1 square inch to an acre ; counties on a scale
of 6 inches to a mile ; kingdom, a general map
1 inch to a mile. The maps issued by the sur-
vey are largely used for evidencing the particular
properties referred to in legal and other docu-
ments, for planning public and private works,
and for the delimitation of boundaries. But
the absence of any information as to the value
of the property delineated — an essential ele-
ment in a true cadastral survey — makes the
ordnance survey inapplicable to purposes of
taxation, and the system of land registration
and transfer which such a survey renders pos-
sible has not yet been fully organised in the
United Kingdom.
In France, cadastral survey has, since 1790,
been a matter of great importance owing to the
prominent position of the contribution foncUre in
the financial system of that country. The
French literature of the subject is proportion-
ately extensive. In Germany a fairly accurate
cadastral survey has (1861-1864) been com-
pleted.
Adam Smith ( Wealth of Nations, bk. v. chap,
ii. art. i.) gives some examples of cadastral
surveys, and appears to think that the labour
and expense they entail is out of proportion to
their value. The point of view from which he
is considering the subject is, however, that of
taxation alone. The labour and delay incident
to an adequate cadastral survey in England
have been regarded as a fatal practical objection
to schemes like J. S. Mill's for appropriating
the Unearned Increment of rent.
[See report of the progress of the ordnance survey
to the 31st December 1886 {Parliamentary Paper
[c. 5005]). — Dictionnaire de V Administration
Frangaise, par M. M. Block (2d ed., 1881). —
Recueil Methodique des lois, decrets, reglements
(be. sur le Cadastre de France (Paris, 1811). — Du
Cadastre et de la Limitation des Heritages, par F.
II. V. Noizet (Paris, 1%QI).—Denkschrift iiber die
Ausfuhrung des Oesetzes vom 21st May 1861,
hetreffend die anderweitige Regelung der Grund-
siewer (Berlin, 1865).] T. H. E.
CADET, FjtLix, born at Paris 1827, died at
Viroflay near Paris 1888. After brilliant pro-
gress in his university studies, he commenced
his career as a professor, lecturing first on his-
tory, then on philosophy. He gave, 1866-67,
with great success, a course of lectures on politi-
cal economy, before the Soci6t6 Industrielle, of
Reims ; and divided with Horn, in 1866, the
L6on Faucher prize, given by the Academic des
Sciences moi'ales et politiques {Pierre de Boisguil-
hert, pricurseur des ^conomistes, 1870, in 8vo).
He then undertook a series of conferences (dis-
cussions) at Rheims, also under the wing of the
Societe Industrielle of that city, the object of
these being to examine curiously the lives and
criticise the works of Boisguilbert, Vauban.
Quesnay, Turgot, Smith, and Franklin.
After 1870 he gave himself up principally to
teaching, a career which he pursued with great
success, and died honorary inspector-general of
public instruction. A. c. f.
CAGNAZZI, LuoA Samuele, born at Alta-
mura, in the province of Bari, 1764, died 1852.
By profession originally a teacher of mathe-
matics, he was appointed, 1806, to a professor-
ship in this study in the university of Naples.
His life was full of trouble ; having been con-
cerned in political intrigues, he had to flee
from Naples and, after wandering, nearly always
on foot, through Italy and Switzerland, and
after being imprisoned more than once, he had
to seek refage in Florence. He returned to
Naples under Murat's government. After the
change of government, he was elected deputy
for Bari, and was President of the chamber on
the 15th May 1848, when it was dissolved by
the troops. To escape capture he fled again and
returned to Florence, where he fell ill. Feeling
his end at hand, and wishing not to die in
exile, he obtained his pardon from the King of
Naples, through the intervention of the Grand
Duke of Tuscany. He deserves mention for
having written on parallel Curves, in a time
when this method of demonstration had some
novelty. As an economist he wrote, besides an
Fssay on the x^opulation of the Realm of Naples,
Saggio sulla popolazione del regno di Puglia ne'
passati tempi e nel presente (Napoli, stamperia
Trani, 1820 and 1839, 2 vols, in 8vo), what
was perhaps his most important work, in 1813,
a little manual of political economy, Elementi
di Economia politica (Napoli, stamperia S.
Giacomo), and, 1827, a pamphlet on La Scienza
della economia politica (Venice). Some years
earlier he had published a manual of statistics :
Elementi dell' arte statistica, Napoli, stamperia
Flautina, 1808, 2 vols. In 1839 he published
his latest statistical work : Sullo stato della
Statistica nel Beame di Napoli al cadere del
secolo XVIII. e comin/^idre del XIX. Napoli.
He desires government interference whenever
practicable, and wrote, in particular, a book on
ancient and modern economical principles
{Analisi delV economia privata e pubblica degli
antichi, relativamente a quella dei modcrni,
CAIRNES
201
1^
Xapoli, stamperia della soc. Filomatica, 1830)
to point out that modem principles are pre-
ferable ! M. p.
CAIRNES, John Elliot (1823-1875), was
bom at Castle -Bellingham, County Louth.
His childhood was spent at Drogheda, whither
his father, who was a large brewer, moved tAvo
years later. He was educated first at Kingstown
and afterwards at Chester ; and, as his teachers
did not consider that his abilities fitted him for
college life, he was, on leaving school, placed in
his father's counting-house. Here he remained
three years, developing a taste for study, and
gi'adually finding business grow more and more
irksome. Eventually his father made him a
smaU allowance, upon which he lived at Trinity
College, Dublin. He took the degi-ee of B.A.
in 1848, and that of M. A. in 1854. He subse-
quently studied law, and was called to the Irish
bar in 1857, but he does not appear to have ever
practised. During this period he also studied
chemistry, engineering, and political economy,
and engaged in journalistic work, his favourite
topics being social and economic questions affect-
ing Ireland. In 1856 he competed successfully
for the Whately professorship of political econ-
omy in the university of Dublin, and from this
time political economy became the study of his
life. He held the professorship for five years,
the full period during which it was tenable. It
was a condition of the tenure that the professor
should publish annually at least one lecture ;
and accordingly in 1857 he published the whole
of his first course of lectures under the title of
The Character and Logical Method of Political
Economy. (A second edition appeared in 1875,
shortly before the author's death.) In 1859,
while still holding the Whately professorship,
he was appointed by Mr. Cardwell, then Irish
secretary, professor of political economy and
jmisprudence at Queen's College, Galway. In
1859-60 he published in Fraser's Magazine and
the Edinburgh Eeview three papers on the efiects
of the Australian and Californian gold dis-
coveries. In 1862 appeared The Slave Power,
a work that grew out of his last course of Dublin
lectm-es. This book, which was dedicated to
J. S. Mill, contained a philosophical analysis
of the characteristics of slave labour, and of the
social and economic effects of slavery, and was
at the same time a defence of the cause of the
Northern States in the American Civil War.
It was an immediate success, and exerted a
powerful influence upon English opinion. A
second edition was called for in the following
year.
From this time Prof. Cairn es enjoyed a high
reputation as an economist. The period in
question was one when political economy, and
the Ricardo-MiU school in particular, was in
t]ie ascendant. In many departments of the
Qcience the doctrines taught by Mill were gener-
ally accepted as complete and final. It was to
this dominant school that Caimes belonged, and
amongst contemporary English economists he
came to be ranked second only to Mill himself.
In 1860 he married Eliza Charlotte Alexander,
sister-in-law of his gi'cat friend Prof. Nesbitt.
In 1865 he moved to tlie neiglibourhood of
Loudon, and in the following year he was ap-
pointed professor of political economy at Uni-
versity College, London. He did not, however,
resign the Galway professorship till 1870, it
being allowed him to appoint a deputy to lec-
ture in his place during the last three years of
his tenm-e. He was, at the time of his moving
to London, a confirmed invalid, subject to
attacks of rheumatic gout of constantly iucreas-
ing severity. Gradually he was reduced to a
state of complete physical helplessness, and his
sufferings were gi'eat. His intellectual vigour
was, however, in no way impaired, and he re-
tained to an extraordinary degree his accustomed
energy and cheerfulness. He is spoken of by
those who knew him as possessing great conver-
sational gifts and admirable humour ; and whilst
himself cut off from active political life, he con-
tinued to take the strongest interest in current
politics. He was an intimate friend of J. S.
Mill, and also of Prof. Fawcett and IMr. L. H.
Courtney. Through them and others his politi-
cal influence was considerable, espscially on
Irish questions. Prof. Fawcett has himself put
on record the great reliance that he placed on
Cairnes's political judgment, and the frequency
with which they discussed cun-ent political
questions together. Cairnes had always been a
strong advocate of united education in Ireland
(see his Letter to J. S. Mill on " University
Education in Ireland," 1866), and it is said
on the best authority that he was the unseen
centre of the operations that led to the defeat
of Mr. Gladstone's Irish University Bill in 1873.
The state of his health compelled him in 1872
to resign his post at University College, and on
his retirement the honorary title of Emeritus
Professor Avas conferred upon him. In the
following year he received from the university
of Dublin the honorary degi-ee of LL.D. In
1873 he published a volume of Political Essays,
about half of which is taken up with Irish
questions, and also a volume of Essays in Poli-
tical Economy, Theoretical and Applied. The
latter volume contained the ' * Essays on the
Gold Question " already referred to, and other
essays that he had written for various periodicals
in the course of the preceding fourteen years.
In 1874 appeared Some Leading Principles of
Political Econ,omy newly Expounded, a work
which is usually regarded as his most important
contribution to economic literature. He died
on 8th July 1875, after gi-eat suffering, borne,
for many years, with extraordinary fortitude.
He left a widow and three children.
After MiU's death in 1873, Cairnes occu-
pied in general estimation the foremost place
202
CAIRNES
amongst English economists, though it may be
doubted whether his subsequent influence upon
the development of the science has been as great
as that of his contemporary Jevons. His work
in economics belongs to three departments of
economic inquiry broadly distinguishable frqm
one another, namely (1) the logic of political
economy, (2) the investigation and interpreta-
tion of contemporary economic facts, (3) econo-
mic theory.
(1) The Logical Method of Political Economy
is an admirably precise and clear exposition of
the province and method of economics from the
point of view of the Ricardo-Mill school, and it
has long been regarded as the authoritative
text-book of English political economy so far as
its logic is concerned. Cairnes urges with great
force that political economy is properly concerned
with what is, not with what ought to be, and
that its principles are therefore theorems of
fact, not rules of conduct. It falls into line
accordingly with theoretical sciences such as
astronomy and physiology, not with practical
arts such as the art of medicine or the art of
legislation. The method of study appropriate to
the science is held to be the Deductive Method,
and the ultimate premises of political economy
are found to consist in a few simple facts of
human nature taken in connection with certain
physical properties of the soil and man's physio-
logical constitution. The body of doctrine thus
established is in itself abstract and hypothetical,
since the forces taken into account are not the
sole, although they are by far the most import-
ant, forces determining the phenomena of wealth.
Hence in the application of economic laws a
constant appeal to facts is necessary, in order to
discover and allow for the effects of disturbing
causes, that is, for the modifications that happen
to be introduced in particular instances by the
minor influences aff"ecting economic phenomena.
Cairnes's whole treatment of the subject is con-
servative in tone, and he has no sympathy either
with those who, like Cliffe Leslie, advocate the
use of the historical method in political economy,
or with those who, like Jevons, regard the
science as essentially mathematical in character.
(2) The best examples of Cairnes's method of
dealing with contemporary economic problems
of a concrete kind are to be found in the
economic chapters of the Slave Power, and in
the Essays on the Gold Question. In both these
cases he was fortunate in selecting topics of
peculiar interest at the time when he wrote,
and he discussed them with such originality,
lucidity, and force, as necessarily to command
attention. His treatment of the problems is,
however, of more than merely temporary value ;
and in particular his conclusions in regard to
the general economic characteristics of slave
labour, and the conditions essential in order that
such labour may be temporarily profitable, are
exceptionally good instances of established econ-
omic doctrines, resting mainly on an Inductive
Method. The Essays on the Gold Question, th ough
open to criticism in certain respects, may, in
regard to style, be taken as models of clear and
well-arranged exposition. They deal with the
eff'ects of the Australian and Californian gold
discoveries, and the most striking of them is
perhaps that which treats of the "course of
depreciation." Cairnes's theory is that whilst
an increased supply of gold will raise the prices
of different classes of commodities and services
with unequal rapidity, there is in the apparent
irregularity nothing capricious or abnormal.
He holds, on the other hand, that the movement
is governed throughout its course by economic
laws, and that it is possible broadly to determine
the order in which different kinds of things will
be affected. The working out of this theory
is exceedingly acute and suggestive ; and the
statistical verification that Cairnes offers of his
theoretical anticipations may be taken as an
example of his work as a statistician.
(3) The improvement of economic theory in
general accordance with the doctrines of Mill
and his predecessors is given as the main
purpose of the Leading Principles of Political
Economy newly Expounded. This work was
not intended to constitute an exhaustive treatise
on economic science. It may rather be regarded
as a critical commentary on Mill's Principles oj
Political Economy. The chief topics discussed
are Supply and Demand, the analysis of
Cost of Production, the Wages Fund theory,
Trade Unions, International Trade and
International Value. It is impossible
in the space at our disposal to give even
the briefest outline of Cairnes's views on
the above questions. His method of treat-
ing them is nearly always ingenious and subtle.
The wages fund theory, for instance, as re-
suscitated by him, is a far more complex and
ingenious doctrine than that which Mill first
formulated in his Political Economy and after-
wards repudiated. Cairnes's theory is that
wages are paid out of capital, and that, given
the nature of the prevailing industries, the
whole amount expended in wages necessarily
bears a definite relation to a nation's total
capital. In further working out the theory, he
lays great stress upon the law of the tendency
of profits to a minimum, and, in fact, assumes
that profits are already at or within a hand's
breadth of the minimum. Little note is taken
of the distinction between profits and interest.
The laws regulating wages are therefore made
to depend ultimately on the laws regulating the
accumulation of capital.
Cairnes is emphatic in his recognition of the
existence of non-competing industrial groups.
"No doubt," he says, "the various ranks and
classes fade into each other by imperceptible
gradations, and individuals from all classes are
constantly passing up or dropping down ; but
CAIENES— CALL
203
while this is so, it is nevertheless true that the
average workman, from whatever rank he be
taken, finds his power of competition limited
for practical purposes to a certain range of
occupations, so that, however high the rates of
remuneration in those which lie beyond may
rise, he is excluded from sharing them." This
is in itself not much more than a restatement
of a passage in Mill's chapter on the differences
of wages in different employments. Much more
prominence is, however, given to the doctrine
by Cairnes, especially in its bearing on the
theory of normal value ; and it has hence come
to be particularly associated with his name.
While the Leading Principles exercised a very-
stimulating influence upon economic discussion
in England, the doctrines laid down in it cannot
be said to have met with anything like general
acceptance, even amongst those economists who
belong, broadly speaking, to the same school as
Cairnes himself. On the whole, the effect of
the book was more destructive than construc-
tive, for it helped to shake faith in the finality
of the Ricardo-Mill doctrines. Cairnes tended
to exaggerate the degree of divergence between
Mill and himself, and the net result of his
criticism was to impair Mill's authority to a
much greater extent than he can himself have
anticipated.
It has been said that as a controversialist
Cairnes was deficient in intellectual sympathy,
and the charge must be allowed. With the best
intentions, he often fails to convey to his readers
a fair idea of the real meaning of the doctrines he
is combating. A striking instance of this is to
be found in his treatment of Jevons's theory of
the relation of value to utility. The theory in
question is based entirely upon the distinction
between total utility and final degi-ee of utility,
and yet, while criticising Jevons's views some-
what severely, Cairnes never once refers to this
distinction. He confesses himself unversed in
mathematics, and to this may perhaps be attri-
buted both his misunderstanding of Jevons, and
also a certain characteristic looseness of thought
in several cases where quantitative notions are
involved. He analyses cost of production, for
instance, into effort and Abstinence, which are
in themselves incommensurable quantities, with-
out ever seeming adequately to realise the neces-
sity of reducing these incommensurables to terms
of some common unit. True to the views ex-
pressed in his earliest work, he always showed
great confidence in the validity of deductive
reasoning in economics, and he was never afraid
of pushing his theories to their logical conclu-
sions. We have a remarkable instance of this
in his working out of the wages fimd theory,
where he does not shrink from the paradox that
an increase in the supply of labour will cceteris
paribiis diminish not merely the average rate of
wages, but actually the whole amoimt expended
in wages.
Cairnes will always be remembered as at once
one of Mill's most distinguished disciples, and
one of his most vigorous critics ; and his works
are likely to retain on their own account an
important place in the history of economic
literature. All that he wrote has a striking
individuality, and he expounds his views with
a literary skill and a persuasive force that it
would be difficult to surpass.
[See Articles in the Tivies for 9th July 1875, by
Mr. L. H. Courtney. — In the Fortnightly Review
for August 1875, by Professor Fawcett. — In the
Encyclopcedia Britannica, by Professor Adamson.
— In the Dictionary of National Biography, by Mr.
Leslie Stephen. — Clifle Leslie, Essays IV. aud
VI., pp. 41 and 60.] ' J. n. k.
CAISSE. French word for (1) a chest where
money is kept ; (2) the cashier's office or desk
in a commercial or banking establishment ; (3)
the money in hand ; (4) the cash book or the
cash account ; (5) an establishment where
money is administered, e.g. Caisse de depots,
Caisse d' amortisation. e. s.
CALL. This is an Option {q.v.) and an
option is usually worth something. On the
stock exchange there are dealers in puts and
calls (see Put and Call) ; a call meaning the
privilege of calling for a specified amount of
stock bonds or shares at an arranged price at a
specified date in advance. Calls extend from
one day to three months and even longer.
Thus, the agreement may bo that a buyer of a
call, in January, gives to the seller 1 per cent
on £10,000 Egyptian unified bonds for the
privilege of calling for the delivery of these
bonds at the end of February. The price usu-
ally taken is the actual quotation plus interest,
or (to use the stock exchange phrase) continua-
tion, rates which may accrue in the interval.
We will say the specified stock is worth 80 in
the middle of January, and to this price is
added three fortnights' rates of continuation or
interest at j per cent per fortnight, so bringing
up the call price to 80|. If, in the meanwhile,
the buyer of the call has been able to sell this
amount of the stock at anything above 80|,
the difference represents his profit on the opera-
tion against which has to be set his first outlay
of 1 per cent.
Call is also used in connection with joint-
stock companies and loans which are not fully
paid up at the time of issue. For the conveni-
ence of subscribers it is usually arranged that
the amounts paid shall be, on application, say
5 per cent of the amount, on allotment, 10 per
cent, and the remainder is paid by degrees
according to the dates of the "calls." Often,
also, it is arranged that only part of the nominal
capital shall be paid up, the remainder not to
be called up without the sanction of the share-
holders. In the case of the City of Glasgow
Bank, in which the liability of shareholders and
trustees of shareholders was "unlimited," the
204
CALONNE— CALVIN
calls continued until many contributors had
paid up to the utmost farthing of what they
possessed. Limited and reserved liability acts
have put some limit to this terrible, because
indefinite, risk. A. E.
CALONNE, Charles Alexandre de,
bom at Douai 1734, died in Paris 1802. Ori-
ginally a magistrate, he became, 9 th November
1783, comptroller-general of the finances, which
office he held till 8th April 1787, and in which
he proved himself singularly incompetent. The
commencement of his official career, however,
at least in those points which were concerned
with the chamber of discount, la caissed'escompte,
was successful enough ; but before long the
treasury, under his direction, became an insti-
tution only kept going by expedients. The
fertility of his pen dazzled him ; he considered
difficulties as solved the solution of which was
only deferred. Under his ministry the first
assembly of Notables was convened. Having
emigrated to England when the Revolution
broke out, he returned to France in 1802, and
died there a few months afterwards.
He successively published : Correspondance de
Necker et de Calonne (1787, in 4to). — Requite au
iJot (London, 1787, in 8vo). — R^onsede Calonne
vL I'icrit de Necker (London, 1788, in 4to). —
Lettres de Calonne au Roi, 9 fevrier et 3 avril,
1789. — Note sur le memoire remis par Necker au
comitS de sviisistance (London, 1789). — De Vital
de la France tel qu'il pent et tel quHl doit itre
(London, 1790). — Observations swr les finances
(London, 1790, in 4to). — Esquisse de Vetat de la
France (1791, in 8vo). — Tableau de V Europe
(1795, in 8vo). — Des finances publiques de la
France (London, 1797, in 8vo). a. o. f.
CALVIN, Jean (1509-1564). The name of
this illustrious theologian rightly finds a place
in an economic dictionary. His writings stand
in the same relation to the Reformation as
those of Aquinas to the Middle Ages. The
clearest and wisest thoughts of the Reformers on
political, social, and economical questions are
to be found in his works. He was qualified
in no common measure to form just conclusions
on these subjects. A profound lawyer, con-
versant with ancient and modern history,
familiar with the state of society in different
countries, engaged habitually in the discussion
and settlement of questions of government,
administration, law, and police, he combined
theoretical with practical knowledge in an
unusual degree. Added to these qualifications
were a sagacity, a historical insight, and an
expository and dialectical power rarely equalled.
Calvin's writings consist of his Institutes,
the greatest theological product of the Reforma-
tion, his Commentaries on Scripture, his letters,
and some polemical and theological tracts.
These, coupled with information furnished by
the records of Geneva, are the authorities for
his views on economical questions. His
opinions may be best discussed under the
following heads (1) church and state, (2) pro-
perty and related questions, and (3) usury.
1. Calvin regards church and state as two
separate and independent institutions. The
state exists for man's temporal, the church for
his eternal welfare. Each has its own officers
and organisation. Neither should intrude into
the sphere of the other : each should assist the
other. All citizens are subject to both. The
clergy are not exempt from the jurisdiction of
the state. The church inflicts spiritual
penalties only. Calvin was the first to dis-
tinguish the church from the state in such a
way that both became independent powers,
possessing an inherent jurisdiction. Up to his
time the state had been subordinated to the
church, or the church merged in the state.
This view of the separateness and autonomy of
the church and state has been of immense
indirect effect on political economy. It has
fostered the spirit of freedom : it has done
justice to man's secular interests : it forms the
foundation for the modern movement in favour
of the separation of church and state. Such
a separation was, however, far from Calvin's
thoughts : on the contrary, he instituted the
closest alliance between church and state.
Magistrates perform sacred and legitimate
functions. They must vindicate both tables
of the law. Tyrannical magistrates are to be
endured, but no obedience is due to commands
at variance with God's will. Tributes and
taxes are the legitimate income of princes : but
their revenues are not so much private as public,
the " blood of the people which it is inhuman
not to spare." Alike in church and state the
one supreme ruler is God (Instit. iv. 20).
2. Calvin saw clearly that the existence of
Property was morally necessary. If there were
no such thing as property there would be no
test of justice and integrity (on Numb, xxxi,
28). The Libertines of his age advocated a
community of goods, drawing their favourite
argument from the practice of the primitive
church recorded in Acts ii. 44 ; iv. 32. Calvin
wrongly denies that such a community of
goods ever existed. He contends that the
community which prevailed had reference ex-
clusively to the wants of the poor : that the
surrender of their property was not made by
all : that it did not embrace all their posses-
sions, and that all did not receive equal shares.
He is as opposed to the exaltation of voluntary
poverty as he is to a community of goods. It
is an ordinance of God that some should be
richer than others. All men are not com-
manded to sell all. The rich young man of
the Gospel was covetous and was bidden to
sell all for his soul's sake. But the farmer sins
who, forced by no necessity, sells the farm by
which he supports his children (on Matt. xix.
16). Experience and observation had taught
Calvin the importance of Trade anc' Commerce,
CALVIN
205
and he was not slow to defend their lawfulness
and value. He knew that Poverty arose when
trade fell off, and hence at a memorable con-
juncture in the social history of Geneva he
proposed to set up the weaving of cloth and
velvet as a means of preventing poverty. His
advice was taken, and for many years Geneva
was famous for its manufactures of cloth and
velvet. It has been too hastily inferred from
this circumstance that Calvin was favourable to
the " industrial ideal " of society. No passages
can be quoted which prove that such was the
case. It is unquestionable that he was ready
to do all he could to augment the j^rosperity
of Geneva, but his ideal was moral rather than
industrial. Luxury he condemned as sinful.
He was a strenuous upholder of Sumptuary
Laws. (For particulars see St'dhelin, i. 342.)
But his legislation regarding the colour and
shape of clothes, adornment, and so forth,
was not conceived in an illiberal temper.
He was equally opposed to those who would
limit men's use of earthly goods to the bare
necessaries of life, as to those who would allow
them to live as they pleased (InsHL, iii. 10).
Calvin put down idleness and begging as
immoral, but for those in real poverty he made
admirable provision. To care for the poor Avas
in his view the duty of the church. A special
grade of officers had been formed for this
purpose in apostolic times (on Acts vi.), and
this grade he revived. He distinguishes
between twa classes of deacons : those who
administer the affau-s of the poor, and those
who tend the sick poor, the former being
specially deacons (Instit. iv. 3^ 9 ; iv. 5, 15).
His famous Ecclesiastical Ordinances provide
for the yearly election of both classes of deacons.
The first class took charge of the poor funds,
the poor throughout the city, and the manage-
ment of the hospital. The deacons tending the
sick lived in the hospital (Kampschulte, p. 466).
Ecclesiastical property he held it unlawful to
alienate. What has once been devoted to
Christ and the church is not the property of
the magistrate. The magistrates should have
the power of supervising and the deacons of
administering this property (letter to Viret,
1542 ; on Acts iv. 32). It is clear that Calvin
was as anxious as Knox himself to preserve
ecclesiastical property for ecclesiastical uses, and
that he did not wish the church to draw its
revenues direct from the state. Tithes were
public burdens and should be paid.
3. Calvin was the first theologian who re-
jected the current opinions regarding the sinful-
ness of Usury. His views on this subject are
to be found in his commentaries on Ex. xxii.
25 ; Lev. xxv. 35 ; Deut. xxiii. 19 ; Ps. rv.
5 ; Ezek. xviii. ; Luke vi. 35, and in the famous
letter (Works, vol. viii. 223, ed. Amst.) Usury
is not condemned by Scripture. Scripture
forbids the exaction of usury from the poor,
but allows it in the case of the rich. The
laws of the Jews which prohibited the taking
of interest by Jews from Jews are political not
moral laws : these very laws permitted Jews to re-
ceive interest from Gentiles. Usury is repeatedly
condemned in the Old Testament, but never on
grounds which are valid for all Christians. The
prohibition of interest in the Old Testament is
a provision in the interests of the poor. The
exaction of interest from the poor has often
produced tumults, as in Rome. Calvin rejects
with proper scorn the substitution of "usuva"
for "the detested word fcemis," holding that
there is no description of "foenus" to which
the name "usura" may not be given. He
exposes the evasions by which usury was
exacted without being mentioned by name, a
poor man requiring to repay the loan of six
measures of wheat by a return of seven. The
question is one not of words but of things.
Aristotle's argument, accepted by Ambrose
and Augustine, that usury is unnatural because
money is barren, is worthless. May not a
cheat make much profit by trading with another
man's money ? A man purchases a farm. Is
not the produce convertible into money ?
Usury is not unlawful unless it contravenes
equity. Usury therefore (1) must not be ex-
acted from the needy ; (2) the lender must not
forget to be charitable ; (3) regard must always
be had to natural equity ; (4) the borrower
must be as much enriched by the transaction as
the lender ; (5) our conception of justice must
be drawn from the Word of God and not from
prevailing usage ; (6) the interests of the state
as well as the individuals concerned must be
considered ; and (7) the limit of interest fixed
in each state must not be exceeded. But usury
should not be made a means of livelihood. It
is plain from this passage that Calvin rejected
the two chief arguments against usury — its
condemnation by Scripture, and the barrenness
of money ; but that he felt rather than saw
the distinction between usury and Interest.
Whether he discerned the principle on which
the payment of interest rests is doubtful. He
says, indeed, that no creditor can ever lend
money without loss to himself, and that usury
ought to be paid to the creditor in addition to
the original sum to compensate him for loss,
but it is uncertain whether he saw that this
principle applies in all cases. (On Ex. xxii.
25 and related passages.)
The best edition of Calvin's wiitings is that
under the charge of Baum, Cunitz, and Reuss, the
publication of which began in 1 863. The Amster-
dam edition of 1667-71, 9 vols, folio, is that
commonly quoted. See also Henry, Das Leben
Calvin's, Hamburg, 1835-44.— Stahelin, Johannes
Calvin Leben und ausgevMhlte Schriften, Elberfeld,
1863. — Kampschulte, Johann Calvin, Seine Kirche
und Sein Staat in Gen/, Leipzig, 1869. — Dyer,
The Life of John Calvin, 1850. — Reybum, John
Galvin : His Life, Letters, and Work, 1914. — And
206
CAMBAGE— CAMBON
Herzog, Real-Ency. " Wucher." — Bohm Bawerk,
QapitaZ and Interest, Mr. Smart's translation I.
28. — Wiskemann, Darstellung der in Deutschland
zur Zeit der Reformation herrschenden Nationul-
okonomischen Ansichten (1861). — Elster, Johann
Calvin als Staatsmann, etc. — Jahrbiicher fur Nat.
Okonomie, 1878, vol. xxxi. p. 163 et seq. — Lecky,
Rationalism, ii. 265, ed. 1878. w. P.
CAMBAGE, Droit de. This was a due
payable in parts of mediaeval Germany, France,
and the Netherlands, by the tenants to their
lord for the privilege of brewing ale. The term
occurs in some chartularies during the first half
of the 12th century, and about a hundred
years later cambage with other dues was
granted by Guy, count of Flanders, to the
hospital of St. Bartholomew of Bethany. In
England the seignorial revenues from ale appear
to have been almost, if not entirely, derived from
Ameecements in the manor courts for breaches
of the assize of ale, and the term "cambage" was
not used. The word was no doubt derived from
the low Latin, carriba, an aleshop, and camum.
The latter was a kind of effervescent ale brewed
from barley with ginger and other spices.
[Ducange, Olossarium medice et inflmcB Latini-
talis, 1733.] A. H.
CAMBIST. See Exchange Broker.
CAMBON, Pierre Joseph (1756-1826),
the greatest financier of the period of the
French Revolution, was a native of Mont-
pellier, where his father carried on a large
business as a wholesale grocer. He was well
educated, and, as he showed a great aptitude
for business, was admitted, while still young,
a partner in his father's firm. He was highly
esteemed by his fellow-citizens, was elected in
1790 a municipal councillor of Montpellier,
and in 1791 a deputy for the department of
the Herault to the Legislative Assembly. He
was already well known in Paris, where he had
resided for several months during 1789 and
1790 as a diput6 suppUant to the Constituent
Assembly, and was immediately appointed
reporter of the committee of the national
treasury. In this capacity he showed such
complete mastery of financial detail that he
was in 1792 chosen by the financial committee
of the Assembly to be their ordinary reporter.
The declaration of war with Austria made it
imperative for the Assembly to raise large sums
of money at once, and Cambon in three elabor-
ate reports laid the financial state of France
before his colleagues. A careful study of these
reports, which were entitled Tableau des besoins
et des ressources de la Nation, presented on 3d
April 1792 ; Rapport sur la situation des Fin-
ances, on 17th, 18th, and 19th April ; and Rap-
port sur la situation genArale des Fina/tiees, on
15th May, is absolutely necessary for any one
who would appreciate the financial condition
of France when foreign war added to the com-
plications of the Revolution. The ability of
the reporter was generally recognised ; Cambon
was elected President of the Assembly in August
1792, and in the following month first deputy
for the Herault to the Convention. He was
naturally elected to its financial committee,
of which he became the ordinary reporter. The
war with Austria had been followed by war
with Prussia, and after the execution of Louis
XVI. by war with Europe. The financial con-
dition of France was desperate. AH Cambon
could do was to propose issues of Assignats, of
which 400,000,000 of livres (£16,000,000) in
nominal value were directed to be created 17th
October 1792, and 800,000,000 (£32,000,000),
1st February 1793. Cambon was elected a
member of the Committee of General Defence
in January 1793, and of the first Committee
of Public Safety in April 1793. This com-
mittee was replaced 14th July 1793 by what
is known as the great Committee of Public
Safety, to which Cambon was not elected.
Thus freed from the cares and responsibilities
of general administration, Cambon devoted
himself wholly to the management of the fin-
ances of France. The two chief causes of the
confusion which prevailed were the excessive
amount of assignats in circulation and their
consequent depreciation, and the ignorance pre-
vailing as to the actual debt of the country.
To remedy them Cambon proposed to prepare
a Grand Livre of the national debt. His
aims are best indicated in the title of his report,
presented to the Convention on 15th August
1793, Rapport sur la dette publique, sw les
moyens d employer pour I'enregisirer swr un
grand livre; pour admettre la dette publique
enpayement des biens nationMux qui sont en vente;
pou/r retirer et annuler les anciens titres de
criance; pour acciUrer la liquidation; pou/r
rigler le mode actual de payement de la dette
consolidie darvs les chefs-lieux de district ; etpour
retirer les assignats de la circulation. This is
the great measure on which Cambon's fame as
a financier rests. There is no need to examine
his other reports ; they aU had the same intent,
to realise the property of the nation and thus
extinguish the assignats as far as possible.
He was aided in his endeavours by other less
known deputies, who worked in the Financial
Committee, of whom the ablest were Ramel
and Johannot, and by Robert Lindet, who had
charge of the department of "national sub-
sistences or resources " in the great Conmiittee
of Public Safety. Throughout the Reign of
Terror, Cambon worked at the finances, and
practically administered them. He had no
sympathy with the views of Robespierre, and
disliked the measure of the "maximum," which
was forced on the Convention for political
reasons, and was economically indefensible.
This attitude made him most obnoxious to
Robespierre, who attacked him by name in his
last speech in the Convention on 8th Thermidoi
CAMBON— CAMERALISTIC SCIENCE
207
year II. (26th July 1794), and would have
proscribed hiin had not he himself been over-
thrown on 9 th Thermidor. During the first
months of the rule of theThermidorians, Cambon
maintained his position, but after the return of
the proscribed Girondins, and the insurrections
of Germinal and Prairial year III. (April, May
1795), he was attacked as a terrorist, because
he had not opposed the Terror, and he was
ordered to be arrested. He was, however,
amnestied in the general amnesty of Brumaire
year IV. (October 1795), and then retired from
public life. In 1797, in a published Lettre
d, ses concitoyens sur les Finances, he promised
to write a history of his administration of the
finances with illustrative documents, but im-
fortunately he never fulfilled this promise. He
returned to Montpellier a poorer man than
when he became a deputy, and continued peace-
fully occupied in his business until 1815, when
he gave in his adhesion to Napoleon on his
return from Elba. This caused him to be
exiled from France as a regicide in 1816, and
he died at Brussels in 1826. Cambon was
without doubt the greatest financier of the
French Revolution ; he shared Mirabeau's
abhorrence of national bankruptcy ; he strove
to draw his country from the financial embar-
rassment caused by the depreciation of the
assignats ; he managed the treasury skilfully
and with absolute honesty, and he possessed
Montesquieu's power of making financial state-
ments lucid and even interesting.
There exists no work devoted to Cambon and
his measures ; the best biographical sketch is in
the Biographic Rabhe (1836) ; there are some in-
teresting notices in Montpellier sous la Revolution,
by Duval-Jouve, Montpellier, 1878 ; on his ad-
ministration see Les Finances de I'ancien Rigime
et de la Revolution, by Rene Stourm. The follow-
ing list of Cambon's most important financial
speeches and reports is extracted from M.
Ren6 Stourm's Bihliographie des Finances au
XVIIIi^me Siecle, published in the Annales de
VJ^cole Libre des Sciences Politiques, for 15th
October 1890. — Legislative Assembly, Rapport
sur la situation de la Trisorerie nationale (10th
October 1791). — Rapport sur les Hats de pyrevisions
de depenses pour 1792 et les comptes d presenter
par les ministres (11th November 1791). — Opinion
8ur le rapport du Comite de la caisse de V extraor-
dinaire et sur la dette publique (24th November
1791). — TaJ)leau des besoins et des ressources de
la nation (3d April 1792). — Aper^u des recettes
et des dipenses de 1792 (6th April 17^2).— Rapport
sur la situation des finances d la date du Her
AvrU 1793 (17th, 18th, 19th April 1792).— Rap-
port sur la situation gin^ale des finances (15th
May 1792). — Convention, Rapport et projet de
dScret sur une nouvelle criation de 400,000,000
d' assignats (17th October 1792).— Rapport et
projet de decret concemant la stippression de la.
caisse de V extraordinaire et sa rkinion d la Tre
sorerie genirale (24th December 1792). — Prqfet
de dicret pour une nouvelle creation d' assignats de
800,000,000 (1st February 17 9^).—Rapport sui
la dette publique, etc., quoted in text (15th August
1793). — Projet de dicret pour difendre la vente,
cession, negociation, ou transport de litres actuels
constatant les creances non viageres stir la nation
(11th September 1793). — Rapport sur lesdomaines
alienis (1st Frimaire year II., 21st November
1793). — Projet de dicret pour demonitiser les mon-
naies d'or et d^ argent (11th Frimaire year II., 1st
December 1793). — Projet de decret relatif aux
assignats dimonitisis (24th Frimaire year II., 14th
December 1793). — Rapport sur le compte des re-
cettes et des dipenses de la nation, depids le lier
Mai 1789 jusquau lier Septembre 1793 (3d Ger-
minal year II., 23d Marcli 1794). — Rapport et
projet de dicret sur les mutations par dices des
inscriptions au grand livre (18th Fructidor year
II., 4th September 1794). — Rapport et projet de
dicret sur la liquidation des compagnies financieres
connues sous le nom de caisse d^escompte, assurances
sur la vie, assurances contre les incendies (25th
Fructidor year II., 11th September 1794). — Rap-
port sur les pensions dites ecclisiastiques (2d Sans-
culottide year II., 18th September 1794). — Dis-
cours au sujet du compte de Vargenterie des iglises
(12th Brumaire year III., 2d November 1794). —
Rapport et projet de dicret sur les taxes revolution-
naires (6th Frimaire year III., 26th November
1794). — Rapport sur les moyens d prendre pour
retirer les assig^iats de la circulation et sur la cria-
tion d'une loterie (3d Pluviose year III., 22d Janu-
ary 1795). — Risume des diverses opinions prisen-
ties d la Convention Nationale sur le projet du
Comiti des Finances pour accdirer le retirement
des assignats (7th Ventose year III., 25th February
1795). — Rapport sur la fixation de la contribution
fonciere d imposer sur les inscriptions consolidies
et viagires (16th Ventose year III., 6th March
1795). (See Assignats ; Maximum.) h. m. s.
CAMBRELENG, Churchill C, born in
North Carolina 1786 ; died in Long Island
1862. He was engaged in business in New
York ; and became member of congress 1821-
39. An ardent free trader, he published anony-
mously, in 1821, An Examination of the Neu
Tariff proposed by the Hon. Henry Baldwin, a
Representative in Congress, by one of the People,
New York, pp. 268. In 1830, as chairman of
committee on commerce, he made a Report on
Commerce and Navigation, which was exten-
sively circulated even in England ; in this he
strongly condemns the commercial policy of the
preceding fifteen years ; in 1838, from the Com-
mittee on Ways and Means, he made a Report
on the Currency, National Bank, Independent
Treasury, in which he argued for the separa-
tion of the banking and fiscal operations of the
government. d. r. d.
CAMERALISTIC SCIENCE {Kameral-
wissenschaft). So called because in the progress
of time the private chamber of the king became
the treasury, and the camerariu^ assumed a new
and fiscal importance. Strictly speaking, the
science treats of the adaptation of means to ends,
and the effects of expenditure on the fund of
wealth from which revenue can be drawn. Thus
208
CAMEKARIUS— CANALS
it is nearly equivalent to " Science of Finance."
There can be no doubt tliat in the ISth. century
the term was applied to a subject wbicli might
have been perfectly described by the latter phrase.
There are, however, two reasons for treating
them as separate and distinct. While writers
on Finance {q.v.) generally treat of the natiorfal
revenue and expenditure from an isolated point
of view, the cameralistic writers considered the
financial as but a part of entire economic science.
Thus we are entitled to speak of cameralistic
as well as of financial science. In the second
place finance is frequently used as almost if
not quite synonymous with taxation. The dis-
tinctions thus drawn are not, however, unexcep-
tionable. Many treatises on cameralistic science
are in point of fact treatises on the art of taxa-
tion, while on the other hand such a work as
RiCARDo's Principles of Political Economy and
Taxation, despite its incomplete nature, belongs
in great part to the department of cameralistic
science. (Another branch of this subject may
be studied under Commeecial Science, g'.v.)
[Good examples of treatises on KaTneralwissen-
schaft in its early sense as related to other branches
of VolkswirthschOift or more generally, Wirthschaft-
licheswissen are furnished in Baumstark (Edward),
Kameral, etc., Encyclopadie, and Rau (C. D.),
Ueber die KameraZwissenschafi ; while for its more
matured form the works of Rau, Wagner, and
Leroy Beaulieu should be studied.] E. c. k. g.
CAMERARIUS, Joachim (born 1500, died
1574), an eminent scholar and "humanist,"
the friend of Melanchthon, the *' glory of the
German name " according to the learned Casau-
bon, deserves notice here as the author of a
history of Greek and Roman money ; and as
having combated the mediaeval prejudice against
the payment of interest (see Aquinas). * ' Why, ' '
he asks, "should you not pay for the use of
money as well as for the use of a house ? "
Historia rei NummaHce sive De NumisTnatis
Grcecis et Latinis, in the ninth volume of Gron-
ovius's Thesaurus Grcecarum Antiquitatum. An-
other work on an economic subject was Politi-
corum et (Economicorum Aristotelis interpreta-
tiones et expUcationes, 1581. f. y. e.
CAMPANELLA, Tommaso (1568-1639), (a
Dominican, born in Calabria), a much persecuted
philosopher, wrote among many other works,
Civitas Solis, an "idea of a philosophical re-
public," resembling the Platonic republic in the
community of wives and goods, and in many
other features, but not in slavery. In the city
of the Sun "no one thinks it lowering to wait
at table or to work in the kitchen or fields.
While duty and work are distributed among all,
each one has only to work about four hours a
day." The remaining hours are spent in pleas-
ant mental and bodily exercises. Commerce
plays a small part in the simple economics of
the Solarians. Money, given in exchange for
foreign goods is not received.
{Civitas Solis, begun In 1602 (during the
author's imprisonment), was published as part oi
Realis PhilosopMce Epilogisticoe partes quatuor,
Frankfort, 1623. — Fra Tommaso Campanella . . .
Luigi Amabile, 1%%7 .—Thomas Campanella . . .
Ernest Nys, 1889. Abstract in Jowett's Republic,
Preface. An English translation in Morley's
Universal Library, Routledge.] f. y. e.
CAMPOMANES, Pedro Rodriguez, Count
of (1723-1802), an eminent Spanish jurist,
economist, and statesman. As a member of the
group of enlightened ministers who gave lustre
to the reign of Charles III., he laboured for the
reform of taxation, the promotion of agriculture
and manufactures, the diffusion of education,
and the adaptation of Spanish institutions to
the needs of the age. Eminently upright and
disinterested, he was one of the foremost bene-
factors of his country. His theoretic views and
practical efforts strikingly resemble those of his
illustrious contemporary Turgot.
The principal economic writings of Campomanes
are : — Respuesta fiscal sdbre aholir la tasa y estdb-
lecer el com^rdo de granos, 1764. — Discurso sobre
el fomento de industria popolar, 1774, and Dis-
curso sdbre la educacion de los artesanos y su fo-
mento, 1775. Robertson eulogises the two latter
works in his History of America (note 193), and
justly says of Campomanes — " There are not many
authors, who hat^e united more happily the calm
researches of philosophy with the ardent zeal of a
public-spirited citizen." j. k. i.
CANALS may be defined as artificial water-
ways constructed for the purpose of navigation
or irrigation. Navigable canals may be divided
into two classes : (1) those used for inland
navigation, and (2) those used to shorten sea
voyages. The former have been constructed to
carry boats and barges limited on the smaller
canals to a carrying capacity of 25 to 30 tons,
and on the larger canals to a capacity of from
50 to 300 tons. In the Amsterdam and Man-
chester ship canals, a successful attempt has
been and is being made to construct a waterway
of sufficient size to permit of the passage of large
sea-going vessels. The chief examples of the
second class are the Suez Canal, the Languedoc
Canal, and the Caledonian Canal. Though
known in Egypt and China, and constructed in
Holland in the 12th century, it was not until
the invention of locks in Italy in the 14th cen-
tury that inland navigation made any progress
in Europe. The development of canals in
Holland greatly extended that country's com-
merce, as by their means a large inland trade
was carried on with Germany and France.
Several important canals are found in France
towards the end of the I7th century, but in
England the first modern canal was not author-
ised until 1755. Five years later the Duke of
Bridgwater obtained his first Canal Act, and
the success attending the construction of the
canal from Worsley to Manchester gave such
an impulse to such undertakings that Porter
{Progress of the Nation, § iii. ch. i., 1836-1843)
CANALS— CANCEL
!09
pointed out that, owing to the construction of
canals, there was no spot south of the county of
Durham at a greater distance than fifteen miles
from water conveyance. It was expected that
canals would prove formidable rivals to railways,
but in 1845 began the gradual transfer of canals
to railway companies. This transfer was in
some cases due to the dread that railways would
secure 'all the traffic, and the withdrawal of
opposition to the construction of the railway
was secured by the purchase of the canal. In
other cases the railways offered tempting terms
so as to secure a monopoly of traffic. The result
was that nearly one-half the inland navigable
canals are controlled by railway companies
(see Evidence taken before select committee on
canals, 1883). Some canals have been closed
or allowed to fall out of repair, on others heavy
tolls called "bar tolls" have been imposed to
prevent their use by traffic from neighbouring
canals, whilst no adequate attempt has been
made to establish through communication or
speedy service (see Eeport of committee on
railways, 1882). In 1872 a joint committee
of the House of Lords and of the House of
Commons recommended that no internal navi-
gation in the hands of the public should be
placed under a railway company, and in 1882
a select committee of the House of Commons
on railways expressed the ojnnion that it was
"impolitic that railway companies should have
the control either directly or indirectly of canal
navigation, and that wliere canals are already
under the control of railway companies, parlia-
ment should endeavour to ensure their use to
the fullest possible extent."
The advantages of canals over railways have
been summed up by L. F. Harcourt in his
treatise on Rivers and Canals (Oxford, 1882), as
follows — "They are frequently less costly in
construction, and their cost of maintenance and
their working expenses are considerably smaller.
Moreover, the proportion of dead weight to the
load carried is much less in canal barges than
in railway waggons ; and the barges not only
cost much less proportionately to their capacity
than waggons, but are also far more easily re-
paired. The resistance also to traction is much
smaller in water than on rails, amounting, ac-
cording to M. Malezieux, to only one-fifth of
the average resistance on railways. Barges on
canals can be loaded or unloaded at any places
they pass ; whilst goods trains can only stop at
stations." See also the Evidence given before
the Committees on the Manchester ship canal,
1883, 1884, 1885, and Canals by M. Stevens
(London, 1887).
[On the economic aspects of canals reference may
be made to Observations sur les tarifs de nos can-
aux, F. Aulagnier, 1837. — Observations on Canals
and Navigable Rivers, G. Beadon, 1848.— Xe Canal
Indo-Europien et la navigation de VEuphrate et du
Tigre, E. Ende, 1886. — Kanale und Eisenbahn^n
VOL. I.
in ihrer wirthschaf (lichen Bedeutung, C. Hauser,
1880. — Des Canaux de Navigation, M. La Lande,
1778. — Die Canalisation des preussischen Staates
nebst Beweis, Z. Puttkammer, 1868. — Canal
und Eisenhahn, Eeimherr, 1884. — Canals, by M.
Stevens, London, 1887. — Eisenbahn oder Kanal,
E. Wiss, 1878. — Ueber die Kanalbahn und deren
Rentabilitat in der Eisenbahnzeit, E. Wiss, 1866.
— Die selbstartende Eisenbahn Transporte und
die Wasserstrassenfrage, L. Zells, 1887. — Ueber
Wasserstrassen, L. Zells, 1887. — Waterways and
Water Transport, by J. S. Jeans, Loudon, 1890.
The relative advantages of railways and water-
ways in Germany are discussed in the Journal of
the Royal Statistical Society, vol. li. 1888. As
regards the canal system of different countries,
see as to English Canals, History of Inland Navi-
gation, by J. Phillips, London, 1803. — Historical
Account of the Navigable Rivers, Canals, and
Hallways throughout Great Britain,\)j J . I'riestley,
London, 1831. — Reports, Evidence, and Returns,
Royal Commission on Canals and Waterways,
1906. Their final Report received much attention,
followed, about 1912, by the establishment of the
Midland Waterway's Association to press for im-
proved water communication with Hull, Liverpool,
London and the Severn Ports. As to France :
Histoire de la Navigation intericure de la France,
par M. Dutens. — Les Voies navigables en France,
par P. MuUer, 1866. — Manuel des Voies navigables
de la France, par A. Larme, 1S78. As to Germany
and Austria: Die Kancd-Verbindung des RJieines
viit der Donau, C, T. Kleinschrod. — Deutschlands
Wasserstrassen in deren Verwendung in ihrem
jetzigen Zusiande fur den Export, von W. J.
Mulvany, 1881. — Vienne port de mcr, Traite de
V exploitation des Voies comprises d'Autriche et de
V Allemagne. Le Grand Danube, par Saint Hubert,
1881. As to Holland: Ncderland als Polderland,
A. A. Beckman, Zutphen, 1888. — Le Canal
d' Amsterdam d la mer du Nord, C. Boissay, 1871.
As to United States : Die Wasserstrassen in den
Vereinigten Staaten von Amerika in ihrer com-
merziellen und industriellen Bedeutung, C. Hosier,
1877.] J. E. c. M.
CANARD, Nicholas Francois, professor
of mathematics at the College cle Moulins (h.
about 1750, f?. 1833). He was the author of
Prineipes d'J^conomie Politique, Paris, 1802,
crowned by the French Academy. "Ces pre-
tendus prineipes," says Cournot, " sont si radi-
calement faux, et I'application en est tellement
erronee, que le sufii-age d'un corps eminent u'a
pu preserver I'ouvrage de I'oubli."
Canard also wrote Memoires sur les causes qui
produisent la stagflation et le decroissement du
commerce en France, et qui tendent d aneantir
Vindustrie commerciale ; moyen simple de les f aire
cesser, Paris, 1826.
[Canard is criticised by M. Bertrand, Journal
des Savants, 1883, p. 499.] f. t. e.
CANCEL, Cancellation. The discharge
of a document, usually by marking across the
operative signature, or signatures, either the
word "cancelled" or some recognised mark.
"The cancellation of a signature operates as a
P
210
CANCRIN— CANNING
discharge, unless proof can be given that the
cancellation was done by mistake."
[Hutchison, Tlce Practice of Banking, vol. i.
p. 125.]
CANCRIN, George (1774-1845), an emi-
nent Russian financier, son of Franz Ludwig
Cancrin, the distinguished German mineralo-
gist. Born at Hanau in Electoral Hesse, he
studied law and political economy at the uni-
versities of Giessen and Marburg, and early
showed a remarkable faculty for work and a
spirit of restless activity. He filled successively
several posts in the administration of Anhalt-
Bernburg. He j oined his father in Russia, 1796.
In 1800 he was employed in the ministry of the
interior, and, having attracted attention by
writings on military economy, he was made,
1812, intendant-general of the army of the West,
and in that capacity accompanied the Russian
forces in their march through Germany. In
1813 he was appointed intendant-general of all
the ' ' active " armies. This office he resigned in
1820, and in 1823 became minister of finance, a
position which he held till 1844. He possessed
in a high degree the esteem and confidence of
the Emperor Alexander, as well as of his
successor. He was most diligent and energetic
in discharging his ministerial duties, founded
many useful establishments, and gave a great
impulse to the national industries. He had
special agents at Paris, at London, and in
Germany, who kept him informed on the pro-
gress of the arts and the introduction of new
processes. By his financial management he
increased the revenue, and raised the credit of
the empire, previously on the verge of bank-
ruptcy. But his system, though successful in
providing resources for the government, was
founded on rigid prohibition and state-manu-
factures, and appears to have been burdensome
to the community. His term of office, we are
told, is now regarded by the Russian people as
the most unfortunate period of their history.
He died at St. Petersburg in 1845. Roscheb
thinks his general economics were injured by
his pre-occupation with the question of military
supply, immediate results being aimed at in the
latter case, whilst in the conduct of national
aff'airs as a whole permanent prosperity is the
object to be achieved. He represented a reaction
against Adam Smith from the point of view
of a man of the world who had to conduct the
economic practice of a country much less ad-
vanced than England, in fact, as he himself
calls it, "infra-European." Strictly conserva-
tive in his economics, he disliked new institu-
tions, being thus sometimes led to paradoxical
conclusions ; he opposed, e.g. the establish-
ment of banks and the extension of railways, at
least in Russia. (Roscher, Geschichte der Nat.
Oek. in Deutschland, p. 813.)
Cancrin was author, besides minor publications,
of a treatise Ueber die Militdro/conomie im Frieden
und im Kriege, und iiber ihr Wechselverhdltniss zu
den Operationen, 1820-23, of Weltreichthum,
National-Reichthum und Staatswirthschaft, oder
Versuch neuer Ansichten der politischen Oekonomie
(published anonymously), 1821, and Die Oekonomie
der m^nschlichen Gesellschaften und des Finanz-
wesen, von einem ehemaligen Finanzminister, 1845.
J. K. I.
CANDAREEN. A denomination of the
Chinese money of account, but not a coin.
10 cash = l candareen (see Cash). 10 candar-
eens = l mace. 10 mace = l tael (the unit of
value). r. e. a.
CANNING, George, bom in Marylebone,
1770, died at Chiswick, 1827, is most famous
for the unique services which he rendered as
foreign secretary, especially in the autumn of
1807, when he directed the capture of the
Danish fleet, and in 1822 and 1826, when he
stood firm against France and the Holy Alliance
in the aifairs of Spain and Portugal. His
"Needy Knife Grinder" and other witty papers
in the Anti-JacoUn have given him a place of
his own in our minor literature. In economical
history his place is subordinate. His first views
of commercial policy inclined him to compro-
mise. Though he was not a profound student
of finance and political economy, his close alli-
ance with »HusKissoN counteracted his own
shortcomings, and justifies his inclusion among
the pioneers of a free-trade policy. His uttei
ances on the bullion controversy, the Cor>
Laws, and the navigation acts, had a distinct
influence on the public as well as on the House
of Commons.
When the Report of the Bullion Committee
came up for discussion. May 1811, Canning as
a private member gave (in two speeches — 8th
May and 13th May) a general support to the
resolutions of the committee, though he refused
to vote for the sixteenth (or last) which pledged
the bank to resume cash payments in two years'
time. Vaksittart and Perceval had urged
that continued suspension of cash payments wa3
necessary to the successful prosecution of the
war with France. Canning answered that our
best strength was to support the credit of the
country, and the soundness of the currency.
There must be no uncertainty in the public
mind as to the real standard of the currency. _
The question of depreciation was a question not M
of the soundness of the bank itself but of the ^
relation of the notes of the bank to the real
standard, which Canning defined (as Peel
afterwards defined it) as a definite measurable
quantity of the metal gold, of a certain ascer-
tainable fineness. Vansittart had talked of
the standard as being a "sense of value," or
as "public estimation" ; and Canning had no
difficulty in showing the vagueness of these
phrases, and, contrariwise, the clearness of the
terms employed by the bullion committee, who
had been slighted as "abstract theorists," only
because in addition to practical knowledge they
CANNING— CANON LAW
211
had acquaintance with iirst principles. They
were right in finding a sufficient proof of de-
preciation in the fact that there was a difference
between the price of Bullion in bank notes, and
the Mint Price of gold ; and it was an import-
ant confirmation, to find the exchanges continu-
ing for some time progressively unfavourable to
this country. It seemed to Canning (as to
Cobbett) that Burke's description (1791) of
the contrast between English notes and French
AssiGNATS can fairly be applied to the contrast
between English notes as they were in Burke's
time, and English notes as they were in 1811.
The resolutions, introduced by Vansittart,
though not of Vansittart's own invention
(see Canning's Speech on Bank Charter Act,
13th Feb. 1826), in opposition to those of the
bullion committee, called forth all the re-
sources of Canning's wit and sarcasm, especi-
ally the famous third resolution that the
bank notes ''have hitherto been and are at
this time held in public estimation to be
equivalent to the legal coin of the realm."
He compares this to Bonaparte's proclamation
that beet and maple sugar are infinitely better
than cane sugar, and must, therefore, be used
in place thereof, under penalties. These two
speeches of 1811 are striking examples of
Canning's power to master at second hand
the principles of a subject to which he does
not appear either then or afterwards to have
given any special study. In the Quarterly
Review (Nov. 1810 and Feb. 1811, dealing
with two pamphlets of Sir John Sinclair) he
treats the same subject (of the bullion
committee) in his lighter vein (see Bullion
Committee, Report of ; Currency Theory,
etc.) He had to deal with a kindred topic
(in his speech of 13th Feb. 1826) when the
government were taking steps to stop the
circulation in England of bank notes under
five pounds ; but except perhaps for a telling
quotation from a private letter of Burke's ("If
Pitt consents to the issue of one pound notes
, he will never see a guinea again " ) the speech
I is not of special importance.
! In office along with Huskisson in 1823 and
i 1826, he gave willing and admiring support to
the reforms in commercial policy introduced by
his colleague. It was in the negotiations for
a reciprocity treaty with Holland, in amend-
ment of the navigation acts, that he sent (in
1826) in answer to Falck, the Dutch minister
at the Hague, the well-known despatch in
cipher :
" In matters of commerce the fault of the Dutch
Is giving too little and asking too much ;
With equal advantage the French are content.
So we'll clap on Dutch bottoms just twenty per
cent.
(Chorus.) Twenty per cent. Twenty per cent.
Nous frapperons Falck with twenty per cent."
In 1827 he helped Huskisson to frame a
sliding scale of duties, in amendment of the
com laws of 1815 and 1822 (see Corn Laws
and Sliding Scale). His policy here, as well
as in the case of West Indian slavery (see
speeches of 1823, 1824, and 1826), was that
of compromise and gi-adual reform. He ad-
mitted in 1827 (speech of 1st March) that the
paternal power he had claimed, in 1826, for
government, to relax the corn laws and open the
jiorts on emergency, had not proved to work well
in practice, and the confession was one sign
amongst many that he was inclining toAvards
a policy opposed to all interference of govern-
ment with trade. His single budget speech,
1st June 1827 (when he was at once prime
minister and chancellor of the exchequer),
cannot fairly be taken as a measure of his
financial ability, for the circumstances were
exceptional, and the budget a makeshift. His
conception of the relation of economics to
politics may be gathered from his short
speech in defence of Huskisson against the
silk manufacturers (24th Feb. 1826): "We
must deal with the affairs of men on abstract
principles, modified, however, of course, accord-
ing to time and circumstances ; " we must
soar to "the heights from which alone ex-
tended views of human nature can be taken."
He was careful to point out that reform of
commercial policy had been hitherto identified
with neither political party ; it was his master,
Pitt, who carried the treaty of commerce with
France in 1786, when Fox opposed it.
[77ie Speeches of the Right Hon. George Canning,
with a Mevioir of his Life, by R. Tlierry, 6 vols.,
1828. — The Life of the Right Hon. George Canning,
by R. Bell, 1846. — George Canning and his Times,
by A. G. Stapleton, 1859. — Statesmen of the Time
of George II L, Henry, Lord Brougham, 1839-43.]
J.B.
CANON LAW. The canon law is a body
of rules (Kauoves) laid down by the early and
medifEval Christian church for the government
of its members. It consists accordingly of
citations from scripture, the fathers, and the
popes, together with commentaries and glosses.
The several compilations of this character,
beginning at the end of the 3d century and
carried down to his own day, were reduced to
something like their present systematic shape
(in the "corpus juris canonici") in the middle
of the 12th century by Gratian, a monk of
Bologna, the founder of the study of canon law.
His successors appended to his collection (or
"Decretum") the decretals of the popes in the
next three centuries. It need hardly be said
that only such of its topics as bear on economi-
cal theory or history will be considered here.
At the beginning of the book we are told
that the human race is under two kinds of
IJaws, — the law of nature and the law of cus-
tom (or positive institution) "uaturali jure et
moribus." Civil law and canon law are two
212
CANON LAW
branches of the second species. By the law
of nature there is no private property, but "all
things are common to all men" (*' jure naturali
omnia sunt communia omnibus"), as they were
among the first disciples. St. Augustine argues
that, as "the earth is the Lord's and the fulness
thereof," private property is not of divine but
of purely human appointment. "Tolle jura
imperatorum," and no one can say "this is
my house," or "this is my slave," etc. It
would seem natural after this to hear that
private property is forbidden by canon law ; but
this is not so. It is forbidden to the clergy,
who are to hold their property collectively for
the good of the poor ; they are not to marry ;
and they are to be "victu et vestitu contenti."
But it is allowed, grudgingly, to the laity, who
are to hold it in trust for the poor, and who
are therefore to give liberally to the poor and
to the clergy as the almoners of the poor. It is
hinted that among Christians the ideal distri-
bution is community of goods, and that only for
the hardness of men's hearts is any compromise
admitted. In the same way the ideal industry
is agriculture ; and the only right way of in-
creasing wealth is to till the ground and breed
cattle. These pursuits and the simple manu-
facturing industries of an agricultural people
are allowed with reservations even to the clergy,
who may thus work for their own livelihood,
like the apostles. Labour within these limits
is indeed commended by the canon law ; and it
is one of the glories of the early and mediaeval
church that it did its best to enfranchise the
labourer. Eoman Law had more regard for
property than for human beings ; canon law
erred on the safer side. In their aspirations
after an idyllic life it is clear that the writers
would have gone back to barter if they dared.
As it was they followed Apjstotle in treating
money as a "barren metal," and they gave
literal effect to the words of the gospel : ' ' Lend,
hoping for nothing again" ("Mutumn date
nihil inde sperantes"), by strictly forbidding
usury and by giving every assistance to the
debtor as presumably poorer than the creditor.
At first (by the council of Mcaea, 325 a.d.)
the prohibition of XJsuey applied only to the
clergy ; but a century later it was extended to
the laity, and the "corpus juris canonici"
abounds in emphatic assertions of it. " Etiam
laicis usura damnabilis." "Usura" did not
simply mean a high rate of Interest ; it meant
all and every interest whatever, and the notion
was even stretched so as to embrace aU and
every gain beyond what was considered a just
and proper price, in ordinary buying and selling.
" Qui plus quam dederit accipit, usuras expetit,"
whether the " superabundantia " be money or
wheat or wine. " Quidquid sorti accedit, usura
est." "Turpe lucrum sequitur qui minus emit
ut plus vendat." "Rapinam facit qui usuram
accipit." As late as the 14th century (at the
Council ofVienne, 1311) Clement V. declared
the prohibition of usury to be absolute, all
civil laws to the contrary notwithstanding.
Dante puts the usurers in the lowest division
of his seventh circle of Hell as doing violence
to God and nature {Inferno XL, 46-50, cp.
95-111). Thomas Aquinas (in 13th century)
speaks of usury as " contra legem naturae," as
weU as against the law of the church ; and this
unnaturalness had been one of the grounds of
prohibition from the first. Usury might be
practised only as a form of war, " Ubi jus belli,
ibi etiam jus usurse."
" If thou wilt lend this money, lend it not
As to thy friends, — for when did friendship take
A breed for barren metal of his friend ? —
But lend it rather to thine enemy."
The arguments by which the unnaturalness
of interest was maintained ran somewhat as
follows : When money is lent, the lender parts
with it, and the borrower has it to use ; if there
were any productiveness in it, the man who has
used it, and not the man who has parted with
it, would justly have the benefit. There is,
however, no productiveness in it. The lender
gives, say, ten pieces of silver ; now these ten
pieces are not like seeds in the earth, or trees
in the orchard ; they do not become anything
else than ten pieces of silver, through however
many hands they pass. Why then should
they become eleven or twelve when delivered
again to the lender ?
Again, it was said, we must distinguish two
kinds of loans. There are objects which, when
we have borrowed (or hired), we use without
destroying them in the use — e.g. a field, or a
horse, or a sjiftde. We return them not "in
genere," but specifically, in their identity, with
compensation to the lender for any deterioration
we may have caused. This loan is the Com-
MODATUM of Roman law, as distinguished from
MUTUUM. In the latter instance ("mutu-
um"), as in the case of fruit or wine, the borrowed
objects are destroyed in the using, and are re-
turned to the lender in kind. Now, money is
of the latter sort; it has no "use" which is
distinct from itself, and consistent with its
retention by the possessor ; to use it, he must
part with it. But, if we allow usury, we are
claiming that money has a use distinct from
itself, and that, when the sum bon-owed is re-
turned, an additional sum should be added in
payment of this supposed use, — in other words
"id venditur quod non est." Of the other
arguments used against usury by the canonists,
it wUl be enough to cite perhaps the most famous
one. To pay interest is to pay for time. Now
time is the common property of all men ; and,
besides, time is like barren metal itself ; it can
of itself produce nothing ; why then should
anything be paid for it ? Thomas Aquinas laid
special stress on this argument, which he was
CANON LAW
213
the first distinctly to formulate. It does not
appear very explicitly in the canon law itself.
The motive for the prohibition is clearer
than the arguments advanced for it. It is the
I same motive which led the church to forbid a
m in any case to take advantage of his
leighbour's need, and wTing from him an ex-
sptionally high price. Christian brotherliness
[uired that my neighbour's extremity should
lever be my opportunity, and I should never
large him more than the lair price Justum
i*RETiUM for my goods, the said price being
16 one assessed in money by the church or
(it might be) by the civil authorities, and rati-
fied as customary. The same principle would
irevent me from exacting any recompense for
loan. Otherwise, in either case, I should be
jceiving what I had not earned by the sweat
of my brow, and violating the law of God
and nature.
The European world, with settled order and
increasing commerce, chafed under this en-
forced unselfishness ; and the church was forced
to tolerate evasions of the prohibition of usury.
These evasions will be more fully treated under
the head of usury ; but the chief instances may
be mentioned here. The buyer on credit was
allowed to ])ay more (in the final settlement) for
his article tlian the buyer for cash, in all cases
where, in tlie first instance, there had been a
real uncertainty from ordinary causes about the
future price of the article concerned. But it
was to be clearly understood that the difference
in time was to have nothing to do with the
difference in the price (decretal of Alexander
III. in 12th century, confirmed by Gregory IX.
in 13th century).
This was a comparatively early concession
made to the Genoese when Italian commerce
was beginning to giow, after the first crusades.
It was followed by others. It was found pos-
sible, for example, to exclude the Bill of
Exchange from the category of usury by repre-
senting any Discount or Interest it involved
as a payment for work done, namely, the work of
transporting money (or at least the payment of
money) from one place to another. Though
money by itself was (to the canon law) unpro-
ductive, " money conjoined with human labour "
( ' ' pecunia juncta cum hominis operatione ' ') could
be productive. Accordingly, when companies
were formed some of whose members contri-
buted money and labour, others only their
money, yet all shared in the gains, it was
allowed (not without misgivings) that this con-
formity to the letter of the law was sufficient.
A third kind of exception was made in cases
where loans were attended with unusual risks
to repayment ; the lenders were allowed to
receive a sum over and above their principal as
a compensation for the risk they had run.
This concession was very grudgingly made ; but
(asHallam has noticed) marine Insurance seems
from the first to have passed unchallenged.
Not unlike these cases was that of creditors
whose debtors were behind their time ; interest
in such a case was counted a justifiable penalty
for breach of contract (" usura punitoria ").
Finally, the Jews were allowed to lend
money at interest, because, not being Christians,
they were not bound by canon law. There
were always some canonists who (like Aquinas)
objected to this toleration ; but its practical
convenience saved it ; and, till the Lombard
money-lenders became their competitors, the
Jews had the monopoly of nearly all the credit
transactions that could not be brought within
the letter of the canon law. Communities of
lax Christians, like the traders of Genoa and
Cahors, seemed to have imperilled their ortho-
doxy to gain similar advantages.
The church itself, especially in the later
centuries, found reason to relax its prohibition
of usury where its oum material interests were
seriously involved. The sale of offices, for
example, such as those of chamberlain and
treasurer in the papal court, realised a higher
price wlien purchasers were allowed to club
together to bid for them ; the. result was,
however, that many of those joint purchasers,
who had no intention of holding the offices
themselves, shared in the revenues in a way
indistinguishable from the receiving of interest
on capital invested. Again, the sale of land
for a fixed yearly ground rent ("census consigna-
torius "), instead of a sum paid down once for all,
was conceded, on the subterfuge that, not the
yearly income, but the right to the yearly
income was the subject matter of the sale.
Pius V. (in the 16th century) decided that
such arrangements were not unlawful, provided
that they related to land only, and were
strictly determined by the actual yearly pro-
duce of it. Had he decided otherwise, the
revenues of large numbers of religious houses,
especially in Germany, would have been seri-
ously affected.
But in the toleration of the "montes pietatis"
(which date from the 15th century), both the
letter and the spirit of the older canon law were
violated. These institutions were formed by
the joint subscriptions and donations of phil-
anthropic Christians ; and they were simply
banks which advanced money to the poor at
interest. This interest was represented as simply
a "recompense" for the trouble of managing
the institutions that advanced the money, and
thus the obnoxious name of usury was avoided,
though the fact was certainly present. Besides,
the "montes," to attract subscriptions, gave
interest on the sums subscribed, and thus be-
came simply an investment for capital. There
were also "montes profani," secular banks,
Bi/unded on their model, but without their
charitable object, and dealing with ordinary
men of business. But even the "montes pro-
214
CANTALUPO— CANTILLON
fani " escaped condemnation ; it was held that
they were of service, if not to the poor, at least
to the public, and the interest they gave on
investments represented a Lucrum Cessans, or
loss which the investors were presumed to have
incurred by withdrawing their money from.trade
and putting it into these banks. When ' ' usury ' '
had been tolerated in the case of these societies,
it could not be long before the like concession
would be made in the case of individuals (see
articles Fathers, The ; Monts De Pifex^.)
[Corpus Juris Canonic, ed. E. L. Kichter, large
4to, Leipzig (Tauchnitz), 1839. The chief passages
relating to usury begin on pp. 147 and 630. In
the companion volume containiug the decretals of
Pope Gregory IX., etc., see especially pp. 782,
1017, 1101.— The edition of E. Friedberg is con-
sidered by some to have superseded Richter's. —
Die Nationalokonomische Gfrundsdtze der canonist-
ischen Lehre, Dr. W. Endemann (Jena), 1863, the
most complete monograph on this subject. — Ge-
schichte der National- Oekonomik in Deutschland
(see Einleitung), W. Roscher (Miiuchen), 1874. —
Geschichte der volkswirthschaftlichjen Literatur im
Mittelalter, Dr. H. Contzen (Leipzig), 1869. The
same aiithor has also published Zur Wilrdigung
des Mittelalters (Cassel), 1870, and De Thomae
Aquinatis Sententiis ad Oecon. Politicam pertin-
entibus (Basel), 1861. — Das deutsche Genossen-
schaftsrecht, vol. iii. Staats- und Korporations-
lehre des Alterthu7ns und des Mittelalters. Dr.
Otto Gierke (Berlin), 1881.— Geschichte und
Kritik der Kapitalzinstheorieen (oh. ii. ) Dr. Bbhm
Bawerk (Innsbruck) 1884. — Neue Untersuchung
der Nat. Oek. und der natiirl. Volkswirthschafts-
ordnung, J. Schon (Stuttgart), 1835. — Economia
politica del medio evo, L. Cibrario, 1839. — History
and Future oj Interest and Profit, Cliffe Leslie
(Fortnightly Review, November 1881). History of
Political Economy, J. K. Ingram (London), 1888.
Introduction to English Economic History and
Theory, vol. i. — {The Middle Ages), W. J. Ashley
(London and New York), 1888.] J. b.
CANTALUPO, DoMENico, a Neapolitan,
author of a very successful essay on the com
trade, published in 1783 at Palermo. The
third edition was published in Nice and Genoa
'in 1795, and the fourth edition by Custodi in
his Economisti classici Italiani. Cantalupo
strenuously recommends free trade, full, sure,
and equal liberty for all, and traces the history
of corn laws from the times of King Ladislaus
(1400) down to his own times to prove the bad
effects which a restrictive system always pro-
duced. M. p.
CANTILLON, Philip, author of ''The
Analysis of Trade, Commerce, Coin, Bullion,
Banks, and Foreign Exchanges: . . . Taken
chiefly from a Manuscript of a very ingenious
Gentleman deceas'd, and adapted to the pre-
sent situation of our Trade and Commerce. By
Philip Cantillon, late of the City of London,
Merchant, London, 1759." 215 pp. 8vo. This
Philip was the eldest son of James CantiUon
of the city of Limerick, who was first cousin
of Richard Cantillon, author of the Essai sui
la Nature du Commerce. Philip carried on a
banking business with David Cantillon at
Wamford Court, Throgmorton Street, London,
at least as early as 1725. In 1738 he was t
director of the Royal Exchange Assurance : in
1742 became bankrupt: in 1747 was trading
alone as insurance agent and policy broker : in
1753 was partner with one Thomas Mannock
in the same business : and in 1759 had retired.
He married, 14th July 1733, Rebecca, daughter
of William Newland of Gatton, Surrey, by
whom he had two daughters. There is reason
to think that he was engaged for a short time
at Richard Cantillon's bank in Paris, but that
his litigious character made him unamiable and
brought about his speedy return. On the
death of Richard, Philip intervened in the
management of his estate, and thus obtained
possession of several papers, including probably
the English manuscript of the Essay, which
professedly served as the groundwork of the
Analysis of Trade. He must, however, have
mutilated the manuscript almost beyond re-
cognition. Much of the closely packed original
is omitted, and much is replaced by vague and
general summaries, most unskilfully made,
with the result that little indeed of the Analysis
fairly represents the views of Richard Cantillon.
Philip added a preface on the history and
importance of commerce, some strictures upon
close corporations, new matter on inland and
foreign trade, bankers and banks, and exchanges,
interspersed with quotations from Hume's
Essays, and from The Universal Merchant, etc.
(see N. Magens), concluding with a criticism
of the law relating to bills of exchange.
The book was reviewed in the Monthly Review
or Literary Journal for April 1759, London,
vol. XX. 309. Sir James Steuabt (Works, ed. 1805,
iii. 22) says, "Mr. Cantillon, in his Analysis of
Trade, which I suppose he understood by practice
as well as by theory, has the following passage," etc.
"A small treatise of Arithmetic," explaining
the foreign exchanges " vulgarly and decimally "
without " unintelligible jargon," was designed by
the author of the Analysis (p. 85), but does not
seem to have ever been published. h. h.
CANTILLON, Richard. The economic
repute of Cantillon, for a time completely
obscured by the glory of Adam Smith, can
never have rested upon the popularity of his
little book, now one of the scarcest works in
economic literature. For Gournay had to
exercise his great personal influence to persuade
his disciples not to neglect it as others were
doing. And the elder Mirabeau, himself an
adept in the craft of popular writing, deplores,
and accounts for, the failure of the book as due
to the defects of its style and the aridity of its
subject. The perverted Analysis of Trade
(see Philip Cantillon), sometimes confused
with it, probably conduced to its disrepute.
On the other hand it was thought worth while
CANTILLON
215
to reprint it at least twice within a year of its
publication. And the references to it in so
widely-read a book as L' Ami des Rommes must
have made known the name of Cantillon to
many who never saw his JEssai.
The influence of the book is evidenced not by
the number but by the distinction of its students,
including Gournay, Quesnay, Mirabeau, Tur.-
GOT, and Adam Smith. It gave birth to Mira-
beau's L'Ami des Hommes and apparently sug-
gested much of the Tableau CEconomique of
Quesnay and parts of the Wealth of Nations.
It was, however — perhaps because of its con-
cise style — much misrepresented and misunder-
stood. Cantillon avoided, as Jevons has pointed
out, the one-sidedness of the Physiocrats ; and
yet has been marked out as a Physiocrat. He
was declared by Mirabeau to hold the doctrine
that population is the source of riches, though,
in Jevons's opinion again, he anticipated in
condensed form the celebrated essay of Malthus.
And Adam Smith loftily imputed to him an
attempt to form exact estimates in matters
where Cantillon expressly disclaimed any such
pretension.
The importance of the book in the history of
the development of economic science may be
best indicated by a short analysis of its con-
tents. It consists of three parts. Part I.
opens by delining Wealth and resolving it
into the elements Land and Labouh, explains
the ** natural" formation of societies and social
classes, villages, towns, cities, and capitals ;
the "natural " variations of Wages in dilFerent
employments (due to time, expense and difficulty
of learning, risk in Avork, capacity and trust
required) ; the "natural " adjustment of Supply
of labour to Demand ; contrast between real or
intrinsic (normal) value, and market value —
the first depending upon cost of production, the
second upon supply and demand ; the equation
between land and labour ; the minimum wage
for family maintenance : the difl'usion of wealth
through the agency of the landed classes ; con-
duct of European commerce by employers at a
venture (robbers, beggars, artists, lawyers, etc. ,
employers of their own labour) ; wages certain,
profits uncertain ; changes of demand (Fashion);
population adjusts itself to the means of sub-
sistence ; labour the "natural" riches of a
state : gold and silver convenient for money
because useful, beautiful, durable, portable,
divisible, easily transported and guarded,
cognoscible, indestructible by fire, of equal
goodness, not too cheaply produced, etc.
Part II. treats of Barter ; market prices ;
circulation of money in mass and rapidity ;
how much money does a country require ?
increased and decreased currency ; effects of
appreciation on fixed contracts and wages ;
Credit ; Interest, its causes, rise and .fall of
rate, not dependent upon scarcity or abundance
of money.
Part III. deals with foreign trade ; Foreign
Exchanges ; variations in relative value of
monetary metals ; alterations of coinage ;
Banks ; national banks ; reserves ; guarantees ;
banking and credit.
The lost supplement included a precise and
comparative account of the economic condition
of the workmen of Europe as reflected in their
expenses — much, apparently, upon the lines of
Le Play's great work exactly one hundred years
later {Les Ouvriers Europeens, 1855). It de-
scribed the actual diffusion of a large income ;
minutely analysed the cost of production of
certain articles through their several com-
ponent elements, etc. etc.
The execution of this ample programme is no
less remarkable than its conceittion. Jevons
thought Cantillon wrote "with the scientific
precision of a Cairnes or a Cournot," and Prof.
Marshall refers to his "thoroughly scientific
manner " of discussion (Frin. vol. i. p. 593 n.)
At once terse and subtle, he united close observa-
tion of concrete fact with keen detluctive power.
To consumption and demand he assigned an
importance not generally recognised till much
later. And his beautiful examples of accurate
reasoning were rendered tedious to his contem-
poraries by very reason of his careful limitations
and guarded hypotheses. The indirect influence
of the book is difficult to trace. In France the
Bssai has been pretty continuously read (see
e.g. Ganilh, Des Systemes d'^lconomie Politique^
2ded. 1821, vol. i. pp. xv. 134 ; vol. ii. p. 107),
and so stimulating and suggestive does it remain
that its direct influence may be found to be not
yet exhausted.
Essai sv/r la Nature du Commerce en gineral
traduit de Vanglois. X Londres, chez Fletcher
Gyles ; dans Holborn, M.DGG.L V. (being reprinted
for Harvard University, 1891). H. H.
Cantillon enunciates most of the leading
principles of political economy relating to
supply and demand, normal value, the role
of the Entrepreneur, population, currency,
banking, and other important subjects. But it
Avill be found that the statements often involve
ideas peculiar to the writer, or the age ; in par-
ticular, his difficult definition of value as
regulated by quantity of land as well as of
labour. The similarities between Cantillon's
views and those now received are not more
instructive than the differences. A full analysis
of Cantillon's work, and an extreme estimate
of its importance, will be found in Jevons's
article on "Richard Cantillon ;ind the Nation-
ality of Political Economy," in tlie Contemporary
Review, 1881. In Investigations in Currency
and Finance, Jevons discusses Cantillon's re-
marks with respect to the statement on the
ratio between gold and silver made by Newton.
F. Y. e.
It has been a matter of some difficulty to
explain the connection of Richard Cantillon's
216
CANTILLON
Essai with Paris, where it was published, and
the influence it had on contemporary French
economic thought. The following additional
particulars respecting his life may assist in
the elucidation of these points.
1. TJie Life of Cantillon. — One Richard Can-
tillon, probably a cousin of the economist, is
described in some documents in the Archives
Nationales, at Paris (E 804, p. 157 ; E 913,
p. 253, and E 1948, fol. 98), under dates 1706,
1709, and 1718, as a merchant and banker at
Paris, Rue de I'arbre sec. Among his customers
were Irish Catholics, and he was "Receveur
general de la lotterie accordee a la Princesse
d'Angleterre en faveur des religieuses Irlandaises
transferees h. Ypres." In August 1717, the
ticketholders in that lottery petitioned to have
their claims settled, the deceased Richard Can-
tillon (E 918, No. 253), having left only 68,200
livres of assets, and 310,000 livres of liabilities.
Another document (Y. 11080) states that after
the decease of one Thomas Cantillon, an Irish-
man, officer in the regiment of Lally, in 1764,
his brother Jean and his father Philippe Can-
tillon claimed to be his heirs.
The will of Richard Cantillon, of St. George's,
Hanover Square (the economist) (Somerset House,
dated the 12th July 1732, and proved the 21st
May 1735), shows that he had bought a house
in I'aris through the intervention of Edmund
Gough, and he names Francis Gar van and Lord
Viscount Micklethwaite (died 1734) as his ex-
ecutors. Another point relating to Cantillon's
position is mentioned by Horace Walpole, who
writes 25th April 1743, to Sir H. Mann:
"Lord Stafford is come over to marry Miss
Cantillon, a vast fortune, of his own religion.
She is daughter of the Cantillon who was robbed
and murdered, and had his house burned by
his cook a few years ago" [1734] {The Letters
of Horace Walpole, Earl of Orford, ed. by Peter
Cunningham, 1857, vol. i. pp. 241, 242, 298,
and the works of Jonathan Swift, ed. by Sir W.
Scott, 1824, vol. xvi. p. 262, 263).
2. His WorTcs. — There are three editions of
the Essai sur la nature du commerce en g6n6ral ;
one of 1755, 430 pp. besides table des chapitres ;
one of 1756, 427 pp. and that of 1756 in the
Discours Politiques de Mr. David Hume, traduits
de I'Anglois par M. de M., Amsterdam, vol. iii.
pp. 153-428, 1766. It is significant that
Turgot's translation of Josiah Tucker's Re-
flections on the Expediency of a Law for the
Naturalisation of Foreign Protestants, 1751-52
{Questions importantes sur le Commerce d Voc-
casion des oppositions au dernier Bill de Na-
turalisation, etc.), ^ bears the name of the
same publisher: A Londres, chez Fletcher
Gyles, dans Holborn, 1755. That Goumay
studied Cantillon is clear, for of Gournay it is
said that "il fit surtout lire beaucoup I' Essai
sur le commerce en g4n6raly par Cantillon,
Duvrage excellent qu'on negligeait " {Memoires
inAdits de VAhU Morellet, t. i. pp. 37, 38,
1823). The work was highly praised by Mably,
Entretiens de Fhocion, p. 239, 1763; and by
Graslin, Essai analytique sur la Fichesse et sur
I'impdt, Londres, p. 365, 1767. The most de-
tailed account of its origin has been given by
the Marquis of Mirabeau in his Ami des
Hommes, vol. i. 1756. He holds CantiUon to
be a Protestant (p. 58V professes to have
adopted all his principles (p. 78), and frequently
quotes passages of the Essai (pp. 34, 108, 115,
116, 171, 206). The seventh chapter too
opens with a quotation and is followed by some
details concerning its author. "He was," says
Mirabeau, "without contradiction, the most
clever man in these matters who ever existed.
This work, one of a crowd of similar productions
of the description then in fashion, is but the
hundredth part of the writings of that ingenious
man, which perished with him by a catastrophe
both jsingular and fatal. This work itself is
mutilated, for the supplement to which he often
refers, and in which he had established all his
calculations, is wanting. Cantillon himself had
translated the first part for the use of one of
his friends, and it was printed from this manu-
script more than twenty years after the author's
death" (pp. 237-239). In 1767 Mirabeau, ex-
pounding to RotrssEAU the ideas of the econo-
mists upon the subject of population, and
refuting his own former opinions, contained in
the Ami des Hommes, says, he had borrowed
them exclusively from Cantillon, "whose work
I had had since sixteen years in manuscript "
{i.e. 1740). See also his Fhilosophie Fur ale,
Amsterdam, 1764, t. ii. ch. ix. pp. 141, 142.
Mirabeau was shaken in his belief by Quesnay,
who denied population to be the source of
riches, and said "that Cantillon, as a political
instructor, was a fool " (see Fousseau Ses amis
et ses ennemis, correspondance publiee, par M.G.
Streckeisen-Moulton, t. ii. p. 358, 1865). A
rough MS. abridgement of Cantillon's Essai, of
Mirabeau's own making, is among the " Papiers
Mirabeau," at the Archives Rationales at Paris
(M 779, No. 1). It contains a dedication
"A.M.1.D.D.K," no doubt the Duke of
Noailles, "under whose auspices he had studied
that part of politics which is based on ' imagina-
tion ' (obviously contrasting this with ' Science '
Calcul), and who had charged him never to
forget that other part of the subject which de-
pends upon calculation, and is included in the
general name of commerce ; if these matters are
not studied from the very bottom, if their basis
is not well laid, they incur the risk of being as
frivolous and useless as many other essays on
commerce." The essay which follows bears al]
the marks of revision by Mirabeau ; it begins
with what is p. 56 of the printed copy, but
contains some passages, especially the introduc-
tory ones of the chapters, in addition to those
contained in the printed book.
CAPELLO— CAPITAL
217
Cantillon's opinions were based on the econo-
mics of the commercialist school, and of some
of his English physiocratic predecessors. The
"equation between land and labour," which
he quotes from Petty, is contained in the latter's
Political Jnatomy of Ireland^ ch. ix. 1691 (see
Tracts, chiefly relating to Ireland, p. 344, Dub-
lin, 1769). Like Adam Smith at a later epoch
Cantillon combined the theoretical reasoning
of the English with the systematic turn of the
French, thereby promoting the economics of
both countries.
[With Cantillon's view of the tlieory of rents
compare J. Arbuthnot, An Inquiry into the Con-
nection between the present Price of Provisions and
the Size of Farms, p. 34, 1773. — Arthur Young,
Political Arithmetick, 2d part, p. 29, 1779, and
Alex. Wedderbiirn of St. Gerniains, Essay upon the
Question What Proportion of the Produce of
Arable Land ought to be paid as Pent to the Land-
lordl p. 4, Edinburgh, 1776. For Cantillon's
part in economics see Dr. Bauer's remarks
in Quarterly Journal of Economics, 1890, vol. v.
No. 1, p. 102, and Dr. Bauer's article on the
Physiocrats in Conrad's Jahrbucher fur National-
ohonomie und Staiistik, Bd. xxi. H. 2 N.F,, p. 145.
— F. von Sivers, ibid. Bd. xxii. 158.— Prof. Mar-
shall, Principles of Economics, 1890, vol. i. p.
63n. — H. Higgs, Economic Journal, vol. i. No.
2, p. 262.] 8. B.
CAPELLO, Pier Andrea, author of a book
having the title Nuovo trattato del modo di re-
golare lamoneta, published 1752 at A^cnice, and
containing an analysis of the terms " value "
and "price," for which it is still noticed in
books of dogmatic liistory. m. p.
CAPITAINERIE. A privilege granted in
France by the king, down to the time of the
Revolution, to princes of the blood, by which
they obtained possession of the property of all
game, even on lands not belonging to them ;
including manors granted before to individuals ;
so that the erecting of a district into a capitain-
erie, was an annihilation of all manorial rights
to game within it. Arthur Young, Travels in
France, 2d ed. vol. i. p. 600, says "in speaking
of the preservation of the game in these capi-
taineries, it must be observed, that by game must
be understood whole droves of Avild boars, and
herds of deer not confined by any wall or pale,
but wandering, at pleasure, over the whole
country to the destruction of crops ; and to the
peopling of the gallies by the wretched peasants,
who presumed to kill them, in order to save
that food which was to support their helpless
children. " The capitaineries were only one form
of the oppressions of the seigneurs, which will
be found described in considerable detail by
A. Young.
CAPITAL. Definitions in political economy
present great difficulties owing partly to the fact
that the words employed are in general drawn
from ordinary language, and partly because the
fundamental ideas often overlap, and it is
necessary to leave a debatable margin. There
is probably no term in economics which has
given rise to so much controversy as capital,
and in the limits of this article it will only be
possible to indicate the main points in dispute,
and their bearing upon fundamental questions.
As usual the historical aspect of the subject has
been treated most fully by German writers
(compare the masterly introduction of Knies to
his work on Money and Credit (Geld und Credit) ;
Kapital und Kapital-Zins by Bohm-Bawerk ;
and the article on "Capital" in Schonberg's
Randhuch). The Avord capital is connected
with caput, and in mediaeval Latin we read
constantly of the capitalis pars dchiti, i.e. the
principal sum as distinct from the interest.
Thus originally the term seems to have been
confined to loans of money. As tlie chm-ch
forbade the lending of money for interest oi
usury (Interest and Usury), and as this
moral prohibition was generally given effect to
by the law, all sorts of devices were resorted to
in order to disguise the real nature of a loan
(see Canon Law). A thing was nominally
bought by the borrower to be sold back after a
time at a lower price to the lender (a dry bar-
gain as it was termed), and gradually exce])tions
were admitted on the ground of wear and tear
of the thing lent or indirect loss to the lender.
In England before the time of the Tudors
(compare Schanz, op. cit. infra) it had become
generally recognised by merchants and legis-
lators that it was impossible to distinguish
between lending money itself and lending the
things which had a money value. Thus in the
natural course of historical development the
term capital received a Avider meaning. Accord-
ingly later on we find Turcot, as Knies points
out, expressly saying that capital consists of
accumulated values (yaleurs accumulees), and
that it makes no difference whether tlic accumu-
lations consist of precious metals or of other
things. Turgot states also that a man can live
on capital, or rather the interest of capital, just
as well as from personal labour or from funds
derived from possession of lands. Thus capital
is considered primarily as a source of profit.
This historical usage of the term capital is still
found implied in ordinary thought, and a
Socratic inquiry on the modern mercantile
mind would probably give as a first- fruit that
capital is (1) wealth which yields a revenue.
It is quite obvious, however, as the writers
on canon law were so fond of pointing out,
that the precious metals are in themselves
barren (nummus numrtium par ere non potest),
and it is almost as obvious that any form of
hoarded wealth is equally barren, that is to
say unless it is actively employed so as to
produce more wealth. In the earlier stages of
agricultural development, for example, it is
quite common to find that the stock is let with
the land (and the custom still survives in the
218
CAPITAL
mitayer system), but unless the stock were used
for productive purposes it could not possibly
yield a revenue. It may further be noticed
that although one private person may lend to
another capital which may be used unjjroduc-
tively (e.g. money lent on mortgage) and, the
interest of which may still be paid punctually,
it would be impossible for a whole nation
(apart from lending to foreigners) to subsist
on this barren use of capital. So much has
this consideration impressed itself upon econo-
mists that many of them, especially English
wi'iters, have given as the root idea of capital
(2) that pai't of wealth set aside for future pro-
duction (see Abstinence). This, for instance,
is Mill's view to the exclusion of the older
notion of revenue simply. Mill indeed makes
the idea of production fundamental even in the
case of individuals, and would only include in
a man's capital that part of his wealth intended
to be used in producing more Wealth.
A little reflection, however, will show that
either the meaning of production must be
strained, or else the definition of capital thus
obtained will be much more narrow than in
the popular acceptation. In estimating, for
example, the accumulations of capital in the
United Kingdom in recent years Sir R. Giffen
{Essays on Finance, vol. i.) takes into account
the movables, furniture, pictures, etc., in private
houses, and roughly surmises that they amount
to about half the value of the houses them-
selves, and although in a certain sense the term
• ' productive " might be stretched to cover houses,
it could hardly be made to cover pictures and
ornaments. As the result of this line of
criticism some writers (notably Knies) have
made the fundamental idea in capital to be
"wealth intended directly or indirectly to
satisfy future needs." If a fair allowance be
made for Adam Smith's want of scientific and
technical phraseology his views on the funda-
mental nature of capital (or stock as he prefers
to call it) come very near to this exposition.
For Adam Smith carefully distinguishes be-
tween the wealth that is immediately consumed
and the stock that is reserved or set aside out
of a possible surplus. It is instructive to note
that Adam Smith, in order to emphasise the
distinction between Income and its source, or,
in other words, between immediate consump-
tion and capital, gives a very wide and unusual
meaning to the term immediate. "A stock of
clothes may last several years ; a stock of
furniture half a century or a century ; but a
stock of houses, well built and properly taken
care of, may last many centuries. Though the
period of their total consumption, however, is
more distant, they are stiU as really a stock
reserved for immediate consumption as either
clothes or household furniture." In spite of
the authority of Adam Smith, however, it may
be questioned if it is advisable to give to the
term immediate such a paradoxical interpreta-
tion, and to exclude houses and the like from
the capital of a country. A man, it may be
argued, might well choose between living up to
his income and saving so much a year in order
to build a house for himself, and when once
the house was built it would appear to form a
part of the capital not only of the individual
but of the nation. In fact, on analysis it seems
that we ought to distinguish between immediate
(in the more usual sense of the term) and de-
ferred Consumption. Even from this point of
view, however, it is impossible to take the term
"immediate" too strictly, and it seems best to
construe it relatively to the kind of income.
The immediate consumption of a labourei
earning weekly wages might be embraced
within the week, whilst in the case of a high-
salaried official a year might be taken as the
unit, and in the case of a great nation spend-
ing money on armaments, etc., the term might
be extended for some years. But even in this
last example there is still a plain diflFerence
between building forts or strategic railways
which are supposed to last for centuries, and
providing for present wants by the personal
equipment of soldiers. Practically it is of
course always difficult to know how much may
be fairly charged to capital account, and how
much ought to be reckoned as part of immediate
consumption. Logically, however, the distinc-
tion seems clear enough, and it has given rise
to that description of capital (3) called by
the Germans especially consumption capital.
The principal difficulty in this conception of
capital is that, in the language of one of Mill's
"four fundamental propositions on capital,"
aU capital is consumed, which, in the sense that
nothing lasts for ever, is obviously true. Yet,
even the schoolboy who decides between a tin-
whistle and a penny pie, knows that the rate
of consumption in the latter case is infinitely
quicker than in the former, and it may be said
that if he eats the tart he is only an unpro-
ductive consumer, whilst if he buys the whistle
he is a small owner of consumption capital.
And, in fact, Mill's object in this proposition
appears to have been rather to emphasise the
distinction between hoarding (the wealth not
being productively consumed) and saving (the
wealth being used as productive capital), (see
Abstinence).
So far then the result of the investigation on
the connotation pf the term capital appears to
be that there are three species of capital in each
of which a different quality is emphasised,
accordingly as we consider (1) the yield of
a revenue, (2) the production of more wealth,
(3) the reservation of means for future enjoy-
ment. It remains then to consider whether
there is not some root-idea from which these
three branches spring. The line of thought
suggested by Adam Smith and developed by
CAPITAL
219
Knies is found to lead to this result : — Capital
is wealth set aside for the satisfaction — directly
or indirectly — of future needs. This satisfaction
may be obtained by the individual by lending
his wealth at "usury" — "usury of money,
usury of victuals, usury of anything that is
lent upon usury " — or by reserving means for
future production as in the case of the husband-
man and his corn or cattle, or by laying up for
himself a treasure which will be a delight for
many days.
In the different departments of political
economy the stress is laid in general on one
of these three characteristics to the exclusion of
the other two. In the department of pro-
duction, for example, as the very name implies,
capital is regarded almost entirely as one of the
principal agents in production, as sustaining
or auxiliary to labour. Logically, it is not
necessary to consider at this stage how the
product is divided, or even that it is intended
for future or immediate consumption. But in
the departments of distribution and exchange,
the characteristic of yielding profit or revenue
is fundamental, whilst in taxation several ques-
tions of importance spring from the distinc-
tion involved in consumption capital.
The principal points of fundamental imjiort-
ance in the qualitative definition have now been
considered, but there are several minor questions
which have given rise to much controversy.
(1) Is all capital the result of labour, and ought
we to exclude the forces and free gifts of nature ?
The answer, as in all questions of definition,
must depend purely on the convenience of
the classification for the subject or problem
in hand. In the department of Phoductiox
it is often necessary to contrast capital in
the sense of accumulations due to labour (fest-
geronnene Arhcit-Zeit as the German socialists
phrase it) and ' ' the natural and indestructible
powers of the soil " of Ricardo, as, for example,
that no exception may be taken to the language,
advantages of situation. In the department of
Distribution, again, stress is often laid on
analogies between the limitation of natural
sources of supply (and the consequent Uneaiined
Increment) and the ordinary forms of capital,
which with sufiScient labour are capable of
indefinite extension at an ordinary rate of
profit. On the other hand, however, it is
extremely difficult practically to draw the line
between the gifts of nature and the results
of labour, and between earned and unearned
increments. Even sheep farms in mountain
districts require a certain amount of surface
drainage, fencing, etc., and once the necessary
labour has been bestowed, it is hard to tell
how much is due to man, and how much to
nature. If we consider the question from the
national point of view, and take, as is natural
with a nation, long periods, the labour in
the mere appropriation or first occupancy of the
natural sources will be found to be considerable.
Compare for example the condition of England
before the invasion of the Romans and during
the Roman occupation, or mediaeval England
with the England of to-day. Rivers have been
diverted, extensive forests cleared, swamps and
marshes drained, and natural harbours im-
proved and protected. Thus even in pro-
duction it would not seem unreasonable to
include these so-called natural sources, in order
to emphasise the fact that they can only be
made available, as with other forms of capital,
by the labour and ingenuity of man. And
although this admission is made, it would still
be possible to discuss Adam Smith's favourite
position that in some things, notably agricul-
ture, nature labours with man to a greater
extent than in others, e.g. the manufacture
of scientific instruments of gi-eat delicacy.
It may be observed that in estimates of
national capital, such as that made by Mr.
Giften, not only is land included, but it stands
first on the list in order of importance. It
is obvious also that the capital value of land
would certainly include from the practical
standpoint the minerals, etc. not yet ex-
tracted, as well as the value due merely to
such a quality as situation. Logically, any
difficulty may be technically overcome by
speaking (with Held) of the "labour oi
appropriation," especially if we take into
account the contribution made by the state
as such to the organisation and secmity of
labour. (2) A second controversy has arisen
on the question on which Mill lays such
stress, namely: — "Z>oe.s the distinction hetweoi
capital and non-capital depend on the intention
of the cajntalist, or in other words, the owiur of
the potential capital ?" If the answer be in
the affirmative, we are confronted with the
difficulty from the point of view of the
individual, that the same thing would at one
time — even on the same day — be considered
capital, and at another non-capital. Thus
Professor Marshall in the Economics of Industry,
argues that a doctor's carriage Avlien used on
professional visits would be capital, but when
used for pleasure merely would not be capital.
(Compare, however, the later treatment by the
same writer in the Principles of Economics.)
This difficulty, however, would be overcome by
admitting the species of consumption capital.
Again, there are certain forms of wealth,
machinery, tools, instruments, etc., which from
their natm-e could only be considered as capital,
whilst other forms, e.g. seed-corn in a famine,
may or may not be immediately consumed
according to the intention of the owners.
After all, however, the difficulty is only one of
degree, and, as in other cases, we may leave
open a debatable margin in the case of the
individual, whilst with a nation it would be
easy to determine roughly by means of statistics
220
CAPITAL
between the amount of goods or wares im-
mediately consumed and the amount on the
average reserved directly or indirectly for the
future. On the whole it may be doubted if it
is possible or desirable to arrive at the intention
except by arguing from the accomplished fact,
or from the nature of the things, and the only
use of the discussion is to emphasise again
the fundamental distinction between the satis-
faction of immediate and future needs.
(3) A third question has been much debated,
which is, however, more properly dealt with
under Wealth (q.v.), namely : — Does capital
include what are called immaterial as distinct
from mateHal utilities ? The answer is similar
to that in question (1) as to the connection
between Labour and capital, and must depend
on the convenience of emphasising, or not
certain points of analogy and contrast. On the
one side the "fixed skill" of a workman is in
many respects similar to the nice adjustment of
the wheels of a machine, and resembles still
more closely the trained qualities of the
domestic animals. The objection that the
skill is attached to the man may be answered,
as by Mill, that a coal mine is also attached to
a place, or, still better, by the analogy that in
matters of contrast the technical skill may be
considered as separated from the higher qual-
ities of the personality of the individual. On
the other hand, however, it is often necessary
to contrast the worker \vith the work done, and
the wealth produced with the people for whom
it is produced. By some writers {e.g. List)
the acquired skill of a people, the greater part
of which has been inherited from the past, and
is due to the labour, and saving, and self-
restraint of past generations, is reckoned as the
most important element in the national capital,
and both in the department of production and
in distribution the contribution of this "social
capital " to the annual produce must be care-
fully considered. The principal reason why a
civilised nation can so soon recover from the
effects of a devastating war is to be found in
the acquired skill of the inhabitants, and the
same remark applies to the rapid development
of new colonies. Thus Adam Smith might
well include the skill of the workers in a nation
in its fixed capital. But when, as is usual in
questions of economic definition, we appeal to
popular usage, we find that hitherto, at any
rate, the contrast has overcome the analogy.
No statistician has yet attempted to give, even
roughly, a value to this "social capital," or to
estimate the capital value of the skill of
labourers, although in particular cases, such as
compensation for injury or death, some such
computation must be made. The distinction
■ will be found to be of vital importance in dis-
cussing the connection between capital (in the
narrower sense) and Wages.
Besides the skill of the inhabitants of a
country are other so-called immaterial utilities
which have sometimes been included in capital,
and sometimes excluded. Precious metals
which form the material money of a country
have always been included under its capital, and
the question arises whether, if an efficient
substitute can be found, this substitute is not
equally capital. There can be no doubt that
without the banking organisation of the
United Kingdom the business even of producing
wealth could not be carried on, at least to the
same extent. Banking is an essential part of
natural division of labour, and Bank Notes and
other forms of representative money are quite
as efficient agents of production as the precious
metals themselves. These questions are,
however, discussed separately under Credit
(g.v.) From the individual point of view such
immaterial utilities as the Good- Will of a
business, Copyrights, Patents, and the like
would fall under capital unless the material
characteristic is considered essential.
Besides the three species of capital already
discussed there are other divisions which have
found a place in the text-books. The most
important is the distinction between fixed and
circulating capital. Adam Smith took the
terms apparently in their literal sense and con-
sidered the essence of the difference to lie in the
fact whether or not the capital changed hands
(or circulated) in order to obtain a revenue.
"If it {i.e. stock) is employed in procuring
future profit (as distinct from present enjoy-
ment) it must procure this profit either by
staying with him or by going from him. In
the one case it is a fixed, in the other it is a
circulating capital." Wealth of Nations, bk.
ii. ch. i. Mill, on the other hand, and most
recent English economists, define circulating
capital, as that which performs the whole of its
functions in a single use, whilst fixed capital
can be used more than once in the same way.
Of course in particular cases it would be diffi-
cult to draw the line accurately, but the broad
distinction is quite obvious. Compare and
contrast, for example, machinery as the type of
fixed, with food supplies and raw materials of
manufacture as the types of circulating capital.
Very often by English writers circulating is
used as equivalent to wages capital. Thus,
under the title of the conversion of circulating
into fixed capital Mill really discusses the
effects of the introduction of machinery upon
the working classes (see Wages, vol. iii. and
App,). This confusion between circulating and
wage-capital has been one of the causes of the
extreme and untenable form of statement of the
wages-fund theory, and of the narrow views of
the relations of industry and capital expressed
in Mill's four fundamental propositions {Political
Economy, bk. i. ch. v.) The terms sustaining
and auxiliary capital seem to be more free
from ambiguity or question beggiiig. Other
CAPITAL
221
divisions of capital are sufficiently described by
the words used e.g. floating and sunk, special-
ised and non- specialised, etc.
It may here be observed that, considering
the complicated controversies which have arisen
in connection with the definition of capital, it
is often useful to employ qualifying adjectives
when the term is applied beyond the limits
within which there is no dispute. We might,
for example, speak of the skill of a workman
as personal capital, and the various industrial
organisations of a nation as social capital. It
seems also worthy of remark that those Avriters
who take the most narrow definition of capital,
and confine it merely to material production-
capital, really bring in the wider content of the
idea, indirectly under different headings, e.g.
the accumulation of capital, the efficiency of
the industrial agents, organisation of industry,
the influence of credit, etc. Thus it often
happens that a -vniter imagines that he has
made some important discovery on the nature
of capital when he has simply made an altera-
tion on the arrangement or classification of
topics, a most useful operation if well carried
out, but of subordinate importance to a positive
addition to the materials of a science. The
latest systematic work on Capital {Kapital und
Kapital-Zins by E. von Bohm-Bawerk), which
is full of excellent material from the historical
standpoint, gives many examples tliat incur
some part of tliis stricture.
In conclusion it must be allowed that it is
impossible to thoroughly discuss such a compre-
hensive term as capital without travelling over
every department of economics. Similarly a
complete bibliography would involve a reference
to almost every important economic work.
[Besides the works referred to in the text, special
attention may be called to the following. On the
historical side (that is of fact, not theory), as re-
gards antiquity one of the most instructive works
on the effects of capital is Mommsen's History
of Rome. In the mediaeval period the work of
Schanz, England's Wirthschaftliche Entwickelung,
etc., gives excellent material from the Saxon to
the Tudor period ; Thorold Rogers on Six Centuries
of English Work and Wages and Brentano on
Gilds and Trade Unions give the later develop-
ment. On the history of the theory the principal
works have already been noticed. On the theory
in recent times, the reader may consult the chapter
on "Capital" in the Principles of Pol. Econ., by
Prof. H. Sidgwick, for an excellent analysis of
"common" and scientific English thought; the
Works of P. Leroy Beaulieu, e.g. La Repartition
des Richesses : La Science des Finances. New
ed.j 1912. The work of Karl Marx ( Das Ka,pital)
which has been translated into English, must be
read with caution as regards the deductions from
the masses of adroit quotations from English
sources, whilst the central theory has not been
accepted by any economist of repute though still
apparently the basis of German socialism. Com-
pare A. Held on Socialismus und Capitalismus and
Schaffle on the Quintessence of Socialism (trans-
lated into English). List on National Systems oj
Political Economy may be compared with the
Wealth of Nations, bks. ii. and iv.] J. s. N.
History of the word. — The word "capital " in
its economic sense, like the word "principal,"
and like the word "capital" itself in its geo-
graphical sense, is an adjective elliptically used
as a substantive (Murray, New English Diction-
ary, s.v.) The full phrase is "capital stock."
" Capital " was used for "capital stock," at least
as early as 1635 {e.g. in Dafibrne, Merchant's
Mirrour, Ex. No. 96), but the fact that it was
merely an adjective was by no means forgotten.
The Act 8 & 9 W. and M. c. 20 (1697) "for
enlarging the capital stock of the Bank of
England," provides that before the enlargement
is made, "the common, capital, and principal
stock of the said governor and company shall
be computed and estimated by the principal
and interest owing to them by the king, or by
any others, and by cash, or by any other effects
whereof the said capital stock shall then really
consist over and above the value of the debts
which they shall owe at the same time for
principal and interest to any other person or
persons whatsoever." In Dyche and Pardon's
Dictionary, 1735, the article on "Capital"
begins, "Chief, head, or principal; it relates
to several things, as the capital stock in trading
companies is the fund or quantity of money
they are by their charter allowed to employ in
trade." Adam Smith frequently uses the full
phrase. e. c.
Legal ruling that Capital need not he replaced
from profits. — A trader's assets are in most cases
whoUy or partly of a perishable nature. Before
ascertaining the profits derived from such assets
in a given year provision ought to be made for
the depreciation estimated to have taken place
during that year. If, for instance, a person who
invested £1000 in the purchase of a patent having
five years to run, and producing an annual profit
of £500, treats the whole of the annual £500
as the profit of the respective year, he will find,
at the end of the five years, that his source of
income has disappeared. If, on tlie otlier hand,
at the end of each year a sum of £200 is carried
to the credit of a sinking fund and the remaining
£300 only are treated as income, the owner of the
patent will at the end of the five years be able to
invest his original £10 00 in some other profitable
manner. Where the facts are so very plain
this seems almost a truism, but in many cases
it is more difficult to distinguish between income
in the proper sense and repayment of capital.
The inquiry ought, however, always to be made
and acted on. The importance of taking the
depreciation of property into account in ascer-
taining the profits of a given year is even more
obvious in the case of a company than in tlie
case of a private individual. The gradual dis-
appearance of wasting property must in the end
222
CAPITAL
materially damnify Preference shareholders,
Debenture holders, and ordinary creditors, and
must also cause great injustice as between the
persons entitled to the income of shares for
limited periods and the persons ultimately
entitled to the property of the shares. It seems
strange that although the integrity of the capital
of limited companies is, in other directions,
most jealously watched by our courts, the
greatest laxity is allowed mth reference to the
valuation of assets of a wasting nature.
In the leading case of Lee v. Neuchatel
Asphalte Company (Law Reports, 41 Chancery
Division, p. 1) it was held by the Court of
Appeal that " there is nothing in the Companies
Acts to prohibit a company formed to work a
wasting property, as e.g. a mine or a patent,
from distributing, as dividend, the excess of the
proceeds of working above the expenses of
working, nor to impose on the company any
obligation to set apart a Sinking Fund to meet
the depreciation in the value of the wasting
property."
The following observations of Lord Justice
Lopes deserve special notice — " It is said by
the appellant that a company is not at liberty
to pay a dividend unless they can show that
their available property at the time of declaring
the dividend is equivalent to their nominal or
share capital. In my opinion such a contention
is untenable. Where nominal or share capital
is diminished in value, not by means of any
improper dealing with it by the company, but
by reason of causes over which the company has
no control, or by reason of its inherent nature,
that diminution need not, in my opinion, be
made good out of revenue. "
The result of the doctrine so laid down may
be illustrated by an example. A company
having invested the whole of its capital in
licensed premises at a price securing an excellent
return during the continuance of the licence,
divides the whole of the net revenue in each
year among its shareholders. The licence is
withdrawn before the dividend for the last year
has been declared. This is a diminution of the
value of the company's property ** by reason of
causes over which the company has no control,"
and the company may divide the whole of the last
year's profit among the shareholders, although
the value of the land and buildings since the
withdrawal of the license is far below the
amount of the debts owing by the company.
We are bound to bow to the ruling of the Court
of Appeal, and must therefore assume that this
result is in accordance with the Companies Acts,
but economically it cannot be considered sound ;
while, from the point of view of persons having
dealings with limited companies, and relying on
the correctness of their annual balance-sheets,
it is highly inconvenient, and further it contra-
dicts every sound principle of business and of
bookkeeping. E. s.
Capital rarely permanent. — The constant
need of renewal of capital is a point often not
remembered. Capital, as Professor Sidgwick
says {Principles of Political Economy, ch. v.), is
"a semi-technical term, being habitually used
not by men generally in their ordinary thought,
but by men of business and others when dis-
cussing industrial matters," ** In its original
use by practical men," Professor Sidgwick con-
tinues, "capital" undoubtedly means "wealth
employed so as to yield a profit." The distinc-
tions which, as Professor Sidgwick shows, must
be made as to the use of the term thus defined,
are stated under the head of Capital (q.v.),
the remarks on the subject in this place are
confined to the point — that the "wealth" thus
" employed " stands constantly in need of
renewal. Whether "capital" exists in the
form of machinery or any other finished pro-
duct of intelligent skill, or in the form of
the floating capital or cash used in paying the
labour employed in keeping that machinery in
motion, or in purchasing the materials needed
to maintain any product of intelligent skill —
a mint for instance in working order — constant
renewal is, in by far the gi-eatest number of
cases, needed to maintain not merely its effici-
ency, but its ,very existence. A railway, for
example, needs not merely a continual repair
but perpetual reconstruction, which has properly
to be charged to the fund which is properly
profit, but which in this technical sense is
called "revenue." As trafiic increases new
rails have to be laid down, old stations enlarged
and renewed, old bridges replaced by new ones
capable of bearing the heavier weights of the
more powerful locomotives and the larger trains
which they draw. In cases like this "capital"
— the word is used here in the technical sense
described by Professor Sidgwick — has already
been charged with the cost of construction of
the stations and bridges which are now super-
seded, and hence have to be rebuilt. It is
"revenue" therefore, the produce of "capital,"
not capital itself, which has to bear the cost
of the renewal so far as this renewal merely
replaces what is actually superseded. Thus, in
the case of a station which cost originally
£10,000, and owing to the increased traffic has
become insufficient to meet the needs of the
locality, and has to be replaced by one costing
£50,000, in all well-managed railways the rule
is that capital bears only the difierence between
the two sums, and revenue is charged with the
replacement of the original outlay. This ex-
ample is given as merely one instance of a pro-
cess which has to be followed in every instance
in which " capital " has to be perpetually main-
tained, however it is employed. It show.i
further, not only the proper method of appor-
tioning the difference between gross and net
"revenues," that is between gross and net pro-
fit, but the very heavy drafts which must cou-
CAPITATION— CAPITATION TAXES
223
stantly be made on "revenue," that is on net
"profit," to meet a class of expenditure which
to many appears exceptional, but which is really
a normal incident in the cost of production.
When examined into thus, it is interesting to
trace how little of what is ordinarily termed
"fixed" capital is really permanent. The ap-
parent permanence of "capital" is occasionally
spoken of as something which may always be
depended on, something which endures for ever.
Because the payment of the interest on the
"debt" of a nation, or the "stock" of a com-
pany is continued from year to year, it is
assumed that the wealth represented by the
original outlay continues in existence and that
the "capital" remains — capital described as the
" saved produce of past labour." The " capital
considered either in the concrete as (mainly) the
accumulated stock of instruments auxiliary to
labour, or more abstractedly as the power of
directing labour to the attainment of gi-eater
but remoter utilities through the control over
the produce of labour possessed by the o-w-ners
of accumulated wealth," is only maintained
through a perpetual process of reproduction.
[See Mill, Principles of Political Economy, bk. i.
cb. v. For connection between KecpdXaiou, caput,
and capital, see Macleod, Dictionary of Political
Economy, s.v. " Capital," pp. 324-67, and Roscher,
Volkswirthschaft, p. 89, § 42.]
CAPITATION (in France). The capitation
was a graduated poll-tax, first imposed in 1695
during the war with the league of Augsburg ;
abolished in 1697, on the conclusion of the
treaty of Rysv/ick, it was renewed when the war
of the Spanish Succession broke out in 1701.
From this time it became a regular source of
income until the Revolution.
The imposition of the capitation is a proof of
the immense power of the monarchy under
Louis XIV. No consent was asked, and no
regard was paid to class privileges. The tax was
to press upon all classes including the nobles.
The mendicant orders, and all whose contribu-
tions to the state did not exceed 40 (afterwards
20) sous were exempted. The rest were divided
into twenty-two classes according to rank, with
a diminishing scale of payment. The first class,
which consisted of the dauphin alone, paid
2000 livres ; the second, viz. the princes of the
blood, paid 1500 ; and so on to the four lowest
classes, which paid respectively 40, 30, 10, and
3 livres. In principle, at least, the tax was
more equitable than any other in France.
The nobles and clergy had been powerless to
prevent the imposition of the tax, but they soon
succeeded in modifying its assessment in their
own interests. The clergy, in fact, succeeded
in escaping it from an early period. In 1695,
and again in 1701, they agreed to pay 4,000,000
livres a year as long as the war lasted. In
1709, when the government was reduced to the'
greatest straits, they purchased permanent im-
munity from the capitation by an immediate
payment of 24,000,000 livres, most of which
they raised by loan. The pays d'etat and many
of the towns compounded for a fixed annual
payment, as in the case of the taille (see
Taille). The nobles obtained the appoint-
ment of special receivers for their own order, and
succeeded in escaping great part of the burden.
But tlie most fatal change was tlie adoption
(in those provinces where the taille was levied
on personalty) of the assessment for the taille
as the basis of that for the capitation. The
division of the twenty-two classes was soon lost
sight of, and the burden upon the lower classes
was enormously increased. If the taille was
increased, the capitation of theRoTURiERwas ipso
facto increased too. Thus the practice grew
up of collecting the tax first from the non-
privileged, and then, if there was a deficit, it
was imposed upon the privileged classes. Thus
it was reckoned that in 1788 a roturier paid
about 12 sous per livre ; and a noble only 2.
The class which ought to have paid 3 livres by
the original arrangement had come to pay 24 ;
the class which ouglit to have paid 10 paid 60,
and that which ought to have paid 30 paid 180.
This enormous change was produced within a
century, not by formal enactment, but by the
steady pressure of the privileged classes upon
the administration. The result was disastrous
to the state, as the tax, according to Necker,
only produced 41,000,000 livres, whereas it
was estimated to produce 54,000,000.
[Necker, I)e V Administration des Finances de
la France (1784). — Gasquet, Precis des Institu-
tions Politiques et Sociales de V Ancienne France
(Paris, 1885).] R. l.
CAPITATION TAXES. Taxes directly im-
posed on each individual to be charged there-
with, the amount payable being either a uniform
sum or, as in later times, a sum regulated by
reference to a prescribed scale varying with the
rank and station, and, in some instances, Avith
the supposed fortune of the person charged.
Such taxes are frequently described as poll
taxes.
The first capitation or poll tax was imposed in
England in 1377 at the uniform rate of 4d. per
head. It is stated in the Subsidy Ptoll printed
in the Archccologia, vii. 37, that the sum pro-
duced was £22,607 paid by 1,376,442 persons,
although, as Mr. Dowell remarks, the "sum
raised does not correspond with the stated
number of taxpayers." In 1379 and 1380
graduated poll taxes were imposed, the tax levied
in the latter year leading to the movement in
which Wat Tyler was the moving spirit. There-
after, capitation taxes were levied at rare inter-
vals, the principle of classification being present
in all of them and on an increasingly elaborate
basis. In 1692 a poll tax paid in each quarter
of that year produced £580,000, and in 1698 a
similar tax estimated to yield £800,000 pro-
224
CARACCIOLI— CARAFA
duced no more than £321, 397. " When a tax,"
said Davenant, "yields no more than half what
in reason might be expected from it, we plainly
see tliat it grates upon all sorts of people ; and
such ways and means of raising money should
be rarely made use of by any governmei^t."
Accordingly, the poll tax of 1698 was the last
imposed in this country, although the system
survives in several Eurojiean countries.
Adam Saiith ( Wealth of Nations, bk. v. chap,
ii. art. iv.) condemns capitation taxes as alto-
gether arbitrary and uncertain, to which he
adds that "the greatest sum which they have
ever afforded might always have been found in
some other way much more convenient to the
people." It may, however, be said, that it is
in the inequality of capitation taxes, rather
than in their uncertainty or arbitrary character,
that the essential objection to them consists.
They need not necessarily be uncertain, and
their arbitrary character depends mainly upon
the manner in which they are administered.
If levied, however, without distinction of age,
sex, or fortune, they are so manifestly unequal
that they have been described as the taxation
of men as if they were beasts, and as constitut-
ing "a mark of slavery." And even when
attempts have been made to remedy this in-
equality by suitable gradations, sufficient care
has seldom been taken in constructing them to
avoid the imposition of a direct burden upon
those above the condition of beggary but
possessed of the means of a bare subsistence
only. Graduated capitation or poll taxes may
be described as rough and ready attempts to
achieve that species of direct taxation which is
more scientifically accomplished by a well-con-
structed income tax (see Income Tax), to
which tax, as then known, many of the observ-
ations of the earlier economists on the subject
of capitation taxes are indeed equally directed.
T. H. E.
[See Dowell's History of Taxation and Taxes in
England (London, 1888). — Block's Dictionnaire
O&neral de la Politique (Paris, 1873).]
CARACCIOLI, DoMENico (marquis and
viceroy of Sicily), born in Naples 1715, died
1789 ; published (1785) a pamphlet on com
laws, having seen their bad consequences
during a great famine which devastated Sicily
in 1784 and 1785. However, he is not a
thorough free trader, and he is more of a political
writer than an economist. Custodi published
his pamphlet in his Economisti classici Italiani,
Milano, 1804. M. p.
CARAFA, DioisrEDE, perhaps the first seri-
ous writer in Italy on public finance. When
he was born is not known. He died in 1487.
He was duke of Maddaloni and was invested
with the highest political offices under Alfonso
I. of Aragon, who only succeeded in taking
Naples from Renato of Anjou through the
bravery and ability of his captain Carafa.
Carafa's book consists only of eighty-eight
pages, and its full title is : De regis et boni Prin-
cipis officio opusculum a Diomede Carafa, primo
Magdalunensium Comite, compositutn, Neap,
apud Castaldum, 1668 (edition now circulat-
ing). He wrote his book between 1469 and
1482 in Italian, and the Duchess Eleonora,
daughter of Alfonso I., and wife of Ercole L,
Duke of Ferrara, whose instructor Carafa had
been, dii-ected it to be translated into Latin.
It is divided into four parts : (1) De imperio
tuendo, (2) de jure dicendo et justitia servanda,
(3) de re familiari et vectigalibus adminis-
trandis, (4) de subditorum civitatisque com-
modis procurandis.
In the third part, which is the financial one,
of his treatise, Carafa makes some original re-
mai'ks. He maintains that the revenue must be
regulated in proportion to the expenditure, and
that this has three principal divisions — expenses
for the protection of the state ; those necessary
for the court of the prince ; and lastly a category
of varying importance relative to the general
welfare of the state. As this last category is
the variable and unforeseen one, whilst the two
other ones are certain, the greatest possible
margin should be left for it on the side of income,
and the othef expenditure should be reduced to
a minimum. The revenue should be minutely
accounted for and examined into every year by
a special body of officers. Taxes should be
stable and in every detail indisputable (Carafa
says : taxes should be formulated so clearly
that people need not go to law about them to
know what they have to pay) and not oppres-
sive ; but taxes wiU be certain to be oppressive
if the greatest economy does not prevail in the
expenditure. Economy in the expenditure
makes it possible for the prince to choose
amongst the many possible taxes only the
very best, and eliminate especially those which
are iniquitous or unequal in their incidence.
Moderation in the expenses will also have the
good effect that the prince need not have re-
course to forced loans, which he thus character-
ises, " Quid aliud existimari debet, quam tutum
quoddam rapinae aut furti genus ? " Such loans
induce population and capital to emigrate, and
it would be highly immoral for the prince to
endeavour to search out where wealth was, by
employing spies so as to plunder his subjects
the better. He thinks the collecting of taxes
ought to be farmed out, because the "publi-
cans " act with greater zeal, intelligence, and
activity than government officials. Carafa
clearly recognises that the wealth of the sub-
jects is the foundation of the whole state
machinery, and must therefore be spared, "Sub-
ditorum facultates potentise regise fundamenta
existimari oportet." Far bolder than S,
Thomas Aquinas (q.v.), Carafa does not feai
moral evils from a development of commerce,
the first great source of the wealth of subjects •,
CARBONARI—CAREY
225
I
therefore commerce must be left absolutely free.
Carafa's powerful intellect discerned how bene-
ficial for a country are foreign merchants who
settle in it, and strongly opposed every sort of
oppression tending to give foreigners a posi-
tion inferior to that of native citizens. His
formula of liberty is "Sicut indignum est a
civibus officia Regentis invadi, ita civium negotia
occupari a Hege non decet. " Nevertheless Carafa
cannot yet quite free himself of the prejudice
that state-help is of some good, and he advises
the prince to lend money, to give prizes and aid
industry in many other ways, since the prince,
he says, is sure never to lose in the long run by
doing so, because " princeps inops esse non potest,
cujus imperio ditissimi homines subjiciuntur. "
Especially agiiculture needs the indulgence of
the prince, because peasants often need loans,
and when the seasons have not favoured them,
the tax collectors ought not to aggravate their
situation, but give them a little time to pay
their taxes and their debts. The labour of the
subjects is tlie source of the wealth of a nation
and the government must never crush them
and if it can, must help them ; ' ' nee tavun
Tiegaverim non posse hoc (state-help) ab omnibus
et ubique praestari ; sed ubi etfacultatum copia,
et locorum commoditas suppetit, ibi s^ibditos a
Principibus suis, et consilio, et re excitandos ad-
juvandosque esse cesser o."
Is it not remarkable to find a statesman and
a warrior of those rough times speaking in sucli
terms ? M. P.
CARBONARI. This secret society (referred
to in the notice of the life of Etienne Cabet).
claims a history of much antiquity, and Francis
I. of France as founder. Its recent activity
dates, however, mainly from the revolutionary
period, at the close of the last century, when
its principal sphere of action lay in Italy. The
project formed by the society of a united Italy,
under the name of the Ausonian Republic,
proved abortive ; but the fall of Murat was in
great measure due to its influence. After the
restoration of the Bourbons, however, to the
kingdom of Naples, the Carbonari were thrown
on one side, and the society was proscribed
throughout Italy. Expelled thence, it began
to take root in France, and Lafayette became
its chief (c. 1820-1821). After many vicissi-
tudes the society was revived about 1825, and
some ten years later coalesced with the society
named Young Italy. The course which the
society of the Carbonari took marks "a transi-
tion period in the history, of secret societies.
From secret societies occupied with religion,
philosophy, and politics in the abstract, it leads
us to the secret societies whose objects are more
immediately political. And thus in France,
Italy, and other centres it gave rise to numer-
ous and various sects, wherein we find the men
of thought and those of action combining for
one common object — the progress, as they
YOlu I.
understood it, of human society " (Heckethorn.
vol. ii. p. 115).
[For literature, see The Secret Societies of all
Ages and Countries, C. W. Heckethorn, 2 vols.,
London.]
CARDOZO, Isaac N., born in 1786 in
Georgia, U.S., settled in Charleston, S.C. ;
engaged in journalism, and died in 1850.
In 1826 wrote Notes on Folitical Economy,
Charleston, S.C, pp. 125. This was called
forth by the publication of Professor M'Vickar's
edition of M'Culloch's article on "Political
Economy," originally published in the Encyclo-
paedia Britannica, a statement of the jDrinciples
of political economy which Cardozo regarded as
erroneous when applied to the United States. The
Ricardian theory of rent was especially attacked ;
many critics at that time saw that the condi-
tions of land tenure and cultivation were so
dillerent in the United States from those in
England that they concluded that Ricardo's
theory was fundamentally erroneous. As editor
of the Southern Patriot, 1816-45, and of the
Evening News, 1845-50, Cardozo wrote in
favour of free trade, and showed an unusual
acquaintance with the subject of finance. He
frequently contributed to the Southern Quar-
terly Peview. D. R. D.
CAREY, Henry Charles (born in Phila
delphia, United States, 1793, died in that city
1879), was the son of Matthew Carey, an Irish
exile, who had become a man of mark as a
publisher, and as a waiter on economic and
]iolitical questions. The son succeeded his
lather as head of the publishing house, but re-
tired with a competency in 1835, and from
that time devoted his energies to economic
science and related subjects. Thirteen octavo
volumes and three thousand pages of pamphlets
remain as the fruit of his activity, besides an
amount of matter, supposed to be twice as great,
contributed by him to the newspaper press. Of
his more important works there are translations
in French, Italian, Portuguese, German, Swedish,
Russian, Magyar, and Japanese, attesting his
remarkable power of commanding attention in
spite of the difificulties created by gi-eat prolixity,
eccentric style, and frequent obscurity of
thought.
Carey began his scientific career at a juncture
when the English School appeared to have
exhausted its deductions fi-om assumed premises.
and to shrink from adjusting its conclusions to
the conditions of actual life. His treatment of
Social Science was original, and led him to a
series of supposed discoveries, the order of which
he has stated in the introduction to his most
important work. The Principles of Social
Science. His point of departure was a theory
of Value which he defined as the "measure of
the resistance to be overcome in obtaining
things required for use, or the measure of
nature's power over man " — in simpler terms
Q
226
CAEEY
the cost of reproduction. This theory Carey
applied to every case of value — to commodities,
services, and land, and in some passages seem-
ingly to man himself. Reasoning that every
gift of nature is gratuitous, he found a universal
tendency to a decline of value as the arts
advance, and to a decrease in the value of
accumulated capital, as compared with the
results of present labour, with a resulting
harmony of interests between capitalist and
labourer. This theory Carey enunciated in his
Principles of Political Economy, published in
1837-40, and its appearance in slightly modi-
fied terms in Bastiat's Harmonies Economiques
in 1850, led to a sharp discussion between the
two authors, in the Journal des itconomistes for
1851. The attempts of Diihring in Germany
to establish the claims of Carey as a reformer of
economical doctrine, led to an equally sharp
controversy between Diihring and Lange, in
which the latter had the best of the argu-
ment.
Ten years later, in his Past, Present, and
Future, Carey announced a law of produc-
tion from land the exact reverse of Ricardo's
With great wealth of illustration, he laid down
the principle that, in the progress of society,
men first till the easily worked and poorer soils,
and descend upon the richer lands as capital
and numbers increase, so that with the advance
of the community the rate of return from land
rises instead of falling. Closely connected with
this supposed reversal of Ricardo's doctrine, and
a natural deduction from the continually in-
creasing ability to support increasing numbers,
was the total rejection of the Malthusian law.
Logical necessity, however, forced Carey to
seek for some ultimate limiting principle, and
this he found at last in Herbert Spencer's con-
jectured physiological law of the diminution of
human fertility, and ultimate equilibrium
between numbers and subsistence. It may be
also noted in passing, that with the Ricardian
and Malthusian doctrines Carey also abandoned
his earlier belief in free trade, from a conviction
that, in the present state of the world, the
co-ordinating power of the government must
be used, in order to preserve economic harmony
and to arrive at ultimate freedom.
Finally, in the second chapter of his Social
Science, Carey announced the crowning dis-
covery of "the great law of molecular gravita-
tion as the indispensable condition of the
existence of the being known as man." The
laws of being he declared to be the same in
matter, man, and communities. As in the
solar world attraction and motion are in the
ratio of mass and proximity, so in the social
world, association, individuality, responsibility,
development and progress are proportionate
to each other. This theory, not of analogy,
but of absolute identity of law, in the physical
and in the social world, is maintained with
great vigour in the Unity of Law, published
when Carey was in his seventy-ninth year.
The scientific importance of these theories
has been maintained by Diihring, Ferrara, and
"Wirth, and has been questioned by Held and
Lange. However revolutionary the theories
may be logically, they had, outside of the
middle United States, little effect in establishing
a school, even in the author's lifetime, and
since his death, under the changed conditions
of economic discussion, have ceased to attract
much attention.
In his own country, Carey is probably best
recollected as an advocate of the policy of pro-
tection. This policy he urged upon grounds so
unusual, that it may be said that, in the dis-
cussion, he seldom pursued his opponents far
upon their own lines of argument, nor has he
often been followed by them upon his own.
The central point of his social philosophy was
the importance of association as the primary
condition of progress. In mere trade, as
between countries exchanging manufactured
goods and raw products, he found an influence
which centralises power and wealth on the one
side and acts towards dispersion and decay on
the other : but in the commerce of services and
ideas carried on by men exchanging with each
other directly, he found a tendency to closer
association, increased economic efficiency, and
general well-being. His treatment of Interna-
tional Trade, then, turned chiefly upon the
stimulus to be given to producers by the home
market, a consequent rapid societary move-
ment, an early diversification of pursuits,
quickened thought, and a resulting gain in
productive power. In this manner he de-
veloped many of the arguments for the protec-
tive system which have now become common,
and perhaps helped in giving to those arguments
a currency much wider than the acceptance, or
even the knowledge, of his general system,
among protectionists to-day. (See American
School of Political Economy.)
Carey held no public office, but his mental
and social qualities made him for many years a
central figure among men of cultivation and
influence in his own community. A brief
memoir of him was published in Philadelphia
(1880) by his friend. Dr. William Elder, from
which is taken the following list of his prin-
cipal works, omitting the long catalogue of
Essay on the Rate of Wages, 1835. — Harmony
of Nature (privately printed), 1836. — Principles
of Political Economy (3 vols.), 1837 '38 'iO.—The
Past, the Present, and the Future, 1848. — Har-
mony of Interests, Agricultural, Manufacturing,
and Commercial, 1850. — Slave Trade, Domestic
and Foreign, 1853. — Principles of Social Science
(3 vols.), 1858-59. — Manual of Social Science
(edited by Miss M'Kean), 1864:.— The Unity of
Law, as exhibited in the relations of Physical,
Social, Mental, and Moral Science, 1872.
CAREY— CARL YLE
227
Closely related to the above is the Manual of
Political Economy, by E. Peshine Smith, 1868.
The Claims of Carey to a high place among
modern economists have been maintained in
Germany especially by Eugen Diihring (Carey's
Umwalzung der Volksvnrthschaftslehre und Social-
wissenschaft, 1865) and in America especially by
Mr. Carey-Baird. Readers who may wish to see
a statement of the case rather from the side of his
followers than from that of his critics are referred
to the writings of these authors. C. r. D.
CAREY, Matthew (father of H. C. Carey)
born in Ireland in 1760, emigrated to United
States in 1788 in consequence of political
troubles. His career was varied and successful ;
editor of newspapers and magazines, pamphlet-
eer, publisher, he was till his death in 1840
(at Philadelphia) a prominent figure. He wrote
numerous pamphlets, partly political, partly
economical. In 1820-40 he was the most active
among the advocates of protection in the United
States. Among his pamphlets (all published at
Philadelphia) may be mentioned : —
Brief Examination of Lord ShefHeld's Observa-
tions on Commerce of United States, 1791. —
Appeal to Common Sense and Common Justice,
1822. — Essays on Political Economy, or the most
certain Means of promoting Wealth, etc. (1822).
— The Crisis, etc., 1823. — Examination of the
Boston Report, etc., 1828. f. w. t.
CARLI, GiAN RiNALDO, born at Capo d'Istria
1720, died at Milan 1795. In 1744 he became
professor of astronomy at Padua. In 1753
he settled at Milan, where he was appointed
president of the financial board by the Aus-
trian government.
Between 1751 and 1760 he published his
famous work on Coins and Minting. (A part
of the first volume was published in 1761 in
Venice under the title, Delia originc e del com-
mercio della moneta, e della instituzione delle
zecche d' Italia ; the whole of the first volume
was published at the Hague in 1754 under the
title, Belle monete e dell' instituzione delle zecche
d' Italia; in 1757 he published the second
volume at Pisa, and in 1759 the third volume,
in two parts, at Lucca.) In 1766 he published
at Milan a pamphlet on the deterioration of
the coin in Milan, and the rules he gives for
amelioration were, later on, the basis of the
reform which was effected. Ten years later
appeared his report on the "Census of the
State of Milan," containing a critical history
of methods for valuations of property. In
1770 he wi-ote a very able refutation of the
mercantile theories concerning the wealth of
nations as measured by exports and imports
{Breve ragionamento sopra i bilanci economici
delle nazioni), hence it is somewhat surprising
to find him writing in 1771 a pamphlet on the
1 oom trade {Del commercio libera dci grani)
in support of Galiani, combating his critics,
and strongly in favour of governmental regula-
tion of this branch of commerce. Most of
I
his economical writings have been reprinted ic
CusTODi's Economisti Italiani, Milan, 1804
Besides being an economist he was a good
antiquarian and historical writer. He tar-
nished his character by his excessive hatred
and jealousy of Pietro Verri, the economist.
M. p.
CARLYLE, Thomas, born 1795, died 1881.
Carlyle conceived that a true political economy
should be a political philosophy and tell us
"what is meant by our country, and by what
causes men are happy, moral, religious, or the
contrary " (see Life by Froude, vol. ii. p. 78).
Economics in a narrower sense was associated
by him with Bentham and M'Culloch
(" M'Croudy "), and nicknamed, through a mis-
conception, pointed by the power which paradox
sometimes exercised even over his happiest
thoughts, the "dismal science." His praises
of Work and Thrift {Past and Present, etc. etc, ),
his description (from Franklin) of man as a
tool-using animal {Sart. Res.), and his respect
for pioneers who drain fens (see Cromwell) or
make railroads, like "the rugged Brindley"
{Past and Present), or reclaim the moors and
forests {Latt. D. P., No. 1), even his cardinal
principle "know what thou canst work at"
{Sart. Res.), are the outcome of his character
as moral teacher, and point to no special econo-
mical bent, though the last no doubt implies
the economical principle of division of labour.
He is courteous to ' ' national economy " when
identified with Old Frederick William (see
Frederick the Great, bk. iv. ch. iii.), and he even
allows that English political economy has had
its lesson to teach us {Latt. D. P., No. 1).
Even "mammonism" itself "has seized some
portion of the message of nature to man ; and,
seizing that and following it, will seize and
appropriate more and more of nature's message "
{Past and Present). The English people are
the wisest in action, and their practical material
work is the one thing they have to show for
themselves that is true and solid {Past and
Present). But he has done most service to
economics by his criticisms. When Past and
Present appeared (1843) the Deutsch-Franzosische
Jahrbiicher of Marx and Engels (App.) took
note of it as the most important book of the day
on social questions. Carlyle there showed that
extreme Laissez-Faire may mean disintegra-
tion of society and simple anarchy ; it removes
old bonds, and leaves men disjoined from each
other, except for the "nexus of cash payments."
The result is the "nomadic servitude" of the
working classes and the destruction of all
security and permanence in their conditions of
life. In the Nigger Question (1849) he allows
no advantage to the English labourer over the
West Indian slave ; the slaves were "hired for
life," and the workman are hired by the job.
He is on safer ground when he points to the
common liability to disease as a wholesome
228
CAROLUS— CARRYING TRADE
reminder to the rich of their common humanity
with the poor (Past and Present), and when ho
impresses on economists the fact that their
Economic Man is an abstraction, and the
universe is not one huge shop. He derides
mere skill in selling cheap {Bohus of Hounds-
ditch), and even industrial enterprise, so far as
it aims at profit-making (Hudson, Plugson of
Undershot, etc.). But he is firm against corn
laws, and against the landowners who * ' refuse
to take the market rate for their onions," and
forget that they did not make the land of Eng-
land. He goes farther than most economists in
his estimate of "captains of Industry," and in
his view that the relation of Master and Ser-
vant is eternal (Nigger Question). He shows :io
appreciation of the power of workmen's com-
binations : and has no sympathy with nations
and peoples as distinguished from individuals.
On the whole economists have learned more from
his protests against abstract Ricardian political
economy and its tendency to reduce the state to
"anarchy plus the constable" than from any of
his positive teachings. His pleadings had their
influence even with men like John Mill, who
were perfectly aware of their defects of logic.
It should be added that the "theory of depend-
ence and protection " criticised by Mill in his
chapter on the " Probable Futurity of the
Labouring Classes " (Pol. Econ. iv. vii. § 1) is
essentially that of Carlyle. J. b.
CAROLUS (English). Gold coin (Charles I. )
rated at 20s. Also called a "unit" or "broad."
Weight, 140-5 grains. Fineness, 916-6. Value
at £3 : 17 : 10^ an ounce, £1:2: 9^. F. E. A.
CAROLUS DOLLAR. A name sometimes
given to the Spanish dollar which circulated
for many years throughout America and in
China and the East generally, and which bore
the effigy of either Carolus III. or IV. of Spain.
The coin was also known as a "pillar dollar,"
a name which it derived from the fact that part
of the device on its reverse consisted of two
pillars, intended to represent the Pillars of
Hercules (the Straits of Gibraltar). Its Spanish
name was "peso duro" (or hard dollar). It
was also called an "eight piece " on account of
its division into 8 reals. (For the dates of
issue, weight, and fineness, see Dollar, Hard.)
F. E. A.
CARRIER, Common. A common carrier is
one who plies his trade between certain places
and regularly undertakes for a pecuniary con-
sideration to transport the goods of all who
choose to employ him. At common law the
principal duties of a common carrier are : (1)
To carry all things belonging to the description
of articles which he publicly professes to carry for
any person who is ready to pay him his custom-
ary hire, provided he has room for the things
in his cart or carriage, or other means of trans-
port. (2) To take proper care of the goods he
carries, and to make safe delivery to 'the con-
signee. He is responsible for loss from any
cause except negligence of the owner, or from
their nature, or from any occurrence independ-
ent of man. He is regarded as an insurer of
the goods, and cannot by public notice limit
his liability. (3) Every carrier of passengers for
hire is answerable for the least want of fore-
thought, skill, or care in himself or his servants,
arising from the discoverable defectiveness of
his conveyance, horses, or equipments. He is
not an insurer like the carrier of goods, and is
not therefore responsible for latent defects which
no skill or care could have detected. ^ The status
of a common carrier at common law has been
modified by the following statutes. By the
Carriers Act 11 Geo. IV. and 1 Will. IV. c. 68
he is not to be liable for the loss of or injury to
gold, silver, plated articles, precious stones,
jewellery, watches, clocks, trinkets, bills, notes,
securities, stamps, maps, writings, pictures,
glass, china, silks, furs, or lace if the value ex-
ceeds £10, unless the value be declared and an
increased charge be demanded and paid. The
act does not apply to any loss or injury arising
from his own misfeasance or the felonious acts
of his servants. By the 29 & 30 Vict. c. 69 he
is not bound to receive specially dangerous goods.
[Chitty on Contracts, London, 1881. — Law oj
Carriers, W. H. Maciiamara, London, 1889. —
Smith's Mercantile Law. ] J. E. c. m.
CARRYING OVER. On all stock exchanges
there are dates for settlements of bargains
which it is not convenient for operators to ne-
gotiate for ready money. The largest settle-
ments are those which are carried on in the
middle and near the end of each month on the
London stock exchange. Before the dates of
settlement those who have bought securities
which they are unwilling to pay for, and those
who have sold what they cannot deliver, come
to an agi-eement by which the bargains are
"carried over." Carrying over, then, is the
process of postponing, by agreement, the date
of settlement. If the stock can be easily
borrowed in the market, the buyer pays a rate
of interest, sometimes called Continuation or
Contango, for the privilege of prolonging his
bargain till the next settlement. If the stock
is scarce, it sometimes happens that a seller,
who cannot deliver or borrow his stock, must
pay a fine called Backwardation {q.v.) to the
buyer. a. e.
CARRYING TRADE. "The carrying
trade," says Adam Smith, "is employed in
transacting the commerce of foreign countries,
or in carrying the surplus produce of one to
another" (bk. ii. ch. 5). He remarks that
the line of distinction is often not drawn with
sufficient clearness between it and the foreign
trade of consumj^tion. In a celebrated passage
he institutes a comparison between the encour-
agement and support given to the productivp
CARRYING TRADE— CARUCAGE
labour of a country by the wholesale home
trade, the foreign trade of consumption, and the
carrying trade, greatly to the disadvantage of
the last. "That part of the capital of any
country which is employed in the carrying trade
is altogether withdrawn from supporting the
productive labour of that country to support
that of some foreign country. Though it may
replace by every operation two distinct capitals,
yet neither of them belongs to that particular
country." The carrier's profits are the only
addition it makes to the wealth of the country,
except in so far as the part of the capital em-
ployed in it, which pays the Freight, puts into
motion a certain number of productive labourers.
The carrying trade, being carried on with the
surplus remaining after the home and foreign
trades are provided for, is, in his opinion, ' ' the
natural effect and symptom of great national
wealth, but does not seem to be the natural
cause of it." Holland had still, in his time,
the largest share of the carrying trade of Europe,
because it was, in proportion to its territory
and population, by far the richest country in
Europe ; England, too, was held to have a large
part, but much of it was really a " round-about
foreign trade of consumption. " Some of Adam
Smith's successors have disputed his views re-
specting the economic nature of the carrying
trade, and have maintained that it is a matter
of indifference to a nation how a capital is em-
ployed so long as the ordinary rate of profit is
obtained. But see Prof. Nicholson's Preface
to his edition of the Wealth of Nations.
There is a tract entitled " Observations
touching Trade and Commerce with the Hol-
landers and other Nations," which is commonly
attributed to Sir Walter Raleigh, and which
appears at least to have been laid by him in
manuscript before James I. In this a very in-
teresting account is given of the caiTying trade
of Holland. The origin of it he represents as due
to the mismanagement of the Portuguese. The
"home-bred commodities" of the Hollanders
he represents as insignificant in amount, and
"not a timber tree," he says, "grows in their
country"; yet " their traffick with the Hans-
towns exceeds in shipping all Christendom."
They transported the "merchandises of France,
Portugal, Spain, Italy, Turkey, East and West
Indies, into the east and north-east kii;gdoms
of Pomerland, Spruceland, Poland, Denmark,
Sweedland, Leifland and Germany, and the
merchandises brought from the last-mentioned
kingdoms . . . into the southern and western
dominions. " Their success he attributes mainly
to their judicious and liberal regulations for the
encouragement of commerce.
It is commonly believed that the first heavy
blow to the Dutch carrying trade was dealt by the
English Navigation Act of 1651, re-enacted,
with some modifications, after the Restoration
('12 Chas. II. ch. 18). Some have denied
this, but, it would seem, on insufficient grounds.
That the Dutch sufiered by this legislation can
scarcely be doubted, though it may well be
questioned whether England gained by it in a
commercial sense. Politically, that is to say,
in relation to the strength and security of the
state, Adam Smith pronounces the acts, though
prompted in some degree by national animosity,
to have been "as wise as if they had been dic-
tated by the most deliberate wisdom."
J. K. I.
CARTEL. Cartel means, in international
law, the terms of agi-eement between belligerents
for the exchange or ransom of prisoners. The
" cartel " of chivalry meant first of all the terms
of a combat, and then simply the challenge ;
and the second is still its ordinary meaning on
the Continent. By analogy, the word Kartell
is now often used by German economists to
denote a Trust, i.e. an agreement between
rival merchants to limit production or other-
wise temper the extremity of competition ; so
in 1889 it was used of the suspension of hos-
tilities between conservative and liberal parties
in view of the common defence of the empire.
J. B.
CARTOGRAM. A cartogram is a representa-
tion ' ' in which the geographical map shows
the totals or the ratios of the different units by
various inserted diagrams and hexagrams "
(see Graphical Method).
[I'aper by E. Levasseur, "La Statistique Graph-
ique," Jiihilee Volume of the Statistical Society ,
London 1885. — Annals of the American Academy,
Supplement, May 1891, "The liistory, Theory,
and Technique of Statistics," by A. Meitzen.]
CARUCAGE. A tax levied on the carucate,
the amount of land cultivated by one full
plough team of eight oxen. It has been
asserted that the carucage was levied on the
plough (caruca), and that a tax levied on the
carucate of land was neither a carucage nor so
termed by contemporary authorities. That the
mention of the carucate Avas much earlier than
that of the carucage can hardly be doubted.
Equally surely may it be surmised that con-
temporaries recognised a tax levied on the
carucate as a carucage (Leland, Coll. p. 223).
The point is one of considerable importance.
In the first place were the incidence of the
carucage on the plough, not on the soil, valu-
able information would be furnished as to the
steps in the transfer of taxation from "land"
to "movables" (cp. Scutage and Knight's
Fee). In the second place the discussion as to
carucage has included a close investigation of
the circumstances of the tax levied by Richard I.
in 1198 towards the payment of his ransom
{Eng. Hist. Rev. iii. 501, 702 ; iv. 105).
Though this levy has been customarily spoken
of as a carucage, there is no doubt that it is not
so referred to in documents of the time ; there is
equally no doubt that it was levied on the
230
GARY— CASH
caracate. Indeed, its chief importance in the
history of taxation lies in the fact that it was
levied after a new and careful survey of the
country had been made, whereby the actual
ploughland was to be substituted for the
nominal Hide "as the unit of taxation." In
this aspect it marks an important stage; The
carucate contained four bovates, and has been
estimated from Fleta as comprising 160 acres in
a two-course, and 180 in a three-course Manor.
[Eng. Hist. Hev., op. cit. ; Dowell, History of
Taxation, vol. i. ch. v. ; Madox, Exchequer.']
E. c. K. a.
GARY, John (died soon after 1719), an
influential Bristol merchant, author of An
Essay on the State of England in Relation to its
Trade, its Poor, and its Taxes, 1695, which
Locke calls **the best discourse I ever read on
that subject," and speaks of "the undoubted
evidence of most of it " (Letter to Gary, Brit.
Mus. Addit. MS. 5540, p. 70). This work
was reissued several times, with alterations, and
under different titles — An Essay towards Regu-
lating the Trade and employing the Poor in this
Kingdom, 1717 and 1719 ; A Discourse on
Trade, 1745. It was translated into French,
1755, with additions said by M'Golloch to be
improvements, and retranslated into Italian
1764. Some extracts from Gary's work were
published separately, and some tracts originally
separate have been bound up with the main
work.
The most valuable part of Gary's work is
perhaps that which relates to the employment
of the poor, for which purpose he proposed a
combination between parishes (Essay suh finem,
appendix to Discourse). Gorrect views on the
relation between the quality of coin and the
exchanges are found in the tract On the Coin
and Credit of England, 1696 (see Macleod,
DictioTiary ; also Banking, vol. i. p. 403). In
An Essay towards Settling a National Credit,
1696, a national bank is proposed. Other re-
commendations embody the doctrines of protec-
tion and the balance of trade in their most
specious forms. Bullion imported "adds to
the wealth of the nation" (Essay, pp. 2, 116),
but not so much as raw material, " the subject
matter of a great manufacture." The difficulty
of applying these principles is illustrated by
Gary's observations on different branches of
British trade. He reckons that England loses
by the East India trade (see Ghild), and wishes
fashion would encourage native woollens rather
than Oriental calicoes (Essay, pp. 52-65). He
would discourage the Irish woollen manufacture
in the interest of Ireland as weU as England (ibid.
p. 91). He would encourage the Irish linen
manufacture (Essay, p. 109, appendix to the Dis-
course) and the export from Ireland both of raw
wool and of cattle and other agricultural produce
(ibid. p. 107). He would "open" the African
trade in negroes, "being indeed the best traffick
the kingdom hath, as it doth occasionally giva
so vast an employment to our people both by sea
and land " (ibid. p. 75).
Some of these topics are discussed in letters
to and from Gary, Brit. Mies. Addit. MS.
5540. F. Y. E.
GASAREGIS, Josephus Latjeentius Maria
DE, born 1670 at Genoa, died 1737 at
Florence.
The author of the Discursus legates de Com-
mercio, Flor. 1719-29, and of a treatise bearing
the title ; II cambista instruito per ogni modo di
fallimenti, Venezia, 1737. m. p.
GASE OF NEED. See Bill of Exchange.
GASH. Monet : Giroulation : Gurrbnoy.
All that may be reckoned as equivalent to
money, or the owner can at option obtain
possession of in money on demand. Thus
coin, bank-notes, postal notes, bankers'
balances on current account, and cheques to
bearer, may aU be reckoned as cash in the
country where they are current, their instant
convertibility into currency being alone
requisite to bring under the designation
" cash." It is evident from this that cash and
money are words having a very different signi-
fication. The money in a country in coin is a
determinable quantity ; the cash resources of
the community are in this country nearly as
much greater than the actual money in circula-
tion as the banking deposits are greater than
the cash actually held by the banks holding
those deposits. It may safely be assumed that
all who are possessed of banking accounts hold
the bulk of their cash in their bankers' hands,
and there are estimates formed, or statistics
available, of aU these descriptions of cash in
the hands of the public. If, therefore, bankers'
current accounts, say, half their deposits are
included among the "cash" resources of this
country the whole may be briefly estimated as : —
Gold In circulation .... £100,000,000
Silver „ 25,000,000
Bronze „ 5,000,000
Postal notes and orders . . . 2,000,000
Banking accounts current . . 600,000,000
Bankers' notes and drafts at sight . 50,000,000
Total cash resources U. K.
£782,000,000
This is a rough estimate for the year 1914, the
coin in circulation excluding that in bankers'
hands, and the banking accounts excluding
money at notice. The coin in the banks is
excluded from the gold in circulation because
it is represented in the accounts current, and
cheques outstanding are included in the same
item. It is not intended here to enlarge upon
the different forms of Gash, for which reference
should be made to the articles Banking ; Bank-
note ; Gheques, Law of.
GASH (or Li). The lowest denomination of
the Ghinese money of account ; a brass coin ; the
only coin as yet issued by the Ghinese govern-
ment. Nominally 1000 cash = 1 Tael (the unit
CASH ACCOUNT— CASTE
231
of value), but in consequence of successive reduc-
tions in their weight they are now only received'
in circulation at from one 1600th to one 1800th
of a tael. By a proclamation in 1889, cash
from the Canton mint were ordered to be re-
ceived at their nominal value, one 1000th of a
Tael. This was disregarded. The decree of May
1910 fixed the silver dollar, suggested value two
shillings, as the unit of the currency, r. R. a.
CASH ACCOUNT. A record of current
cash receipts and payments, usually kept in a
book termed the cash-book. Hence it follows
that the difference between the one side of the
account and the other exactly represents the
cash balance to date, and available for all
current purposes. This account is essential for
purposes of book-keeping, and in important
businesses its total should be made day by day
to agree with, and in fact be the same as, the
current account at the bank ; as of course it
will when all receipts are paid into the bank,
and payments are made by cheque. The
auditor, for instance, who thus has all the
receipts and payments for a given period veri-
fied by the pass-book, together with the
balances owing and receivable at the date of
closing the accounts, is at once placed in a
position to construct a revenue account for tlie
period under consideration, and possesses a
general voucher as to the accuracy of the cash
transactions entered.
Some further description of the cash-book,
however, is necessary. In its simj)lest form it
is ruled for debtor and creditor entries — the
first column for the entry of the date ; the
second for the entry of the description of the
receipt on the one side, or payment on the
other side ; the third for the entry of the ledger
folio ; and the fourth for the pounds, shillings,
and pence received or paid under that particular
head. Many cash-books, however, are ruled
with a considerable number of cash columns, so
as to separate and classify the different items of
receipt and payment. For instance, the cash-
book of a gas company may contain on the
receipt side four columns representing so many
collecting districts, a fifth column for cash
received for sales of coke, a sixth column for
residual products and miscellaneous, and a
seventh column for the weekly totals. On the
other side there would be six columns recording
different descriptions of wages and salaries,
coal, buildings, implements, and repairs of
mains, and the weekly total ; the account thus
arranged would be regularly examined by the
board, and compared with the corresponding
periods of previous years. The cash-book in
this instance indicated much more than the
simple receipts and payments of money : it
indicated the progress made in each district and
in all branches of their operations. This is but
an illustration of what a properly constructed
cash account is made to show.
CASH CREDIT. In Scotch banking, a
mode of advancing money by permitting an
account current to be regularly operated on and
overdrawn up to a certain specified limit. The
advances are secured to the bank by two cau-
tioners or securities, and interest is paid on
actual overdrafts. In earlier years this method
of advancing served largely to develop com-
mercial enterprise in Scotland, but during recent
years the country has become richer and the
Scotch banks have, since they set up branch
offices in London, applied themselves to negoti-
ating bills at current market rates rather than
to employing money in cash credits. A. d.
CASH, Sale for. On the stock exchange
bargains are sometimes done for cash as dis-
tinguished from payment and delivery on the
succeeding settling day. That for Consols ia
the onlymarket on the London stock exchange in
which a broker, asking for a price, would receive
a quotation "for cash." This "consol market"
includes Metropolitan Board of Works stocks,
Indian sterling stocks, also Colonial inscribed
stocks. In other stock markets the quotation
would be for purchase or sale on the date of the
next settlement. a. e.
CASHIER. In English banks and offices
the clerk appointed to take charge of the cash
is designated by this title, occasionally by that
of "teller." For convenience sake the work is
sometimes divided between receiving and paying
cashiers. The duties of the office require intelli-
gence, quickness, and firmness, with a pleasant
manner of addressing people. The position
differs in some banks. The chief officer, the
general manager of a bank as he would more
usually be termed, is sometimes spoken of as
the cashier. In the United States the cashier
is spoken of much in the same way. Horton,
C. J., has remarked, "The cashier is the execu-
tive of the financial department of the bank,
and whatever is to be done, either to receive or
pass away the funds of the bank for banking
purposes, is done by him or under his direction ;
he therefore directs and represents the bank in
the reception and emission of money for bank-
ing objects" (Asher v. Sutton, 31 Kan. p. 289,
quoted in American Banker's Magazine, July
1889). The care and management of the
property of the bank, and the conduct of its
business in the usual and ordinary way are in
these cii'cumstances among the duties of the
cashier ; their scope is in England restricted
usually in the narrower sense.
[J. W. Gilbart's Practical Treatise on Banking.
— G. Rae's Country Banker. — J. Hutchison's The
Practice of Banking. — The English Bankers
Magazine, and the American Bankers Magazine,
passim, may be cited.]
- CASTE. This word is derived from the
Portuguese casta "white, pure;" and is used
by Em-opeans as the name of an institution
232
CASTE
which they believed themselves to have found
in the East Indies. There is no native word
exactly corresponding to the idea formed by
Europeans; but jdti "birth," and varna
"colour," supply its place. In the oldest
records of the Aryan race in India, that is
the oldest hymns contained in the Vedasj there
is no mention of caste. It is in a celebrated
hymn called the Perrusha Siikta, which is in
a later appendix to the older ones, that we
first find a reference to the four principal
divisions of Indian caste : — the Brahmins, the
Kshakiyas or nobles, the Vaishyas or peasantry
and traders, and the Shudras or servants. But
caste itself, as an institution, is neither men-
tioned nor even inferred in the actual words
of the poem, which may be dated approximately
at about 800 B.C. In a passage repeated in
both recensions of the Gajur Veda we have a long
list of seven hundred and sixty divisions into
which the people of India were then divided. It
is very interesting as containing many names
(partly of trades, partly of tribes) which after-
wards became caste-names. But that it is not
a list of castes is clear from the fact that it
includes also a number of such divisions as
thief, back-biter, dwarf, leper, red-eyed man,
barren woman, and so on — a classification quite
independent of the idea of caste. From that
time onwards each later Hindu book shows
a marked growth of the development of caste
feeling, until in the law book of the Manavas,
also called the Laws of Mann, which may have
reached its present shape about a century before
our era, we find the institution of caste, as at
present understood, in full vitality. Import-
ant privileges are accorded to men of the higher
castes ; crimes are punished, not only according
to the nature of the crime, but according to the
caste of the criminal ; — it may be inferred,
though it is nowhere actually stated, that
occupations are usually hereditary and depend-
ent upon caste ; — caste is lost by eating or
drinking, and of course by sexual intercourse
with the lower castes ; marriage is restricted by
the distinctions of caste ; and to lose caste
altogether, to become an "outcaste," has become
almost the greatest of disasters. On looking
more carefully, however, into the castes men-
tioned in Manu, sixty in number, we find them
to be mostly diff"erent not only from the castes
now actually existing, but also from the quasi-
caste names in the early list of divisions of the
people mentioned above, and in other similar
lists found in the Milindu and in the Rama-
yana (which are somewhat later than Manu).
This is to be explained by the fact that the
caste divisions of the many peoples in the great
continent of India have, from the first, been
constantly though sloAvly changing. The
institution has remained, and remained with
similar restrictions. But the lines of the divi-
sion have varied. The history of each caste
requires, indeed, to be separately examined ;
and examined from each of its various sides —
as a trade guild, as a racial division, as a circle
within which marriage is permitted, as a com-
munity with legal powers over its own members,
even as a religious sect. The commonly-received
notion of " The immovable East " is due simply
to the ignorance of Western writers. And
there is no better example of the mistakes into
which that idea may lead us than the concep-
tion of an iron system of caste whose bounds
none may pass over. "When the Dutch began
cinnamon planting in Ceylon they were in need
of labourers, ' ' coolies " as they are called,
"men working for hire." A peasant in India
looks upon the labourer for hire as a disgrace.
Those, of whatever caste, whose necessities
drove them to accept the terms off'ered, were
looked down upon. And so rapid was the
effect of this feeling that in a couple of genera-
tions an entirely new caste was formed, that of
the " cinnamon-pealers. " For nearly a century
the trade flourished, and their numbers in-
creased. For the last seventy years the trade
has steadily diminished. But the caste, the
members of which are now engaged for the
most part in other occupations, remained.
Throughout its short but most instructive
history it had never been (as the majority of
the castes have been) identical with a division
of race. For some generations it had fulfilled
many of the functions of a trade guild and of a
trades union, functions now only feebly surviv-
ing. But it is still in full vitality as a restric-
tion on marriage, and as an index of social
position. This instance has been chosen because
all the facts are ascertainable from the official
documents of European administrators. But a
comparison of the lists referred to above, and
of lists of the different castes now existing in
different parts of India, show that it is only a
sample of many changes that have occurred in the
caste-system of that continent. There are about
one hundred and fifty castes to-day in the Bom-
bay Presidency. No one has yet attempted to
-write their history. It is probable that most of
them are, as castes, of comparatively recent
origin, and each one of the one hundred and fifty
must be considered apart from the others in order
to ascertain the vitality of its caste powers and
feelings in respect of race, of religion, of trade,
and of family ties. There are numerous instances
in the books of transition of an individual from
one caste to another. It is quite common for
a man of one caste to follow the occupation
usually assigned to another. And there are,
on the other hand, trade guilds independent
of caste ; and castes within castes, so far as
marriage is concerned. Even among the
Brahmins, very few can trace their descent
from pure Brahmins. They are split up into
innumerable exogamous gotras or families, somt
of which are not Brahmins at all by descent
CASTE— CATASTO
233
And they follow every imaginable sort of occupa-
tion except only those assigned to certain of
the lower castes. Certain Beldars, for instance,
excavated as navvies the now sacred lake of
Pushkara or Pokhar in Marwar. Their de-
scendants rank as Brahmins, have raised the
pick -axe into an object of worship, and are
found to the number of twenty or thirty
thousand, throughout Rajputana and Sind,
as a special gotra called tlie Pokhar Brahmins.
Each of the constantly recuiTing religious
movements in India has had a profound
influence on caste. Many of the greatest
leaders, from Gotama the Buddha downwards,
have commenced by protesting against caste
distinctions, and entirely abolishing them
within the inner circle of their more ardent
followers. Caste among the laymen of the
new communities was for the most part left
undistm-bed. But, though in different degrees,
the new religious communities became them-
selves the source of new caste divisions, and
people of the same caste, but of different
religions, ceased to intermarry. It will be
seen that the subject of caste in India is one
of very great complexity. Dr. "Wilson of
Bombay had intended to undertake the gigantic
task of bringing order into the chaos of our
knowledge of the subject. He died when the
work, though he had laboured at it for years,
was really only begun. There were published,
however, two volumes entitled Indian Caste
(Blackwood and Sons, London and Edinburgh,
1877, pp. 450 and 228) in the first of which
he has collected together all the references to
caste he could find in Hindu literature from
the Vedic times downwards ; and in the second
of which he attempts to trace in detail the
history and the present occupations of one caste
only, that of the Brahmins, in all its numerous
details. Even that is confessedly imperfect ; and
there is no other work in which even an attempt
has been made to explain either the past history
or the present position of any of the other castes.
Various details as to the numbers of the
different castes, not in India as a whole, but
in particular districts, can be found in the local
Gazetteers and Census reports of the Indian
Government. But they have not yet been pro-
perly summarised or analysed. It would be un-
desirable, in the present state of our ignorance
of the subject, to attempt to form any estimate of
the economic influence of the caste system. It
is doubtful to the writer whether it has really
had any practical effect in restraint of trade.
But the few words here devoted to the subject
may remove some misconceptions, and the
numerous authorities quoted by Dr. Wilson
will assist those who wish to investigate tlie
problem further. T. w. E. D.
CASUEL. A general term in France for a
revenue which was not fixed, but proportioned
to the performance of work. It was specially
applied to the fees charged by the clergy foi
baptism, marriage, burial, and the other sacra-
ments of the Roman Catholic chm-ch. r. l.
CASUS. An expression used by Roman
la^vyers to express events which could not have
been avoided by the strictest amount of diligence
required by the law in ordinary cases. The
expression does not quite correspond with the
English "Act of God," which is the equivalent
of the Roman vis major, and includes those
events only which could not by any amount of
care have been foreseen or controlled under the
special circumstances. e. s.
CATALLACTICS, or the Science of Ex-
changes, is a name proposed by Archbishop
Whately as conveying a much better idea of
the nature of economic science than is conveyed
by the name political economy. Other writers,
e.g. Mr. H. D. Macleod, have also regarded the
exchange of wealth as constituting par excellence
the subject-matter of the science. More gener-
ally, however, it is held that while the laws of
exchange occupy a fundamentally important
place in economics, the science is equally con-
cerned with the laws of the Production, Dis-
tribution, and Consu:mi'tion of Wealth.
A Catalladic community has been defined as
one in which individuals freely exchange com-
modities one with another, each with a view to
making the enjoyment he derives from his
possessions a maximum.
[An anonymous treatise was published in Lon-
don, 1842, entitled Letters on the rudiments of a
Science called Catallactics.] j. n. k.
CATASTO. Taxation in mediseval Florence
was an important political weapon, because it
was based upon an arbitrary assessment of real
and personal property. Thus the party in
power could ruin its political opponents by
excessive taxation. In 1427, when the oligarch-
ical party had the upper hand under Rinaldo
degli Albizzi and Nicolo da Uzzano, the opposi-
tion, headed by Giovanni de Medici, endeav-
oured to reform this abuse by securing the
adoption of the catasto. The object of this
reform was to obtain a careful and impartial
registration of property, so that the incidence
of taxation should depend upon wealth alone,
and not upon political opinion. Every citizen
was to make a return to the gonfalonier of his
district of his whole income, from whatever
source. His income from capital, whether
fixed or circulating, was to be reckoned at 7
per cent. If a man concealed anything the
penalty was confiscation. These returns were
to be collected into four books, one for each
quarter of the city. The assessment of taxes,
which was to be strictly based upon the record
of these books, was entrusted to a commission
. of ten, who were elected out of sixty citizens
-chosen by lot. A new catasto was to be made
every three years.
This admirable reform was abrogated by
234
CATTANEO— CAVOUR
Cosimo de Medici, the son of Giovanni, to whom
Machiavelli ascribes the chief credit of the
change. Cosimo, who overthrew the oligarchy
in 1434, and laid the foundation of the Medici
dynasty, returned to the system of arbitrary
assessment. It was said of him that he used
the taxes as the northern despots used * the
dagger. His object, however, was not only to
ruin his opponents, but also to conciliate the
lower classes by diminishing the burden of
taxation upon them and throwing it upon the
rich.
[Machiavelli, History of Florence, bk. iv. ch. iii.
Gino Capponi, Storia deUa Itepublica di Firenze,
libro iv. cap. vii.] R. l.
CATTANEO, Carlo, bom 1801 in Milan.
He wrote frequently in the Annali Universali
di Statistica and in the PoUtecnico. He dis-
tinguished himself in the defence of Milan in
1848, against the Austrians, but was a feder-
alist, opposing the union of Lombardy with
Piedmont. He was elected three times a deputy,
but never sat in Parliament, because, as a re-
publican, he refused to take the oath. He
died in 1869 at Castagnola, close to Lugano.
His works are as yet only partially published.
His principal subject was land tenure. Besides
his economical writings, in which he shows
himself a decided opponent of List and his
?ystem, he wrote historical and literary com-
positions of value.
Among his writings are the following : Notizie
naturali della Lowhardia, Milano, 1844. — Storia
delta rivoluzione del 48, Lugano, tipogr. Svizzera,
1849.— C7"^o Foscolo e V Italia, Milano, 1861.—
Della jpena di morte, Milano, 1860. — Alcuni
scritti, Milano, 1846-47, vol. iii. — Borroni e
Scotti. — V Italia armata, Milano, 1861. m. p.
CATTLE PLAGUE ORDERS. By the 41
& 42 Vict. c. 74, 47 & 48 Vict. cc. 13, 43, 47,
and 49 & 50 Vict. c. 32, very extensive powers
are given to the privy council for the preven-
tion of contagious diseases amongst animals.
These powers are exercised by means of " orders "
issued when necessary. The privy council may
declare what places are infected areas, and regu-
late the destruction or movement of animals in
or out of such area : it may make orders rela-
tive to dairies, cowsheds, and milkshops ; and
may prohibit or regulate the importation,
slaughter or quarantine of animals coming from
foreign countries. j. e. o. m.
CAUTION (Scots Law Term). In Scotland
the law has been very largely assimilated to that
of England. No consideration need be proved,
and the period of limitation is seven years from
the date of the bond of caution, at the end of
which time the surety, if known to the creditor
to be a surety and not a principal, becomes free,
unless the creditor shall then have begun execu-
tion proceedings against him. When sureties
become bound by way of collateral security, each
for the performance of the whole of an obliga-
tion, the Scottish ride is that the creditor can
rank for the whole upon the estate of each, but
not so as to do more than draw full payment of
the debt.
[Bell's Commentaries on the Law of Scotland, ii.
416.] A. D.
CAUTION. Security given in the course of
judicial proceedings. The word is not used in
England except in the practice of the ecclesias-
tical courts ; in Scotland it is a regular term of
art used in acts of parliament and legal docu-
ments. In the French language the word
caution is equivalent to the English Guarantee,
and is used to express the security as well as
the person acting as surety.
[Fournir caution de payer les frais, Code
de Procedure civile, § 166. — La solvabiliti d'une
caution, Code civil, § 2019.] E. s.
CAVEAT. An expression used in the pro-
cedure of the probate, divorce, and admiralty
Division of the High Court. A person wishing
to dispute the validity of a will, by entering a
"caveat" compels the executors to bring an
action to obtain probate. In admiralty pro-
ceedings a person can prevent the arrest of hia
ship or cargo by entering a " caveat," if at the
same time he undertakes to appear in the action
and gives security in accordance with the rules
of court. E. s.
CAVEAT EMPTOR. A maxim of the
common law applicable to sales of personal
property as regards the quality of the things
sold. The buyer (in the absence of fraud)
purchases at his own risk unless the seller has
given an express warranty or unless a warranty
be implied from the nature and circumstances
of the sale. The rule does not, however, apply
if the buyer has had no opportunity of inspect-
ing the article bought. Hence, where a chattel
is to be made or supplied to the order of the
purchaser, or where it is sold by description or
by sample, or for a particular purpose, the law
implies a Warranty.
[The Sale of Personal Property, by J. P.
Benjamin, Q.C. 4th ed. London, 1888.]
J. E. 0. M.
CAVOUR, Count Camillo Benso di (1810-
1861), can be considered in this place only as
an economist. His career as a statesman lies
outside our boundaries. A few biographical
remarks will, however, not be out of place.
Cavour, like the sons of all the Piedmontese
nobility, was placed in the military academy
as soon as of age to be received there. He
left this school at eighteen as a lieutenant
in the Engineers, and was sent to work at
the fortifications of Genoa. He had a parti-
cular talent for mathematics, and one of his
teachers, the well-known Plana, desired him
to devote himself to pure mathematics, telling
him he would rival Lagrange. Cavour's answer,
eminently characteristic of the man, is preserved
in his correspondence : it is to the effect ** that
CAVOUR
235
mathematics are not the thing required just
now, but economics." Much later (14th
December 1849) Cavour wrote in the Msorgi-
Tnento, "The greatest problems our time is
called upon to solve are not political ones, but
social ones ; questions relative to the forms of
governments arc quite secondary, compared with
those reflecting the economic position of
society." Cavour left the army in 1831, after
having been punished for speaking out too
freely on political matters. This misadventure
turned out to be his good fortune ; it caused
him to travel in Switzerland, France, and
England, where he remained several years and
formed himself as an economist. He is in this
respect a disciple of Cherbuliez, of P. Rossi,
and of what is now called the Classical School.
His writings and his speeches abound with
quotations from Ricardo, and he wrote an essay
in defence of Malthus. In one of his first
writings. On the State of Ireland, he speaks of
England in the following terms: "From St.
Petersburg to Madrid, in Germany and in
Italy, the enemies of progress and the friends
of revolution alike consider England as their
greatest obstacle. The one set regards England
as the hearth upon which all revolutionary
flames are kindled, the refuge and citadel of all
the subversionists. The other, perhaps more
truly, considers the English aristocracy as the
central pivot of the European social system and
as the greatest obstacle their democratic tenden-
cies meet with. This hatred which England
meets with from all extreme parties ought to
endear that country to the intermediate ones, to
all men who wish for the moderate progress, and
for the gradual and regular evolution of human-
ity, i.e. to all men who from principle are opposed
alike to all violent tempests and to stagnation
in social affairs. But this is not the case. The
motives which might lead them to sympathise
with England are counteracted by an enormous
mass of prejudice, old tales, and old passions,
whose force is nearly irresistible. Therefore
there are but few men, scattered here and there
and solitary, who feel for the English Nation
that esteem and that regard which ought to be
inspired by one of the greatest nations which
has distinguished mankind, — a nation which
has effectively co-operated in the moral and
material development of the world, and whose
mission of civilisation is very far from being at
an end." Cavour's admiration for England and
English thought was a subject for which he
was often attacked. But he had been trained
from his youth upwards to stand fearlessly
isolated by his opinions from his countrymen
and to face their opposition. His family cir-
cumstances were at first a formidable obstacle
to his rising rapidly to the front. His father
was what would now be called the chief of the
police, and as such had many a disagreeable
duty to perform. The nobility, to the very
highest ranks of which Cavour belonged by birth,
looked down upon him as the son of the councillor
of an unpopular king, and of a man who exer-
cised a somewhat despised calling ; by the
middle classes he was, if not hated, certainly
received very coldly for the same reason.
Besides this, his independence of thought,
which led him not to agree either with the
aristocratic or the democratic party, put him
for a long time between two fires, with no
friends to back him. And in parliament, when
he first entered it, the fact that he did not stick
to any party, and sometimes supported the
government and sometimes the opposition, was
at first harshly judged, and only appreciated
when people came to imderstand that Cavour
was a new leader, with a programme of his
own. As a minister he continually showed
unusual courage in expressing, without any
regard for the prejudices of his audience, his
scientific convictions on economic questions,
he even ventured to explain in the chamber
economic theories — rebuking those who affected
to despise theory. As an example of the high
tone of parliamentary discussions under his
leadership, and of his sincere respect for science,
not concealed from an assembly which, also in
those times, often declared economical laws
good for some other planet than our owti, the
following passage of a speech of his, made
in defence of the treaty of commerce with
France (8th April 1852), and in answer to
Menabrea's attacks, may be quoted. Cavour
spoke French on this occasion, as on several
others, so as to be clearly understood by the
Savoyards. The law would even now permit the
use of French in the Italian parliament. The
quotations from the speech which follows is
therefore given in French ; the reader will bear
in mind that Savoyards, though fluent in that
language, do not speak perfect French. "Et
d'abord, messieurs, il est facile de demontrer
mathematiquement, qu'une fois les principes
du libre echange etablis, si on veut proceder
par degres dans leur application, en suivant
une marche rationelle et logique, on devrait les
appliquer d'abord aux produits de I'agriculture
avant de les appliquer k ce qui a rapport h. I'in-
dustrie manufacturiere. Malheureusement, pour
faire cette demonstration, je serai oblige de re-
courir pendant quelques instants aux lumieres
de la theorie. J'en demande bien pardon a M.
Menabrea, mais je ne puis m'empecher de lui
manifester I'etonnement que j'ai eprouve, voy.
ant un homme aussi savant que lui, un membre
de I'Academie des Sciences, manifester un si
superbe dedain pour les theories, et surtout
pour la theorie de I'economie politique qui a
tant d'affinite avec celles des sciences exactes,
qu'il possede si bien et qu'il professe d'une
maniere si distinguee. Car, messieurs, le sys-
tems protecteur a des consequences bien plus
funestes lorsqu'il est applique aux produits
236
CAVOUR
du sol, que lorsqu'il est applique aux produits
de rindustrie. Le systeme protecteur applique
k rindustrie n'a qu'un seul effet facheux, celui
de detourner les capitaux et le travail national
des industries naturelles pour les pousser vers
des industries factices, ou les capitaux et le
travail trouvent un emploi moins productif.
C'est Ih un inconvenient grave sans doute, mais
qui est restreint a cette quantite de capitaux et
de travail qui par I'effet de la protection sont
detournes de leur voie naturelle. Et encore
cet efFet est-il attenue par la concurrence inte-
rieure qui, au bout d'un certain temps, ram^ne
le taux des capitaux et celui de la main d'ceuvre
des industries privilegiees au niveau des profits
et des salaires des industries qui ne le sont pas.
Mais le systeme protecteur applique k la culture
du sol a des effets bien plus etendus, et, je
n'hesite pas a le dire, bien plus funestes. En
effet, lorsque par la suite d'un droit protecteur,
vous elevez le prix des produits du sol, le prix
du vin et du ble, par exemple, qu'est-ce qu'il
arrive ? II arrive deux choses : en premier lieu
certains terrains qui n'etaient pas assez fertiles
pour produire du ble ou du vin dans les condi-
tions anterieures du marche, sont mis en culture,
ou bien encore, on consacre k la terre des capi-
taux et du travail qui n'aurait pas ete productifs
si le prix n'avait pas vari^. Cette premiere
consequence du systeme protecteur appliqu^ h.
I'agriculture est analogue kcelle que j'ai signalee
lorsqu'il a pour objet I'industrie manufacturike.
C'est-k-dire qu'il y a une certaine masse de capi-
taux et de travail, qui re9oivent une destination
moins productive qu'ils n'auraient re§us si les
cboses avaient ete abandonn^es k leur courant
naturel. C'est Ik un inconvenient grave qui
oependant n'aurait pas une grande portee, si
I'elevation des prix des produits du sol n'avait
d'effet que sur les produits des terrains nouvelle-
ment mis en culture ou des capitaux et du tra-
vail additionnels consacres k I'exploitation des
terrains depuis longtemps defriches. Mais
I'elevation factiee des prix s'etend aux produits
de tous les terrains, k ceux d'ancienne aussi
bien qii'k ceux de nouvelle culture. Qui est-
ce qui profite de cette elevation ? Lorsqu'elle
a lieu elle se partage entre les proprietaires et
les fermiers, surtout si ceux-ci sont en possession
de long baux : apres quelque temps, le profit se
concentre tout entier entre les mains des proprie-
taires. Ainsi done, le systeme protecteur applique
aux produits du sol a pour effet, d'une part, de
pousser ainsi que le fait le systeme protecteur
industriel des capitaux et du travail, dans une
voie pen productive, et de I'autre d'augmenter
la rente des terrains precedemment cultives aux
depens des consommateurs. Ce qui en definitive
constitue un veritable impSt supporte par les
consommateurs au profit des proprietaires. . . ."
Cavour also ventured occasionally to give
parliamentary discussions an academical tone,
quoting economic authority, as in the following
instance : " It is my opinion, in accordance
with that of all the most enlightened people in
England, and not alone with the men of the
present generation, but with the economists
who have preceded the present generation, with
A. Smith and Ricardo and his followers, that
England has prospered, not in virtue of the
protective system, but notwithstanding this
system. . . . If you examine English industries
you will see that those which have been least
protected are precisely those which have suc-
ceeded best. . . . The progress of English
industry has always been in an opposite ratio
to the degree of protection it received. The
silk industry (strongly protected) remained
nearly stationary ; the woollen industry pro-
gressed slowly, and the cotton industry, which
was hardly at all protected, grew gigantically.
I therefore maintain that protection in England
not only has failed to aid the increase of wealth,
but has even been a hindrance to it." Thus he
explained to the chamber the economic prin-
ciples as to the basis of wages : — " Le taux des
salaires, selon les principes non contestes de la
science, se regie par la masse des capitaux
destines k payer les salaires, c'est-a-dire par la
quantite de denrees de premiere necessite k
I'usage des Islasses ouvrieres que possede la
nation, comparee avec le nombre des bras qui
cherchent de I'emploi." He further argued
that Protection cannot augment capital, and
therefore does not raise wages. All that Pro-
tection can do, he said, is to cause Capital to
** flow rather in one channel of industry than
in another. . . . And it does this by driving
them (capital and labour) into the less remuner-
ative branches of industry. " The best example,
however, perhaps which can be given of his
scientific spirit in discussing practical problems
in parliament is his definition of the individu-
alist and of the socialist policy. * * For reaching
this goal (the amelioration of the economic con-
dition of the lower classes) two ways are open
for us. All the systems supported in modern
times by the wisest and by the boldest men can
be classified under two heads. The one school
relies on the principle of liberty, on the principle
of competition, on the free development of the
morals and intelligence of men. Those who
hold this opinion think that the larger the
application of this principle is, the greater will
be the welfare of all, but particularly of the
lower classes. This is the school of economists,
these are the principles held by the men who
are in office, in England. Another school pro-
fesses principles diametrically opposed to these.
It believes that human misery cannot be allevi-
ated, and that the condition of the lower classes
cannot be ameliorated, unless individual action
is limited, and the central action of the whole
social body, represented by a government which
has still to be created, is made more powerful,
and concentrates all individual forces into itseK
CAVOUR— CENS
237
This is the socialist school. Now, no illusions
must be indulged in : although this school
reaches fatal and sometimes even atrocious con-
clusions, it cannot be denied that there is some-
thing in its principles which captivates many
generous and elevated minds. And the only
way to combat this school, which threatens to
invade all Europe, is to oppose principles to
principles. In economics as in politics, as in
religion, ideas can only be fought by other ideas,
and principles by other principles ; forcible re-
pression is useless. For a short time guns and
bayonets may repress theories and maintain
order ; but if these theories find entrance with
the intellectual class, you may be sure that
they will thrive and triumpli. Now, I say that
the strongest ally of socialism is protection.
Both start from the same base. . . . Given the
protectionist system, logic will compel you to
admit, if not all, a great many of the doctrines
of Socialism."
When Cavour defended Free-Thade he gave
in just as little to absolute protectionists as to
fair traders ; he explained on more than one
occasion that if a foreign country commits the
error of protecting its own industries, this is no
reason for making the same error ourselves.
Again, he argues with great acuteness ' ' that
if a nation has to undergo great sacrifices and to
bear heavy taxation, it must be left the more
unfettered in its commercial and industrial
activity, so as to bear the weight easier." The
best protection, he repeatedly declares, is the
maximum of liberty. "It is my opinion tliat
those elements of production and of prosperity
which we possess, ought to be left to develop
themselves unfettered ; that neither agiiculture,
industry, nor commerce ought to be protected.
I believe firmly that the gi-eatest encourage-
ment is to be had from the gi-eatest possible
amount of liberty : ' che il massimo degli in-
coraggiamenti sia il massimo della possibile
liberta.' " This speech of his marks distinctly
Cavour's position as an economist.
The success of Cavour's speeches in a parliament
in which even men of the greatest merit ignored
the most elementary truths of political economy,
was due to his unmatched knowledge of commer-
cial and technical details. This enabled him to
give each man the right argumentum ad hominem
which would bring home to him the theory under
discussion. He was himself a practical agricul-
turist, and a very successful one into the bargain.
This gave him a high authority with all those
deputies who were also landlords and knew he
could beat them in any practical question. And
he liked to quote, on the right occasion, instances
of personal experience in agricultural matters.
To his mind, highly speculative as it was, sophistry
and legal casuistry were completely alien ; he would
appeal to historical facts, recent and ancient, and
generalise skilfully on them ; he would show the
interests of different parties, explain their actions
by their motives ; but he would not stoop to play
with the sense of words and base political action
on some legal nicety — a method of reasoning very
frequent in Latin countries, in which parliaments
are largely composed of lawyers. Naturally he
was the object of much sarcasm. At one time he
was called "Lord Camillo," and from the name of
the jmu-nal which he had founded and was directing
"My Lord Risorgimento," to ridicule his Anglo-
mania. Risorgiviento means resurrection, and is
here used in the sense of political resurrection or
revival. Cavour was no orator, he had always to
win his way by the weight of the matter of his
speeches. His voice was disagreeable, his tone
harsh, and he had some difficulty in finding the
proper words rapidly. But he was first-rate in
reply and at making a good pun, and was seldom
worsted in debate. When Cavour was not allowed
to answer an opponent in the Chamber, because his
turn to speak was past, he employed Mirabeau's
system, publishing the same evening or the next
morning his answer in the " Eisorgimento." This
journal is therefore one of the great sources of in-
formation concerning his economic and political
views, together with the collection of his speeches
(eleven volumes published by Botta at the expense
of the government), his con'espondeuce (five volumes
edited by Chiala and published by Eoux, Turin,
1881-86), and his Ouvrages politiques et econo-
miques (published in 1885 by Galiraberti, Coni).
His best known economical pamphlets are : — the
memoir already quoted, Sur Vetat actuel de
Virlande et sur son avenir. — Des idees communisies
et des moyens d'en comhattre le developpement. —
Des cheviins de fer en Itcdie. — He ^vrote Sur
V Influence de la politique commerciale de I' Angle-
terre dans le monde 'econoraique (in the Review
I'Antologia), and a pamphlet on Prof. Ferrara's
inaugural address on Political Economy. As
an economist Cavour contributed nothing to the
theory of the science. He is rather one of those
who are well acquainted with the state of science
in their time, and utilise it for practical purposes.
His opinions in economic matters may be summed
up as those of the Manchester School, as the
Germans qualify Orthodox political economy
{Mayichesterthum) when it is accompanied with
an optimistic view of the effects of natural laws,
and reduced to the basis of absolute Laissez-
Faire and Laissez-Passer. m. p.
CAYLEY, Edward, author of the tract,
Corn trade, Wages, and Rent, 1826 ; a plea
for protection backed by some curious statistics
(see pp. 8, 16, 31). f. y. e.
CEDULA. A Spanish word, used on the
London stock exchange, chiefly to describe
certain guaranteed bonds issued by Argentine
banks, corresponding to loans made by these
banks against land to proprietors in various
Argentine provinces. The word originally
meant something ceded, and has reference prob-
ably to the land or property which has been
ceded as security for the advances made by the
Argentine banks. A. E.
CENS. The French term for a Quit-Eent ;
but it has a special meaning in the history of
France. De Tocqueville has shown the error
238
CENSUS
of supposing that Serfdom survived in France
until the Revolution. Most of the French
peasants in the 18th century held their lands,
either as proprietors or as Metayer tenants.
In the former case, however, the lord still
retained the cens, or quit-rent, as a synjbol
that he retained the ownership, though he had
parted with the property of the soil. The cens
was almost invariably a fixed sum, arranged
at the time of the original bargain, and had
become insignificant in the 18 th century,
owing to the decline in the value of money.
For this the lord was, to some extent, compen-
sated by the droit de lods et ventes, by which,
every time the land changed hands, the lord
was entitled to a share in the purchase-money,
usually a twelfth, but sometimes as much as a
fourth.
[De Tocqueville, France before the Revolution
(London, 1873), note Ixxvii.] k. l.
CENSUS may be defined as an enumeration
of the persons in a country, and in each of its
principal classes : such as those constituted by
sex, age, occupation, and so forth. An enumer-
ation of houses and other property is often
included. The institution is very ancient. Its
existence is evidenced by several passages in the
Old Testament (Exodus xii. 37 ; Numbers i.
xxvi. ; and 2 Samuel xxiv. ; 1 Chronicles xii. 23,
xxi. 2-3, xxiii. 3-5 ; Esdras ii. viii. ; Nehemiah
vii. ix.) The ancient Egyptians and the
ancient Persians were not without a sort of
census {Herodotus, bk. ii. ch. cxix. clxxvii. ;
bk. iii. ch. Ixxxix.-xc.) In Greece there were
enumerations of the citizens for political pur-
poses. In Rome the census was instituted in
the age of the kings, and formed an im-
portant branch of administration down to the
age of the emperors. It is recorded that
Augustus wrote out with his own hand a Brevi-
arium totius imperii, containing the number
of citizens and allies in arms, the statistics of
the fleets and provinces, and even the names of
freedmen and slaves. The care of Augustus
was imitated by his successors. In the ages
which followed the fall of the Roman empire
the most remarkable compilations of the nature
of a census were the Breviary of Charlemagne and
the Domesday Book of William the Conqueror.
A more detailed notice of the census in
modern times may be arranged under the
following three heads : (1) The United King-
dom ; (2) The Continent of Europe ; (3) The
United States of America.
(1) The first census in England was in 1801.
An abortive attempt to introduce a census had
been made in 1753, when Thomas Potter in-
troduced a bill for taking and registering an
annual account of the total number of marriages,
births, and deaths. The bill was violently
opposed. Mr. Thornton, who spoke against it
frequently, said : 'I did not believe that there
was any set of men, or indeed any individual of
the liuman species, so presumptuous and so
abandoned as to make the proposal which we
have just heard. " The bill, carried in the House
of Commons, was thrown out by the Lords. In
1801 there was no opposition. The fear of ex-
posing the paucity of our numbers had given
place to a dread of over-population. Mr. C.
Abbot {q.v.), in introducing the Population Bill,
said : "In times like these, when the subsistence
of the people is in question, it is surely import-
ant to know the extent of the demand for which
we are to supply."
It might have been expected that the new
machinery would not work well the first time.
But Mr. Rickman, one of the clerks of the
House of Commons, the able superintendent of
the operation, argues — in the reports accom-
panying the second and third censuses — that
the return of the population is fairly accurate.
The overseers of the poor, whose agency was
employed, had good opportunities for ascertain-
ing, and no motive for misrepresenting, the
numbers. Errors in particular parishes would
compensate each other in the aggregate. We may
therefore accept a statement which, compared
with the enumeration of 1881, shows that the
population of England and Wales almost trebled
itself during tte first eighty years of this century.
Equal success did not attend another depart-
ment of the first census. It was attempted to
group the population by occupations into three
classes : agriculture, trade, etc., and a residual
class of others. But it was left uncertain
whether the householder should speak for him-
self or his family. The want of uniformity in
this respect rendered these returns almost use-
less. The statistics of the present were not the
only object of the first census. It was at-
tempted to reason backwards to the numbers of
the population in the preceding century by
means of entries in the parish re^sters — an
attempt which had been initiated by Graunt in
his Bills of Mortality, 1661, and sanctioned by
Laplace in his TMorie des Prdbabilit6s (bk. ii.
ch. vii.) The baptisms, marriages, and burials
were obtained for several years of last century.
Then, as the number of entries in 1801 is to
the (enumerated) population in 1801, so is the
number of entries in any assigned year of the
eighteenth century to the population of that
year. Of the three kinds of record the marriages
are the best for the purpose of this reasoning.
Especially after the marriage act of 1754 there
is reason to think that the registry of marriages
is pretty complete. As Mr. Rickman puts it,
" The solicitude of the female and her family,
aided by the precision and severity of the
marriage act" precluded omissions. Accord-
ingly the reasoning may pretty safely be carried
back as far as that date. As we go farther
back there is danger that the reasoning may be
falsified by a continual increase in the number
of omitted entries. But Mr. Rickman's statistics
CENSUS
239
appear to establish that the danger is not fatal
for recent periods (see Census 1821, Prelimin-
ary Observations, p. xxviii.) Altogether the re-
trospective census seems to establish certain
broad statements, as that the population of
England increased by about 45 per cent in
the latter half of the eighteenth century, and
that in the former half of the century the
advance was much slower, and retarded by
occasional retrogression (see Census 1821, Pre-
liminary Observations, p. xxix. ; 1831, Preface,
p. xlv. and 1851, Report, p. Ixviii.)
The second census took place in 1811. The
growth of the population during the decade
1801-11 was rather more than 14 per cent ; a
rate of increase to which we have now returned,
after exceeding it for one generation (1811-41)
andfalling short of it for another(1841-71). The
mistake which had marred the first census was
avoided in the second by counting the families,
not the persons, in each of the three classes —
agricultui-al, trade etc, and others. In 1821
questions as to age were first put. But it was
left optional, both to the returning officer to
ask the question and to the citizen to answer.
The returns were fuller than might have been
expected, eight-ninths of the total population
enumerated. In 1831 the only return relating
10 age was the number of males aged twenty and
upwards. In this year a more elaborate classifica-
tion of occupations was introduced. One of the
principal classes, trade, was subdivided into a
hundred specifications. Into the compartments
thus prepared the statistical matter did not flow
very freely. Accordingly at the census of 1841
each individual was left free to declare his own
occupation. The returns were made for the indi-
vidual, not for the family, as previously. The
inquiry as to age was again introduced in 1841
and made obligatory. This census had the
benefit of the newly created registration office
which supplanted the antiquated machinery of
the parish registers. At the census of 1851 and
on the two succeeding occasions, the advantage
of Dr. Fare's collaboration was felt. The re-
ports embody many of his valuable contributions
to vital statistics. His scientific work is enriched
with a vein of philosophical speculation and
a wealth of literature, which do not often adorn
parliamentary papers. To Dr. Farr is due the
sixfold classification of occupations which is
perhaps destined to be permanent — the pro-
fessional, domestic, commercial, agricultural,
industrial, and the unoccupied class. The
grounds of this division are set forth by Dr.
Farr in a note appended to the report for 1861.
A special feature in the census for 1851 was
an attempt to ascertain the extent of church
accommodation and the size of congregations for
the different religious denominations. In the
same year conjugal condition was first made an
object of inquiry. In 1861 there was a return
of the number of houses containing one, two,
or any assigned number of inhabitants, for
twenty -four selected districts. In 1871 the
first imperial census was taken.
The history of the census for England and
Wales is nearly coincident with that of Scot-
land down to 1861, when a separate census for
Scotland was first taken. A peculiar difficulty
attending the Scotch census is caused by the
definition of a house which the imperial
authorities have adopted : "a distinct building,
separate from others by party walls." This
definition has been far from "distinct" to the
provincial mind. A whole block of buildings
have often been returned as a house. The
statistics of the number of rooms to a family
are more valuable. There are many contrasts
between the results of the census in North and
South Britain — for instance, the much greater
preponderance of the female sex in Scotland —
which cannot be adequately treated here.
The history of the Irish census deserves a
separate notice. From the age of Petty to the
beginning of the present century estimates of the
population, based mostly on Hearth-Money,
were attempted. If this method may be
trusted, there were in Ireland at the end of the
18th century from four to five million persons ;
that is about half the contemporary population
of England and Wales. A census was instituted
in 1812. But it was not successful, having been
taken in different years and for partial districts.
The Irish census of 1821 was more satisfactory.
Its result, in round numbers 6,802,000, com
pared with the contemporary population of
England and Wales, 12,000,000, shows a rela-
tion very different from that which now prevails;
the proportion of the Irish population to that
of England and Wales being in 1821 about a
half, in 1891 about a sixth. In 1831 and 1841
returns as to occupations were obtained on
much the same lines as in England. But the
answers were worked up into different summa
genera. Families are divided into those who
live by (1) capital in wealth or in professional
knowledge ; (2) the direction of labour ; (3)
manual labour. The somewhat indefinite second
class comprised 50 per cent of the families in
1841. The difficulties of obtaining occupational
statistics are illustrated by the incident that in
the whole of Dublin only five coffin -makers
were returned, whereas in a single street it was
ascertained that there were twelve persons so
occupied. Only one person in the Irish capital
designated himself as an author ! Great diffi-
culties attended the preparation of vital statis-
tics in Ireland. The number of births in any
year used to be inferred by adding the numbers
alive at each year of age to the numbers whose
ages at death proved them to have been bom
in the year under consideration (Report for
1841, p. xl.) There is a large deficiency due
to Emigration and imperfect returns of deaths.
Still it is interesting to observe with what
240
CENSUS
accuracy the well-known proportion of male and
female births comes out in the aggregates. The
commissioners for 1841 claim to have made
some contribution to the theory of that remark-
able phenomenon. In the census of 1851 a
gloomy feature was the decrease of population
by almost 20 per cent, due to the famine of
1847. A decrease of 29 per cent is recorded
for directors of labour, the second of the three-
fold division of occupations above mentioned.
The decrease of population has continued ever
since ; the rate of decrease continually diminish-
ing down to the last decade ; when, as shown by
the Preliminary Report for 1911, the decrease
dropped from 5*2 per cent in the decade 1891-
1901 to 1*5 per cent. Much the same dis-
tribution as in 1841 is presented by another
classification of occupied persons as those
ministering to food, clothing, and six other
primary wants. In 1861 this classification
is modified by the addition of twelve new
categories. For example, out of 1 0, 0 0 0 occupied
persons 18 minister to religion, 5 to amusement,
1 to science and art, and 1816 to food. A
feature of interest in the census of 1861 was
the inquiry concerning the religious profession
of the people. The proportions were, Roman
Catholics 77-69 per cent ; Protestants 22-23 per
cent ; not quite 1 per cent being left for Jews
and unspecified. Of the Protestants a little
more than half belonged to the Established
Church. These proportions continue to be
approximately maintained. The latest returns
give Roman Catholics 73-9 per cent, Protestants
(Episcopalians, Presbyterians, and Methodists)
24-5 per cent ; Jews and other persuasions, as
before, about 1 per cent. In 1871, as in 1861,
the returns as to occupation are arranged both
according to the English sixfold classification
and the system grounded on the wants to which
different occupations minister. The Irish com-
missioners defend the indigenous system with
much warmth. The census of 1881 conforms
to the English classification with more docility.
The later censuses of Ireland deserve commenda-
tion for the completeness of the agricultural
returns. The principal points to be noticed in
the census of 1911 are — the smallest decline in
population on record, a decrease in emigration,
an increase in the number of houses, a general
improvement in house accommodation, a de-
crease in poverty, and a decrease in the death
rate (Sir W. J. Thompson, M.D., Registrar-
General of Ireland, "The Census of Ireland,
1911," Journ. of the Statistical and Social
Inquiry Society of Ireland, Dec. 1913).
A general idea of the scope and purpose of a
census may be obtained by noticing the salient
points in a particular report, that for 1901 for
England and Wales being a good example. (1)
Number of the population and rates of increase.
The number slightly exceeded thirty-two and a
half million. The rate of increase per cent was
12*17 per decade ; greater by -52 than for the
preceding decade. The increase, determined
by actual enumeration, differs little from the
"natural increment" determined by subtracting
the number of deaths from the number of births.
Hence two methods of forecasting the future
increase of population. Either we may observe
the natural increment for the year or two im-
mediately adjacent to 1901, and assume that
this rate will remain constant for the following
decade ; or we may assume that the actual rate
of increase for the decade 1891-1901 will con-
tinue to prevail for the next decade. A variant
of the second method takes account of the fact
that the decennial rate of increase is itself
greater than in the preceding decade. The
average of the results obtained by these three
methods gives, as the probable population in
1911, over 36,400,000. The Report for 1911
records 36,075,269 as the actual population of
England and Wales in that year. The Economic
Journal for March 1911 contains a forecast of
the census results worked out by two students
of statistics from the recorded births and deaths
and Board of Trade returns of emigrants and
immigrants. The figures of England and Wales
were put at 35,914,000, or about half a million
less than tlie estimate given above, which dis-
regards all records of migration, and about
160,000 less than the actual figures. (2)
Density of the population and habitations. The
density, whether expressed as the mean distance
between individuals, or in more familiar terms,
is found to vary from place to place and to
increase from age to age. The proportion
between the number of persons and the number
of habitations is less variable. (3) Sexes. The
excess of females over males was more than 6
per cent ; a slight increase over the preceding
decade. It remained at that figure in 1901-
1911. (4) Ages. At this stage we reach less
solid ground. The returns of age are falsified
by various causes. Many are ignorant and put
down a round number at random. The very
old desire to appear still older. Very young
women overstate their age with a view to
obtaining employment ; women not very young
understate their age. From this double cause
the category of female ages between fifteen and
twenty -five is enormously exaggerated. All
that can be done is to distribute the answers in
periods of five years ; and, assuming that these
totals are correct, to determine by interpolation
the numbers for each year. (5) Condition as to
marriage or civil condition. The immense army
of over five and a half million wives supplies
an effective force of nearly four million "of
reproductive age," between fifteen and forty-five.
The number of single women and widows of this
age-period exceeded the number of wives by
over 400,000. The proportion of married
persons to the adult population is declining.
(6) * * The most laborious, the most costly, and
CENSUS
241
after all, perhaps, the least satisfactory part of
the census " is that which is concerned with the
occupations of the people. One difficulty is
obscurity of the answers given. What sort of
occupation is designated by an "all-rounder,"
or a "baubler"? The same designation may
have diiFerent meanings. Thus clothier means in
some parts cloth-maker, in others cloth-dealer.
There is also the difficulty of multiple occupa-
tions. For the census of 1901 the classification
of the occupations was, to a great extent, recast
to bring the census statistics more in harmony
with those issued by the Home Office and the
Board of Trade. In earlier censuses the six-
fold classification framed by Dr. Farr had been
adopted and modified from time to time. To
reproduce the figures in detail would be out of
place here. The following round numbers strike
the imagination and impress the memory. The
number of persons engaged in transport is over
a million and a quarter ; the number employed on
textile fabrics about a million and a quarter ; the
number employed on dress about a million and
a quarter ; the number of agincultural labourers
over a million ; of miners nearly half a million.
The number of the professional classes is about
600,000, and of those employed in preparing
food, drink, tobacco, and concerned with lodg-
ings about a million. (7) Under the head
Birthplaces of the population we learn what
proportion of the inhabitants have filtered into
England from other countries : about 1 per cent
from Scotland, 1*3 per cent from Ireland, and
from abroad about 1 per cent. (8) Infirmities
comprise blindness, deaf-mutism, and the various
forms of mental unsoundness. It is gratifying
to find the relative numbers of the blind (about
1 per 1285 of the population) diminishing.
That men should become blind oftener than
women is not surprising.
A more recent model of a census is presented
by the preliminary report of the census of 1911
for England and Wales. The Report begins
by stating the total number of persons returned
as living in England and Wales at 12 p.m. on
2nd of April 1911 : namely 36,075,269. The
deficiency of this number, as compared with the
estimate formed (see above), is accounted for
partly by a diminution in the natural increase,
partly by an increase in the net emigration
from England and Wales during the decade
which far exceeded that of the decade 1891-
1901. The decline in the natural increase was
not due to increased mortality but a decrease
in the birth-rate. The number of families,
8,005,290, has increased in proportion to the
population by "55 per cent ; the number of
inhabited houses, 7,141,781, has increased in a
ther smaller proportion. The rate of increase
population varies in different areas ; with
me exceptions, being highest in the counties
adjacent to London and counties in which coal-
KmiT„-«-y jg ^jjQ predominant industry. Eight
DL. I.
rural counties show an actual decrease. The
general law that a district increases more
rapidly the more decided its urban character is
not overthrown by the figures which show in
some cases a smaller percentage increase for
districts with populations above 100,000 than
for districts with populations between 20,000
and 100,000. For "probably, or at any rate
possibly," the contradiction is only apparent,
the newcomers in the larger towns having to
settle outside the municipal or official boundary.
Accordingly the falling off of increase in some
large towns need not imply a decline in pro-
sperity. The population of the Administrative
County of London has decreased "29 between
1901 and 1911 — the first time that such a
phenomenon has presented itself. Twenty out
of the twenty-nine Metropolitan Boroughs show
a decrease, while the City of London fell about
27 per cent. The " Outer Ring," on the other
hand, increased 33*49 per cent.
The following table shows the figures for the
United Kingdom at the last two censuses : —
Enumerated population of the United Kingdom.
1901.
1911.
England and Wales
Scotland
Ireland
United Kingdom. . ...
32,526,075
4,471,957
4,456,540
30,075,209
4,759,445
4,881,951
41 454 578 1 4r. 'ue, fi(ir>
' '
The rate of increase of tlie United Kingdom
in the decade 1901-1911 was 8-2 per cent. It
was thus lower than in the decatle 1891-1901
when it was 9 '5 per cent, equal to the rate
in the decade 1881-91, but lower than in the
earlier decades 1861-71 and 1871-81, when
it had been 8*8 per cent and 10*8 per cent
respectively. The movement in the rate of
growth was unequally shared by all the divisions
of the kingdom. In England and Wales the
population showed an increase of nearly 9*6
per cent as compared Avith the enumeration in
1901 ; in Scotland there was an increase of
14-7 and 11*7 per cent in the large town and
small town districts respectively, and a decrease
of 5*6 per cent in the insular-rural districts.
In Ireland there was a decrease of 1 7 per cent
over the whole country, Leinster alone having
increased by -7 per cent, while Connaught de-
creased by 5 '7 per cent. The population of the
islands in the British seas enumerated in 1911
was 148,915 ; showing a decrease of 1*455 ]ier
cent as compared with the enumeration of 1901,
and a considerable decrease in the rate of growth.
Valuable as these results are, and though
the British census may be described as a good
article at the price, there is room for many
improvements. The reform most loudly called
for is that the ensus should be quinquennial.
A -committee of the Royal Statistical Society
{Jmirnal, 1888, p. 817) urged that the addi-
tional cost incurred by the reform would be
B
242
CENSUS
small ill comparison with the advantage of
obtaining correct returns of population. They
pointed out that the estimated population for
certain districts was inaccurate to the extent
of 11, and even .18 per cent. This argument
has now become a fortiori, owing to th^ imper-
fections disclosed by recent censuses. Dr. Noel
Humphreys, in his "Kesults of the Recent
Census and Estimates of Population in the
largest English Towns" (Journ. Stat. Sac,
1891), gives instances of towns in which the
hypothetically estimated death-rate differed
from the true figure by as much as 20 and even
26 per cent. The estimates based on the
decennial census were so worthless that they
seemed to evidence a decline in the death-rate
of Salford and Liverpool, while in reality there
was an increase. For recent work on this point
see yearly volumes of the Journ. Stat. Soc. under
heading " Census," especially vol. Ixxiv., 1911,
arts, by E. C. Snow — "The Application of the
Methods of Multiple Correlation to the Estima-
tion of Post-Censal Populations, " and * 'Estimates
of Population." The Statistical Society has
also, through the mouth of various committees,
advised that the character, as well as the number, '
of dwellings should be returned. Sir I. Palgrave
shows {Journ. Stat. Soc, 1869, p. 411) that
information as to the house accommodation of
the people is very deficient. This has not yet
been completely supplied. Another recom-
mendation sanctioned by the Statistical Society
is that the religious profession of each inhabitant
should be obtained. Mr. Longstaff, in his
"Suggestions for the Census of 1891 " {Journ.
Stat. Soc, 1889), proposes that the number of
rooms in dwelling-houses should be recorded.
An annual census has been proposed by the late
Sir Edwin Chadwick {Journ. Stat. Soc, 1889,
p. 468 ; Internet. Stat. Congress, The Hague,
pt. ii. p. 164). Major Craigie demands more
conformity between the census and the returns
of the agricultural department. "There must
be large omissions in the ranks of land occupiers
in our census." (Journ. Stat. Soc, 1887, pp.
98, 149, and Jubilee vol.) For Imperial Census
see Sir J. A. Baines' "Under the Crown," and
"The Census of the Empire, 1911," Journ.
Stat. Soc, vol. Ixxiv.
The glory of instituting the first census does
not belong to England. While the Population
Bill of 1753 was denounced in the House of
Commons as subversive of liberty, Sweden was
already enjoying a tolerably perfect census.
Sweden had the advantage of very complete
parish registers, recordiug not only births,
deaths, and marriages, but also the number of
persons migrating to or from each parish and
residing in it. By the agency of the clergy
these materials were embodied in a census in
1749 and subsequent years, first at intervals of
three, subsequently of five years. The results
of the early Swedish census, communicated to
the scientific world by the celebrated Wargentin,
were utilised by Dr. Price {q.v.) and Milnb
(q.v.) {Annuities, ch. xii.-xiii.) Malthus {q.v.)
builds upon these statistics {Essay, bk. ii. ch.
ii.), noticing the correlation between the lean
years and the diminution of marriages. In the
recent publications of the Swedish Bureau the
study of such correlations is facilitated by affix-
ing to each year a numeral (from I. to X.) indi-
cating the quality of the harvest (see Journal
of the Statistical Society, xxv. p. 141). Looking
at the whole series, " the gradual diminution of
mortality since the middle of last century is very
striking " now, even more than when Malthus
made this observation. The increase of suicides
is less gratifying. The unrivalled length of the
Swedish records affords particularly striking
instances of those uniform relations which con-
stitute what has been called physique sociale.
The proportion of male to female births was
1-043 to 1 in 1751-60, 1*050 to 1 in 1851-55.
Spain has some claims to priority. A toler-
ably complete census of the dominions of Castile
was taken as early as 1594. There was a
general census of Spain in 1787 and in 1797.
But then occurred a pause down to the census
of 1 857. During the first half of the nineteenth
century Spain lagged behind the statistical
movement which was general in Europe.
The age initiated by the French Revolution
was truly called by Burke the " age of statists."
In France a census was ordered in 1791 and
executed in 1801. In Prussia a statistical
bureau was founded in 1805. The impulse was
followed by other states, at different times and
with varying pace — some with quinquennial,
some with triennial intervals. The inquiries
have become more fruitful by the addition of
new questions, and the fruit has become more
accessible through increasing uniformity of the
questions in diSerent countries. The branches
of the European census, as they lengthen,
become not only broader, but more parallel.
The possibility of international comparison is
partly due to the action of the International
Statistical Congress during the quarter century
which followed its first meeting in 1853. The
extent to which its recommendations have been
adopted may be expressed by the following
statement. At the congress of St. Petersburg
(1872) consolidating the results of discussions
which had been carried on at several preceding
congresses, twelve questions or rubrics (as to
name, sex, age, etc.) are proposed as "essen-
tial," or obligatory. Of these recommendations
the first seven are already adopted in twenty-
five continental bureaus, with only one or two
exceptions. The remaining five directions are
carried out, roughly speaking, in about half of
the continental states. Among the headings
about which it is difficult to obtain uniformity
may be instanced conjugal condition. At the
Florence congress (1867) it was proposed to
CENSUS
243
ascertain the relationship of husband and wife.
The question is put in Sweden and some other
countries. Population, de fait and de droit —
The Italian census grapples with the difficult
questions connected with domicile by an elabor-
ate arrangement distinguishing the birds of
passage from the residents, and the temporary
from the i^ermanent absentees. Age — Consider-
ing the inaccuracy of returns under this head, is
it worth while publishing them in full and
without manipulation? Some European bureaus
have decided in the affirmative. Language
spoken — What does this heading mean ? the
language most used in good society, or in
the family, or in the church 1 Occupations
form a rubric which is the despair of the
international statisticians. The diversity of
employment in different countries is aggra-
vated by the difficulties of language. What
would a Frenchman understand by "clerk
of the parish," even when translated (?)
into "clerc de paroisse" {sic)'i ** Carvers,"
one of the designations in the St. Petersburg
scheme, should not have been rendered in
French as "agens des abattoirs." On these
and other topics perfect unanimity is still only
an ideal. Even when agreement has been ob-
tained as to the questions to be asked, there
still remains diversity in the arrangement of
the answers. To smooth these remaining dif-
ferences may, it is hoped, be a function of the
International Statistical Institute, founded in
1885. As M. Korosi, one of the ablest advo-
cates of uniformity, points out, the diverse
practices mostly involve no question of prin-
ciple ; it would give no additional trouble
to act in concert. It is needless to dwell on
the advantages of increased uniformity. The
census was used by ancient Rome as an engine
of government ; modern Europe should make
it also an instrument of science.
[For the antiquities of the subject Gabaglio,
Storia . . . delta Staiistica (2d ed., 1888), may
be consulted. For the history and scope of the
census in the United Kingdom, see the preface or
report which is attached to every census except
the first. Proposals for reform are expressed in
the recomraendatious made by a committee of the
Statistical Society before each census (see Journal
of the Statistical Society for 1840, 1850, and sub-
sequent decades). Sir I. Palgrave's paper, Jour-
nal of the Statistical Society, 1869 ; and Dr.
Lougstaffs paper in Ibid. 1889 contain other
proposals besides those which have been noticed.
A general view of the earlier methods of taking the
census on the continent is presented in the Journal
of the Statistical Society, vol. iii. Mr. Hendriks'
detailed accounts of the Spanish and the Swedish
census, in the 23d and 25th volumes of the same
journal, are very valuable. As to the history and
scope of the census in the different European states,
copious information will be found in the records of
the International Statistical Congress, especially in
.the reports made by the members for each nation.
In the same publication will be found repeated
proposals for securing greater uniformity. A con-
spectus of these recommendations is presented by
M. Korosi in his Projet d'un Recensement du
Monde (Paris, 1881). Attention is due to his
own recommendations offered in that work and in
his address to the Jubilee meeting of the Eoyal
Statistical Society (Jubilee volume, 1885), and in
his contribution to the second Bulletin of the In-
ternational Statistical Institute, p. 200. A com-
parison of the statistics obtained by the census in
different countries is afforded by Confronti Intcr-
nazionali (published by the Direzione Generale
della Statistica), Roma, 1884. Many of the figures
there compiled have been extracted by Sir Rawsou
Rawson, who has added explanatory comments
(Presidential address to the Statistical Society,
Journal, 1885). The most recent results for
several European countries and for the Cape
Colony and Victoria are presented together in the
Notes on the Preliminary P<,etums of the Censuses,
1890-91, in the Journal of the Statistical Society
for Sept. 1891. Less recent comparisons are Movi-
mento della Popolazione in Italia e in altri Stati
d'Europa, by ]\L Bodio ; Archivio di Statistica,
1876 ; Mouvevients de la Population dans les divers
etats de V Europe, by M. Bertillon ; Annates de la
Demographie Internationale, vol. i. ; and other
articles in that series (extending from 1877 to
1883). See also Quetelet, Physique Sociale, 1869.]
F. T. E.
CENSUS, United States. The mode of
conducting the census of the United States is
so important as to demand special notice.
History of the Census. — The origin of the
census system in the United States lay in the
necessity of establishing some basis for the dis-
tribution of representatives and direct taxation
among the dillerent states. When the colonies
associated themselves together to resist the
mother country it was necessary to find some
method of distributing the expenses of the w^ar.
The congress which assembled in 1775 had no
power to assess and collect taxes through officers
of its own. The draft of the articles of con-
federation (1776) provided that expenses should
be distributed according to the population of
the states, which should be ascertained trienni-
ally and transmitted to the assembly of the
United States. The southern members objected
to the slaves being counted with the whites,
and in the articles of confederation finally
adopted (1777-1781) it was provided that all
expenses for war or the common welfare should
be apportioned among the states "according to
the value of all land within the state granted
to or surveyed for any person, as such land, and
the buildings and improvements thereon, shall
be estimated according to such mode as the
United States in congress assembled, shall from
time to time direct and appoint " (art. 8).
The land force, on the other hand, was to be
furnished by the different states according to
the number of white inhabitants in each (art.
9). Neither of these provisions ever led to a
census ; in fact in 1783 congress recommended
244
CENSUS
the levying of money in proportion to the
population rather than according to land-
value, and drew up a table of the estimated
population in each state. In this estimate only
three-fifths of the slaves were counted. This
amendment did not prevail, hut we »ee here
the origin of the three-fifths rule which crept
into the constitution of 1787 (art. 1, § 2),
which is the legal basis of the census at the
present time. That clause reads as follows :
"Representatives and direct taxes shall be
apportioned among the several states which may
be included within this union, according to
their respective numbers, which shall be deter-
mined by adding to the whole number of free
persons including those bound to service for a
term of years, and excluding Indians not taxed,
three-fifths of all other persons. The actual
enumeration shall be made within three years
after the first meeting of the Congress of the
United States, and within every subsequent
term of ten years, in such manner as they shall
by law direct."
To carry out this provision of the constitu-
tion, congress passed the first census law, 1st
March 1790. The law has since been so
extended that from a mere enumeration, the
census has become an elaborate description of
the social and industrial condition of the people
of the United States. This progress has in one
sense been gradual, but the census of 1850 and
that of 1880 stand out as marking epochs,
setting the standard for those that followed.
The census of 1790 was a simple enumeration
of the people under the following classification :
free white males of 16 years and upwards, free
white males under 16 years, free white females,
all other free persons, and slaves. The census
of 1800 was similar in scope except that the
age classification was slightly more elaborate,
namely : under 10 years, from 10 to 16, from
16 to 26, from 26 to 45, over 45, with distinc-
tion of sex. The same population schedule
was used in 1810 ; in addition questions were
asked in regard to manufactures, but the latter
returns were so incomplete as to be of no value.
They were equally incomplete in 1820, and
in 1830 the inquiry was omitted. In 1820
the age classification was further elaborated ;
"foreigners not naturalised" distinguished ; and
the people divided, according to occupation,
under agriculture, commerce, and manufactures.
The census of 1830 adopted the age classifica-
tion : under 5 years, from 5 to 10, from 10 to
15, from 15 to 20, from 20 to 30, and then by
decennial periods. It also distinguished the
blind, and deaf and dumb, by colour and certain
ages. In 1840 the number of insane and
idiotic, white illiterates, and statistics of schools
were added. A manufacturers' schedule was
again attempted, but without much success.
The census of 1850 was more elaborate. It
included the number of dwelling-houses, of
families, of persons according to sex, age, colour,
free or slave, profession or occupation, value ol
real estate, number of persons married within
the year, attendance at school, illiteracy, the
deaf and dumb, blind, insane, idiotic, pauper,
and convicts, mortality statistics for the year,
products of agriculture and industry, wages,
capital, taxes, colleges and schools, newspapers
and periodicals, and churches. Most of our
comparisons at the present time go back to this
census. In 1879 a new act was passed which
resulted in the elaborate "tenth census of the
United States," a description of which is given
below.
Method of talcing the Census. — The returns of
1790 were taken under the supervision of
United States marshals and sent to the presi-
dent of the United States. From 1806 to
1840 they were sent to the secretary of state
and published by him. In 1850 the census
oflSce was created in the newly-established de-
partment of the interior ; since then a super-
intendent of the census has been appointed for
each census. The law of 1st March 1889, for
the taking of the eleventh census (1890), pro-
vided for the appointment of (not more than)
175 supervisors who were to appoint enumera-
tors, the latter to visit personally every family
in their subdivisions and by inquiry obtain all
particulars required by the law, which also
allowed schedules to be distributed in advance,
to be filled up by householders and others. The
schedules to be employed were (as in 1880) a
population schedule, one for farms, for manu-
factures, for mortality and vital statistics, for
social statistics, and for transportation com-
panies. Where there was an official registration
•of deaths, the superintendent might withhold the
mortality schedule from the ordinary enumera-
tors and obtain the statistics through official
records. The superintendent might withhold
also the schedules for manufacturing, mining,
and social statistics, and charge the collection of
these statistics upon experts and special agents.
He might also employ special agents to investi-
gate the statistics of the manufacturing, rail-
road, fishing, mining, cattle, and other industries
of the country, and of telegraph, express, trans-
portation, and insurance companies as he might
require. The census also took on a special
schedule the names, organisations, and length of
service of those who had served in the array,
navy, or marine corps of the United States in
the war of the rebellion, and who were survivors
at the time of the inquiry, and widows of
soldiers, sailors, or marines. The population
schedule included an inquiry as to the number
of negroes, mulattoes, quadroons, and octo-
roons. The superintendent also collected the
statistics relating to the recorded indebtedness
of corporations and individuals ; also, informa-
tion relating to animals not on farms. The
cost of the census of 1890 was not to exceed
CENSUS
246
$6,400,000 (say £1,280,000), exclusive of
printing, engraving, and binding. The cost
of the census of 1880 was about $4,853,350
(say £970,000). One of the criticisms made
on census methods in the United States had
much weight, namely, that, the census office
should be permanent. Formerly, as soon as
the census was completed, the office was
abolished, and the skilled force was disbanded.
The result was that every census was taken by
inexperienced men, and all the benefit of
previous practice in statistical work was lost.
By the act of 1902, a permanent Bureau of the
Census was created. One of the chief objects of
this act was the retention of a certain number
of persons familiar with decennial census work,
but also to provide an organisation to deal in
the -interval between the censuses with certain
statistics now crowded upon the decennial
enumerations, such as investigations as to in-
dustries, public indebtedness, social statistics, etc.
The Scope of the Census. — This may be seen
by a survey of the tenth census, an extraordinary
undertaking, unlike anything that preceded it
in the United States. In the words of the
superintendent,^ — "It was intended to form
a grand monumental exhibit of the resources,
the industries, and the social state of the
American people on the occasion of their tenth
ten-year enumeration. In its nature much of
the work done from 1880 to 1883 is detinitive
or else such as to require only slight additions
or corrections from time to time."
The tenth census falls into two parts : the
ordinary statistics of population, wealth, and
industry ; and the special investigations and
reports of experts having only a semi-statistical
character. It will be necessary to dismiss these
latter with only a word.^ They are not pro-
perly census work, and their value can be esti-
mated only by scientific men. The ' ' Forest trees
of North America," for instance, is an elaborate
description of the trees of the United States,
their distribution, their value as lumber, the
strength of different kinds of wood, etc. The
volumes on "Cotton-growing" contain a similar
elaborate description of the cotton -growing
states of the south, soil and climate, strength
of cotton fibres, methods of cultivation, etc.
Other volumes do the same for tobacco, the
cereals, petroleum, coke, building stones, pre-
cious metals, other metals, and the natural
water power of the United States. Still others
contain elaborate descriptions of machinery used
in various industries, and the processes of pro-
duction. Such, for instance, are the reports on
flouring mills, on the ice industry, on pumps
and steam engines. Still further removed from
a statistical investigation is the volume con.
i Wning the mining laws of the United States
^ Quartefly Journal of Economics, ii. 143, 145.
"^ See titles of volumes of the Tenth Census at
end of this article.
and of the several states and territories. Two
volumes contain "Statistics of Cities," giving
a history of each city and town in the United
States and a description of its government, in-
stitutions, sewerage system, pavements, etc.
All this is scientific work, not census work.
"It is not to be expected that succeeding
censuses will be of such colossal magnitude. "
Real census work falls under the following
heads : (1) population ; (2) mortality and vital
statistics ; (3) agriculture and fisheries ; (4)
manufactures, miningand mechanical industries;
(5) transportation ; (6) taxation and public
indebtedness.
The thirteenth census (1910) covers the sub-
jects (1), (3) and (4). The twelfth census had in-
cluded (2), but mortality statistics are now col-
lected annually by the Permanent Census Bureau.
Population. — There are some peculiarities of
United States census work which explain the
size of the publications, and are of scientific
interest' as differentiating it from census work
in Europe.
(1) One is the size of population and the ex-
tent of country covered by the census. In 1880
the enumeration covered fifty million people, the
census of 1910 covers over ninety-three millions.
The country is divided into forty-eight states.
All the facts of the census are presented for eacli
state, for the purpose of satisfying local inteiest.
Still further, the states are divided into counties,
sometimes more than a hundred in a state, and
most of the tables carry the figures out for the
counties. The counties are divided into town-
ships, wards, etc. The towns and cities often
differ from these in their boundaries, and some-
times separate presentations are made for these
minor civil divisions.
(2) An elaborate attempt was made to con-
nect population with the facts of physical and
political geography, such as climate, altitude,
rainfall, eastern, western, and southern sections,
etc. The immense territory of the United States
offers such a variety of physical characteristics,
and the history and colonisation of the several
sections have been so different, that a wide field
(it was hoped) would be opened for the use ol
statistics in sociological speculation.
(3) Two elements in the population of the
United States are of very great interest. One is
the coloured population, the other the foreign-
born. In no other population do we find the
opportunity to study such social questions as
those presented by the presence of a race dif-
ferent in blood from the dominant race and just
lately emancipated from servitude, and by the
presenceof a numerous body of foreigners. Ethnic
questions have nowhere such a field for statisti-
cal determination. With this feeling the census
has, in almost all its investigations, analysed
the results with distinction of race and place of
birth. Such are the characteristics of the census
which make it of particular scientific importance.
246
CENSUS
We will now examine sonie of the results : —
The total area of the United States is over
3,000,000 square miles, but of this only
1,569,570 square miles had (1880) a density
of population of 2 to the square mile. This
is called the settled area, and has steadily
increased since the beginning of the occ\ipation.
The growth of population and of settlement at
the successive census periods is seen in the
following table : —
Year.
Popula-
tion.
Settled
Area.
Density per
sq. mile of
settled area.
Increase per
cent of
Population
in Decade.
1790
3,924,214
239,935
16-4
....
1800
5,308,483
305,708
17-4
35 -io
1810
7,239,881
407,945
17-7
36-38
1820
9,633,822
508,717
18-9
33-06
1830
13,866,020
632,717
20-3
32-51
1840
17,069,453
807,292
21-1
33-52
1850
23,191,876
979,249
23-7
35-83
1860
81,443,321
1,194,754
26-3
35-11
1870
38,558,371
1,272,239
30-3
22-65
1880
50,155,783
1,569,570
32-0
30-08
This table shows the rapid growth of popula-
tion and its slight increase in density on ac-
count of the constant extension of the area of
settlement. For further illustration the census
has adopted the following classification of dens-
ity of population. Group 1, from 2 to 6 to a
square mile, represents a very sparse popula-
tion, supported perhaps by grazing (frontier) ;
group 2, from 6 to 18 to a square mile, repre-
sents agriculture in early stages or on a rugged
soil ; gi-oup 3, from 18 to 45 to a square mile,
represents, in the United States, well-developed
agriculture ; group 4, from 45 to 90 to a
square mile, indicates the presence of manufac-
turing industry ; group 5, over 90 to the
square mile, represents advanced industry. A
series of tables and coloured Caetograms pre-
sents the distribution of . population according
to these groups at each decade since 1790. It
is a most interesting and unique study of the
process of settlement in a new country, at first
the tide of settlement being controlled by the
course of navigable rivers and the removal of
hostile Indians, and later by lines of railroads.
The following table will show the area of
settlement for the different groups in 1880 : —
Sq. miles.
Group 1, from 2 to 6 to a sq. m. . 384,820
,, 2 ,, 6 „ 18 ,, ,, . 373,890
,, 3 „ 18 „ 45 „ „ . 554,300
„ 4 „ 45,, 90 ,, „ . 231,410
,, 5 ,, over 90 „ ,, . 25,150
Outside of cities only a very small strip of
territory along the Atlantic seaboard has
acquired the density of population due to
advanced industry.
In a similar way the distribution of popula-
tion is shown according to latitude and longi-
tude (the greater part of the population live
between latitude 38° and 43°, one half to the
north of 39° of latitude, and to the east of 83°
of longitude ; according to elevation above sea-
level (nearly two -fifths live, below 500 feet,
and three-fourths below 10^/0 feet) ; according
to drainage basins (the greater part of the
population is in the Mississippi valley) ; accord-
ing to mean annual temperature, to mean
temperature in July, to mean temperature in
January, to maximum temperature, to mini-
mum temperature, to annual rainfall, and to
spring and summer rainfall. The centre of
population is said to be at 39° 4' 1" latitude,
and 84° 39' 7" longitude, or at a point about 8
miles west by sou ill of Cincinnati. All these
calculations except the last are carried out for
the foreign-born and the coloured as well as for
the total population.
Turning now to the distinctions of colour and
race, the population of the United States in
1880 was as follows :
Total population . 50,155,783
White ,, . 43,402,970
Coloured „ . 6,580,793
Native „ . 43,475,840
Native white „ . 36,8)13,291
Foreign-born ,, . 6,6»'9,944
The coloured population is mostly in the
southern states ; in three (South Carolina,
Mississippi, and Louisiana) the coloured were
(1880) in excess of the whites. The foreign-born
are principally in the north, and especially iij
the large cities. The coloured are almost ali
of them of native birth, and the foreign-born
are almost all of them whites, so that the two
elements are entirely separate in the statistics.
It is to be borne in mind that the terms
"native" and "foreign" refer always to place
of birth, not to descent or alien condition.
Children of immigrants born on the soil of the
United States are classed as natives. This is
unavoidable, but has led to many false conclu-
sions in regard to the influence of the foreign
element in the United States. We cannot
say, for instance, how many of the people ol
the United States are descendants of the
original settlers, and how many of immigrants
since 1820. The census did inquire as to the
birthplace of the parents, and by means of this
inquiry discovered that nearly 15,000,000 in-
habitants of the United States were either born
abroad or children of parents born abroad.
It is one of the most interesting points of the
tenth census to follow out these foreign-born.
They congregate largely in cities, 34 '2 per cent
of the total number being found in the largest
44 cities (of Irish 45-26 per cent, of Germans
38*73 per cent, and of Italians 60-80 per cent
were in large cities). The census follows the
foreign-born into different occupations. Of all
the persons engaged in agriculture in the
tJnited States, 10*60 per cent were of foreigu
birth ; of those engaged in prcfessional and
personal services, 24-48 per cent; of those in
trade and transportation, 25-33 percent; and
CENSUS
247
of those engaged in manufactures, mining, and
mechanical industries, 31*95 per cent were of
foreign birth. Other statistics show the pro-
portion of foreign -born among illiterates,
prisoners, convicts, paupers, deaf and dumb,
insane, blind, etc. The figures must be used
with caution, because the census was not alto-
gether successful in the enumeration, and be-
cause no regard was paid to the age classification,
although the abnormal proportion in some of
these cases (insane, blind, etc. ) is due to the ab-
normal proportion of adults among the foreign-
bom. This whole inquiry as to the foreign-born
is a characteristic part of the American census.
The other population tables do not dilfer
from those in use in Europe. The classification
by sex shows a proportion of only 965 females
to 1000 males, contrary to the usual case in
Europe, but easily explained by immigration.
In the eastern states there was an excess of
females, owing to emigration of males west-
ward, in the south also an excess of females, due
apparently to the usual cause, namely, greater
mortality among males. The age classification
showed a large number of children, especially
among natives, but this latter figure must be
used with great care because children of immi-
grants born on this soil were classed as natives.
The urban and rural classification showed 22-5
per cent of the population living in towns of
8000 inhabitants and over (in 1790 it was only
3*3 per cent), and 25-5 per cent living in towns
of 4000 and over. Of the people of the United
States engaged in gainful occupations, 44-1 per
cent were engaged in agriculture, 23 '4 per cent
in personal and professional services, 10*4 per
cent in trade and transportation, and 22*0 per
cent in manufactures, mining and mechanical
industries.
II. Mortality and Vital Statistics, — As there
has been no uniform registration of births and
deaths for the whole country, and in many states
having registration it was imperfect, American
mortality and vital statistics of former years
are sadly deficient. The tenth census tried to
collect the number of deaths during the census
year and the ages of the deceased. By com-
parison with one or two states where there was
registration, it was estimated that the census
returns were thirty per cent short of the actual
number of deaths. The office, in addition, by
correspondence with nearly thirty thousand
physicians, tried to make up this deficiency, and
to ascertain with accuracy the cause of death.
This inquiry was only partially successful. In
large cities where there was already a registration
of deaths, the census office simply copied the
list. The births were obtained by adding to the
number of children under one year of age the
number of children reported as born and dying
during the census year. The number was sup-
posed to be 15 per cent short of the actual
births. With such imperfect material, the birth-
and death-rates, the proportion of deaths from
different diseases according to age, sex, locality,
race and nationality, the mortality tables, etc.,
must have a very uncertain value. The birth-
rate was probably about 36 per 1000, the death-
rate about 18 per 1000. The only excuse for
the census undertaking this impossible task was
that no one else would.
III. Agriculture. — These returns were made
on a separate farm schedule filled by each farmer
under the direction of the enumerator. The
figures as to acreage rest on no ofiicial survey,
but simply on the statements of the farmer.
The statistics serve a double purpose : to display
the condition of farming as a national industry,
and to show the value of agiicultural products as
a contribution to national wealth. Under the
first head, the number of farms was 4,008,997,
comprising 536,081,835 acres, or 28*9 per cent
of the total land area. But nearly one half
(46-9 per cent) of the land in farms Avas unim-
proved, mostly woodland and forest. The aver-
age size of farms was 134 acres, but this varied
greatly with localities. About 74 per cent of
the farms were cultivated by owners, about 8
per cent by tenants paying a money rent, 18
per cent were cultivated by tenants paying a
share of the product as rent. The value of
farms including buildings was estimated as
$10,197,096,776 (say £2,040,000,000). Under
the second head the census gives detailed in-
formation as to number and value of live stock
on farms, acreage devoted to different crops,
amount and value of different products, such
as wheat, com, cotton, etc. for 1879, details
which it would be useless to repeat here.
IV. Manufactures. — These statistics were col-
lected with great care and comprise all factories
and workshops producing to the value of $500
(say £100) per annum and over down to the
village blacksmith or carpenter. The statistics
of industry are regarded with gi-eat interest in
the United States as indicative of the growth and
material prosperity of the community. Especi-
ally is this true in the rivalry of state with
state, and of city with city, and many bitter
attacks were made on the census office because
the results did not come up to local expectation.
None of these was substantiated. The statistics
have been collected since 1850 on the same plan,
and give some interesting points of comparison,
as shown in the following table (values foi
1870 reduced to gold basis) :
1
Value
of gross
product.
Value
of raw
materials.
Total
amount of
wages paid.
Capital.
Number
of hands
employed
1850
1860
1870
1880
£
203.823,923
377,17:i,335
677,172,070
1.073,915.838
£
111,024,764
206,321,018
398.148,359
679,364,710
£
47.351,893
75,775,793
124,093.495
189,590,759
£
106,649,050
219,971,143
338,913,403
558,055,521
958,079
1, 311.246
2.053,996
2,732.535
(.lu £. steiiiiig, $ converted as 5 = £1.)
These figures seem to give a fair picture of the
manufacturing industry of the United States.
248
CENSUS
The return of total value has been criticised on
the ground that the finished product of one
industry is the raw material of another, and
that thus the same material is valued several
times in succession. But there seems to be no
objection to this so long as value is added to
the product at each stage. In another rfespect
the census figures have been greatly abused.
Persons have taken the cost of raw materials
plus the total wages paid, and deducting it from
the value of the finished product, treated the
result as employer's profit. For the whole of
the United States (1880) this figure would be
$1,024,801,847 (say £200,000,000), or more
than the total wages paid. On the basis of
the capital returned, this represented a profit
of 36 '5 per cent in manufacturing industries.
In some cases it was still greater, as for
instance in the boot and shoe industry there
appeared to be a profit of nearly 50 per cent.
The fallacy arose from considering wages and
raw materials as representing total cost of pro-
duction, and from the diflBiculty of determining
the real amount of capital invested. The
eleventh census attempted to remedy the false
impression, in part, by adding to the cost of
production the amounts paid for rent, for taxes,
for insurance, for commissions, for interest, for
freight and transportation, and other expenses.
It also proposed to follow the example of the
Massachusetts census of 1885, and include
under the head of capital, credit capital, i.e.
money borrowed, bills receivable in excess of
bills payable, etc. This would doubtless pre-
vent any such excessive sum appearing as profits
again ; but the whole attempt to show the rate
of profit by means of a census enumeration is
fallacious, and destined to failure.
Wages. — The total sum paid for wages during
the census year divided by the whole number
of employees gave an average wage, |346-90
(say £70) per annum. This figure has no value
because many of the persons were employed
during only a part of the year, and because it
averages the wages of men, women, and children.
The average wage of employees in the principal
industries is fallacious for the same reasons.
In 1890 it was proposed to attempt a classified
wage, i.e. ascertain the number of men receiving
$5 (£1) per week, between $5 and $6 (£1 and
£1 : 4s.), etc.
V. Transportation. — The statistics for rail-
roads were collected on special schedules filled
out by the companies themselves (1017 com-
panies working 87,781*97 miles of road), and
covering financial statistics, such as income and
expenditure, amount of stock, bonds, and
general indebtedness, traffic statistics, rolling
stock, employees, accidents, etc. There are
similar reports for telegraphs, telephones, steam
navigation, canals, etc.
VI. Taxation and Public Indebtedness. — This
report (vol vii.) deserves notice as our only
source of information in respect to the amount
of wealth, the burden of taxation, and the sum
of public indebtedness for the whole of the
United States. Each state had its own system
of valuation and taxation, and its own stat-
istics of local indebtedness, but these were not
uniform and had never before been combined.
The census office was able to accomplish this
by extensive correspondence with state and
local officers, and prominent bankers, and busi-
ness men throughout the country. The results
in regard to taxation were not entirely satis-
factory. As regards wealth, the census office
estimated the total wealth of the United States
to be $43,642,000,000 (say £8,700,000,000).
The statistics of indebtedness reveal for the
first time the amount of state and local
indebtedness, the cause for which it was
contracted, rate of interest paid, amount of
sinking funds for its extinction, etc. The
report analyses also the public debt of the
United States, number of holders, amount of
their holdings, amount in the hands of banks
and corporations, the section of country where
held, etc. This may not be true census work,
but the student of finance is to be congratulated
that the census ofiBice was willing to do it.
State Censuses. — Some of the states take a
census at the intermediary period between the
national. Most of these are mere enumerations
of the people for the purpose of readjusting the
distribution of representatives. The census
law of 1879 tried to encourage the states to
prosecute such work by providing that if any
state or territory should take such a census at
the intermediary period and in accordance with
the schedules of the United States census, the
United States government would pay one half
of the expense of supervisors and enumerators.
The provision had no effect, and was quietly
dropped out of the act of 1889. The census
of Massachusetts of 1885 was probably the
most perfect piece of statistical work done in
the United States up to that date.
Census of 1910. — The thirteenth census was
taken as of date 15th April 1910. The total
area enumerated included the United States,
Alaska, Hawaii and Porto Rico, and persons
stationed abroad in the service of the govern-
ment. The figures given below are for the
United States only :
1
^(2"^
py
li
m
ill
1890
1900
1910
62,947,714
75,994,575
91,972,266
12,791,931
13,046,861
15,977,691
25-e
20-7
210
2,973,965
2,974,159
2,973,890
21-2
25-6
30-9
The statistics of population and agriculture
(except those relating to irrigation collected
by special agents) were collected by a force of
supervisors and enumerators. There were 330
supervisors of the census appointed by the
CENSUS
249
President, controlling about 70,000 enumera-
tors of population and agricultural statistics,
the candidates being subjected to a practical
examination. In general each supervisor had
jurisdiction over one congressional district, but
in the more populous districts the work was
subdivided. The statistics of manufactures,
and of mines and quarries, were collected by
special agents or by clerks detailed from the
Census Bureau. Statistics of population are
classified with regard to : — number ; distribution
in territorial divisions, in states, in counties,
in urban and rural districts, in cities over
2500, and cities over 25,000 inhabitants ;
colour, or race, nativity, parentage ; sex ; age ;
marital condition ; place of birth, native or
foreign (with date of immigration) ; school at-
tendance and illiteracy ; dwellings and families.
Some recent results are as follows : —
Population.
Under '2 to a sq. mile
From 2 to 6 ,, ,,
„ 6 „ 18 „
„ ^8 „ 45 „
,, 45 ,, 00 ,,
Over 90 „
3-21,255 sq. miles.
434.242
9t52,s71
f)3L),207 „
396,670
210,769
Proportion of Urban and Rural Population
to Total. Totals 100.
ISSO.
1890.
1900.
1910.
Urban .
Kural .
29-5
70-5
86-1
63-9
40-5
59-5
4(;-:!
53-7
White and Negro Population.
Total.
White.
Negro.
§i lo-
ll P
Per cent of
Total.
X,
IS-
2
t ;
O 1
1890
1900
1910
62.947,714
75,994,.575
91,972,266
65,101,258
66,809,196
81,731,957
7.488,676
8,83.S,994
9,827,763
357,780 87-5
351,385 1 87-9
412,546 J 88 -9
11-9
11-6
10-7
%
Native and Foreign-horn Population.
62,947,714
75,994,575
91.972,266
53,698.154
65,653,299
78,456,380
Percent of Total.
Foreign-
'^°'""- Native. F^reign-
9,249,560 85-3
10.341,276 I 86-4
13,515,886 ! 853
14-7
13-6
14-7
Population by Sex.
Population.
Males to 100 Females.
Male.
Female.
Total.
Nntive
White.
Foreigu-
boru
White.
Negro.
1890
1900
1910
32.237,101
38,816,448
47.332,277
.30.710,613
37,178,127
44,639,989
105 0
104-4
106-0
102-9
102-8
1027
118-7
117-4
129-2
99-5
98-6
98-9
Agricultural statistics relate to (1) farms ;
(2) tenure, mortgage indebtedness, race of
fanners, size of farms ; (3) livestock ; (4) crops,
acreage, production and value ; (5) irrigation.
In 1910 there were 6,361,502 farms in the
States, total acreage 878,798,000 acres, of
which 478, 452,000 acres were improved. Total
value of farm property, £8,198,289,818.
The census statistics of manufactures are
compiled primarily for the purpose of showing
the absolute and relative magnitude of the
different branches of industry and their growth
or decline, and incidentally to present data
showing character of organisation, location
and size of establishments, labour force and
similar subjects. These statistics are classified
according to industries, states and cities. The
statistics of mines and quarries are also classified
according to industries and states.
The number of manufacturing establish-
ments was 268,491 ; persons engaged in manu-
factures, 7,678,578; primary horse - power,
18,675,376; capital, £3,685,654,000; ex-
penses, £3,690,818,000 (wages and salaries,
£873,122,600; materials, £2,428,558,000);
value of products, £4,134,410,000; value added
by manufacture, £1,705,852,000. The
number of mines, quarries and wells was
193,688 ; persons engaged in mining, 1,166,948 ;
primary horse - power, 4,699,910; capital,
£732,505,413 ; expenses, £214,838,285 (sal-
aries and wages, £131,116,893 ; materials,
£52,022,000); valueof products, £247,682,000.
{The First Census, 1790. (Return of the whole
number of persons within the several districts of
tlie United States, 1791.)— TAe Second Census,
1800. (Return of the whole number of persons, etc.,
1 801. )—The Third Census, 1810, 2 vols. (Aggre-
gate amount of each description of persons within
the United States of America and the Territories,
tables showing the several branches of American
manufactures.) — The Fourth Census, 1820, 2 vols.
(Census for 1820 ; digest of accounts of manu-
facturing establishments, 1823.) — TheFifth Census,
1S30, 1SS2.— The Sixth Census, 1840, 4 vols. ( (1)
Enumeration of the inhabitants of the United States
as corrected at the Department of State in 1840,
1841 ; (2) statistics of the United States as returned
by the marshals of the several judicial districts,
1841 ; (3) compendium of the enumeration of the
inhabitants and statistics of the United States,
1841 ; (4) census of pensioners of revolutionary and
military service. ) — TheSerentk Census, 1850, 4 vols.
( (1) Seventh Census of the United States, 1853 ;
(2) mortality statistics, 1855 ; (3) statistical view
of the United States compendium of the Seventh
Census, 1854 ; (4) Report of the superintendent of
the census for Dec. 1, 1852, 1853.)— TAe Eighth
Census, 1860, 5 vols. ((1) Preliminary Report,
1862 ; (2) population, 1864 ; (3) manufactures,
1865 ; (4) agriculture, 1864 ; (5) statistics (includ-
ing mortality, property, etc.), being the final exhibit
of the Eighth Census, 1866.)— TAe Ninth Census,
1870, 4 vols. ( ( 1 ) Population and social statistics,
1872; (2) vital' statistics, 1872; (3) statistics of
wealth and industry, 1872 ; (4) compendium of
the Ninth Census, 1872.)— TAe Tenth Census
of the (Inited States, 1880. (a) Compendium of
the Tenth Census, 1883. (6) Tenth Census of the
United States, 22 vols. : I. Population ; News-
papers and Periodicals ; Public Schools ; Illiteracy ;
Defective, Dependent, and Delinquent Classes.
II. Manufactures, embracing general Statistics and
Monographs on Power used in Manufactures ;
250
CENT— CENTEALISATION
Factory System ; Interchangeable Mechanism ;
Hardware, Cutlery, etc. ; Iron and Steel ; Silk
Manufacture ; Woollen Manufacture ; Chemical
Products and Salt ; Glass Manufacture, 1883.
III. Agriculture, general Statistics and Monographs
on Cereal Production ; Flour Milling ; Tobacco
Culture ; Manufacture and Movement of Tobacco ;
Meat Production, 1883. IV. Transportation, in-
cluding Eailroads ; Steam Navigation ; Canals ;
Telegraphs, Telephones ; Postal Telegraphs, 1883.
V. and VI. Cotton Production (general discussion
and special reports for fifteen states), 1884. VII.
Valuation, Taxation, and Public Indebtedness,
1884. VIII. Special Eeports on : the Newspaper
and Periodical Press ; Alaska, its Population, In-
dustries, and Resources ; the Seal Islands of Alaska ;
Shipbuilding Industry, 1884. IX. Forests of North
America. X. Special Reports on Petroleum, Coke,
and Building Stones, 1884. XI. and XIL Mortality
and Vital Statistics, 1885, 1886. XIII. Statistics
and Technology of Precious Metals, 1885. XIV.
United States Mining Laws and Regulations there-
under, and State and Territorial Mining Laws. XV.
Mining Industries (exclusive of Precious Metals),
1886. XVL and XVIL Water Power, 1885, 1887.
XVIII. and XIX. Social Statistics of Cities, 1886,
1887. XX. Statistics of Wages in Manufacturing
Industries ; Prices of Necessaries of Life ; Trades
Societies ; Strikes and Lock-outs, 1886. XXI.
Defective, Dependent, and Delinquent Classes,
1888. XXII. Power and Machinery employed in
Manufactures (six Monographs) ; Ice Industry,
1888. Th& Eleventh Census : Report of the Super-
intendent of the Census, 6th Nov. 1889. — Report
of a Commission on different Methods of tabulating
Cens^is Data, Washington, 1889. Bulletins of the
Eleventh Census. For History and methods : Re-
port of the Committee of the House of Representatives
on the Ninth Census, Jan. 18, 1870. E. C. Lunt,
Key to the Publications of the United States Census
(Publications of American Statistical Association,
1888). Francis A. Walker, ' ' The Eleventh Census
of the United States " {Quart. Journ. of Econ., vol.
ii., 1888). Carroll D. Wright, "The Census, its
Methods and Aims " {International Review, vol.ix.).
R. Mayo-Smith, "Wage Statistics and the next Cen-
sus" {Quart. Journ. of Econ., vol. ii., 1888). Many
of the statistics of the Tenth Census will be found
in the Encyclopcedia Brit., 9th ed., art. "United
States : Political Geography and Statistics " (F. A.
Walker). The Thirteenth Census ; publications
of the Bureau of the Census, Washington ; esp.
Abstract of the Census, 1 vol., 1913.] R. m.-s.
CENT, Centesimo or Centavo (words used
as equivalent to each other — Cent in the United
States of America, Centesimo in Peru and the
Argentine Republic, Centavo in Chili, the
United States of Columbia, the Philippines and
Mexico). The 100th part of any Dollar, e.g.
the dollar of the United States of America or
equivalent coin (e.g. Peso, Sol, Duro, of Chili,
Peru, etc. ). Copper, nickel, or bronze token
coins of various weights and dimensions.
Cent (Dutch). Bronze token coin weighing
69-34 grains; 2|- and \ cents in proportion.
100 cents = 1 florin. F. E. A.
CENTESIMI (Italy); Centimes (France,
Belgium, and Switzerland) ; Centimos (Spain),
Bronze token coins weighing 1 gramme (1 5 •4323£
grains) each. 100 = 1 franc (or its equivalent).
F. e. a.
CENTRALISATION. A term applied to
the concentration of the functions of govern-
ment, more usually those of an administrative
character, in the hands of a single directing
authority.
It is obvious that the supreme authority
existing in any community is able to exercise
a paramount influence upon its wealth and
economic position. On this account many of
the leading writers on economics have discussed,
in some detail, "the proper limits of the func-
tions and agency of governments," and incident-
ally the organisation by which those functions
and that agency should be exercised. The
results arising from the regulation and control
of individual action by public authority have
been seen to be frequently determined by the
manner in which the authority is brought into
existence, and the nature of the responsibility
attaching to its actions ; and some at least of
the economic objections which present them-
selves to the multiplication of the duties of
government, disappear when these are placed in
the hands of local and sectional, as distinguished
from imperial and national, authorities. Thus
Mill points out that the evil of entrusting toe
much business to the government is "felt in
great magnitude under some of the governments
of the Continent, where six or eight men living
at the capital and known by the name of
ministers, demand that the whole public busi-
ness of the country shall pass, or be supposed
to pass, under their individual eye." But he
adds that " the inconvenience would be reduced
to a very manageable compass in a country
in which there was a proper distribution of
functions between the central and local offices
of government" {Political Economy, 6th ed.,
1865, p. 567). Sir Arthur Helps, too, calls
attention to the now well-recognised fact that
a carefully devised system of Local Government
affords an opportunity of practising that ' ' habit
of spontaneous action for a collective interest "
without which the education of a people, as
MUl observes, "is defective in one of its most
important branches."
The extent to which it is better that the
functions of government should be entrusted to
a minor authority and dissociated from the
national executive is not capable of any exact
definition. It will differ in different nations,
and at different periods of then- existence. It
must depend upon the willingness of those
upon whom authority is to devolve to exercise
it for the common good, and to sink individual
interests in the desire to advantage the general
welfare ; much too, will depend on the educa-
tion and intelligence of the constituency within
which administrative powers are to be exercised,
CENTRALIS ATION—CERTIFICA TE
and of the class or classes which are to wield
them. The decision as to whether any given
function may more properly be entrusted to an
authority under the direct control of the national
government, or to an authority independent
thereof, rests rather with the statesman than
with the economist. If, however, it be true that
"people can understand their own business and
their own interests better, and care for them more
than the government does, or can be expected to
do," then it would appear that the onus prohandi
should always rest upon the advocates of the
exercise of governmental power in any direction.
It must be shown to be for the general advan-
tage that individual action should be replaced
by the action of a small section of the commun-
ity, and similarly that the nation as a whole
will perform any given function better than the
section immediately concerned. In other words
the endeavour should be to restrict the exercise
of public authority to the smallest possible
area, and above all to secure that all who
either directly or indirectly are responsible for
the administration of public business should
have an actual interest in the success of their
administration.
In thus limiting the executive area, and
restricting the exercise of public authority, as
far as other ch-cumstances will admit, to those
directly concerned, care must be taken to pre-
serve for the general use the wider experience
and clearer insight into principles which a
central authority will usually possess, and it
will frequently be necessary to reserve some
power of review to be exercised in the interests
of minorities or of other sections of the com-
munity.
The English poor-law system afibrds a good
niusti-ation of a system of independent local
administration combined with centralised super-
vision and control within certain prescribed
limits. The maintenance of the poor being a
matter of national concern, and it being impos-
sible to localise the effects of good or bad
administration in such a matter, parliament
has prescribed the jjrinciples upon which relief
shaU be afforded and its cost raised. A depart-
ment under a responsible minister has also
been established to see that these principles
are observed, and to furnish the best advice and
information available. But it rests with the
local authority to adjudicate on applications for
relief, and generally to make provision for the
due administration of the law.
Much of the legislation by means of " private
bills " would be more efficient if it were entrusted
to a less important, but more interested, author-
ity than the imperial parliament, and the
establishment of County Councils may eventu-
ally afford a means of relegating many of the
fimctions at present performed by the national
executive to a minor authority better able to
discharge them to the advantage of the section
of the community more immediately con-
cerned.
In view perhaps of the fact that the British
government is the least centralised in Europe, our
own literature on the subject is much less ample
than that of the Continent, and especially ol
France. John Stuart Mill's Representative Govern-
ment and Principles of Political Economy (book
v.), and Sir Arthur Helps's Thov^hts upon Govern-
ment may, however, be consulted. For the view
of the Manchester School which is against Central-
isation, see e.g. Mallet, Free Exchange, pp. 97,
etc. Speech of Cobden in ed. Bright and Rogers,
vol. i. No. XX. pp. 362-3. [" Government will
revert to something like the municipal system."]
T. H. E.
CERTAINTY. Certainty is an economic con-
ception of great importance in several depart-
ments. The certainty of enjoying, partially at
least, the fruits of one's own exertion is one of
the principal elements in the efficiency of labour
(contrast slave with free labour). In the
accumulation of capital, and in the institution
of private property, certainty is again funda-
mental. The essence of Capital {q.v.) is held
to be in the reservation of "Wealth for future
consumption or the satisfaction of futui-e needs,
which implies that the fund reserved will be
secured to a gi'eater or less degree. The degi'ee
of certainty naturally operates upon the rate of
interest when capital is lent. Certainty is
also used in reference to taxation as regards the
manner, time, and amount of payment, and as
the basis of Adam Smith's second canon. He
considers certainty to be of such importance
that a very considerable degree of inequality is
" from the experience of all nations, not near so
great an evil as a very small degree of uncer-
tainty." In insurance the certainty attaching
to groups, relatively to the uncertainty in the case
of individuals, is the fundamental conception.
[Uncertainty of employment, as an evil of the
present industrial regime, is dealt with by Prof.
Foxwell in Claims of Labour (Edinburgh, 1886)].
J. s. N.
CERTIFICATE, Shake. A broker, when
he has bought shares in a company for a client,
has to deliver a document called a certificate,
which is the only visible sign of the property in
the share. It is signed by one or more officials
of the company, and when the shares are sold
must in most cases be given up. Several de-
cisions in the courts have shown that a certificate,
although registered in buyer's name, is worthless
in the event of forgery of the seller's name on
the transfer, and no claim can be upheld against
a company, notwithstanding the registration
of transfer and issue by it of the certificate in
the buyer's name. The Forged Transfer Act,
1891, gives a company power to compensate a
holder so defrauded, but a certificate is not
absolute security. American railroad share
certificates are peculiar ; as the certificate may
be made in the name of another person, whereas
252
CESARE— CHAD WICK
the owner of the document may have paid for
it without his name appearing as the owner
either on the certificate or on the company's
books. The American share document usually
carries a transfer, and this is almost as usually
left blank when the seller has given up his
interest in the share, not naming the buyer.
These certificates therefore pass very much as
bonds to bearer. Awkward legal cases have
arisen out of this loose custom. A. E.
CESARE, Caklo de, born at Spinazzola
(Bari) 1824, died at Rome 1882. First as a
deputy, and later as a senator, he was employed
in reporting on important laws and charged
with delicate commissions, such as the inquiry
into the condition of the navy after the battle
of Lissa, and on the state of Sicily in 1875.
He was Counsellor of the " cour des comptes " ;
having been, before reaching this dignity, in-
spector-general of the banks of issue. He was
the author of a manual of political economy,
putting forward principally the doctrines of
RiOARDO ; this book is useful even now on
account of a chapter it contains of historical
notices concerning political economy in Italy.
Manuale di Economia pubblica, 2 vols. Torino,
1862. De Cesare wrote also upon a great many
economical problems of the day in his country,
and earned thus a considerable reputation as
politician and practical economist.
The following list of his publications will give
an idea of his activity :
Intorno alia ricchezza pugliese, Bari, 1853 ; R
mondo civile e industriale nel secolo xix., Napoli
1857 ; DelV indiustria asiatica, Napoli 1857 ;
Delia protezione e del libera cambio, Napoli 1858 ;
Delia proprietd intellettuale, Napoli 1858 ; Delle
condizioni econoniiche e morali delle dassi agricole
(published by the Accademia Pontoniana), Napoli
1859 ; DelV educazione alle arti e mestieri, Pal-
ermo 1859 ; Progetto di perequazione delV imposta
fondiariaper tutto il regno d' Italia, Torino 1863 ;
II credito fondiario e agricolo, Torino 1863 ; La
legge delV affrancamento del Tavoliere di Puglia e
gli interessi economici delle provincie meridionali,
Torino 1863 ; II Passato, Present e e I'Awenire
della pubblica amministrazione del regno d' Italia,
Frrenze 1865 ; Disarmonie economiche, Firenze
1865 ; La finanza italiana nel 1867, Firenze
1867 ; Relazione sullo stato del materiale e sulV
amministrazione della r. marina, Firenze 1867 ;
Le due scuole economiche, Firenze 1875. m. p.
CESS. The land-tax of Scotland, perma-
nently fixed at £47,954 per annum, subject to a
power of redemption. It is payable partly from
burghs, and partly from shires ; the incidence
of taxation is determined by the local authorities.
A. D.
CESSIO BONORUM. See Bankruptcy
IN Scotland.
CESSIONARY (Scots law term). Assignee.
CEVA, Giovanni, born in the province of
Milan in 1647 or 1648 — is a remarkable author,
and will probably attract a growing interest, as
the first clear-aighted and decided mathematical
economist. He has also the merit of clearly
defining hypothetical economics and insisting on
pure economics as being the only possible exact
science of which the subject permits the con-
struction. He was by profession a mathe-
matician and hydraulic engineer, and as such
was several times employed by the government
of Mantua. His death took place during the
siege of Mantua in 1734.
Ceva's economical work has the following
long title — De re nummaria, quoad fieri potuii
geometrice tractata, ad illustrissimos et excellentis-
simos dominos Frcesidem, Qucestoremque huius
areiducalis Ccesarcei Magistratus, Mantuae,
1711.
He divides the causes influencing the value
of money into two groups: those which "ex-
trinsecus adveniunt " and those which "ex
nummo ipso procedunt." The " valor externus
omnis rei nummarise" varies in a direct ratio
to the population and inverse ratio to the
"quantitas rei." When "nummi serosi" and
"cuprsei," are in excess of the quantity needed
for small transactions true coin gets appreciated
a,nd vice versd . . . " in eadem quantitate nmn-
mis aureis persistentibus eorum externi valores
componuntur ex ratione quantitatum aerosse
monetae et exf reciproca quantitatum argentece.
As to the causes of variations in value classified
as depending "ex ipso nummo," he enumerates
the principal ones which can be called expenses
of production, viz., the distance and nature of
the mines, the expenses of coinage, etc.
Passages characterising his conception of
economic science and his condemnation of
inductive methods are the following : Mag-
num aliquid est commercium illud reconditum
atque complexum, quo humana respublica,
pecuniae occulto gyro, florens atque incolumis
perpetuo servatur ; . . . sed huiusmodi naturam
explorare difficUlimum est, nee aliter possum/us,
nisi qucedam geometrarum modo ponantur.
Alias necesse est nos versari in quadam obscur-
issima nocte, nee de re huiusmodi posset quid-
quam constitui neque cognosci. . . . Quibusdam
petitionibus proefixis, sic rem intellectui pro-
ponemus, ut si fieret, quod ratio admonet fieri
debere, geometrice ostendi possit, unde oriantur
au^menta Tnonetarvmi, et quot quibusque ex
rationibus componantur valores ipsi nummorum.
Quamvis plura contingant, quae praxim minus
exactam reddunt, regula tamen eiusque vis fixa
atque immobilis perseverat. m. p.
CHADWICK, Sir Edwin. This distin-
guished economist and statistician was born in
1800 and died at his residence at East Sheen,
Surrey, on the 5th April 1890. He preserved
his untiring energy and enthusiasm to the end
of this long term of ninety years, and happily
lived to see a vast degree of success resulting
from the great social reforms he had instituted,
fostered, and practically carried through to tlie
advantage of the health, well-being, and general
CHAD WICK
252
improvement of his country. Bom of a Lan-
cashire family of the middle class, and with
immediate ancestors gifted with little riches but
with much earnestness of purpose, he had to
work out his own way to fortune. Intended
at first for the bar, Chadwick was soon forced
to change his legal reading for the more im-
mediately bread-winning occupations of report-
ing and review writing. A contribution of his
to the Westminster Review, in 1828, on the
subject of "Life Assurance," and another on
"Preventive Police," gained him the acquaint-
ance and support of Grote, the elder and
younger Mill, and Bentham. Soon after the
caU to the bar of Chadwick, Bentham engaged
him as an assistant to complete his own cele-
brated treatises on civil and penal legislation,
and in this capacity Chadwick went to reside
with the octogenarian philosopher until his
death in 1832. Bentham left him a legacy
and a small library, and would fain have wished
Chadwick to have succeeded him in the propa-
ganda of what may be called Benthamism.
Fortunately Chadwick prefeiTed a practical to
a speculative career. National, social, and
sanitary subjects, such as the condition of
labour, the housing, living, and over-crowding
of the population, and especially of the working
classes, the improvement of the water supply
of great cities, the interment of the dead in
cemeteries removed from the immediate neigh-
bourhood of the living, and other similar great
questions, had become Chadwick's earnest
study. His well-earned reputation for this
soon led to his being offered and accepting
official employment. In 1832, during the ad-
ministration of Lord Grey, the first poor-law
commission was appointed, and Chadwick's
duty, in the post of assistant-commissioner to
which he was promoted, demanded his per-
sonal visit to all parts of the country where
investigation of facts seemed needful, and his
collection of them led to such astounding revela-
tions of the then condition of the labourer, of
the poor, and of the evils to be remedied, that
the government, impressed with the talent and
genius displayed in his reports, appointed him
a commissioner. The commission itself, of
which Chadwick was the real heart and soul,
carried out the most sweeping reform in the
old English Poor- Law system. Even this was
not sufficient to satisfy his almost perfervid
imagination of view of the advantages to be
expected from a root-and-branch substitution
of complete centralisation, in place of the ex-
cessive and costly decentralisation and its many
abuses that were rampant when each of the
16,000 parishes of England looked to the
wants of its own poor much in its own way.
In 1833 Chadwick had the chief share in
drawing up the report upon the condition ol'
Children's Labour which led to the Ten Hours
Act In 1834 he was appointed secretary to
the new poor-law board, and during his tenure
of that office for about twelve years his exer-
tions for the public good were unceasing.
In 1838 he presented a report of the commis-
sioners on a special inquiry into the local and
preventible causes of disease, and the improve-
ment of habitations in the metropolis. This
report proposed a venous and arterial system of
water supply and drainage for the improvement
of towns, and works for the application of
sewage to agricultural production. Similar
inquiries were pursued throughout England
and Wales under his guidance, and led to very
substantial reforms. His report of 1843, on
the results of a special inquiry into the practice
of interments in towns, formed the basis of the
legislation which substituted a better system.
In the same year he read to the Royal Statisti-
cal Society of London a paper on the best mode
of representing by returns the duration of life
and causes of mortality. In 1844, Chadwick
suggested to Sir Robert Peel the appointment
of a Commission to make a general investiga
tion into the national health and the best
means of improving it. Quarrels ensued be-
tween Chadwick and the other commissioners,
and the new poor-law board was dissolved.
It was not perhaps to be expected that a man
of the enthusiastic and optimistic type of Chad-
wick could steer clear of conflict with his col-
leagues. Nor can it be said with truth that
there existed no well-founded cause of complaint
on their part, for Chadwick was egoistic and
dogmatic even when not positively domineering,
and was gifted with a readiness of pen and a
volubility of tongue which often wearied out
his opponents. But as gi-eat public benefits
often accrued from his contentions, the private
evil to his colleagues does not count for much.
Socially, as we and many of his survivors can
vouch, Chadwick was a most interesting and
valued acquaintance. The fact is that the
necessity for speedy action to remedy evils
glaring and grievous was so obvious that the
urging of them on in a nation wedded as we
are to a long retention of old forms and ways
and systems, was a positive public good ; and,
in the case of Chadwick, the man was fortu-
nately equal to the work. Sometimes, indeed,
on occasions when he had to stir up apathy or
Laissez-Faire into reform, he was in the habit
of profusely spicing his statements with statistics
which would not bear Ihe test of strict actuarial
investigation, and which were incorrect in respect
of their collocation with results, or of their com-
parative percentages. The year after the poor-
law board was dissolved Chadwick was ap-
pointed one of the commissioners to inquire
into the health of London, and in the next
following year (1848) one of the commissioners
of the general board of health, for improving
the supplies of water, and the sewage, drainage,
and cleansing of great towns. In the same
254
CHADWICK— CHALMERS
year he was nominated to the Companionship
of the Bath, although he was not promoted to
the knighthood of the order until 1889, the
year before his death. When the board of
health was dissolved, Chadwick retired upon a
pension of £1000 per annum. But there .was
no retirement by him from the active pursuit
of his life-long researches and labours for the
practical advancement of all that concerns the
health and educational and social progress of
the nation. On sanitation especially he con-
tinued to be its chief authority to consult.
He had much influence in such matters, for ex-
ample, in the sending out of commissioners to
the Crimea for the relief of our soldiers there.
This was followed up in 1858 by inquiries into
the heavy mortality amongst the troops in
India, a subject he fully explained in a paper,
"On the application of Sanitary Science to the
protection of the Indian Army," read before
the Social Science Congress at Liverpool. In
1860 he was vice-president of the public health
department of the meeting of the same congress
at Glasgow, and delivered a remarkable address
on sanitation. In 1861, he followed up the
same subject, as president of the section of
economic science and statistics, at the health
association at Cambridge. It would be tedious
to prolong the list of his contributions, from
1861 to 1890, to the journals of aU the numer-
ous scientific societies to which he belonged,
and for whose researches and practical public
objects he continued to labour to the end of
life. A long career thus well spent deserves
the gratitude alike of his contemporaries and
of posterity. England certainly has erected
statues and memorials of many men of far
inferior worth to Chadwick. There remains,
however, an ever-present memorial of him in
the improvements that have taken place in this
country in almost every direction that he laboured
in, and which are briefly indicated in the present
outline of the chief points in his biography.
See TAe Health of Nations, a Review of the
Works of Edtuin Chadvyick, with a Biographical
Dissertation, by B. W. Richardson, 2 vols., 8vo,
London, 1887. Chadwick's papers, printed in
the Journal of the RoyaZ Statistical Society,
extend over a period of thirty-six years. Their
titles are — "On the best mode of representing
by Returns the Duration of Life and Causes of
Mortality," vol. vii. p. 1. — "On the Economical,
Social, Educational, and Political Influences of
Competitive Examinatious, as Tests of Qualifica-
tion for Admission to the Junior Appointments
in the Public Service," vol. xxi. p. 16. — "On the
Progress of the Principle of Competitive Examina-
tion for Admission into the Public Service, with
Statistics of Actual Results and an Investigation
of some of the Objections raised," vol. xxii. p. 44.
— "Results of Different Principles of Legislation
and Admiuistration in Europe ; of Competition
for the Field as compared with Competition within
the Field of Service," vol. xxii. p. 381.— "Post-
Ofiice Savings' Banks," vol. xxiv. p. 519. — Ad-
dress as President of Section F. ("Economic
Science and Statistics ") of the British Association,
October 1862, printed, vol. xxv. p. 502. — "On
the Subject Matters and Methods of Competitive
Examinations for the Public Service," vol. xxvi.
p. 72. — "Poor -Law Administration, its Chief
Principles and their Results in England and Ire-
land as compared with Scotland," vol. xxvii. p.
492. — Opening Address, as President of the De-
partment of Economy and Trade, at the Meeting
of the National Association for the Promotion of
Social Science, York, 1864, printed, vol. xxviii.
p. 1. — " Treatment of Pauper Children on a Larger
Scale," table illustrative of school organisation for
reducing expenses with increased eflBciency, vol.
xliii. p. 245. f, h.
CHAFFER, now a verb, was originally a
noun, and meant a journey for the purpose of
buying and selling, from the words chap (as in
Jcaufen, caupo, KdTrrjXos), and fare, a journey.
Chap appears in chapman or merchant, also in
cheap, which was at first a noun, and meant
simply market, as in Eastcheap, and Cheapside.
Articles sold on terms favourable to the buyer
were to him "good cheap" or good market
(compare "bon marche"). The adjective was
dropped and the substantival character for-
gotten ; hence the adjective "cheap." Chaffer
in popular language is a form of what Adam
Smith calls Higgling of the Market, or
the disputing of buyer and seller, which is the
usual preliminary to the striking of a bargain ;
but it is used of retail dealers and their cus-
tomers more often than of wholesale ; and is
associated rather vnth petty than with impor-
tant interests. [See also Chapman.] j. b.
CHALMERS, Geoege (1742-1825), Scotch
antiquarian, historian, and economist, born at
Fochabers in Moray, and educated there and at
Aberdeen. He afterwards studied law at Edin-
burgh. He went to America, and practised as
a lawyer at Baltimore. Returning home at the
beginning of the civil difficulties in 1775, he
settled in London. He was appointed, 1786,
chief clerk of the committee of the privy council
for trade and foreign plantations. His works
were chiefly historical and antiquarian, includ-
ing the well-known Caledonia.
His economic works, as their titles suggest,
are chiefly statistical, and as such are of the very
highest importance ; the Estimate in particular
furnishing the student with valuable infor-
mation, which, bearing in mind Chalmers's
official position, may be deemed more than
usually trustworthy. In his Considerations on
Commerce he deals with more theoretical matters,
committing himself to the opinion that the
high price of Bullion was owing to the state of
the Foreign Exchanges. It cannot, however,
be said that his arguments or facts tend to estab-
lish his position.
His economic works were as follows : The
Propriety of allovnng a Qualified Export of Wool
CHALMERS
25£
discussed historically , 1782. — An Estimate of the
Comparative Strength of Great Britain diiring
the Present and Four Preceding Reigns, 1782. —
Opinions on Interesting Subjects of Public Laws
and Commercial Policy arising from Amencan
Independence, 1784. — Observations on the Strength
of England in 1696, by Gregory King, vnth a
Life of the Author, 1804. — A Chronological Ac-
count of Commerce and Coinage in Great Britain
from the Restoration till ISIO, 1810. — Considera-
tions on Commerce, Bullion and Coin, Circulation
and Exchanges, with a View to our Present Cir-
cumstances, 1811 (3d ed. 1819).
There is also attributed to him, but on very-
slender grounds, a small anonymous pamphlet
entitled Useful Suggestions favourable to the Com-
fort of the Labouring People, 1795. e. c. k. g.
CHALMERS, Thomas (bom at Anstruther
in Fife 1780, died at Edinburgh 1847), the son
of a prosperous merchant, and the sixth of a
family of fourteen children, was educated at St.
Andrews University, and became minister of
Kilmany parish 1803. He was at first more
attached to mathematics, physics, and political
philosophy than to theology ; and brought
himself into notice by his scientific lectures given
at St. Andrews, first for the university and then
in competition with it. In 1808 he published
An Inquiry into the Extent and Stability of
National Resources, in connection with the
continental Blockade. The doctrines of this
pamphlet were incorporated with his Political
Economy (ch. vi. p. 221 of vol. xix. ed. Collins),
under the heading "Limits of a Country's
Foreign Trade, and its supposed power to fur-
nish a people with Employment and Mainten-
ance." In 1815, transferred to Glasgow, he
carried out his famous voluntary organisation
of charitable relief, to show (as he expressed it)
the "sufficiency of the parochial system" and
the needlessness of a Poor Law. The scheme
worked successfully for more than twenty years.
Chalmers was professor of moral philosophy
and political economy in St. Andrews (1825-
1828), and then of divinity in Edinburgh
(1828-1843), holding the latter office till
the Disruption of the Church of Scotland in
1843, and the formation of the Free Church,
in whose service he laboured (both in its college
and in its church courts) to the day of his
death. It was no doubt a bitterness to him
that by aiding this schism he helped to bring
about the establishment of a Poor Law in Scot-
land, which took place in 1845, two years
before his death.
In his book on Political Economy (1832) his
aim is not to develope a body of doctrines but
to secure the moral and thereby the economic
elevation of society. Political economy, in the
sense in which he treats of it, is regarded as
aiming at the ' ' diffusion of sufficiency and
comfort." Economists and ecclesiastics (he
repeatedly says) liave stood too much aloof
from each other ; and for his part he will write
as an ecclesiastic who recognises the value oi
economics. He follows Adam Smith and
Malthus, rather than Ricardo, accepting the
" Ricardian " theory of rent with the modi-
fications of Malthus and Perronet Thomp-
son, and the theory of population with less
reserve than its author ( ' ' Population tends to
double itself in fifteen years," Pol. Econ. ch.
xiii. p. 382). Like J. S. M.11A, {^ee Dissert, ch.
ii. p. 183, "Claims of Labour," written 1845)
he saw that the theory of population, instead
of closing the way to progress, had really for
the first time opened it. He regards the theory
of Malthus as the vinculum between moral
character and economic comfort. "By the
indefinite control which the collective mind
and habit of society have over the element of
population, the general standard of enjoyment
in a country is capable of being indefinitely
raised " (ch. i. p. 44) ; and, as a matter of
fact it has been raised : * ' The labourers of
our day work harder than before but live better
than before." " The rate of wages depends on
the proportion which the inclination of the
people for marriage bears to their inclination
for the comforts and decencies of life " (ch. ix.
p. 279) ; and without a Christian education
to give self-control progress cannot be assured.
The philanthropy of the few cannot save the
many from "that most overmastering of all
oppressions, the oppression of their own num-
bers" (ib. p. 285). Neither home colonisation
(on Dutch or other models), nor emigration,
which is a worse alternative, nor a Poor Law,
which is worst of all, can do more than cause
multiplication and misery. Government can
administer justice, but humanity is out of its
province {Chr. and Econ. Pol,, pref. viii.) He
speaks of the fallacy of "finding employment"
for the poor. People forget that a manufacture
is creative of nothing but its own products ;
the equivalents of these products must come from
elsewhere. The benefit of a Foreign Trade,
too, lies simply in the article it brings us ; the
tea trade gives us tea, and if it were abolished
we should lose tea, and nothing more (cli. ii.
pp. 63, 67, etc.) Chalmers, therefore, thinks
lightly of the loss of foreign markets. In his
book on Christian and Economic Polity (ch.
xxii.) he says quite truly "that the worth of
that by which a thing is done is all derived
from the worth of that for which the thing is
done ; " but from that and similar maxims
(there and in the Pol. Econ.) he argues in a way
that would logically lead to the conclusion that
it is indifferent to a shopkeeper whether we
deal with him or not (see Mill, Unsettled Ques-
tions, pp. 53 scq.) He saw that the importance
of the home trade had been under-estimated by
statesmen like Pitt, who idolized foreign trade ;
but he went too far in asserting that it was the
desti-uction of British trade that made Britain
successful against Napoleon (see Pol. Econ., ch.
256
CHALMERS— CHAMBERLAYNE
viii. p. 264). His own idol is Agriculture, as
giving not merely "employment" but "main-
tenance " ; as long as agriculture is unairected,
any stoppage of trade is "only a shift, not a
subtraction " {Ohr. arid JEcon. Pol. , ch. xxii. ) In
everything except agriculture there may b^ over-
supply, over- population, and over -supply of
capital — too many ploughmen and too many
ploughs. If either the "appetite for present
indulgence " or the " appetite for future wealth "
were to become universal, society would lose its
balance {Pol. JEcon., ch. iv. p. 127). As popula-
tion follows food, capital follows openings in busi-
ness ; and, where they fail, it becomes de trop.
Like the Physiocrats, Chalmers considers that
all taxes fall eventually on the net Rent of Land,
and should therefore be placed there directly,
and the landowning class, as they bear all the
burdens of the country, should have all the
political power. He would maintain Primo-
geniture to prevent ' ' infinite subdivision " of
lands, and to secure that the ship of state shall
not have more sail than ballast {Pol. Econ., ch.
xvi.) He assents to repeal of the Corn Laws
and commutation of Tithes ; but he thinks the
good effects will be transitory, the real causes
of distress being over -speculation and over-
population (ch. ix. p. 303). He is against
the Funding System, government loans being
always, he says, paid twice over by the pubUc,
first in the form of high general prices caused
by the withdrawal of the capital lent, and
afterwards in repayment of the principal to
the lenders {Pol. Econ., Append.) Government
should raise enough for the year's needs by
taxation within the year. Finally, it may be
noted that he stands by his order when he
refuses to confine the term productive labour to
labour that produces material objects, to the
exclusion of professional labours like his own.
Perhaps Dr. Chalmers is better known to
later economical readers by his phrases than
by his doctrines. As he has made current in
ethics "the expulsive power of a new affec-
tion," so he has given to economics "the
margin of cultivation" {Pol. Econ., ch. i. pp.
19, etc.) — "Disposable population" (or non-
agricultural), "secondaries" (makers of second-
ary necessaries), "rotation" (or transfer as
opposed to creation of wealth), were less happy ;
but, as John Mill says, Chalmers has always
"the merit of studying phenomena at first
hand and expressing them in a language of his
own " (Mill, Pol. Econ., i. v. § 7). MiU was
specially referring to the explanation given by
Chalmers of the rapidity with which a country
recovers from a war in which it has been over-
run by the enemy. The reason was not to be
sought in any mystical vis medicatrix Tiaturce,
but simply in the everyday fact that the greater
part of Capital, fixed as well as circulating, is
being constantly renewed by human eff'orts
year by year, and the stimulus of higher gains
than usual will lead to an energetic direction
both of the "immediate" and of the "ante-
cedent" labour on the most urgently needed
production. " By one revolution of the econo-
mic cycle the circulating capital would be
nearly restored ; and by a few revolutions
more the fixed capital would be fully restored,
not by the parsimony of successive generations,
but by the privations of a few successive
seasons" {Pol. Econ., ch. iv. § 13, pp. 140-142).
It may be added that our author anticipated
Mill in maintaining, against the opinion of Adam
Smith, that the Stationary State of wealth
and population might be happier than the pro-
gressive {Pol. Econ., vol. XX. ch. xv. § 12, p. 28).
(1) An Inquiry into the Extent and Stability of
National Resources, 1808. — (2) Vol. vL Commercial
Discourses (in Works, published by Collins, Glas-
gow, twenty -five volumes, 1836-42). — (3) Vol.
xiv. to xvL On the Christian and Economic Polity
of a Nation, more especially vdth reference to its
Large Tovms (an expansion of " The Christian and
Civic Economy of ou/r Large Toums," 1821). — (4)
xvii. Church and College Establishments (a defence
of endowments against Adam Smith and Turgot).
— (5) xix., XX. On Political Economy in Connec-
tion with the Moral State and Moral Prospects of
Society. — (6) xxi. On the Sufficiency of the Par-
ochial System. — (7) Ih. On the Application of
Statistics to Moral and Economical Questions. —
(8) Sundry economical articles in North British
Review (*'Corn Laws," "Political Economy of the
Bible," "Poor Laws of Scotland," "Savings
Banks," " Stirling's Philosophy of Trade," " Poli-
tical Economy of a Famine"). For criticism,
see M'CuUoch's Literature of Political Economy
(1845), and his article on " Chalmers's Pol. Econ."
in Edinburgh Review, October 1832. j.b.
CHAMBERLAYNE, Edward, LL.D. (1616-
1703). His reputation rests on his statistical
and descriptive work, Anglice Notitia, which
went through no fewer than twenty revised
editions under his name, and was then (1704)
continued by his son John Chamberlayne, the
last edition being issued in 1755. It consists
of three parts, the first relating to history and
general conditions, the second to government,
and the last to manners and customs. Cham-
berlayne's work was the Whitaker's Almanack
of the period. Its information is varied and
detailed, but only in certain cases are the
statistics given available for use at the present
time. Such statistics are more frequent in the
later issues of the work, where reference is
frequently made to the estimates of Petty,
Davenant, and King, though even in the early
editions the description of the trades and the
economic condition of the people occupies a
prominent place.
The Rise and Fall of the Late Favourite of
Spain, the Count Olivares, 1632. — The Present
Warre Paralleled: or a Brief Relation of the
Five Years' Civil Warres of Henry the Third,
1647. — England's wants, or General Propositions
probably Beneficial for England, humbly offered to
CHAMBERLEN— CHAMBERS OF AGRICULTURE
257
the Consideration of all good Patriots, etc., 1667.
— Anglice Notitia, or the Present Slate of England,
1669, also other works, educational and religious.
E. c. K. o.
CHAMBERLEN, Hugh. Hugh Chamber-
lain, Chamberlin, or Chamberlen (born 1664,
died 1728), son of a court physician of the same
name, was educated at Trinity College, Cam-
bridge. He devoted himself, like his father,
to obstetrics, and is said to have practised in
France and Holland before finally building up
a professional reputation in his own country.
But as early as 1693 he took the field as a
financial projector. In that year, after vainly
approaching the Scottish parliament on the
subject, he induced the English House of
Commons (Dec. 1693) to submit his plan for a
land bank to a committee, which reported in
its favour. No effect, however, was given to its
recommendations till 1696 (10th Feb.) when
Foley and Harley procured an act in favour of
the land bank. William was in need of
money for his continental war ; and the re-
form of the currency had brought the Bank of
England into difficulties of which the gold-
smiths and the country gentlemen were in-
clined to take full advantage. The Bank of
England at its foundation in 1694 had lent to
government £1,200,000 at 8 per cent ; Cham-
berlain offered to find more than 2 millions
at 7 per cent, the security to be a special
salt tax, and the subscribers to be incorporated,
in recognised rivalry with the Bank of England,
for the lending of money on land securities, at
3 to 4 per cent interest, and with paper
issues limited for each year to the total amount
of the loan to government. The scheme was
vigorously pushed, but the subscriptions were
not completed within the date fixed by the act
of foundation, and Chamberlain seems to have
lost money as well as reputation. He retired
to Holland in 1699 ; and after two fresh
attempts, still unsuccessful, to recommend his
project to the Scottish parliament (1700, 1705)
he seems to have quietly resumed his profes-
sional work in England, where he died 1728.
Chamberlain's land bank was open to the
general criticism that applies to all schemes for
the issue of a paper currency based on land
securities ; — the securities are not speedily and
certainly convertible, and they are not every-
where negotiable. But it had special defects
of its own. The security proposed was lament-
.bly inadequate. Its calculations were drawn
i up on its projector's curious idea that the
ji value of an estate is in direct proportion to the
I length of time from which an income is derived
\ from it. Chamberlain off'ered, for example, to
' give eighty years' purchase for a rent charge of
£100 for 100 years, from property in land.
^The market value of the fee simple in those
I^Hfeys would have been about twenty years' pur-
|^B|^e, or one-fourth of Chamberlain's estimate.
VK^ ^OL. I.
[Macaulay, History of England, ch. xx., xxii. —
Thor. Rogers, First Nine Years of the Bank of
England (Clar. Press, 1887), ch. ii. — Anderson,
Hist, and Chron. Deduction of Commerce, vol. ii.
year 1696. — Macleod (H. D.), Dictionary of
Pol. Econ., gives a useful list of his pamphlets
(art. "Chamberlain ").] J. b.
CHAMBERS OF AGRICULTURE are, in the
United Kingdom, voluntary associations for col-
lecting, maturing, and expressing the opinions of
persons engaged in or familiar with agricultural
pursuits on public questions concerning the
weU-being of the agricultural interest. All the
chambers now in existence have been formed
wathin the last quarter of a century. Their
origin may be traced to the general recognition,
in the period 1862-1865, of the want of any
adequate machinery for ascertaining the balance
of opinion among agriculturists, and, in particu-
lar, in the last named year, to the absence of
official acquaintance with agricultural conditions,
and the helplessness and isolation of the farming
classes in the face of the disastrous invasion of
cattle plague at that date. The functions of
these chambers diff"er from those of the older
farmers' clubs and agricultural societies by in-
cluding discussions on matters of a distinctly
political or economic character. By means of the
central chamber in London and the interven-
tion of a representative council, opportunity is
given to concentrate and focus the separately
expressed views of agi-iculturists, and, where
anything like unanimity is found to prevail, for
bringing pressure to bear on the legislature in
cases of necessity.
The first formed chamber was the Scottish, in
1864. In organisation it differs somewhat from
the English chambers by its membership being
more closely restricted to actual tenant-farmers
or owners farming their own land. While in
corresponding association with the central
chamber, its business is independently con-
ducted by means of a board of directors in
Edinburgh aided by county committees. The
English central chamber was projected by
Mr. Charles Clay of Wakefield in 1865, and,
since its establishment in 1866, its chairmen,
chosen as a rule alternately from different
political parties, have been among the most
prominent or characteristic leaders of agi-icul-
tural opinion in parliament. The membership
of the central chamber embraces leading agri-
culturists residing in all parts of England, and
includes many peers and M.P.'s. The local
chambers for the most part are formed for com-
plete counties. In some instances branch
chambers reporting to the county chamber are
formed. In others an area less than that of a
county is chosen as the district of the chamber
where special local or market facilities have
established an individuality of agricultural
character. Recently, in an increasing number
of cases, certain farmers' clubs or societies have
258 CHAMBERS OF AGRICULTURE— CHAMBERS OF COMMERCE
become chambers by adding the special debating
functions of a chamber to their primary work,
and by aifiliating themselves with the central
organisation. The membership of all the
English chambers has been gradually increasing,
and the total includes landowners, yeomen,
and tenant-farmers, and other persons engaged
in businesses dependent on agriculture. But the
strength and activity of the several local bodies
varies very greatly. Some are small, and in
others, where the numbers are large, much of
the work is left in the hands of standing
committees of the more active and intelligent
members, owing to the practical difficulty of
obtaining largely attended meetings among a
community so scattered as the farmers. No
chamber possessing less than fifty members is
recognised by the central association, and the
representatives of a hundred and ten active and
fully accredited chambers now meet the repre-
sentatives of the central chamber periodically in
London in a body known as the Council of the
Central and Associated Chambers of Agriculture.
Its deliberations are generally accepted as
affording a fair index of the drift of agricultural
opinion ; — and an enumeration of at least some of
the more prominent subjects dealt with by this
Council in recent years, will afford the readiest
means of appreciating the class of business —
political, social, and economic — coming under
discussion by the chambers of agriculture.
Partly from the circumstances above referred
to in connection with the origin of the cham-
bers, and partly from the events of recent years,
no subject has had a greater prominence than
that of the repression of cattle disease. Ques-
tions of the regulation, of the home trade and
traffic in animals, the restriction or stoppage of
importation from countries infected with con-
tagious diseases, and the treatment of outbreaks
cf cattle plague, pleuro-pneumonia, and foot-and-
mouth disease have been under frequent con-
sideration, and much of the existing successful
legislation on this subject, and the policy adopted
by successive governments, as well as the altered
position of public opinion generally, has been
admittedly due to the initiative and pressure of
the agricultural chambers.
The incidence and distribution of taxation in
rural districts have naturally furnished another
important series of questions for the considera-
tion of the chambers. The incidence of rating,
the special burdens falling on land, the relief of
localities from the entire cost of obligations
imposed for national objects, the improvement
of our systems of poor-law relief, of valuation
and assessment, the management of highways
and main roads, and the reform of local govern-
ment, have all been largely discussed, and effect
given in various instances to the views of the
chambers. Questions also of imperial taxa-
tion, the adjustment and collection of the income
tax, the malt tax, and the beer duties have led
to frequent communication between the cham-
bers and the executive government. More
recently, and under the pressure of agricultural
distress, it has been observed that a disposition
exists among some of the local chambers, especi-
ally in wheat-growing districts, to raise discus-
sions on the propriety of reverting, in some form,
to import duties on competing foreign produce.
The methods for efiectively compensating
outgoing tenants for the unexhausted value of
improvements effected on their farms have been
the subject of prolonged inquiries set on foot
by practical and experienced committees of the
chambers of agriculture, and to these efforts
must be ascribed a large share in securing the
Agricultural Holdings Acts.
The relations of the various railway companies
with the agricultural producers have been
frequently debated, and legislation has been
secured forbidding the preferential railway rates
allowed to foreign produce. The chambers
were also very largely occupied in such questions
as the prevention of food adulteration, the
securing of purity in fertilizers and feeding stuffs
and the provision of agricultural instruction.
Among the earlier debates of the chambers,
the question of amending the game laws was
prominent. Legislation accordingly was passed
in 1880 and 1908. Various reforms of the
existing land laws have furnished topics for
debate, especially in the Scottish chambers,
while a consolidation of the scattered functions of
tlie government in relation to agriculture has
always been a favourite recommendation,
realised in the Board of Agriculture and
Fisheries. Apart from the discussion of
questions more or less matters of controversy,
the machinery of the chambers has been used
for spreading information on agricultural
matters, and in some instances for the diffusion
of agricultural education and the conduct of
practical experiments. p. g. c.
CHAMBERS OF COMMERCE, or at least
bodies similarly named, flourished on the con-
tinent and in the United States, the New York
Chamber of Commerce, for example, being
incorporated under a Georgian charter before
their rise is noted in Great Britain. One at
Marseilles is reported as existing in the 14th
century. Chambers in several of the chief
cities of France are mentioned early in the 18th
century. It would appear that these bodies
were suppressed in France in 1791, but restored
by official decree in 1851. The foreign type of
chamber has, in its quasi-official character, al-
ways differed from the purely voluntary form of
association for promoting trade interests, recog-
nised as a chamber in the United Kingdom. One
of the earliest chambers here is that of Glasgow
1773. Edinburgh possessed a chamber in 1785,
Manchester in 1820, and Hull in 1837. Origin-
ally chambers were formed with purely local ob-
jects, as the promotion or protection of particular
CHAMBERS OF COMMERCE
259
businesses. A federation of individual chambers
of commerce for concerted action on common sub-
jects of general interest was, however, suggested
at a meeting of the Social Science Association in
1859 ; in the following year what is now known
as the Association of Chambers of Commerce of
the United Kingdom held its first annual gather-
ing. The chambers of Belfast, Birmingham,
Bradford, Glasgow, Gloucester, Hull, Kendal,
Leeds, Liverpool, Norwich, Sheffield, Southamp-
ton, Staffordshire potteries, Wolverhampton,
and Worcester, took part in this movement,
Coventry and Dundee being also in communi-
cation with the central body. Some of the larger
provincial chambers did not at first join the
central body. Glasgow at the present time is
the only one of the larger members which keeps
aloof. But the forma Lion of local chambers and
their affiliation with the central association has
proceeded rapidly ; twenty-seven bodies being
thus connected in 1865, forty-six in 1873, and
117 at the present time (1910).
The London chamber of commerce, although
one of the most recently formed, and dating
only from 1881, is the largest existing chamber,
with (1902) a membership of over 4000,
individuals and firms, and an annual income of
£8000. It is an entirely voluntary organisa-
tion independent both of the Government and
of the municipality of London. Its sphere of
activity extends practically over the commercial
world. Its work is to facilitate business in the
broadest sense, — incidentally this tends to
prevent strikes and lock-outs in tlie port of
London, — to supply information as to com-
mercial treaties, and to improve commercial
education. The size and relative importance
of the provincial chambers of commerce varies
very greatly. In the case of the larger bodies
such as Manchester, Glasgow, and Liverpool,
the work of each chamber embraces diffeient
interests and is divided into three or four trade
sections ; the smaller chambers usually exist in
towns where there are but one or two prominent
trades of which a single general committee can
be made fairly representative.
In the case of the London chamber a more
general sphere of duties is necessarily entered
j on than is attempted elsewhere. Besides possess-
ing direct relations with thirty-two separate
affiliated associations, among which very im-
portant special bodies like the institute of
bankers, the London corn trade, London timber
trade, shipowners' societies, etc. , are represented,
there are here over forty organised ' ' trade
sections." Separate provision is thus made for
the East Indian, the Canadian, the Australian,
and the African trades, the metal, textile, pro-
vision, and many other groups of businesses. To
an extent unknown among the older chambers,
the London chamber endeavours to collect and
I disseminate statistical and other information,
and to promote, by the holding of public con-
ferences and lectures by distinguished explorers
and others, a knowledge of new openings for
foreign trade. The services of the commercial
chambei's have been made practically useful in
cases of mercantile arbitrations. Their advice i»
frequently sought on specific points by the
government, and at their suggestion much
additional information is obtained from consular
representatives abroad and circulated widely.
It may be interesting, however, in further
illustration of the range of business, to quote a
few of the earliest and of the most recent topics
of debate in the biennial meetings which take
place of the delegates of these chambers in the
central association. But when it is remembered
that as many as sixty different topics have been
occasionally disposed of, besides purely formal
business, at a single three days' meeting of the
central association, it will be seen that no
enumeration of the functions of these bodies
can pretend to be exhaustive. Among the sub-
jects prominently recurring in the earlier years
of the association's existence, and still in some
form under discussion in 1886, 1887, and 1888,
may be named the improvement of the laws of
bankruptcy and of partnership, of legal and
county court facilities, of the extension of
postal and telegi-aphic facilities, and the bearing
of foreign tariffs and consular arrangements on
British trade, as well as a numerous gi-oup of
questions of internal taxation, shippingdues, local
tolls, and assessments. Discussion on patent-
law reforms, on uniformity of weights and
measures, and on tribunals of commerce were
perhaps more notable in the earlier years, while
debates and suggestions on the regulation of
railway charges, on the constitution of a ministry
of commerce, or on improvements in parlia-
mentary and private bill procedure, come more
frequently under notice in the later years. In
the past quarter of a century, during which the
machinery of these chambers has been more
especially developed, their activities have taken
a Avide range, which is summarised in " The
London Chamber of Commerce and its Work "
by Mr. C. E. Town.
To illustrate the class of subjects with which
chambers of commerce actually deal, we may
remark that a list of the business transacted under
the auspices of the London chamber alone, in the
past twenty-eight years, embraces the following
numerous and varied items : — The Anglo-French
Treaty negotiations, affairs in Burmah, Postal and
Telegraphic Rates, Coffee Adulteration, Bills of
Lading Reform, Bankruptcy Law Reform, the Suez
Canal, the Anglo-Spanish Treaty negotiations, the
Coal and Wine Dues, Arbitration and Codification
of the Laws relating thereto. Dock Charges, the
Congo Treaty, Thames Communication, Railway
Communication and Extensions in India and
the Colonies, Home Railway Rates and Fares,
Indo-Chinese Railways as projected by Messrs.
Colquhoun & Hallett, the development of South
Africa, the London Corn Dues, Commercial Treaties
260
CHAMBRE ARDENTE— CHAMPION AND SEVERALTY
with Foreign Countries, Sixpenny Telegrams, Co-
lonial and Imperial Federation, Emigration, the
Merchant Shipping Bill of 1884, Trade Marks, the
preparation of Average Wages Tables, the questions
of the Eoyal Commission on Depression of Trade (to
which the Chamber replied), organisation of seven
Congresses of Chambers of Commerce of the»British
Empire, the Colonial and Indian Exhibition of 1886
(in which the West African Court was initiated by
the Chamber), the State Guarantee of War Risks,
Code Telegraphy, Technical and Commercial
Education, Protection from Fire in London and
Fire Insurance Rates, Codification of the Factors'
Acts, Canadian Preference Claims, Commercial
Museums, the Imperial Institute, the Silver
Question, the Shop Hours' Regulation Bill, the
Baku Petroleum Conference, Decimal Coinage,
Post Office Investments, Colonial and International
Exhibitions, Income tax, the Japan and Franco-
Chinese Treaties, the Merchandise Marks Act, 1887,
the Submarine Telegraph Monopoly, Railway Rates,
Port of London Authority, Labour Conciliation and
Arbitration Boards, and a varied range of topics of
an industrial or commercial character. P. G. c.
CHAMBRE ARDENTE. This name, though
most commonly used in relation to occasional
tribunals erected in France for the examination
of persons accused of heresy or poisoning, was
applied to all extraordinary commissions, estab-
lished outside of the ordinary course of law, for
the trial of alleged criminals of whatever kind.
Thus the student of the economic history of
France will find the title given to the commis-
sions appointed in the reign of Louis XHL, and
under the regency, to inquire into the frauds of
the farmers of the public revenues and to enforce
restitution of their unlawful gains. Accordingly
Littre, in his French Dictionary, gives as the
more recent meaning of the term "commission
nomm^e pour connaitre des malversations de
deniers publics, etc."
[See also Dictionnaire de la Conversation et de
la Lecture, tome xiii., under the head *'Chambre,"
and H. Martin's Histoire de France, Index, s.v.]
J. K. I.
CHAMILLART, Michel de (J. 1653, d.
1721). After filling several minor positions
Chamillart, by favour of Madame de Main-
tenon, was set in 1695 over the school at Saint
Cyr, — then a recognised stepping-stone to high
office in the state. Appointed controller-
general of finance in 1699, and minister of war
in 1701, he combined for seven years the rdles
which, taken singly, had taxed the respective
energies of Colbert and of Louvois. Without
aptitude for either office, he wore himself out
to little purpose. According to Montyon (Par-
ticularitis sur les ministres des finances, 1812,
p. 87), the last argument always appeared to
Chamillart the most convincing, so that his
studies were filled with unexecuted draughts,
referred alternately to their promoters and their
critics. The popular songs of the day, probably
influenced by tho necessity of rhyming his name,
represent him as the king's boon companion at
billiards — "a hero at billiards, a zero in the
ministry," etc. His want of administrative
ability was well known to the public, and he
frequently appealed to the king to be relieved
from burdens which he felt unable to support.
But the Grand Monarque, who had said L'Mat,
cest moi ! had encouraged Chamillart to assume
office by the promise "I will second you," and
still flattered himself that he could train a
minister or repair his deficiencies. Chamillart
was, therefore, retained in office until, in 1708,
he resigned the ministry of finance, and a
year later, having given umbrage to Madame
"de Maintenon, was called upon to quit the
ministry of war.
Historians are agreed as to the personal
probity and amiability of Chamillart, no less
than as to his ineptitude. His term of office,
however, included a period of seven years'
disastrous war, during which desperate expedi-
ents were almost forced upon a financier of less
than the highest ability. The measures of
Chamillart are examined by the judicious
Forbonnais (Eecherches et considerations sn/r les
finances de France, 1758, ii. 104, 109-171), who
gives him credit for establishing a special
council of commerce to deal with state matters
of industry and trade. It was by Chamillart
that Boisguillebert was deprived and punished
for publishing his Factum de la France, 1706.
[For some graphic touches descriptive of Chamil-
lart see the Memoires of his friend St. Simon. —
Vuitry, Le desordre des finances d la fin du rigne
de Louis XIV., 1885, pp. 138 seq., emphasises
the ruinous nature of his makeshift finance.]
H.H.
CHAMPART. The right of the feudal lord
in many parts of France to receive a fixed share
of the tenant's produce. It was collected after
the ecclesiastical tithe, and the proportion
varied in different districts according to custom
or agreement. Sometimes it was a fourth or a
fifth, but occasionally it was as little as a
twentieth. The lord's share is known by the
various names of champart, airier, and terrage.
R. L.
CHAMPION AND SEVERALTY. The
change from champion, or the system of com-
mon lands and common cultivation, to severalty
was the first act in the history of enclosures,
the second act in which took place in the reign
of George III. The first period, during which
the tendency to enclosure was denoted by the
terms used above, consisted chiefly of the reigns
of Henry VII., Henry VIIL, and Edward VI.,
though it must not be supposed that it was^
rigidly confined within these boundaries. Two
movements may be detected on a close examina-
tion. The first, the turning of arable into pas-
ture land ; the second, the "violent in closure of
commins without just recompence of them that
have right to commen therein" (Stafford's Brief
Conceipt, N.S.S., p. 41). But both these move-
CHAMPION AND SEVERALTY— CHANGE
261
ments were denoted by the term enclosure, and
it was into their common action that a commis-
sion of inquiry was appointed in 2 Edward VI.
By enclosure, said John Hales, is meant "when
any man hath taken away and enclosed any other
man's commons, or hath pulled down houses ol
husbandry and converted the lands from tillage
to pasture " (Strype, Ecd. Mem. ii. pt. ii. p. 362,
cf. Brief Conceipt, ut siipra). The nature of
the change is not hard to understand. The
effect of the Black Death {q.v.) had been to
materially accelerate the dissolution of old
habits of cultivation and the introduction of a
system of pecuniary payment in place of the
interchange of dues and privileges. Leases had
been granted, and the semi-feudal ties connect-
ing landowners and labourers were snapped.
There was another change in progi-ess of im-
portance equal to this. Though towns and
hamlets dependent on husbandry were decaying
(Strype, ut supra, p. 352 ; Stubbes, Anatomic
of Abuses, p. 116), the more mercantile com-
munities were rising in wealth. The era of
trade and manufacture was opening. "We begin
to catch glimpses even of the system of concen-
trated industries (or those organised in large
establishments). The effect of this system was,
however, felt forcibly only towards the close of
the Tudor period. During the earlier reigns,
though trade was developing, its progress was
not evident enough to be recognised as mitigat-
ing the suffering consequent on so gi'eat a
change as that described. Other causes served
to heighten the discontent, while ifc intensified
the real suffering. There was continual de-
basement of the coinage. Prices were chang-
ing, and all prices, e.g. the prices of labour and
commodities, did not change at the same time,
or in the same rate {v. The Brief Conceipt).
Again, the dissolution of the monasteries left
the poor without their most common source of
relief. Thus it came about that the change
from champion into severalty, while necessarily
a source of distress, was but one, though by
far the gi-eatest, of several changes leading to
social disorganisation. Such is the position to
be assigned to it as an influential event of the
16th century.
Viewed in its relation to the after history of
England, in connection with the later repetition
of the policy of enclosure, its results are im-
portant indeed. They may be summarised as
follows : — (1) Large ownerships in land encour-
aged, small ones discouraged ; (2) the yeoman
class deprived of its importance ; (3) consequent
tendency on the part of those with small for-
tunes to occupy themselves in trade rather than
in agriculture.
[Harrison, Description of Englaiid. — Stafford,
Brief Conceipt of English Policy. — Starkey,
England in the reign of Henry the Eighth. — Lati-
mer's Sermons. — Tusser, Five hundred points of
Uusbandrjj. — Stubbes, Anatomie of Abuses. —
Strype, Ecclesiastical Memorials. — Nasse, Uebe'T
die Feldgemeinschaft in England. — Report oj
Select Committee of the House of Commons, 1844,
vol. V. — For a description of tLe system of com-
mon cultivation v. Seebohm, English Village
Community.'] e. c. k. q.
CHANGE. Abbreviation for Exchange
{q.v.) — (1) The meeting of bankers and mer-
chants for the transaction of business ; (2) the
place where they meet. In London there are
separate exchanges for the various classes of
business. The Royal Exchange is used alter-
nately for transactions in foreign bills and for
business in drugs and chemicals, and there are,
besides the stock exchange, the corn exchange,
the metal exchange, the hop exchange, the wool
exchange, the coal exchange, etc. The "Com-
mercial Sale Rooms " in Mincing Lane and the
" Baltic," though not called exchanges, are used
for similar purposes.
This word is also used for small coins, etc.,
given in exchange for one, or perhaps more,
coins or notes, and in the aggi-egate of similar
value : the balance returned in cash Avhen goods
of one value are purchased with money of a
greater value. One of the advantages of the
cheque over coins or notes of specific amounts
is that it can have assigned to it any required
amount, and that changcis rendered unnecessary.
E. s.
CHANGE (Agents de) — the official name
of the licensed brokers who possess in France
the exclusive privilege of negotiating the pur-
chase and sale of public secmities. As early
as the 16th century the State exercised a con-
trol over the business of courtier or broker for
the exchange of money or merchandise by re-
quiring agents to obtain letters of license. The
7iext step was to limit the number, to exact pay-
ment for the monopoly, and to fix the rates of
brokerage. At one time the exercise of the
office was hereditary. In 1720 the two branches
of the profession were separated, the name of
courtier being reserved for brokers in merchan-
dise, while that of agent de change was created
for intermediaries in letters of exchange and
moneys. A gi-eat number of decrees and ordi-
nances regulating the privilege were issued
down to the Revolution, when the business of
agent de change was made free, but after the
re-establishment of order the monopoly was
revived, and the privilege was afihmed by art.
76 of the Code de Commerce promulgated in
1807. A law of 1816 fixed the number of
ageiits de change in Paris at sixty, and con-
ferred on them the right to nominate their
successors, subject to the approval of the cor-
porate body and the Minister of the Interior.
As their number has since remained unchanged,
thfi value of the office has increased with the
iihmense expansion of business. The first
transfer made was for a premium of £1200,
but the purchase price has since risen as high
262
CHAPMAN— CHARITABLE FOUNDATIONS
as £90,000, although it varies with the standing
of the holder of the office transferred, the
amount of business transacted by the different
agcTvts de change being very unequal. Sleeping
partners generally supply the greater part of
the capital, the nominal holder contributing
the business qualifications, which are to have
been employed not less than four years with an
agent de change, a banker, or a public notary.
Besides the various laws relating to agents de
change, which were codified by a decree of 7th
October 1890, in eighty-four articles, the dis-
cipline of the body is exercised by an elected
council called the Syndical Chamber, in each
town possessing a bourse. Members are for-
bidden to operate on their own account ; they
are bound to secrecy as to the parties for whom
they are acting, unless with their consent, or the
nature of the operation justifies a departure from
the rule ; they cannot refuse to execute orders,
nor can they form associations with each other in
the exercise of their profession ; they are liable for
the regularity of the securities they deliver ; and
they are bound, by a recent decree, to give receipts
for the money or securities they receive. Al-
though not legally obliged, agents de change,
in Paris at least, guarantee in common the
liabilities of their members in their professional
engagements, and possess a fund for the purpose.
They meet at the close of each market and draw
up the official price current for the day. The
syndical chamber decides, subject to the approval
of the Minister of Finance, on the admission of
new secm-ities to official quotation. The num-
ber of agents de change in Paris, not having
been increased since 1816, is quite insufficient
for the present volume of business, and they
have abandoned dealings in coin and bullion
and bills of exchange, which they formerly
transacted and which properly belong to them.
The same cause has led to the rise of an outside
market, unauthorised but tolerated, called the
Coulisse {q.v.) t. l.
CHAPMAN. A person engaged in trade or
commerce ; a merchant. Up to the Tudor
period it is impossible to discover any
distinction in the use of the two words chap-
man and merchant. Chaucer, e.g. in the " Man
of Lawe's Tale," and in the " Shipman's Tale,"
uses the two words indifierently. The returns
for the poll-tax of 1379 in the West Riding of
Yorkshire show that the chapman is on the
whole a less important and wealthy person than
the man described as a merchant or mercator,
but there is nothing in the documents to show
that the " marchand de bees," or cattle dealer
of Pontefract, who pays a tax of 2s. is in any
superior or diff"erent position to his fellow
townsman who calls himself a *' chapman de
bees " and also pays 2s. It is not until the
great expansion of commerce in the 15 th and
16 th centuries that the word chapman is
definitely restricted to the small pedlar or retail
dealer. The transition is markedly seen in
the act 5 & 6 Edward YI. c. 21, in which one of
the terms used for pedlar is " petty chapman."
By the l7th century the distinction between
the chapman or small trader or pedlar and the
merchant was firmly established. In modern
times chapman is only used as an antiquarian
or romantic synonym for merchant, or in certain
districts as the local name for pedlar.
Besides this signification of seller or merchant,
the word was frequently used in the converse
sense of purchaser, a usage still to be found in
some dialects.
{Poll-Tax Returns, West Riding Yorkshire.
Archaeological and Topographical AssociatioUj
1882.— Chaucer (c. 1340-1400), Canterbury Tales.
— Dr. Murray's Neiv English Dictionary, 1890.]
c. G. c.
CHARGING ORDER. Where a judgment
has been entered up in any of the superior
courts against a person interested in any
government stock, funds, annuities, or stock or
shares in any public company, a "charging
order " may be obtained from the court by the
judgment creditor to the eSect that such stock,
funds, etc., shall be charged with the payment
of the amount for which judgment was recovered.
The effect of a charging order is to entitle the
judgment creditor to all such remedies as he
would have been entitled to if such charge had
been made in his favour by the judgment
debtor.
[Daniel's Chancery Practice, 6th ed. London,
1882. — Wilson's Judicature Acts.l J. e. c. m.
CHARITABLE FOUNDATIONS. These
may be defined as "gifts to a general public
use, which extend to the poor as well as to the
rich " (Lord Camden). A charity is said to be
constituted by "any legitimate dedication of
property upon a trust, whether express or
implied, capable of permanent duration for the
benefit, whether they be rich or poor, of the
public,- or a class of the public as distinct from
individuals" (29th Report of Charity Com-
missioners, 1882). To such foundations the
state has always stood in a peculiar position.
It has, in England, maintained that they
required especial care, partly because, like
infants and lunatics, they are inopes consilii,
partly because, owing to their permanence,
they are liable to every kind of vicissitude,
and partly because those who administer them
have not that inducement to good management
which self-interest gives in private business.
This attitude on the part of the state implies
two things, first, the duty of protecting, secondly,
the right of controlling. Both of these are
necessary that the foundation may be adminis-
tered and applied to promote the charitable
intent of the founder, or as near as may be ;
which last proviso has given rise to the doctrine
of cy-prhs which is set forth in the celebrated
Campden case (Law Report, 18 Ch. Div. 310),
CHARITABLE FOUNDATIONS
26?
The Court of Appeal here laid it down that it
is the duty of the state to review the means
which the founder of a charity has prescribed
for carrying out the general intention of his
foundation, whenever those means, by reason of
changes which may take place either in the
value of the endowment, in the circumstances of
the locality or the population for the benefit of
which the charity is administered, in the times,
in the habits of society, or in the ideas and
practices of men, have become unfitted to secure
the end which the founder had in view. This
position is illustrated by — (1) trusts for appren-
ticeship, where the end is to give the objects of
the charity such an education as will enable
them to gain their livelihood in an honest and
respectable manner ; and (2) doles, a " practice,"
says Sir G. Jessel, "which should be more
honoured in the breach than in the observance,"
which may be turned into permanent pensions
or used for any method of promoting thrift.
These objects were originally carried out by the
courts of equity, a method of procedure which
proved to be ii-regular, costly, dilatory, and to
give great openings for fraud. The state of
things became so little satisfactory that in
1818 a commission was appointed, commonly
known as Lord Brougham's Commission, to
inquire into the state of the charities of Eng-
land, and sat, wdth various changes, until 1837.
In 1835 and 1849 committees of the House of
Commons were appointed to deal with the results
of its labours. Ultimately, in 1 853, a permanent
charity commission was appointed with a two-
fold aim : viz. (1) to supplement the means
provided by founders, where those means were
inadequate, to give full effect to the purpose of
the foundations ; (2) to protect the property of
charities against waste and loss, and so preserve
it for the purpose to which it had been dedicated
by the founders. These objects the commis-
sioners have continued to discharge down to the
present time. In the year 1870 the work of
the endowed schools commissioners was trans-
ferred to the charity commissioners, and in 1883
under a special act of parliament (46 & 47
Yict. c. 36) a department was formed to
supervise the administration of the city paro-
chial charities. It was hardly to be expected
that the powers of the commissioners could be
exercised without a considerable amount of
friction and of adverse public criticism. The
friction has arisen between the central board
and the trustees and other local administrators
of "charitable funds, but the line between the
spheres of the two bodies is clearly marked. It
is for the local body to administer the charity,
i.e. its annual income, the duty of the commis-
sioners is to secure its permanence ; they and
they only are the judges of all applications of its
capital, and of the prescribed mode of giving
effect to the objects of the charity. It is
enough to say of the criticism that it is not
uncommonly the result of ignorance, prejudice
and disappointed self-interest, or of a strong
local feeling which has for a time obscured
the judgment. The total number of charities
registered by the commissioners was on 31st
December 1889, 31,350, and the funds invested
in their name amounted to £14,497,836 in
15,511 accounts.
It is quite clear that whatever be their origin
or their aim, charitable foundations will have
considerable economical effects. (1) They will
determine for long periods of time the employ-
ment of considerable amounts of property. In
the case of real estate the accumulation in the
hands of charitable trustees has been limited by
the mortmain acts and by the statute 9 Geo.
II. c. 36, but with regard to personal property
there is no such limit. (2) The effect of founda-
tions on the habits and character of a population
may be very great, as will be best seen by some
practical instances. In 1793 George Jarvis
left a large property, £100,000 in all, for the
benefit of the poor of three parishes in Hereford-
shire, the united population of which did not
exceed 900. The consequences are thus sketched
by Mr. Hare of the Charity Commission.
"The pauper population increased in ten years
upwards of 20 per cent ; in twenty years almost
40 per cent ; and in thirty years 60 per cent.
The cottages became more and more crowded,
houses not more than sufficient for one family
were divided into two or more, other dwellings
were built, some on waste, others on remote
spots, with regard to little else than mere
shelter. The inhabitants of the country round
the parishes, who remember their state some
years ago, are uniform in their testimony of the
demoralisation of which the poor were by this
means made the victims : their mode of existence
resembled that alternation of want and reple-
tion which is characteristic of the savage state.
Idleness, discontent, and improvidence were
found to be the fruits of this ill-conceived and
ill-judged gift, to which must be added an im-
morality of life the results of which are yet
distinctly felt." Of the endowed charities of
Bristol it is said by the Education Commission
of 1861, "these charities, by their operation,
are teaching indolence, mendicancy, servility,
and falsehood to the poor of Bristol." The
judgment of the poor law commissioners of
1 834 is thus stated. ' * In some cases, charitable
foundations have a quality of evil peculiar to
themselves. The majority of them are dis-
tributed among the poor inhabitants of particular
parishes and towns. The places intended to be
favoured by large charities attract therefore an
undue proportion of the poorer classes, who, in
the hope of trifling benefits to be obtained
without labour, often linger on in spots most
unfavourable to the exercise of their industry.
Poverty is thus not only collected but created
in the very neighbourhood where the benevolent
264
CHARITABLE INSTITUTIONS
founders have manifestly expected to make it
disappear." These reports, and others of the
same nature, suggest the question : — How far it
is for the good of a country that the characters
of thousands should be at the mercy of one man's
folly ? By some the answer is made, that all
endowments for specific purposes are ba'd, and
that if foundations be recognised at all, they
should be determined in their object and method
wholly by the state. By others, again, a large
increase of the power of interference on the
part of a public body, a large discretion as to
purpose, and a constant living control are
urged. How far this last can be attained is at
present very doubtful. In 1869, Mr. Mill
wrote, " We have well-nigh seen the last of the
superstition which allowed a man who owned a
piece of land or sum of money 500 years ago,
to make a binding disposition, determining
what should be done with it as long as time or
the British nation should last," but the antici-
pation must still be reckoned sanguine. (3)
Special effects will be produced by foundations
having an educational purpose. Adam Smith
in a well-known passage has pointed out that
endowments to assist those preparing for the
clerical calling had attracted large numbers
into it, and so damaged the position and pros
pects of all {Wealth of Nations, bk. i. ch. 10).
Other writers have urged that teachers require
the stimulus of competition, that students
are more productive when their self-interest is
involved, that scholarships, bursaries, and the
like tend to stereotype lines of study long after
they have ceased to be profitable, and give
them a great advantage in competing with new
and perhaps more valuable subjects. But, on the
other hand, it is maintained that by endowments
only can variety be ensured, that many subjects
could not possibly be studied or taught as a
means of gaining a livelihood, that education as
a whole cannot be safely left to the action of
competition.
[Lord Brougham's Commission, 1837. — H. C.
Committee, 1835. — H. C. Committee, 1849.—
Charity Commission 1854 onwards (especially
1882). — Endowed Schools Commission, 1861. —
Lord Hobhouse, The Dead ITawc?, 1880. — LordSher-
brooke, Endoioment and Free Trade (answered in
Macrrdllaris Magazine), April 1869. — J. S. Mill,
"Endowments," Fortnightly Review, April 1869.
— R. E. Mitcheson, Charity Comviission Acts,
1887. — Anon., On the Principles of Charitable
Institutions, 1834. See also Turgot's article
" Fondation " in the French Encydopedie.]
CHARITABLE INSTITUTIONS, "charit-
able institutions may be classified in various
ways. If distinguished according to their ob-
jects, they are designed to give (1) permanent
help in old age, in almshouses or by pension ;
(2) permanent help to the incapacitated, in
asylums for lunatics, imbeciles, incurables ; (3)
temporary relief in homes for convalescents,
orphans, cripples, inebriates, hospitals for surgi-
cal and medical cases, nurseries for children ;
(4) educational advantages, in schools for the
bKnd, the deaf, and dumb, for children of all
classes and all creeds ; (5) miscellaneous forma
of help, aids to prisoners, homes to penitents,
shelter, drugs, etc. The general supervision
of all institutions supported by endowments is
in the hands of the charity commissioners (see
Chaeitable Foundations) ; the administra-
tion is sometimes carried on by trustees, some-
times by representatives of local councils, etc.,
sometimes by co-opting boards, sometimes, in
the case of those supported by subscriptions,
by representatives of the subscribers.
The general principle may be laid down that
a charitable, institution will be useful in pro-
portion as it is an aid and not an obstacle to
self-help. But provision for any one of the
above mentioned objects on a large scale may
check the spirit of provident foresight and thrift.
Asylums for the aged may be multiplied to such
an extent as to discourage provision for what is
an inevitable contingency in life. Many such
institutions, again, run the risk of destroying
family life, or at least lessening its usefulness.
Not only is it difficult to imagine any public
institution^for children which is not inferior to
their home, but the fact is often forgotten that
the aged and the young, even the cripple and the
bedridden, have their place and use in family
life. Parents and children are taught to under-
value their responsibilities when facilities are
given for escaping them. Reckless living and
early marriage are often encouraged. It is
found almost impossible to establish a provident
dispensary in the neighbourhood of a great
hospital with its free out-patient system. The
existence of institutions may also encourage
imposture, for to secure their benefits is the
aim of the artificial pauper who lives by writing
begging letters. Case after case has come to
light in recent years in which the benefits of.
institutions have been the prey of such impostors
to the discouragement of every honest and inde-
pendent man. Again, vice is often fostered by
such institutions. The impression is easily cre-
ated in men's minds that a certain degree of bad-
ness is sure to excite compassion, and so the care
of children may be evaded or a retreat secured.
These evils can only be avoided by very care-
ful administration, for which two things are
needed.
First. — Watchfulness on the part of the
managers. Too often boards and trustees are
negligent of their business, leave everything to
paid officials, and scandals ensue in the manage-
ment and in allotting the benefits. In many
institutions the regulations as to admission are
framed with a view to exclusion rather than
selection. In some cases admission is gained
only by the votes of subscribers — a systenn
which ensures success to those who have influ
CHARITY
265
ential Mends, and wlio are therefore in many
cases the least in need of help. This system
is defended on the ground that subscribers ex-
pect a quid pro quo, but the experience of
institutions which have abandoned it does not
justify the argument. Again, watchfulness is
needed to avoid waste in salaries, general ex-
penditure, and advertising, and the proportion
of income devoted to working expenses often
points to the absence of such care.
Secondly. — Elasticity. The objects of an
institution may disappear under changed condi-
tions. Almshouses, e.g., which were once the
solution of the problem of housing the poor,
are now generally condemned. The class for
whose benefit the institution was intended may
have ceased to exist. Thus in many cities and
boroughs are large endowments for the use of
freemen, an entirely different class of persons
to-day from those for whom they were originally
intended. In all such cases careful reform is
needed on the lines of attaining a kindred
object to that originally proposed, and the
wisest founders are those who leave a complete
discretion to posterity.
In general terms it may be said that those
institutions are the best which provide (1) for
the result of temporary disaster — first-rate
medical and surgical skill must always be
beyond the reach of the poor, and no amount
of foresight on their part can guarantee them
such professional aid ; (2) for objects which are
beyond attainment, owing to the scale on which
they are needed, as for instance, large establish-
ments for technical training, libraries, and
museums ; (3) for deplorable instances of break-
down in old age, due to no fault of the aged
themselves. But even in these cases it is
difficult to oveiTate the importance of careful
administration. No action has yet followed the
Report of the Royal Commission of 1909.
[For the charitable institutions of England, see
Reports of Charity Commission. — ChaHties Regis-
ter and Digest, by the London Charity Organisa-
tion Society (1890). — Essays on the Principles of
Charitable Institutions, anonymous, 1836. — Re-
ports of Charity Boards, etc., in America are
published by the various States. ] l. r. p.
CHARITY. '' In the minds of all ordinary
persons charity implies the relief of poverty. "
Lord Esher in Court of Appeal Q. B. Law
Reports, 22 Q.B.D. 296. But how poverty
may be relieved is a question beset with diffi-
culties. First, it is almost impossible to avoid
weakening the motive to exertion. If a thrifty
man finds his thriftless neighbour placed by
charity in as good a position as that which he
has won for himself by his own industry and
self-control, a great discouragement is given
to thrift. It is easy to multiply instances of
this. Towns with largely endowed charities
are almost always full of paupers, and a con-
nection may be traced between the two facts.
The vagrant class is created and maintained by
thoughtless charity ; the out-patient system in
hospitals is fatal to medical clubs ; it is found
almost impossible to establish a provident in
the neighbourhood of a free dispensary. All
experience goes to show that men wUl not make
provision for themselves if they know that they
can fall back on others. Charity is too often
morally as well as economically harmful.
Secondly, it is difficult to avoid weakening the
family tie — parental and filial responsibility.
Thus all provision made by charity lor the aged
will discourage children from doing their duty,
the applicants for almshouses and still more for
pensions are always in excess of the vacancies ;
foundling hospitals increase the number of il-
legitimate births and of desertions, wliilst theii*
abolition is not found, as was feared, to increase
child-murder ; facilities given to parents to get
rid of their children, on whatever ground —
cruelty, neglect, bad surroundings, etc. — will
ensure an increasing number of such cases.
Thirdly, charity, by lowering wages, often inflicts
a serious blow on the independent wage-earning
class. Persons who are in the receipt of charity
are certain, when competing for work, to under-
bid those Avho have to live wholly by it ; pro-
vision by charity for old age will prevent wages
from rising to a point which allows of securing
it by the labourer's own efforts ; to transfer
employment or to "make work" on charitable
grounds is to tax the independent labourer for
the benefit of his poorer competitor ; the pro-
vision of model-dwellings, etc., by charity at
less than cost price attracts crowds of work-
men competing for employment. Lastly, some
miscellaneous evils may be added. Charity
often leads to a congestion of population in a
favoured district, with all the evil conse-
quences of overcrowding. In country villages
the fear of admitting strangers to share in the
charities has before now led to intermarriage in
a small circle, with disastrous results. Charit-
able endowments often keep alive useless and
sometimes injurious occupations with a view to
qualification for their enjoyment, — those which
are confined by a religious test become in many
cases a premium upon hypocrisy.
The first duty then of those who would relieve
poverty without increasing it is that of inquiry
into its causes. Poverty may be deserved —
the result of non-production from laziness, or
reckless consumption, self-indulgence, thrift-
lessness, etc. ; — or undeserved, being either
from general causes — the result of commercial
depression, failure of crops, hurricanes, inunda-
tions, etc., or from personal misfortune — the
result of bodily or mental infirmity. Prelimin-
ary inquiry on these points will prevent many
of the evils of thoughtless charity. It clears
-off impostors and prevents charity from being
the prey of the idle and dissolute ; it showa
that in many cases charity will do no good,
266
CHARITY— CHAEITY ORGANISATION
but rather harm, either because the power of
recovery is wanting, or because repeated failures
show that some such discipline as that of the
workhouse is necessary ; in other cases it brings
to light elements of hopefulness, it shows
grounds for thinking that with timely aid in-
dependence may be regained. But inquiry does
more than this. It not only gives a thorough
knowledge of the circumstances of those to be
relieved (character, history, opportunities, etc.),
but as a result of such knowledge it gives a clue
to the best method of relieving. It is to the
charitable what diagnosis is to the physician —
it shows who can safely be helped and how they
can be most helped.
Nothing is more difficult than to formulate
methods of charity, i.e. of relieving poverty.
It may be questioned whether experience has
as yet yielded any but negative results, and the
constant changes in the conditions of life forbid
any hope of finality — thus though the housing
of the aged poor has been a problem for centuries,
the old solution, viz. the provision of almshouses,
is at the present time generally condemned. The
following general principles may be laid down —
(1) that aU charity, to be useful, must be ade-
quate, that is to say it must be sufficient to
secure some definite object, or to put the re-
cipient beyond the need of charity. Inadequate
charity is worse than useless. The old system
of doles illustrated this. People got into debt
up to the amount which they anticipated, or
not uncommonly wasted the whole in excess.
A small sum given to a beggar is just enough to
make him go on begging and to give him and
others an excuse for doing so. (2) Charity
should never be directed to providing the neces-
saries of life. For those who lack them, viz.
the destitute, provision is made by the poor
law. Now the poor law embodies in its
regulations, etc., the experience of some of the
wisest and most skilled in the relief of the poor.
It is very dangerous to attempt to relieve desti-
tution without the safeguards which the poor
law provides. It is almost as dangerous to
attempt to remedy or deal with the ordinary
ills of life. Thus sickness and old age are
inevitable for all, and it is the duty of all to
make provision for them. To relieve people
from the responsibility is to weaken self-reliance
and self-control, and so in the long rim to
increase poverty. Charity therefore, when it
deals with individuals, should aim at helping
those of whom there is good gi'ound for hoping
that they may be restored to independence,
those whose poverty is inevitable, the blind,
dumb, etc., or those who in old age have been
defrauded of their savings, or those whose needs
are on a scale which is beyond any power of
provision — the result of accident or sickness of a
kind requiring special knowledge and skill in
treatment. (3) The wisest charity is that which
does not wait till poverty is a fait accompli
to relieve it, but aims at removing its causes.
In individual cases this work is moral rather
than economical, it aims at the formation oi'
character by personal friendship, moral suasion,
the creation of opportunities, friendly guidance.
Material assistance will be best employed in
improving the general conditions of life, and
that form of charity is least open to objection,
under present circumstances, which does not
come into direct contact with individuals at all,
but seeks to provide on a large scale the con-
ditions of good living, open spaces, museums,
picture galleries, etc., the requisites of culture,
bodily and mental.
Any such scheme of charity is clearly beyond
the power of the individual to realise ; both for
inquiry and administration some organisation
is needed. The question arises whether this
should be the work of the state or left to volun-
tary bodies. Precedents may be found for
almost every possible combination of the two
systems. In England the spheres of the state
and private charity are distinct. The state
undertakes the relief of destitution, leaving
poverty to voluntary effort.
[Reports of Charity Commissioners (1833 seq.).
— Publications of Charity Organisation Society
London. — Defoe, Giving Alms . .. no Charity. —
Walker, The Original. — For foreign countries :
Twining's Poor Relief in Foreign Countries^
also Senior, 1835, and blue book, 1875-77.—
Report, Royal Commission on Poor Laws and
Relief of Distress, 1909.] L. B. p.
CHARITY ORGANISATION. Charity or-
ganisation is an application of the principle of
division of labour to the relief of poverty,
with the further object of giving the assist-
ance required by the poor in the manner most
beneficial to them, while leading the more
prosperous to understand that it is their duty
to join in meeting the wants of those in distress.
With a limited area and a small population
the problems of charity are, by comparison,
simple, for the well-to-do know their poorer
neighbours, and the conditions under which
they live, and so can help them personally.
All this is changed in a city with a dense
population, a wide separation between rich and
poor, a complex social system in which the
causes of poverty and its remedies are hard
to see ; here some organisation among the
charitable is needed to ensure greater knowledge,
and greater efficiency as a result of knowledge.
The knowledge requisite is of two kinds : first,
to guarantee that charity is bestowed on fitting
objects, and secondly, that it is given in the
most useful form. Such knowledge is only to
be gained by thorough inquiry, and its value
may be shown by examples of the evils caused
by ignorant almsgiving. (1) In every com-
munity in which charity abounds there will
grow up a class of persons who live by it in
preference to living ty independent work. The
CHARITY ORGANISATION
267
existence and growth of such a class is often
the result of ignorance on the part of charitable
persons who, whilst striving to mitigate the
evils of poverty, increase them by fostering
mendicancy, hypocrisy, idleness, and improvi-
dence. In proportion as the charitable act
together in some organisation they will avoid
creating these mischiefs, for diligent inquiry
will prevent the diversion of alms to such
recipients. (2) Unless there is some common
action among the charitable there is danger of
overlapping. Some persons will be assisted by
three or four institutions and half a dozen
individuals at one and the same time. This
danger is greatest when charity is distributed
on several different principles, as in England,
where we have municipal and parochial charities,
charities for members of various religious bodies,
trades, and professions, charities for persons
suffering from various forms of mental and
bodily disease, and the like. Here ignorance
of what others are doing causes waste.
It was these evils, amongst others, which the
late Edward Denison had in his mind when, in
1869, he gave the impetus which started the Lon-
don Charity Organisation Society. He desired
to establish a union of charities having a regis-
tration office in each parish and a central office
auditing and controlling the parochial charities.
It was to be an organisation of existing charities
with a view of checking imposture and waste,
and of teaching sound principles in almsgiving ;
it was not to add another to the sources of
help, but to increase the efficiency of those
already in existence by their co-ordination. As
a result, we have now in London a central com-
mittee with district committees in every poor-law
union. The central committee does not relieve
directly, but aims at propagating sound views on
the subject of charity by publication and discus-
sion, promoting co-operation, suggesting new
institutions on good principles, collecting infor-
mation relating to individuals and of general
import, and preventing misapplication. The
district committees in London, and the sixty-
eight affiliated societies in England and Scot-
land, not only organise, but also administer
relief on certain principles. Those principles
may be summed up as follows: (1) That all
relief should aim at making the recipient inde-
pendent of relief. (2) That no relief should be
given without thorough inquiry and investi-
gation. Quite apart from the detection of
impostors mentioned above, inquiry is to the
charitable worker what diagnosis is to the phy-
sician. Nothing short of thorough knowledge
can ensure the discovery of the best means of
helping ; only thus can we see the germs of
hopefulness which it is for charity to develop —
the gi'ounds for thinking that restoration to
independence is possible. Knowledge of the
past is necessary as a guide to the future. In
the best societies the term ** deserving," as im-
plying that charity should be given on a test
of merit in the past, has been dropped. (3)
That existing institutions should be utilised as
far as possible. Thus a person may be referred
to medical or general institutions, to private
persons co-operatingwith the society, to relations
or friends ; he may also be helped by finding
employment, by loan, or a grant from the
society's funds. (4) That all relief should
be adequate to secure the object with which
it is given. If on the one hand organisa-
tion prevents overlapping, on the other it
secures co-operation — it can bring a number of
persons together, and by joint elfort do what
individuals acting separately cannot. By
putting these principles into practice the
various societies train workers, promote discus-
sion, and spread knowledge.
The administration of charity in England is
bound up with the existence of a poor law (see
Poor Law), and one of the aims of charity or-
ganisation is to establish relations with the
official forms of relief. It is the duty of the
poor-law authorities to relieve destitution, and
in administering relief to take into account the
amount of destitution and that only. But even
among the destitute there are many cases which
can be treated far better by the assistance of
the charitable than by the poor law, — all those
cases, that is, which give gi'ound for hope that
independence may be restored. Charity can
ensure more thorough inquiry and knowledge ;
it can induce relations and friends not legally
liable to give substantial help ; the help which
it gives directly is far more elastic, determined
by futm-e possibilities rather than by existing
needs. Above all, charity can give moral assist-
ance. In many cases, e.g. widows left with
large families, the poor require not so much
material help, as the encouragement and support
which sympathy brings (an American society
takes as its motto "not alms, but a friend ") —
these, together with opportunities for work,
openings for children, and the like, can be given
by charitable volimteers working together, but
they are beyond the scope of an official system.
It may be said shortly that in many cases
charity can restore independence more quickly,
more cheaply, with a smaller risk to family
affection and self-respect, than the poor law,
whilst at the same time it enforces social duties
and binds classes together.
The relations between voluntary and state
help differ in different countries. In France,
the right to relief is recognised only in the cases
of lunatics and deserted children, all other relief
may be described as organised charity distri-
buted by public bodies. Institutions, such as
Hdpitaux for the sick, hospices for the aged
and infirm, are supported by endowments and
voluntary contributions, and managed by un
paid bodies constituted and controlled by the
state. The Bureaux de Bienfaisance, consist-
268
CHARITY ORGANISATION— CHARITY, STATE
ing of elected and nominated members, tlie
Maire presiding ex officio, distribute relief in
the communes to the poor at their own homes.
The funds which they administer are derived
almost wholly from endowments and voluntary
contributions, a small proportion only cpming
from taxation. Inquiry is conducted mainly
by sisters of charity, and is very thorough. It
is claimed fbr the French system that it com-
bines the efficiency of voluntary effort with the
regularity and consistency of official manage-
ment ; it is objected to it that in practice the
relief given is rarely adequate. The value of
inquiry is illustrated by the case of Elberfeld
in North Germany. Here the prevalence of
pauperism induced the authorities to enlist
volunteer aid very largely. Relief is now ad-
ministered by 18 overseers and 252 visitors,
to each of whom is entrusted on the average 4
cases ; as a result, pauperism of all kinds has
largely diminished, able-bodied pauperism has
disappeared, thrift and providence have greatly
increased.
The difficulties in the way of extending or-
ganised charity in the United Kingdom lie first
in the absence of strictly binding principles.
The reports of the various societies show a
great variety both of principle and practice.
It is with the greatest difficulty that even
the local government board, with its statutory
limitations and its official machinery of in-
spection and audit, can secure even an approach
to uniformity in administering poor relief ; it
would be far more difficult to do so with
voluntary, uncontrolled, irresponsible bodies.
Secondly, gi'anting a general acceptance of
principles, and loyalty to them, a difficulty
arises from the scarcity of individuals with the
skill and experience necessary to apply them.
Charity organisation makes way but slowly in
the United Kingdom. Charitable persons and
the governors of institutions are unwilling to
subrait themselves to its discipline, and misin-
terpret its objects and methods ; and yet the
best hope for improving the relief of the poor
lies in supplementing the poor law by volun-
tary and organised effort.
[Mai thus, Principle of Population, bk. iy. ch.
X, — Edward Denison, Letters. — Charity Organis-
ation Society, Annual Eeports and Publications. —
Moggridge, Handbook for Helpers. — Emminghaus,
Das Armenwesen in Europaischen Staaten (1870).
— Eastwick, Poor Belief in Different Parts of
Europe (1873). — Aschrott, Das Armenwesen Eng-
lands (Eng. trans, contains much information as
to relations of Poor Law and Charity). — Twining,
Poor Relief in Foreign Countries and Out-door
Relief in England (1889).— C. S. Loch, Charity
Organisation. — L. Bequet, Regime et Ligislation
de I' assistance publique etprivSe en France (1885).
L. R. P.
CHARITY, State. A distinction may be
drawn between the supply of the necessaries of
life, of the minimum, i.e. of food, clothing, and
shelter needful to support it, and the supply of
sources of comfort over and above these, which
technically fall under the head of luxuries, in
short, between the relief of destitution and oi
poverty. The action of the state with regard
to the former is determined in this country by
the Poor Law (see Poor Law), we are now con-
cerned with proposals that the state should
supply or guarantee certain of the latter. Such
action on the part of the state may be con-
veniently summed up under the head of state
charity. The growth of such a theory of the
duty or functions of the state is not difficult to
trace. The poor-law system guarantees to every
citizen the necessaries of life, but the conception
of these necessaries is constantly changing. As
Ricardo has pointed out, it differs in different
countries, and at different times in the same
country. In popular parlance the term "neces-
saries of life " implies a great deal niore in this
country to-day than it did a hundred years ago.
And, as the conception has grown,, so, not un-
naturally, the state has come to be regarded in
some quarters as responsible for all the individual
things which are contained in the new concep-
tion.
We must distinguish, in limine, two kinds
of provision made by the state. There are,
first, services common to the nation as a whole,
which are open to all alike, and of which all
avail themselves, of which it is difficult to
say that any individual or any class is more
benefited by them than any other ; as, for
instance, the administration of justice, the
guarantee of security at home and abroad, the
enforcement of contracts, the means of com-
munication, the medium of exchange. There
are, also, advantages accruing to certain indi-
viduals or certain classes only, which practi-
cally are given by one part of the community
to another ; such at the present time in England
would be free education ; it would be provided
by one section or class for the use and enjoy-
ment of another, whereas in the United States,
it is said, the whole population, without dis-
tinction, send their children to the common
schools. Free libraries might come under
either head ; picture-galleries under the first ;
and baths and wash-houses under the second
only. Again, a distinction must be drawn
between England, where there is a poor law,
i.e. provision for the destitute, and countries
where there is none. The poor-law system in
England is practically the outcome of a drastic
reform of a system of state charity which
was working untold ill, and many of the pro-
posals of modern times, e.g. free dinners, may
be treated, and indeed would naturally be treated,
as part of the poor-law system, and administered
under the safeguards which are embodied in
that system as the result of a bitter experi-
ence. On the other hand, the attitude of a
country towards such a question as Government
CHARITY, STATE
269
Insurance may be determined by the presence
or absence of a poor law, the arguments pro
and con will be of a different kind in the two
cases, and even the same arguments will have
very different weight.
A few instances will show the nature of
state charity. I. Allotments. All through
history we find pressure put upon the state to
"find land" for the poorer citizens. At the
present time proposals of this kind are common,
as, by 50 & 51 Vict. c. 48, the local authority
is empowered to purchase land, by compulsory
sale if need be, for the purpose of allotments
(see Allotment). Now when the powers
granted by this act have been put in force, the
question arises as to the terms on which sucli
allotments shall be let, whether at the market
value (a) as agricultural, or (6) as building land,
or at any of the thousand-and-one varieties of
" fail' rent." If they are let at anything under
the market rent they come at once under the
head of state charity. For the rates then
provide for certain citizens advantages which
they cannot command for themselves, or, at
least, the advantage secured to them from the
rates is out of all proportion to their contribu-
tion. The question of riglit — how far, e.g.,
in country parishes the allotments represent
a repair of wTong done by enclosure acts —
is outside the economical question which
refers to the probable effect of a course of
conduct. Now, if a piece of land be let to
a labourer at less than its market value,
he clearly is benefited to the extent of the
difference, in other words, his wages are in-
creased out of the rates. The results of such
policy, on a large scale, may be seen in the
well-known allowance system. In the long
run wages will be lowered by almost exactly
the amount of advantage given ; in other words,
the employer of labour will profit by the fact
that a part of his wages bill is paid for him by
the whole body of ratepayers. Again, if the
experience of the past may be trusted, the
results to the labourers themselves will be
disastrous (see Allowance System). A practi-
cal difficulty arises from the fact that it is almost
impossible to ensure that the letting of allot-
ments on easy terms shall not be an engine of
political corruption. As it is, the promise to pro-
cure cheap allotments is fast becoming a favour-
ite device to catch votes at a parliamentary
election. In considering this question we must
bear in mind that if an open space be acquired
out of the rates and let in allotments at its
market- value, no charity is involved. The ad-
vantage to the ratepayers of an open space may
fairly be set off against the difference of value
for agricultural and building purposes, and the
opportunity given for open-air exercise, etc., is
clear gain to the community. II. Buildings.
A form of state charity which finds many
supporters at the present day is the provision
of houses, or sites of houses, for the working
classes, by the state. The question involved
here is twofold, viz. : (a) how far is such action
on the whole for the good of the community,
and (J) how far is it likely to achieve its im-
mediate end. That end, it must be confessed,
is most attractive. The moral and economical
loss to the nation involved by the conditions
under which the poor live — bad air, bad
materials, confined space, want of sun, and the
consequent habits of ill-health and intemper-
ance— cannot well be overstated. But it must
always be borne in mind (1) that an attempt to
improve dwellings which is not the result of a
rise in the standard of comfort on the part of the
occupants is not likely to have a lasting success,
though it may foster such a rise ; (2) that a supply
of houses at less than the market value will not
only have the same results as a supply of allot-
ments, but also will attract workmen from
other districts, and even other countries, who
will increase the pressure upon accommodation ;
(3) that it is veiy difficult to confine the
benefits of such a system to tlie class for whom
it is intended, with the result, if a different
class enjoy them, of increased pressure in other
quarters. All these considerations, coupled
with the actual experience of success on the
part of various joint-stock enterprises, point to
the provision of dwellings as a matter which may
well be left outside the sphere of state-action.
III. Three forms of state charity are so closely
connected that they may be considered together.
(a) Free Schools. — Comparatively few writers
have maintained that elementary education
should be left to private enterprise, and it is
probably undertaken or organised by the state
in every civilised country. But much contro-
versy has arisen on the point whether it should
be given free of charge. On the one hand it
is said that if the poor are deprived of their
children's earnings by the compulsory system,
it is right that at least they should have them
taught for nothing ; and again tliat educational
endowments have been in very many cases
monopolised by the rich, who may fairly make
compensation by paying for the education of the
poor. With these arguments the economist is
not concerned. It is also said to be well worth
while, inasmuch as education diminishes crime
and pauperism — a statement vigorously denied
by some writers, as by Mr. Herbert Spencer ;
or again, because it increases the efficiency of
a nation's labour, by assuring the genei'al
education which is a necessary preliminary to a
technical one, and, lastly, because it raises a
nation's moral tone indirectly if not directly ; in
short that education is so necessary a condition
of civic life, in any real sense, that it cannot
be left to the option or power of a parent to
provide it. All these arguments, it will be noted,
presuppose that education cannot be general or
compulsory unless it is free, (h) Free Libraries.
270
CHARITY, STATE
— Free schools cany with them free libraries,
that is to say, if it be worth while to give ele-
mentary education, it is also worth while to give
the necessary complement, without which the
educated youth is turned loose with his mental
appetite sharpened and nowhere to graze. No
complaint is more common in the countsy dis-
tricts than that the effects of elementary educa-
tion disappear in a few years. It is also argued
that the amount of good done is out of all
proportion to the cost. It is a striking case, says
Prof. Jevons, ' ' of the principle of multiplication
of utility." Thus the cost of each issue from the
Birmingham Free Library is under twopence.
Economically, too, there is a direct advantage.
The supply of wholesome literature not only
cheers and brightens a workman's life, making
him a better producer, but it also helps him to
special knowledge. At a free library he learns
where his labour is in demand, and so the
mobility of labour is increased. He learns also
the lessons of history, gets a wider horizon of
knowledge, and greater familiarity with the
points at issue in trade disputes, etc. (c)
Free Dinners. — Free schools are said also by
some to carry free dinners with them. It is
useless, and even cruel, it is urged, to force
children into school who cannot profit by in-
struction for want of nourishment, and it is
"beyond question that in large towns numbers
of children come in that condition every day.
Now it is the duty of the state to provide the
conditions of mental development, of which
teaching is only one, and therefore in such cases
as the above it is argued that it should provide
dinners as in other cases it provides desks. The
objections to the provision of education, libraries,
and dinners by the state are up to a certain point
common to all three. Thus we may say that
so far as experience and history are any guide,
the only motive which can be tnisted to work
generally and constantly in making men in-
dustrious is self-interest, i.e. the desire for
necessaries and luxuries. Anything which
weakens this motive by supplying the results
of industry without its exercise helps to in-
crease the idle class in the community — the
least profitable and probably the least happy of
all — and so to decrease the amount of production.
Again, any measures which guarantee the means
of supporting children will, in the long run,
diminish providence in the matter of marriage
and increase population ; in other words, the
evils it is sought to cure will grow greater and
not less. Now both the training and feeding
of children, it is argued, are matters for which
persons should make provision, or should see
their way to supplying before they marry ; and
it is unwise to enable them to dispense with
such provision. The general contention that
free schools weaken or diminish the sense of
parental responsibility is met by two special
arguments. First, by pointing out that the bulk
of the expense of a child's schooling is already
borne by other than its parents, and alwayg
must be. Subscribers, endowments, voluntary
or compulsory rates contribute by far the larger
part of the cost of carrying on a school. Con-
sequently free schools present a question of degree
rather than of kind. This argument applies
only to the special circumstances of England.
Secondly, by denying the truth of the statement.
In such matters disproof is not easy. We may
trace a connection between a motive and a fact,
or vice versd, as between the absence of outdoor
relief and the strength of family affection in
Ireland, but it is hardly possible to demonstrate
more than this. It is said, however, that in the
United States the strongest sense of responsi-
bility goes hand in hand with free schools, the
parents straining every nerve to provide for their
children a secondary education, the primary
being found for them by the state. Again it may
be questioned whether educational endowments
have had any such result as the weakening of
responsibility on the part of middle-class parents,
who, in the main, enjoy them. So again with
regard to free libraries. The existence of these
is not found to diminish men's zeal for the
possession of books ; on the contrary, the busi-
ness of bool^sellers increases in towns where they
are opened. The existence of a state-supported
library in the British Museum, or endowed
libraries as those of Oxford and Cambridge, is
not found to have any bad effect on those who use
them. There is no difference in principle be-
tween supplying at the public cost rare books
and any other — rareness is wholly relative.
Libraries stand on the same footing as picture
galleries, the provision of which is a recognised
function of the state. As to free dinners it
may be said, whilst in all countries the pro-
vision of education is a state matter, and is
never kept wholly to individual effort, etc., the
provision of meals is a family or domestic
matter. The difference between the two is one
of principle, and the supply of food should
never be undertaken by the state, except in
cases of destitution, when it falls within the
province of the poor law. Further, an inquiry
conducted in 1889 by the Charity Organisation
Society showed that the evil to be met by free
dinners was of such small dimensions as to
call for no exceptional measures, and that where
exceptional measures had been adopted the evil
had greatly increased.
The sphere of state action, including state
charity, is rarely if ever determined by logical
considerations : it is more often the result of
historical events. "When we ask ourselves the
abstract question, how far will the state do more
good than harm, or vice versd, by the provision
of necessaries or comforts, experience gives no
certain answer. The conditions of the problem
vary with each succeeding generation and in
each country. The answer will depend largely
CHARTER— CHARTISM
271
on a balance of probabilities. How far will
industry and thrift be weakened, family life
threatened, and human feeling deadened, by
state charity ? How far, again, is improve-
ment made possible, a higher standard con-
ceived, by the provision of certain conditions of
realising an end in life? (For Pensions, Old
Age. See Appendix.) l. r. p.
CHARTER. A ^vritten document by which
the crown, in virtue of its prerogative, confers
special privileges on an individual, or group of
individuals. The term was at one time applied
to conveyances of land, and to measures adopted
by the crown by way of legislation. In modern
times, the crown's assent to the formation of a
corporation, such as a university, a city, a bank,
or a trading company, is frequently given
by charter. Trading corporations are usually
formed under the companies acts, but where
these are not applicable, a charter of the crown
has sometimes been obtained. The North
Borneo Company was incorporated in this way
in 1881 (see charter in London Gazette, 8th
Nov. 1881, pp. 5448-5453). In the charter
of this company, it is expressly declared that
the grant is not to authorise the setting up
of any monopoly of trade, and is to be sub-
ject only to customs duties imposed for
revenue purposes, and to restrictions on import-
ation similar to those existing in the United
Kingdom. Formerly, it was thought that foreign
trade could be best promoted by conferring a
monopoly of trading with certain countries,
and various companies were incorporated by
charter with this object. The chief companies
so formed were the East India Company, 1600 ;
the South Sea Company, 1711 ; the African
Company, 1618 ; the Russia Company, 1553 ;
the Eastland Company, 1579, and the Turkey
Company, 1593. (See African Companies,
Early.)
[Chitty, in his Commercial Law, vol. i. p. 661,
gives a concise account of these companies. Adam
Smith in Wealth of Nations, bk. v. ch. i. discusses
the economic effects of such monopolies. The right
of the crown to grant a trading monopoly depends
on the 21 Jac. I. c. 3, and is discussed in Broom's
Constitutional Laiv, 1886, p. 239.] J. e. c. m.
CHARTER PARTY. A document embody-
ing a contract by which a ship or part of a ship
is let to a merchant for the conveyance of goods
on a determined voyage to one or more places.
The instrument expresses the freight to be paid,
the tonnage, the nature of the cargo, and other
particulars. The merchant usually covenants
to load and unload within a specified time, or
if he delay the ship for a longer time, to pay a
fixed daily sum, which is called demurrage.
It frequently happens that the option of a
number of ports is given to the consignee (the
person to whom the ship is addressed), a certain
port or several ports being named in which the
master of the ship is to call for orders. B. s.
CHARTISM. The chartist movement was
in its origin and its aim economic. It arose
out of the economic necessities of the time, and
its leaders had before them, as their ultimate
object, social and industrial amelioration. To
understand fully this aspect of chartism we
must study the movement in its two phases :
(1) from 1836 to 1839 ; (2) from 1840 to 1848.
(1) 1836 to 1839. Three circumstances
may be regarded as bringing about the chartist
movement : the commercial and industrial
distress immediately preceding it in time ; the
introduction of machinery with its effects ; and
the new poor law of 1834. Various men were
of course variously affected by these causes ;
but their common action was secured by the
predominant influence of one man, and the
action of another, supported as he was by his
colleagues. The influence referred to was that
of Robert Owen, Avho had preached the gospel
of optimism and social regeneration when all
around seemed overshadowed with a gloomy
present and a threatening future, and, further,
urged on his followers and all with whom he
came in contact, the need of education and
moral elevation. It was, however, the action
of Lord John Russell that brought into united
action bodies so diverse in aim and constitution
as the working men's association of London, the
Birmingham political union, and the unions of
the north, these latter being under the guidance
of Feargus O'Connor. Briefly described, the
first was educational and moderate, the second
unstable, partly desirous of bringing about the
adoption of Mr. Attwood's currency scheme,
and partly anxious for general industrial ameli-
oration, while the latter formed centres for
violent denunciation of the rise of machinery,
and of the application of the new poor laws.
All, however, hoped to attain their ends by
bringing pressure to bear on parliament, itself
to be rendered more amenable by a further
extension of the franchise ; and hence Lord
John Russell's declaration against all further
reform united them together and led to the
formation of the national convention. The
task to which this body devoted itself was
mainly political, and to attain its object re-
course was had first to menaces and then to
open revolt. The former were disregarded and
the latter was suppressed. Meantime, however,
in the northern unions an almost socialistic at-
titude had been taken by some of the leaders.
Throughout the entire movement, indeed, there
had been symptoms that many were thinking of
and aiming at an entire social reconstruction.
(2) 1840 to 1848. The second phase of chart-
ism differed essentially from the first. It was
of smaller account in every way but one. Its
strength was less, its adherents fewer, its organ-
isation less stable ; but the views of its leaders
were much more advanced. In theory, Bronterre
O'Brien stood far ahead of any other. He wag
272
CHARTISM
socialistic in his aims, but, unlike some of his
associates, he did not confuse socialism and in-
dustrial retrogression. His schemes were, it is
true, somewhat immature, but he may be de-
scribed as feeling about for a new social organis-
ation, Feargus O'Connor, on the other hand,
was neither so consistent nor so advanced m his
aims. Thus at one time he was advocating the
claims of the ''National Charter Association,"
for so the organisation of the chartists was
called, while at another, in defiance of the advice
of his associates, he advocated a new scheme for
bringing the people into connection with the
land. In opposing the Anti-Corn Law League,
it should be noticed, however, that he based
his antagonism on the need which he alleged to
exist of general social reconstruction (see especi-
ally speech, 5th August 1844). But the direct
effect of the agitation at this period was small.
Discussions among the leaders and mutual accusa-
tions " of interested motives" diminished their
following, and it was to little or no purpose that
O'Connor sought to win them back by his ap-
parent advocacy of their interests in a periodical
called Labour^ or by his national land scheme.
The latter, as a matter of fact, was financially
unsound. The movement failed. That the
leaders were really in earnest in their agitation
is probable from the circumstances which have
been alluded to, as also from their decided
refusal to form any alliance with the middle
class, or capitalist, reformers of Birmingham.
In its two phases, then, chartism was of econ-
omic importance. During the earlier period it
aimed at economic regeneration ; during the
second, it not only aimed at this, but assumed
a socialistic character.
[Historical Review, October 1889. — Gammage,
History of the Chartist Movement. — Place, MSS.
— Northern Star and other papers.] E. c. K. g.
Chartism. The Points of the Charter.
The Charter itself was a document in the form
of an act of parliament, drafted by Francis
Place from materials supplied by William Lovett.
Its proposals were always summed up under
six heads or ''points," viz. Universal, i.e. adult
male. Suffrage, the Ballot, Annual Parlia-
ments, Payment of Members, Equal Electoral
Districts, and Abolition of Property Qualifica-
tion. No one of these proposals was in any
sense new, and the great majority of them had
been continuously agitated for more than fifty
years. The Duke of Richmond introduced a
proposal for adult suffrage and equal electoral
districts into the House of Lords in 1780. All
or nearly all the charter " points " were adopted
by the Society of the Friends of the People, and
the Corresponding Society in the earlier years of
the French Revolution, and by that Edinburgh
Convention for taking part in which Muir and
Palmer Avere sentenced in 1793. The " points "
were generally spoken of as the Duke of Rich-
mond's, or Sir Francis Burdett's, or Major
Cart Wright's "plan of radical reform," and
were undisguisedly intended by all their work-
ing class supporters to be used for bringing
about economic as well as political equality.
During the ten years following the French war
every period of high prices and low wages pro-
duced a fierce agitation for "radical reform"
in the manufacturing districts and sometimes
also in London. In 1830-32 the "plan" was
for a time given up in favour of the Reform Bill,
but in London amendments in favour of
universal suffrage were carried at the public
meetings held in support of Lord Grey's bill.
These were generally moved by members of the
"Rotunda Gang," or National Union of the
"Working Classes, many of whom had been per-
sonal disciples of Robert Owen. The reformers of
1790-1820 had advocated Tom Paine's proposal
of a graduated income tax, or had been followers
of "Spence's plan" of land municipalisation.
These men went further, and were strongly
though vaguely socialistic in tone. Place
describes them as "filled with bitter notions of
animosity against everybody who did not
concur in the absurd notions they entertained,
that everything which was produced belonged
to those who by their labour produced it, and
ought to Be shared among them ; that there
ought to be no accumulation of capital in the
hands of any one to enable him to employ
others as labourers, and thus by becoming a
master make slaves of others under the name of
workmen, to take from them the produce of
their labour, to maintain themselves in idle-
ness and luxury while their slaves were gi-ound
down to the earth or left to starve. They .Jj
denounced every one who dissented from these m
notions as a political economist under which
appellation was included the notion of a bitter
foe to the working classes — enemies who
deserved no mercy at their hands."
Place also gives a good specimen of their
teaching in a song published about this time —
" Wages should form the price of goods,
Yes, wages should be all ;
Then we who work to make the goods
Should justly have them all.
But, if the price be made of rent.
Tithes, taxes, profits all,
Then we who work to make the goods
Shall have — just none at all. "
From among these men came Lovett, Cleave,
Hetherington, and others who were afterwards
leaders of the Chartist movement. It is signifi-
cant that their organisation was called success-
ively the "British Association for Co-operative
Knowledge " (i. e. of Robert Owen's principles) in j
1829; "The Metropolitan Trades Union "in M
1830, when one of their declared objects was 1
to "enhance the value of labour by diminish-
ing the hours of employment," and "The
National Union of the Working Classes," for
nbminally political purposes, in 1831.
CHASTELLUX— CHEQUES
273
After the complete failure of the chartist
movement in 1848, working-class reformers
generally returned to the work of co-operation
and trade-unionism, so that the economic side
of the agitation which carried the Reform Bills
of 1867 and 1884 was not so apparent as the
political side. But the bill of 1 867 was opposed
on economic grounds by Robert Lowe (afterwards
Lord Sherbrooke), Lord Shaftesbury, and others.
Lord Shaftesbury on that occasion said : —
**I am sure that a large proportion of the
'working classes have a deep and solemn convic-
'tion — and I have found it among working
people of religious views — that property is not
distributed as property ought to be ; that some
checks ought to be kept on the accumulation of
property in single hands ; that to take away,
by a legislative enactment, that which is in
excess, with a view to bestow it on those who
have insufficient means, is not a breach of any
law, human or divine."
[Authorities as above, and William Lovett's
Autobiography. — Bamford's Life of a Radical. —
The Anntud Register, and Hansard's Parlia-
mentary Debates. — Scribner's Century Magazine,
January 1882.] aw.
CHASTELLUX, FiiANgois Jean, Marquis
de, born at Paris 1734, died 1788. By pro-
fession a soldier, he was received, 1755, into
the Academie franraise, a distinction which he
owed to the success of his principal work, De
la fdicitd puhlique ou considerations sur le sort
des hommes dans les diffdrcntes 6poquesde Vliistoire
(1st ed. 1772, 2 vols, in 8vo ; 2d ed. 1776, 2
vols, in 8vo ; 3d ed. 1 822, 2 vols, in 8vo, with
notes by Voltaire). This work, if out of date
in form, is yet full of ideas which would do
no discredit to a book of our own times. In
particular he discussed the question of the
population a quarter of a century earlier than
Malthus, and from the same point of view as
that distinguished economist. A. c. f.
CHATTEL or Chattel Personal. Any
movable thing which can be part of a person's
property. The expression "chattels real" is
applied to interests in land granted for a fixed
number of years, as, for instance, leasehold
interests. Chattels real are thus classed with
ordinary chattels (with which they have other-
wise nothing in common), because after the
death of an intestate owner the devolution is in
both cases the same, while the descent of im-
movable freehold property is regulated in a
different manner. This somewhat anomalous
and artificial distinction may soon disappear
and the expression * ' chattels real " will then,
no doubt, become obsolete. E. s.
CHECKS ON Population. According to
the theory of Malthus (g'.'W.), population
invariably increases when the means of sub-
sistence increase unless prevented by some
powerful and obvious checks. These checks, and
the checks which repress the superior power
VOL. I.
of population and keep its effects on a level
with the means of subsistence, are all resolvable
into moral restraint, vice, and misery. These
checks are classified as preventive and positive ;
by the former the birth-rate is diminished, by
the latter the death-rate is increased. Person-
ally Malthus was the strongest supporter of
moral restraint as exemplified in late and
provident marriages, and he makes no mention
even of those physical cheeks with which, in
the present day, his name is often associated
{e.g. by the late Mr. Bradlaugli).
[Malthus, Essay on Popidation. — Doubleday's
Ti^e Theory of Population, London, 1846. —
Bonar, Malthus and his Work. ] J. s. N.
CHEQUES, Law of. The law relating to
cheques is now mainly contained in §§ 73 to 82
of the Bills of Exchange Act 1882 (45 & 46
Vict. c. 61), which codifies the law relating to
bills, notes, and cheques. A cheque may be
described as an order by a customer to his
banker to pay on demand a given sum of money
to, or to the order of, a specified person, or to
bearer. Its strict legal definition is contained
in § 73 of the act, and is as follows: **A
cheque is a bill of exchange drawn on a banker
payable on demand." The section then goes
on to enact that, subject to the special rules
contained in §§ 74 to 82, the provisions of the
act applicable to bills payable on demand shall
apply to cheques. It follows from this enact-
ment that the paying banker is not bound to
verify the indorsements on a cheque (§ 60),
though he pays at his own risk if the drawer's
signature be forged ; that a cheque is not entitled
to days of grace (§ 14) ; that the expenses of
noting a dishonoured cheque are recoverable
(§ 57) ; and that notice of dishonour must be
given to the drawer and indorsers unless excused
under § 50 of the Act. A cheque should be
stamped with a penny stamp in the same
manner as any other bill payable on demand.
When a banker opens an account with a
customer the relationship between them is that
of debtor and creditor, with a superadded obli-
gation on the part of the banker to honour his
customer's cheques as long as there is sufficient
money to his credit to meet them. The right
to overdraw only arises from special agreement.
A banker's authority to pay his customer's
cheques may be determined by countermand of
payment, by notice of the customer's death,
or that he has committed an actual act of
bankruptcy, or by the fact that a leceiving
order has been made against him. If a banker
wrongfully dishonours his customer's cheque,
he is liable to the customer in an action for
damages, and it has been said that the smaller
the cheque the greater the wrong, inasmuch as
it implies a greater reflection on the customer's
credit. The holder of a cheque which is wrong-
fully dishonoured has no remedy against the
banker, for there is no privity of contract
T
274
CHEQUES— CHEVAGE
between them, and a cheque, being a bill of
exchange, does not, according to English law,
operate as an assignment of the funds in the
banker's hands, even though it be drawn for
the exact amount of the customer's balance
(see, however, § 53 as to Scotland).
Though a cheque is an instrument intended
for prompt presentment, the drawer, in case of
delay, is not relieved from his obligation to the
holder unless he suffers actual damage through
the delay, as, for instance, through the failure
of the bank on which the cheque was drawn.
In such case the drawer is discharged to the
extent that he has been damnified, but the
holder is allowed to take the drawer's place in
proving against the bank (§ 74).
Crossed Cheques. The practice of crossing
cheques first received legislative recognition by
the statute 19 & 20 Vict. c. 25. This act
was amended by the 21 & 22 Vict. c. 79, in
consequence of a decision to the effect that the
crossing was not an integi-al part of the cheque.
In a case decided in 1875 it was held that if a
crossed cheque was stolen and got into the
hands of a bona fide holder, the true owner had
no remedy, even though the cheque was paid
in contravention of the crossing directions. To
meet this defect the Crossed Cheques Act 1876
was passed, which introduced the "not negoti-
able " crossing. These enactments are now
repealed, and §§ 75 to 82 of the Bills of Ex-
change Act take their place.
A cheque may be crossed either generally or
specially. A general crossing makes it payable
only when presented through a bank, but any
bank will do. A special crossing names the
bank by which the cheque must be presented.
A cheque may be crossed either by the drawer
or by the holder, and the holder may convert
a general crossing into a special crossing.
When a cheque is crossed specially the banker
to whom it is crossed may again cross it speci-
ally to another banker for collection, but a
cheque must not otherwise bear two crossings.
A collecting banker is also allowed to cross to
himself an uncrossed or generally crossed cheque.
If a crossed cheque be paid contrary to the
directions of the crossing, the paying banker is
liable to the true owner for any loss he may
sustain thereby. A cheque which is crossed
either generally or specially may further be
crossed with the words "not negotiable."
These words are a little misleading. They do
not mean that the cheque is no longer transfer-
able. The cheque may be transferred as before,
but the person who takes it with these words
on it does not obtain, and is not capable of
giving, any better title to the cheque than that
which the person from whom he took it had.
A cheque so crossed is very much on the same
footing as an overdue bill of exchange. Sup-
pose a cheque payable to bearer and crossed
"not negotiable" is stolen. The thief gets a
tradesman to cash it for him, and the trades-
man passes the cheque through his bank and
gets it paid. The paying and collecting banka
would incur no liability if they obeyed the
directions of the crossing, but the tradesman
would be liable to refund the money to the
true owner ; or again, assuming payment of the
cheque to have been stopped, he could not sue
the drawer. For further information as to
cheques, see the headings Bill of Exchange ;
Clearing System ; Dividend Warrant.
^ M. D. c.
CHERBULIEZ, Antoine Elys^e, bom at
Geneva 1797, died at Zurich 1869. Originally
a barrister, then a magistrate, he replaced Rossi,
1833, at the academy of Geneva as professor of
law {droit), and, 1835, as professor of political
economy. His first works were political, as he
was a member of the legislature of the canton
from 1831 to 1846, then of the representative
council, and finally of the general assembly and
great council up to 1848. His political works
are TMorie des garanties constitutionnelles (2
vols, in 8vo, 1839) ; J^tvdes sur la loi 6lectorale
delSSl (in 8vo, 1840) ; finally, Z>g laD6mocratie
en Suisse (2 vols, in 8vo, 1845). But it was
especially as an economist that he made his
mark, and his works on this branch of study
are much valued. By 1840 he published Riche
ou Pauvre, exposition succinate des causes et des
effets de la distribution aduelle des richesses
sociales (in 8vo). Then after 1848, the date
when he fixed himself in France, Ze socialisme
c'est la barbarie, an examination of the social
questions raised by the revolution of 24th Febru-
ary 1848 (in 8vo, 1848). Simples notions de
I'ordre social, for the use of every one (in 18mo,
1848). Le potage A la tortus, popular conversa-
tions on social questions (in 18mo, 1849).
Finally J^tude sur les causes de la misere tant
morale que physique, and on the means of
remedying them (1 vol. in 8vo, 1853). He was
a very active member of the Political Economy
Society. He returned to Switzerland at the
time of the coup d'6tat of 1851, and was im-
mediately appointed to the chair of political
economy at Zurich at the polytechnic federal
school of Switzerland. It was while thus en-
gaged (in 1862) that Cherbuliez wrote his most
important work — Pr6cis de la science 4conomique
et de ses principales applications (2 vols, in 8vo) ;
the value of which was recognised by the insti-
tute of France, and led to his election as a cor-
responding member. Cherbuliez also assisted
in the preparation of the Bibliothhqus universelle
de Genbve in which, and in the Journal des £ccm-
omistes, he wrote numerous articles, a. c. f.
CHEVAGE. The use of this word in
mediaeval documents is a little vague, and in
consequence the exact sense in which it is em-
ployed is not always clear. Bracton, at page 48
of vol. i., describes chevage as a fixed payment
to the lord made at fixed times by " nativi " or
CHEVAGE— CHEVALIER
275
bondmen who are engaged in trade, or as
soldiers, or who, from any other reason, have
ceased to reside on the lord's manor ; this pay-
ment is "made as a sign of subjection," and
' ' so long as the bondmen pay chevage they are
said to be in the power of the lord, nor is his
power destroyed," even though they cease to
reside on the manor. Britton, bk. i. c, 32,
gives a slightly different account but does not
define chevage. He says '* that in order that
the lord may retain his power over his bond-
men, it is only necessary that he be in
possession of their services, so that he may take
services from their holdings, and from those
who hold no land in villenage may take a
penny a year of * chefage ' and a day's work in
harvest time, or other little or great service
according to their ability." It is clear from
this passage that chevage was a payment
made by a man of villein status, who was for
some reason not in the ordinary position of a
villein, and that it was made either in return
for the privilege of being allowed to reside olf
the manor, or merely as a recognition of the
fact that, although he had no holding in the
manor like other villeins, he was nevertheless
one of the lord's bondmen. An instance of
the first kind of chevage can be found in
the account of the manor of Ansty for the year
2 & 3 Henry IV., which is printed at })age
521 of Cunningham's Growth of English
History mid Commerce, ed. 1890. The
amount paid for licence to leave the manor for
a time is one shilling in one case, and sixpence
in another. But in many manorial accounts
an enti-y can be found of the chevage of a whole
manor, and it is probable that if this meant a
payment for leave to remain off the manor, the
name of the person making the payment would
have been given. It is not possible to speak
definitely on the point. Britton clearly
suggests the existence of a class of villeins out-
side the land organisation of the manor, and,
from a comparison of his account with Bracton's,
it would appear that the class of villeins not
included in the manor as landholders grew up
in the time which elapsed between the two
writers. (See Villanus.)
In the court rolls of some manors the word
occurs in yet another sense. Strictly speaking
all the villein tenants of a manor were bound
to appear at the manorial court to assist in the
decision of the matters discussed there. But
in some manors a kind of representative system
was in use, under which each tithing or group
of tenants was represented at the court by its
chief man ; and for this privilege of attending
the manor court by deputy a payment at the
opening of each court was made to the lord ; to
which the name of chevage is sometimes given.
For instance in the court roll of the manor of
Hemingford printed at page 88 of Prof. Maitland's
Select Pleas of Manorial Courts, the persons
who attend the court give as chevage 13s. 4d
Other instances of this payment are given in the
same book. The poll-tax paid by the Jews before
their expulsion from England was sometimes also
called chevage.
[Bracton, De Legibus Anglice (Rolls Series,
1878).— Britton, edited by F. M. Nicholls, 1865.
— Select Pleas in Manorial Courts, vol. i. edited by
F. M. Maitland (Selden Society), 1^%%.— Growth
of English Industry and Commerce, Cunningham,
1890.] c. G. c.
CHEVALIER, Michel, born at Limoges
1806, died at the Chateau de Montj)laisir near
Lodeve (Herault) 1879. Having distinguished
himself at the polytechnic school, he commenced
life in the departevient du nord as a mining
engineer, a post which he gave up in 1829 to
join Saint-Simonism (q.v.) His style, the
brilliancy of which was early recognised, won
for him the position of editor-in-chief of the
Globe, the organ of that school of socialism of
which he rapidly became one of the most active
and influential members. Faithful, through
the troubles which ensued, to the Saint-Simonian
faith, he was condemned, 28th August 1832, to
a year's imprisonment and one hundred francs
(£4) fine, as the responsible agent of the Globe,
in which articles appeared which were accused
of being outrages on public morality. His in-
tentions were worthy, and his habits of life more
strict than appearances would have led the world
to suppose ; hence the government itself, which
discovered at this time M. Chevalier's abilities,
remitted half the penalty, and also entrusted
to him the mission of studying the railways of
the United States. It is enough to say of the
labours of our economist in this direction that in
a memoir entitled the Systhne de la MMiteri-anee
(1832, in 8vo), he foresaw with rare intelligence
the future of these new methods of communica-
tion. He sent from America to the Journal des
D6hats, which had taken him on its staff even
while he was in prison, articles which, pub-
lished in two volumes, furnish a collection
of the highest value, even after the lapse of
fifty years — the Lettres sur VAmdrique du
nord (2 vols, in 8vo, 1836). He commenced
also at this date to write in the Remie des
Deux Mondes. Soon after his return from
America he published, as the result of his
mission, the Histoire et Description des voies de
cmnmunication aux J^tats-Unis et des Travaux
qui en dependent (1840, 2 vols, in 4to), with
an atlas in folio.
His pen, from this date, was able to render
aU the subjects which it treated interesting ;
but his judgment, especially on its economic side,
only formed itself into shape gi-adually. The
successive stages through which he passed are
all the more obvious in his writings, as with a
rare sincerity, he never sought to cloak them
from view. A volume in 18mo, Des Int^rSts
mat^riels en France, — on public works, roads,
canals, railways, — appeared in 1838, bringing
276
CHEVALIE]
ioto one series those articles of his which had
appeared before on these different subjects.
M. Chevalier intended to have completed
this volume, which put forward a kind of
economic programme, by adding to it two
other parts , credit institutions and those
which supply professional education. This
idea, unfortunately, was never realised. De-
voted to peace, he opposed, in a pamphlet
addressed to M. Mole, the fortifications of
Paris. He replaced, 1841, Rossi at the College
de France in the chair of political economy.
The lectures of the two first years, taken down
in shorthand by one of his pupils, Michel
Broet, form the material of two volumes in
8vo, which appeared in 1842 and 1844 (1st ed.),
and in 1855 and 1856 (2d ed.) One can see,
by reading each volume alternatively in the
first and the second editions, what the modi-
fications were which the judgment of the author
passed through, gradually and almost uncon-
sciously, as the years of his professional work
went by.
Thus, to quote only one example, freedom of
competition at first inspired him with alarm,
and caused him to advocate reservations, the
necessity of which he no longer felt in 1855
and 1856. We may add that in 1850 a third
volume of his lectures appeared, of which a
second edition was published in 1866. The
subject was La Monnaie ; the work is full of
technical details of the highest interest, and
written with a masterly hand. In 1845 he
was elected a deputy by the department of
I'Aveyron ; but his resolute acceptance of the
principle of free trade hindered him from being
re-elected the next year.
The Revolution of 1848, which Chevalier
submitted to rather than joined, found him none
the less disposed to combat courageously, step
by step, the socialistic errors which triumphed at
the Luxembourg in the Commission du gouverne-
mentpour les travailleurs, presided over by Louis
Blanc. He wrote at that time in the Journal
des Dihats a series of letters called Lettres sur
V organisation du travail, which, collected under
this title, form a stout volume in 18mo. This
and the Lettres sur VAmirique du nord, may be
considered as the most characteristic and remark-
able works of this author. The result of the
appearance of these letters, written off-hand,
and under the pressure of the events which were
happening around him, was a decree from the
government suspending him from lecturing at
the College de France. The AssembUe constitu-
■ante annulled this decree the December following,
and Michel Chevalier was able to return to his
chair.
The Institut {Acadimie des Sciences morales
et politiques) opened its doors to him February
1851. At the end of that year he gave in his
adhesion to the government of the Coup d'etat,
following in this rather his judgment than his
inclination. He believed liberty to be more in
peril under the class of parliamentary govern-
ment of which he had seen the working, than
under a personal government. Called to the
council of state February 1852, he had to ask for
a substitute to give in his stead his course of
lectures at the College de France. It was M.
Henri Baudrillart who undertook this duty
for him. At the same date M. Chevalier
published the Mmvun du syst^me commercial
connu sous le nom de syst^me protecteur (in 8vo. ),
a work in which protectionism was demolished
completely, and the advantage of commercial
liberty shown.
Immediately after this he rendered the last-
named cause a service of a very different char-
acter. Holding as he did the same opinions as
Richard Cobden, whom he presented in 1859 to
the emperor, he induced Napoleon III. to sign
the famous commercial treaty with England of
23d January 1860, which was the precursor
of the French treaty of 1'861 with Belgium, of
1862 with the ZoUverein, of 1863 with Italy, of
1864 with Switzerland, of 1865 with Sweden
and Norway, the free cities of Bremen, Lubeck,
and Hamburg, and the grand -duchies of
Mecklenburg -Schwerin, Strelitz, and Holland,
of 1866 Vith Portugal, then with Austria,
and finally of 1866 with the pontifical states.
These treaties introduced, so to say, free trade
into the public international law of Europe.
But this system is at the present time destroyed
in France, where protectionism has struck its
roots afresh, and causes all consumers to
pay toll for the advantage of the privileged
producers.
In 1859 Michel Chevalier published a new
volume with the significant title, De la baisse
probable de I'or (in 8vo). It was translated into
English by Cobden in the same year. Facts,
as is well known, have shown he was wrong in
his opinion on this point.
He strove later against Louis Wolowski in
favour of the single standard (gold, this time)
against the system of a double standard com-
bined with a fixed ratio. The question of the
banks became also in his hands the occasion
for a vigorous contest. Wolowski strove for
the unity of banks, Michel Chevalier for their
duality (1864). He resumed his duties as
professor in 1866, and carried them on till
1878, when he took afresh a coadjutor, this
time one of his sons-in-law, M. Paul Leroy-
Beaulieu, who was destined, after his death,
to become his successor.
A strong supporter of exhibitions, especially
of universal exhibitions, he wrote a brilliant
introduction, in 8vo, to the reports of several
juries of the magnificent industiial and inter-
national/^te which took place at Paris in 1867.
This economist, though his natural predilee-
tions for the less rigid side of economic science
were too strongly marked, is justly reckoned
CHICKERINQ— CHILDREN'S LABOUR
277
on account of his strictly scientinc exactness,
his brilliant style, and the depth of his views,
among the highest of his class in France. His
pen was most fertile, but we have only thought
it needful to enumerate above his chief works.
A. c. f.
CHIOKERING, Jesse, M.D., born in New
Hampshire 1797 ; entered the Unitarian minis-
try, then practised medicine, and died in West
Roxbury, Massachusetts, 1855. He was in-
terested in statistical inquiries and published
A Statistical View of the Population of Massa-
chusetts, from 1765 to I84O, Boston, 1846,
pp. 160 ; — Immigration into the United States,
Boston, 1848, pp. 94, in which he questions
whether too much encouragement has not been
given to immigration to the United States ;
and also Comparative View of tM Population of
Boston in 1850, ivith the Births, Marriages,
and Deaths, in 1849 and 1850, Boston, 1851,
pp. 7-58. D. R. D.
CHIEF RENT. See Rent-Charge.
CHILD, Sir Josiah (born 1630, died 1699),
the chairman, and virtually the ruler, of the East
India Company for some years. He aimed at
aggrandising the Company by extending its
political power, and restraining competition
with its trade. Several anonymous Avritings in
defence of the Company are attributed to Child.
Under the sobriquet ^tXoTrdrpts (sic) (1681) he
maintains that "the clamours, aspersions, and
objections made against the present East India
Company are sinister, selfish, or gi'oundless, "
While contending that "the trade of the East j
Indies cannot be carried on to a national advan-
tage in any other way than by a joint stock," he
enumerates many enlightened principles, as that
"silver and gold, coined or uncoined, though
they are used as a measure of all other things,
are no less a commodity than wine, oil, tobacco,
cloth, or stutf, and may in many cases be
exported as much to national advantage as
any other commodity. That no nation ever
was or will be considerable in trade that pro-
hibits the export of bullion." In the Humble
Answer of the Governor ... to a Paper of Pro-
positions for Regulation of the East India Com-
pany . . . (Somers's Collection of Tracts, vol.
iii.), "the great monopolist," as Macaulay says,
"took his stand on the principle of free trade."
Similar antinomies, as they appear to our age,
are noticeable in Child's principal work, the
Discourse itpon Trade. He asserts the j)rinciple
of competition, the law of market, thus unequi-
vocally : "They that can give the best price
for a commodity shall never fail to have it,
by one means or another, notwithstanding the
opposition of any laws, or interposition of any
power by sea or land ; of such force, subtlety,
and violence is the general course of trade"
(chap, viii.) Yet the panacea, the."unum
magnum," which is recommended is a legalised
rate of interest. Child admits, with regard to
the navigation laws, that unrestricted commerce
might be best "if the present profit of the
generality be barely and singly considered " ;
but holds that " profit and power ought joyntly
to be considered " (chap, iv.) (This was also
his contention.) He^ considers that the doe-
trine of the balance of trade does not apply
to the trade with East India, "both in point
of strength and warlike provisions, in regard
of shij^ping and saltpetre, but [and] also in
respect of the furtherance it gives to many
other trades," by means of which England
regains more specie than the company exports
(chap, ix.) But the trade with Venice in
"currance purchased with our ready money"
is to be discouraged. "Concerning plantations"
(chap. X.), Child argues, in a manner worthy
of Malthus, that the colonies have not caused
the depopulation of the kingdom. It is a more
disputable proposition that "most nations in
the civilised parts of the world are more or less
rich or poor proportionable to the paucity or
plenty of their people." Equally instructive is
Cliild's scheme for the relief and employment of
the poor (chap, ii.) There is a spirited criti-
cism of this scheme in Eden's State of the Poor.
The first draft of this work was published in
1668. The original title appears to have been
Brief Observations Concerning Trade and Interest
of Money (British Museum Library ^^^), This
tract was reissued in a later edition, together
with a preface and ten additional chapters ; the
whole work being designated by the title The
New Discourse of Trade.
[Macaulay's History of England, vol. iv. — R.
Grant's Sketch of the History of the East India
Company. — Macpherson's History of Covimerce.,
vol. ii.] F. Y. E.
CHILDREN'S LABOUR (Factory Acts).
Few records exist anterior to the rise of the
factory system which throw light upon the
conditions attending the labour of children.
Lord ]\Iacaulay {History of England, ch. iii.),
states that in the 17th century, the practice of
setting children to work prematurely existed
"to an extent which, Avhen compared with the
extent of the manufacturing system, seems al-
most incredible. At Norwich, the chief seat of
the clothing trade, a little creature of six years
old was thouglit fit to labour." In 1677, a
Worcestershire ironmaster, Andrew Yarranton,
published a pamphlet entitled "England's Im-
})rovement by Land and Sea," in which the
schools then existing "in all the towns of
Germany," for the purpose of training girls
in the art of spinning linen, are described
Children of six years old and upwards were,
sometimes to the number of two hundred in
a single room, systematically employed in this
industry, producing large quantities of excellent
yarn. The writer lu-ged that efforts should be
'made to follow the German plan in England,
especially in the counties of Warwick, Leicester
278
CHILDREN'S LABOUR
Northampton and Oxford. His advice was, how-
ever, not adopted. About the beginning of the
1 7th century the manufacture of lace by machin-
ery was introduced into this country by refugees
from the Continent. In Bedfordshire and Buck-
inghamshire, schools were established for teach-
ing the art to young children (Felkin's ISistory
of Machine- Wrought Hosiery and Lace Manu-
factures, 1867). But throughout the greater
part of that century the manufacture of textile
fabrics was mainly a domestic industry, and the
children of the household were compelled to
labour long and hard. Dr. Cooke Taylor {Silk,
Cotton, and Woollen Manufacture) holds that
the system of overworJcing children " was at its
worst and greatest height long before anybody
thought of a factory." Probably the most com-
prehensive account of the employment of juvenile
labour in productive industry before the rise of
the factory system is to be found in Mr. R.
Whateley Cooke Taylor's Introduction to a His-
tory of the Factory System.
The latter half of the 18th century witnessed
a number of remarkable inventions, each of
which aided in the establishment and spread of
that highly organised method of industry known
as the factory system. The discovery of the
spinning machine, of the mechanical loom, of
the steam engine, of the cotton gin, of the
calico-printing machine, and of coal gas for
illuminating purposes, successively tended to
the aggregation of workpeople in textile manu-
factories. They aided too in that separation of
processes, known as the "division of labour,"
which opened the way for an extensive employ-
ment of children in the lighter and simpler pro-
cesses calling rather for dexterity than strength.
But it was not alone in the textile manufac-
tures that this conversion of domestic into factory
industry was going on. It gradually spread
into other productive departments. Unquestion-
ably, however, it was in the textile occupations
that the growing employment of infantile labour,
and the abuses accompanying it, first drew public
attention to the necessity of factory legislation.
In Lancashire and Derbyshire the rapid increase
of the cotton manufacture created a great de-
mand for labour, and the population grew faster
than the means of decent habitation. There
was consequently much overcrowding, and the
mills themselves were unhealthy, whilst the
labour was long and exhausting. Large num-
bers of pauper children were brought from
southern parishes, where the local authorities
were glad to get rid of them, and the accom-
modation provided for these young and over-
(vorked immigrants was very defective. The
result was a serious epidemic disease, which at
the close of last century wrought great havoc
amongst the factory population, and especially
amongst the children. In 1802, therefore, the
first factory act (the Health and Morals Act)
was passed. However, beyond ordaining some
sanitary regulations of a general kind, the act
did not apply to others besides the apprenticed
children, drawn chiefly, as already stated, from
distant portions of the country. Children ol
families living near the factories were still sub-
ject to oppressive treatment, their parents being
as a rule regardless of their health. The need
of further interference being demonstrated by
an inquiry conducted by parliament in 1815-
1816, a second act was passed in 1819, but its
operation was confined to cotton mills. No
child might begin to work under nine years
old, and between that limit and sixteen years
the hours of labour were not to exceed twelve
per day, and night work was prohibited. The
next act, that of 1825, restricted the labour of
children to nine hours per day, and these were
not to extend beyond five o'clock in the morn-
ing and half-past four in the afternoon. Still
further, meal hours were carefully defined, and
employers were, for the first time, compelled to
keep a register of the children working for
them. Then came the early days of the trade
unions, which were marked by much violence,
the issue of which was the Act of 1st and 2d
William IV. c. 39, consolidating and improving
previous factory acts, but without afiecting very
seriously the status of children. Later on, how-
ever. Lord Althorp's Act of 1833 defined the
ages at which boys and girls might be allowed
to work in factories as that of nine years. Be-
tween that age and thirteen years children were
to work only nine hours, and were to attend
school during two hours. Thus the "half
time" system was introduced, which was im-
proved in 1844 by Sir Robert Peel's act. That
measure provided that children of eight (no
longer nine) years of age and up to thirteen
might be employed for six and a half hours
only, and three days' attendance at school pel
week was required. Afterwards protective legis-
lation for children was further improved and
extended by the Factory Extension Act, and
the Workshop Regulation Act. (1878 (Con-
solidation) Factory and Workshop Act.) Not
only textile and other factories in which large
numbers of workpeople are employed, but also
small industrial establishments, were brought
under governmental control. The regulations
of the Workshops Act were placed under the
control of local authorities. The intention
was to ascertain by experiment how far local
control might prove equal or superior to central
administration. Practically the act was ignored
by the local authorities, and further legislation
was deemed necessary. This has tended rather
in the direction of extending the protection of
the law to children in various occupations not
coming within the factory system, than of in-
creasing the restrictions upon the employment «
of youthful labour. The act (1889) for the]
prevention of cruelty to children gave to those
employed in theatrical and other entertainments
CHIMINAGE— CHREMATISTIC
279
the benefit of the factory acts. That of 1904 i
forbade children to sing, perform, or offer
things for sale in any public place without a
licence, licences being only granted to children
over 10 and under stringent conditions. It
forbids, as did the Children's Dangerous Per-
formances Act, 1879 (amended 1897), the train-
ing of children under 16 as acrobats or for any
dangerous performance. The act 1908 made
the punishments for misdemeanours under these
headings still more severe. Similar legislation
has been gradually adopted in foreign countries.
In France, the desire to protect young children
from exhausting labour has taken practical shape
in recent enactments. In the United States
labour is regulated by the several state legis-
latures. There has been in recent years a steady
tendency in several states, stimulated by the
reports of the various " bureaus of statistics
of labour," to provide for the protection of
children employed in industry. e. h,
CHIMINAGE. Among the special revenues
arising from the exceptional position of forest
land was a toll on traffic known as chiminage
(Forests, Medi/Eval). The law naming
those from whom such toll could be taken, and
its amount, is to be found in the Charter of
the Forest, 9 Henry III. § 14. The special
mention of this toll suggests that it had been
made an excuse for unreasonable exaction before
the issue of the charter. Under the law so
settled no forester is allowed to take chiminage
unless he holds his office in fee by the payment
of a rent for it ; no persons but those who come
into the forest to buy brushwood, timber, or char-
coal to sell again are to be liable to pay the toll ;
and all other travellers and even those who came
to fetch away brushwood on their own backs
without the use of beasts or carts were to pass
free. The amount of the toll was fixed at two-
pence for each cart for each half-year, and one
halfpenny for each horse. The toll so limited
seems to have formed no grievance, and its
amount is usually unimportant. For instance in
Sherwood forest in the 15tli century the chimin-
age is farmed out at 6s. 8d. a year. The word
is sometimes used for any toU paid for passing
along a road.
[Manwood's Forest Law (4th ed.), 1717. —
Records of the Borough of Nottingham^ vol. ii.,
1883. — Dr. Murray's New English Dictionary^ s.v.,
1889.] CO. c.
CHITTI, LuiGi, by birth an Italian, passed
the greatest part of his life abroad ; tlds ex-
plains how he came to write his books always
in French. In 1833 he published a Cours
d'^conomie politiqtce and in 1839 at Brussels,
a pamphlet — Des crises financieres et de la r6forme
du Systhme MovAtaire. He had occasion to ob-
serve a very severe monetary crisis in Belgium,
the origin of which he assigns to excessive
emissions of paper money. He proposes the
gradual abolition of metallic money, substitut-
ing paper money for it, which, if only not
superabundant, cannot become depreciated, a
doctrine which is clearly taken from Ricardo's
Reply to Mr. Bosanquet. Chitti proves himself
to be well versed in questions of capital, credit,
money, exchange, but is no original thinker.
M. p.
CHOROGRAM. "A chorogram is the
result when different aggregates are indicated by
surfaces, showing the size of each, and portions
of the surface are coloured or shaded differently
to indicate the result of the enumeration in
each aggregate. It can be profitably employed
to show the different degrees of the occurrence
of a single phenomenon in different aggregates."
^Annals of the American Academy, Supplement
May 1891, '* The History, Theory, aud Technique
of Statistics," by A. Meitzen.]
(See Graphical Method.)
CHOSES IN ACTION. The term applied
by early lawyers to rights of action.
Choses in action were not at common law
assignable except in the case of bills of exchange
and other negotiable instruments which by the
custom of merchants were assignable by indorse-
ment and delivery of the bills. In the reign
of Henry VIII. it was held that a chose in
action might be assigned as satisfaction for a
debt, the assignee to sue if necessary in the
assignor's name. Afterwards by various statutes
promissory notes, bills of lading, and life and
sea policies of assurance were made assignable,
but it was not until the 36 & 37 Vict. c. QQ,
25 (6), that it was provided generally that a
chose in action may be assigned. The
assignment must be in Avriting, and notice of
the assignment has to be given to the person
liable to pay the debt.
A right of action conferred by a suit in equity
was always assignable in equity.
[Principles of the Law of Personal Property ^ by
J. Williams, London, 1887.] J. e. c. M.
CHOSES IN POSSESSION. Movable
tangible property, as opposed to rights of action
which are called choses in action. Property of
this nature could not at common law be held
by estates though settlements were always
enforced in equity. As compared with real
property, choses in possession descend to the
administrator or executor, and not to the heir,
but title deeds, heirlooms, fixtures and chattels
vegetable are exceptions to the rule, as they
partake of the nature of real property.
[Williams's Personal Property, London, 1887.]
J. E. 0. M.
CHREMATISTIC (or Money- making). The
locus classicus on chrematistic is in the Politics
of Aristotle, bk. i. ch. viii. -xi. The passage is
somewhat obscure, from the nice distinctions
dwelt on ; but the general purport is that there
are two sorts of chrematistic — one natural and
necessary, being the art of acquiring the material
resources to be placed at the disposal of, and
280
CHRISTIAN SOCIALISM— CHRISTIANITY AND ECONOMICS
used by, the higher art of economic, of which
this kind of chrematistic is the handmaid,
whilst the other sort is devoted to the unlimited
pursuit of gain for its own sake, without rela-
tion to the real wants of the household or the
community. The word is now usually applied to
systems of theoretical or practical economy which
overlook the higher ends of society, and exclude
from consideration questions of moral obliga-
tion and political well-being (see Akistotle).
J. K. I.
CHRISTIAN SOCIALISM is a name which
properly belongs to the propagation of co-
operative production or working men's associa-
tions by F. D. Maurice and his disciples in the
years 1849 to 1853. For its use merely as a
name for socialism inspired by Christian motives
see Socialism. Its origin is to be found in a
letter from J. M. Ludlow to Maurice (March 184 8)
saying that the socialism of Paris workmen was
a real power which would shake Christianity if it
were not Christianised. After the publication
of Henry Mayhew's letters on the London poor
in the Morning Chronicle, in 1849, Maurice and
his followers at Lincoln's Inn, who had already
been trying to persuade the Chartists, in Politics
for the People (6th May to 29th July 1848), and
in discussions at the Cranbourne Tavern, that
moral and sanitary reform were of much more
importance than extension of the suffrage,
turned their attention to economic questions.
They were led to deny any beneficence to the
operation of self-interest. * * Free competition, ' '
said Ludlow, "mars everywhere, instead of
making, the wisest distribution of labour"
{Christian Socialism, p. 35). "We have pro-
tested," Maurice wrote to Dr. Jelf, 12th Nov-
ember 1851, "against the spirit of competition
and rivalry precisely because we believe it is
leading to anarchy, and must destroy at last the
property of the rich as well as the existence of
the poor " {Life, ch. ii. p. 83). As a remedy they
proposed "Christian Socialism," or friendly
association for productive purposes. They
sometimes went so far as to imagine a state of
things in which all producers might "combine
regularly into one body which should, after
mutual explanations and by mutual concert, fix
the terms upon which each member should dis-
pose of his wares to the others" (Ludlow,
Christian Socialism, p. 35) ; but they suggested
no principle of distribution on which this
agreement should be based. They founded an
association of tailors (February 1850) of which
Walter Cooper, formerly a Chartist, was manager,
and organised a society for promoting working
men's associations under a council of promoters
among whom were Maurice, Charles Kingsley,
T. Hughes, E. V. Neale, and F. J. Fumivall.
Alton Locke, which represents the ethical side
of the Christian Socialist doctrine, was pub-
lished early in 1850, and was followed by
Tracts on Christian Socialism, Tracts by Chris-
tian Socialists, and the Christian Socialist, a
weekly penny paper which lasted from 2d
November 1850 to the end of 1851. Its place
was then taken by the Journal of Association,
which endured tHl 28th June 1852. The
evidence of the "Promoters" before Slaney's
Committee of the House of Commons on "In-
vestments for the savings of the middle and
working classes" in 1850, aided in bringing
about the legalisation of co-operative societies
by the " Industrial and Provident Partnerships
Act" of 1852. After the passing of that Act
the society for promoting associations was re-
modelled and the term "Christian Socialism,"
as employed in this connection, was abandoned.
It was oftensive alike to theologians, economists,
and socialists. The hostility displayed towards
the Christian Socialists in many quarters was
more due to the name they assumed, and to the
vehemence with which Kingsley denounced com-
petition, than to dislike of their Associations,
though these were doubtless looked on with
some suspicion as copies from French models
(see Co-operation. For recent history see
Socialism, Appendix).
[F. Maurice, Life of Frederick Denison Maurice,
2 vols., 2d. ed., 1884.— T. Hughes, Prefatory
Memoir in the Eversley ed. of Alton Locke, 2 vols.,
1881. — L. TBrentano, Die christlich - soziale Be-
loegung in England, 2 Aufl., Leipzig, 1883, con-
taining bibliography, pp. 75-78. — J. M. Ludlow,
Christian Socialism and its Opponents, 1851.: —
Abp. Benson, Fishers of Men, 1894.— Dr. E. W.
Donald, The Expansion of Religion, 1896. — Bp.
Chas. Gore, The Mission of the Church, 1892.] e.c.
CHRISTIANITY AND ECONOMICS
Church, the Mediaeval, Economic Influence of, p. 280 ;
Roman Catholic School of Economics, p. 283 ; Influ-
ence of Protestant Thought on Economic Opinion
and Practice, p. 285.
CHURCH, The Medieval, Economic
Influence of. The following article is not
concerned with the origin of church property
or the title by which it is held — subjects which
belong rather to the historian or the jurist than
to the economist ; — it is limited to two points :
the influence of the church upon social ranks,
and the influence, chiefly in England, of church-
men and ecclesiastical bodies, as landowners,
upon agriculture.
1. If it be true that the mediaeval church
was always the great leveller, that the clerical
order was the one profession in which it was
possible for a man of the humblest birth to
attain to the highest position, this was less by
virtue of express enactment than in consequence
of the facts, {a) that the church remained free
from the distinctions of classes that grew up in
the civil state, and (&) that the churchman, as
the rule of celibacy became universally accepted
in Latin Christendom, could be raised to any
rank without the drawback of his founding a
family of nobles. The possibility of rising was,
it is true, not confined to churchmen : but thai
CHRISTIANITY AND ECONOMICS— THE MEDIEVAL CHURCH 281
which was the exception among the laity was
common among the clergy ; and in one import-
ant point, with respect to slavery, the exemp-
tion of the clerical status from the classes of
civil society produced a remarkable relaxation
of class conditions.
It was not, however, for many centuries that
it became the accepted doctrine that an
ordained person was ipso facto a free man. At
first the only question that arose was that,
when a slave was ordained or received into a
monastery, his lord was robbed of his service.
Accordingly, by a number of ordinances con-
tained in the civil law {Cod. i. tit. iii. 37 ;
Novell. V. 2, cxxiii. 35), and reinforced by
ecclesiastical decrees which became incorporated
in the canon law, it was repeatedly laid down
that no bishop should ordain a slave without
the consent of his lord. The rule was not
merely intended to protect the lord's rights : it
was found also that slaves guilty of crime
availed themselves of the refuge alforded by
holy orders or admission to a monastery to
escape punishment ; and churchmen on their
side — St. Leo the Great is a prominent instance
— objected to the clerical profession being
"defiled by the baseness of association" with
slaves {Can. apost. Ixxxi. (cp. Cone. Chalced.
A.D. 451, can. iv.) ; Leo 1. Epist. iv. 1).
If, however, in the fifth century it could be
conceived as possible that a man might be a
clergyman and yet a slave, this idea early gave
way before another which presumed that if a
slave were ordained with the knowledge of his
lord, and without any objection raised by him,
he was a free man, though not formally manu-
mitted. It was still, however, conceded that
supposing the lord were not aware of the act,
he had a right to claim his slave within the
space of a year : and that ordination did not
for a long time involve of itself emancipation
is shown by the enactments in the civil law,
that, supposing an ordained slave retm-ns to
secular pursuits, his lord may claim him ; and
that it was lawful to ordain a bondman bound
to the soil on his lord's land even without his
lord's consent, so long as he continued to fulfil
his servile duties {Novell, cxxiii. 17). This
latter rule was soon modified by the provision
that the ordained person might perform his
services by a deputy {Novell., I.e. ; cp. gloss, in
God. i. tit. iii. 37) — an arrangement which
was accepted by ecclesiastical authority ; but on
this side it was maintained that in no case
could a man in priest's orders be claimed back
as a slave (Gelas. I., epistt. in Deer. Grat., dist.
liv. 9-11).
So far, therefore, it appears that it was the
lord's assent, express or implicit, which made
the clerk free ; that, failing such assent, the
lord was compensated by substituted service ;
and that a distinction made itself felt between '
priest's orders and the inferior degi-ees which
admitted a very large and heterogeneous com-
pany of ordained persons to ecclesiastical
privileges. It was unquestionably the admis-
sion of slaves to the lower orders which led to
the gi-avest abuses ; and the prohibition of the
ordination of slaves without their lord's consent,
which is repeated through Frankish times,
(Karol. Magn. Admon. gen. (a. 789), cap. Ivii.
(cp. cap. xxiii.) ; Hludow. Pii, Capit. eccl. (a.
818-819), cap. vi.), and of which a famous
instance occurs in the sixteenth constitution- of
Clarendon {Const. Clar. xvi., c]). Stubbs, Sel,
Charters {ed. 5, 1884), p. 137 ; Assis. Clar. xx.i),
was directed principally against this practice.
Not merely were the lord's rights infringed, but
persons of suspicious character were able to
remove themselves from the ordinary jurisdic-
tion of the country. In spite, however, of
positive enactments, the view that a priest was
necessarily free became extended to the diaconate
and the inferior orders ; and the petition of
the commons in 1391 that the villeins miglit
not be allowed to send their sous to school in
order to raise them by holy orders {qe null neif
on vileyn met scs enfantz de cy en avant a cscoles
2)ur eux arancer par clergic) {Hot. Pari. iii. 294,
cp. Rogers, Hist, of Agric. and Prices (1866), i.
78, 93) may be taken as proof that by that time
the result was established.
With reference to the influence of the church
upon slavery outside its own body, there can
be little doubt that the humaner piinciples of
jurisprudence by which, at least in England, it
was guided were favourable to the bondman (cp.
Theodor, Penit. xiii. 3 ; Egbert, Penit. Addit. 35).
Alike in Francia and in England ordinances
were passed moderating the abuses of the slave-
trade (Freeman, Norm. Conq. i. (ed. 3, 1877) 335
seq., 435), and in these the h;i,nd of the church-
men is hardly doubtfril. Still more striking is
the public action of St. Wulistan, bishop of
Worcester, to whose arguments and those of
Lanfranc was attributed the express prohibition
by William the Conqueror of the export of
slaves (Stubbs, Sel. Charters, p. 85 ; Will.
Malmesb. Gestt. Eegg. iii. 269 ; cp. Freeman,
iv. (ed. 2, 1876) 380 seq.), a prohibition which
was extended by St. Anselm in 1102 to any sale
into slavery whatever (Eadmer, Hist. Nov., a.
1102 ; cp. Freeman, v. (1876) 223 seq.) The
emancipation of slaves was from an early time
recognised as a religious act, and the practice
of including such a deed in testamentary dis-
positions was manifestly promoted by clerical
persuasion. If religious corporations were not
specially forward in manumitting their own
bondmen, it was rather because the law of the
church was precise against diminishing their
property, than through any reluctance to in-
crease the body of freemen. But the process by
1 Gamier de Pont-Sainte-Maxence's attack upon the
constitution (St. Thomas le Martyr,^ lines 24SS-2490 ed.
Hippeau, 1859) rests rather on fjk priori grounds.
282 CHRISTIANITY AND ECONOMICS— THE MEDIEVAL CHURCH
whi3h the bondman rose through the ambiguous
rank of tho villein to that of the copyholder
is traceable to known economical causes and
only in isolated cases to ecclesiastical influence.
2. Lands in the possession of a church were
distinguished from other real property in so
far as they were protected against aliensftion,
and enjoyed certain immunities from the pay-
ment of taxes.
{a) According to the civil law, church lands
could not as a rule be alienated, though they
might be exchanged between two religious
corporations or mortgaged up to a limited
amount {Novell, cxx.) They could only be
alienated by an act performed in the presence
of the metropolitan and of two bishops of the
vicinity {Novell, xlvi. 1, Ixvii. 4). Except as
subject to some such condition, alienation was
totally forbidden by the early councils {Cod.
Canon. Ecd. Afric. xxvi., xxxiii.), and by the
later canon law it was not permitted sine iusta
causa, that is without evident necessity or
advantage (6 Deer. iii. tit. ix. 1). But the
power which was reserved of granting leases of
land not brought into cultivation made it
possible to frustrate the intention of the accepted
rule. Setting on one side the numerous cases
of alleged unlawful appropriation of church
lands by the civil ruler, cases in which there is
often reason to suspect exaggeration in the
record of the misdoing (cp. Freeman, ii. (ed. 3,
1877) 554-567), we find abundant instances in
the Domesday Book and elsewhere, of church
lands being granted not merely for life but for
several — commonly three — lives (see examples,
in Freeman, v. 778-785), at the expiration of
which it was not always easy for the grantor to
resume possession. By degrees it was attempted
to restrict the practice, and the canon law as
laid down by Clement Y. prohibited all grants
for life or even a term of years, allowing them
only **ad modicum tempus" {Clevient. iii. tit.
iv. 1), an ambiguous phrase which was after-
wards restricted by Paul II. to three years
{Extrav. conim. iii. tit. iv.)
{b) Among the earliest grants of land to
churches or monasteries, in England there are
examples in which it appears that the lands in
question were entirely freed from the common
burthens of property (Bed. Vit. S. Bened. vi.,
Epist. ad Ecgherct, xii.) ; but soon, as such
grants were multiplied, it became a matter of
public policy to subject them to the trinoda
necessitas. With regard, however, to the other
payments to which land was liable, the usage
varied ; sometimes the land was wholly en-
franchised, sometimes only in part ; sometimes
it bought its enfranchisement by payment at
the time of the grant or by a surrender of lands
in lieu of future obligations (Lingard, Hist and
Antiq. of the Anglo-Saxon Church (1845), i.
240-250). Gradually the rule was established
that lands held by a church or religious house
were held in "free alms" (libera et
or Frank- ALMOIGN {q.v.), a form of tenure (
which is found in Domesday as not exclusively
ecclesiastical (Freeman, vol. v. p. 804, seq.),
and which is legally understood to involve ex-
emption from all temporal dues (Digby, Introd.
to the Hist, of the Law of Real Property (ed. 3),
p. 38 ; Bracton, iv. 28 f. 207 ; Ellis, Gen. In-
trod. to Domesday (1833), vol. i. p. 258 seq.) On
the other hand the liberty thus implied in the
possession of lands by the church did not extend \
to all lands held by the church, nor was it at
first admitted by all statesmen. The latter
point is suflBiciently illustrated by the notorious
policy of Randolph Flambard ; and as to the
former, it is clear that the recognised obligation
of the trinoda necessitas might naturally be
construed in the light of feudal ideas as carrying
with it the obligation to feudal military service.
That this was in fact the case is shown by the
way in which Archbishop Lanfranc — to name
no other instance — compounded for the services
due from the convent of Christ Church, Canter-
bury, by maintaining a certain number of
knights {Epistt. Cantuar. ccxliii. ; cp. Freeman,
V. p. 372) ; and when in 1159 the imposi-
tion of ScuTAGE {q.v.) was carried out, it was
levied also upon church lands (cp. J oh. Saresb.
epist. cxlv.) But from the reign of Henry II.
onwards, the payment of taxes directly levied
on church lands was repeatedly resisted as an
infringement of ecclesiastical immunities (cp.
Stubbs, Const. Hist, of Engl. (ed. 1880), i. 647
seq., ii. 187 seqq., etc.) ; and it was to prevent a
fraudulent multiplication of lands for which
such immunities could be claimed that Edward
I., in 1279, enacted the statute of Mortmain
{Stat, de Vir. Relig., ap. Stubbs, Sel. Charters,
p. 458 seq.l
The lands held by a religious house, at least
those in its immediate vicinity, were as a rule
cultivated by the brotherhood itself, and the
personal interest thus devoted to the work pro-
duced better results than the enforced labour
of bondmen. The evidence of the Domesday
survey goes to show that the church lands were
in a higher state of cultivation than other
property. The monks also employed them-
selves in clearing forests, draining marshes,
and making roads and bridges (cp. Lingard, i.
2Q7seq. ; Cunningham, Growth of Engl. Industry
and Commerce in the Early and Middle Ages, p.
64 seq., 1890) ; and the Cistercian order, through
the activity which it displayed in sheep farming,
promoted in a singular degree the production
of the staple commodity of England. Through
the immense extent of their property, variously
estimated in the 13th and 14th centuries from
a quarter to a half of the total landed property
of England (Wycliffe, de Eccl. xv. p. 338 ; cp.
Pearson, Hist, of Engl. ii. 497 (1867)), the
churches and religious houses came to take an
important share in the industrial development
CHRISTIANITY AND ECONOMICS— ROMAN CATHOLIC SCHOOL 283
of the country ; and it is acknowledged that the
clergy were mild landlords (see generally Stubbs,
Cmst. Hist. iii. 662). The attacks of the
Lollards upon the landed property of the church
were inspired rather by a prioi'i objections to
the system itself than by any actual abuses to
which it led ; and the considerations which
Bishop Pecock, writing in the middle of the
15th century, alleged on the opposite side are
probably in the main just. "The treuthe is,"
he says, "that the tenementis and alle the
possessiouns with her purtenauncis, which the
clergie (religiose or not religiose) holden and
hauen, is better meintened and susteyned and
reparid and kept fro falling into noujt and into
wildirness, than if tho same tenementis and
possessiouns Avith her purtenauncis weren in the
hondis of grete lordis, or of knyjtis, or of
squyeris. . . . The tenauntis, occupiyng tho
tenementis and possessiouns with purtenauncis
vndir the clergie, ben esilier tretid, lasse disesid,
and not greened bi extorcioun, as thei schoulden
be, if thei helden the same tenementis and
possessiouns of temporal lordis or of kny^tis
and squyers." Among other points in favour
of those who held of the church, Pecock
notices that their tenure was less liable to be
disturbed than that of those who held under
lay lords {liepressor of overmicch hlaming of the
Clergy, vol. ii. p. 370 seq. (ed. Babington,
I860)). It has been noticed by critics least
friendly to the mediaeval church that it was
such causes — the known advantage to the tenant
— that did much to reconcile public opinion to
the enormous estates held by the church (Pear-
son, Hist, of Engl. vol. ii. p. 502 ; Rogers,
vol. i. p. 160). That at the close of the Middle
Ages the state of things was somewhat altered,
and the abuses which had arisen with respect
to the management of church property called
forth well-founded complaints (cp. Dyalogc
hetwene a Gentillman mid a Husbandman, 1530
ed. Arber, 1871, p. 134 scqq.. Ballads from
Manuscripts, ed. Furnivall (1869), vol. i.), need
not be denied ; but the question, which is a very
debatable one, lies beyond the province of the
present article. n. l. p.
[See Sir F. Palgrave, History of Normandy and
England, esp. In trod, to vol. iii.]
The Roman Catholic School (as the
economic school of thought which has developed
within the Roman Catholic Church has been
termed) is of comparatively recent origin.
Though the date of its birth cannot be fixed
with exactness, it certainly goes as far back as
September 1869, when a conference of bishops
giving special attention to social questions met
at Fulda in Germany.
No doubt the Catholic church, through the
fathers in the first ages of Christianity, and
through its doctors in the Middle Ages, had
always occupied itself with the social question
from certain points of view, especially with
regard to the relations between the rich and
the poor. Through its agency, indeed, lending
at interest had been forbidden by the civil
law (see Aquinas ; Canon Law ; Church,
MEDiiEVAL). But it was not till quite recently
that it published a programme of economic
reforms, and turned its activity particularly to
labour questions. Without imputing any in-
terested motive, it may be supposed that this
action of the Roman Catholic church has been
not uninfluenced by the desire to regain the
power over the labouring classes which socialism
threatened to wrench from its hands. Up to
the present time, however, this object does not
appear to have been attained. In spite of the
armies of workmen Avhich the church leads as
pilgrims to the feet of the Pope, in spite of the
"workmen's clubs " {Oercles ouvriers) which the
church strives to multiply in France, no pro-
found impression seems yet to have been made
on the masses of the labouring population ; and
it is from the ranks of the higher clergy and
the aristocracy that it has almost exclusively
drawn its leaders and even its adherents.
In England the late Cardinal JManning was
prominent in labour questions. In the United
States, Cardinal Gibbons has undertaken the
defence of the Knights of Labour. In France
Cardinal Langenieux, Comte Albert de Mun —
an ex-cavah-y officer and one of the most
eloquent speakers in the French legislature,
M. Harmel — a large manufacturer, — all three
are organisers of workmen's pilgrimages. In
Switzerland, M. Decurtins, deputy of the
canton of the Grisons, has taken an active part
in the labour laws passed in Switzerland of late
years. In Germany, the Bishop of Mayence,
Monsignnr von Ketteler, now dead, was one of
the initiators of the movement ; at present
there is the Bishop of Breslau, Monsignor
Kopp, who played an important part at the
International Conference of Berlin on the
regulation of labour. In Austria, there have
been Baron de Vogelsang, now dead, the Prince
of Liechstentein, and others. Pope Leo XIII.
has placed himself at the head of the movement.
On several occasions he has shown great interest
in social questions, especially by his famous
encyclical of 15th May 1891 and his addresses
to the workmen pilgrims.
By the vehemence of its criticisms of the
economic organisation of the day, more particu-
larly by opposing itself to individualism, self-
help, competition, and the inordinate search
for gain, also by the sombre picture which it
paints of the condition of the working classes,
the "Roman Catholic school" makes common
cause with democratic socialism. Like it, in
deed, it protests against Manckesterthum,
against the body of teaching which regards
personal interest as the only motive force of
human activity, and the law of supply and
demand as the sole regulator of wages. Hence
284 CHRISTIANITY AND ECONOMICS— ROMAN CATHOLIC SCHOOL
the appellation of ** Catholic socialism " which
it sometimes receives. However, it always
refuses to accept this title. Indeed, it stands
really at the opposite pole to the socialist
school, for its objects are not only to conserve
but also to restore the fundamental institutions
of society, id est — religion, — family, — prop^ty,
— employer system. It sees the solution of the
social question, first of all, in the fulfillment
of the laws of morality and religion, then in
that corporative system which, in the words of
Leo XIII., " comprises in itself almost all other
works."" This corporative system must not be
confused with the co-operative system, so much
extolled by some of the Protestant schools of
socialism, or even with trade-unionism. The
"Roman Catholic school" understands by this
phrase associations of trades, composed at one
and the same time of masters and of men, re-
gulating in sovereign fashion, and by decrees
fitted to each particular industry, the number
of hours of labour, the rate of wages, and so
forth ; and invested with the rights of property
in consequence of their status as corporate
bodies, and with political power through their
ability to elect their representatives in the
chamber. The works of M. Harmel in the Val
des Bois near Rheims are usually given as a
type of the industrial organisation which is
the ideal of this school.
In France and in the countries which have
felt the influence of the French Revolution and
of the movement of ideas which thence took
its rise, the "Roman Catholic school" violently
attacks the Principles of '89, holding them
responsible for the state of agitation and un-
rest through which the nations of Europe are
struggling. Thus the law of equal division of
estates between all the children is regarded by
the " Roman Catholic school " as the chief cause
of the disorganisation of the family, whilst
from the abolition of the corporative system
the misery of the working classes is held to
have mainly arisen.
The question of state interference has caused
the division of the "Roman Catholic school"
into two clearly-marked sections. The inter-
ventionist school, the names of whose repre-
sentatives have been given above, labours
steadily for state interference to regulate the
length of the day's labour, for the enforcement
of Sunday rest, for the abolition of usury, for
the prevention of monopoly and speculation ;
in fact, for all measures which seem likely to
raise the condition of the poorer classes. On
the other hand, the "Liberal" section of the
" Roman Catholic school " entertains a distrust
of state interference in a coercive shape, which
is no whit less than that felt by the economic
school of Adam Smith. It sanctions the ap-
plication of state interference only in cases of
clearly-proved necessity, and upholds liberty of
labour and freedom of contract. It is also less
bitter in its criticisms of the economic organisa-
tion of the day and confines its programme of
social reform to the restoration of the authority
of the church in society, of the father in the
family, of the employer in the workshop, and
to the exercise of social duties. Further, its
characteristics are more of a lay nature ; it
refuses to be called "Catholic" in the narrow
sense of the word, and opens its arms to all
who desire to apply the historical method to
the study of social facts. M. Le Play (q.v.),
who died in 1883, is usually regarded as the
chief of this school, which includes among its
members several distinguished professors, for
instance M. Claudio Jannet, jjrofessor at the
Catholic university of Paris ; Charles Perin,
formerly professor at the university of Louvain,
and his successor in the same chair, M. Victor
Brants. It was believed that the Pope would
give his opinion on the delicate point involved
in these discussions in such a way as to decide
the question. But the holy father, in his en-
cyclical of May 1891 de Conditione Opifieum,
expressed himself in such general formulae and
made use of such diplomatic and guarded lan-
guage, that each of the two sections of the
school has been able to claim his high approval.
Thus the encyclical declares "that the force
and authority of laws are necessary to save the
unhappy workman from those speculators who
treat men as if they were machines, — who use
them up in order to glut their own insatiable
cupidity." Nevertheless, it also condemns
state socialism "which aims at substituting
state control for paternal care." Moreover, in
his address to the workmen pilgrims on 19th
September 1891, in which he commented on
his encyclical, the Pope declared " that it must
be taken as certain that no true and practical
solution of the labour and the social question
would ever be found in purely, civil laws, how-
ever good they might be." It is therefore
probable that these two main lines of thought
— the one seeking a remedy for all human ills
by methods closely allied to those of socialism,
the other by strictly religious influences, — will
continue to divide the "Economic school" now
existing in the Roman Catholic church.
[Francesco Nittl, II socialismo cattolico, 2d ed. ,
Roux, Turin, 1891. — " The Catholic Church and
Economics," J. J. Keane, Quarterly Journal of
Economics, Oct. 1891. — C. S. Devas, Political
Economy, London, 1892. Stonyhurst Series. —
Von Ketteler, Die Arbeiterfrage uiid das Christ-
enthum, Mayence, Kirchheim, 1866. — Liberal-
ismus, Socialismus, und Christenthum, Mayence,
Kirchheim, 1871, by the same author. — Rudolph
Meyer, Der Emancipationskampf des vierten
Standes, Berlin, 1882, 2d ed., 2 vols.— Charles
Perin, Le Socialisme chritien, Paris, Lecoft're, 1879.
— Decurtins, La question de la protection ouvriere
Internationale, Berne, 1889. — De Mun, Discours,
Paris, Poussielgue, 3 vols. — Harmel, Catechisme du
patron, Paris, 1889, — also Manuel d'une corpwa-
CHRISTIANITY & ECONOMICS— INFLUENCE OF PROTESTANT THOUGHT 285
Hon chrHienne, Tours, 1879. — Manning, The
Rights and Dignity of Labour, London, 1887. —
The Journals and Reviews which are the organs
of the "Roman Catholic school" are very numer-
ous. The following are the most important in
France ; V Association Catholique, a monthly review
(organ of the school of the Comte de Mun). — La
Refarme Sociale (organ of the school of Le Play).
— In Germany : Arbeiterwohl, conducted by Abb6
Hitze. — Historisch-politische Blatter ; — CJiristlich-
sociale Blatter. — In Austria : Oesterreichische
Monatsschrift fur christliche Social Reform, for-
merly conducted by Baron de Vogelsang ; Das
Vaterland.] c. a.
The Influence of Protestant Thought
ON Economic Opinion and Practice.
The intention of this article is to trace the
influence of Protestant thouglit, mainly on the
continent of Europe, both in its original tend-
encies and in its historical development on
economics. The outcome of these influences
may be generalised under four heads, viz. : I.
the principle of Individualism encouraging
individual .enterprise, the stability of private
property, and the development of industrial
progress ; 11. the principle of libre examen (the
expression is that of Guizot), which in freeing
the mind led indirectly to the liberation of
trade, free competition, and the doctrine of
laissez-faire as further developed by the French
revolution ; III. the Protestant idea of the
state during the transition period, which helped
in establishing the mercantile theory in Holland
and England, and the cameralistic conception
of political economy in Germany, since economic
science was then regarded merely as a method
of action, the object of which was the furnish-
ing the state or its head with ways and means
to carry on the government ; IV. Protestant
ethics in relation to the modern economic
method, introducing the Caritativc element of
Christianity {i.e. that not only the selfish prin-
ciple of supply and demand but Christian love
and duty should be the guiding laws in eco-
nomic action — the doctrine of Adolph Wagner)
as a corrective of the purely egoistic theory.
I. Individualism. — Friends and enemies,
Guizot, Seebohm, K. Marx, and E. de Laveleye,
declare alike that the "history of capital and
the supremacy of private interest," i.e. commerce
in its modern aspect, commenced contempor-
aneously with the period of the reformation,
accompanied as that movement was by many
discoveries and inventions, and the recovered
sense of personal freedom and responsibility.
In Protestantism and Catholicism in their hear-
ing upon the Liberty and Prosperity of Nations,
by Emile de Laveleye (1875), the progress
of economic enterprise is attributed to the
superior education and enlightenment fostered
by Protestantism, De Tocqueville ascribing to
the Pm'itan discipline of the first settlers the
same result in the commercial expansion of the
United States. From Luther to Protestant
divines of the present day the moral force of
the dignity of labour and the duty of cheerful
exertion in the subduing the earth by economic
effort, have been held up to admiration, and
have given an impulse to the economic life of
Protestant countries. The Wealth of Nations
appeared in 1775-76, and marks a revolution
of thought in Protestantism in the author's
mind, and a revolution of industry then com-
mencing. "The machine is somewhat in the
nature of Protestantism," says Dean Uhlhorn in
his brochure on Katholicismus und Protestant-
ismus gegeniiber der socialen Frage (1887).
Private property is encouraged by Protestant-
ism. Luther, in his Sermon on Usury (1579),
speaks of three gi-ades "of dealing well and
worthily with temporal goods." The highest
is to allow ourselves to be despoiled of it with-
out off'ering opposition, the lowest is to take
neither profit nor interest, though he sees objec-
tions to this ideal being realised. Whilst
Erasmus complained of the "rage of owner-
ship," Protestantism endeavoured to make a
compromise, maintaining the ideal in theory
and encouraging what Fr. A. Lange calls a
"moderate egoism," or "ethical materialism,"
in practice (see Gcschiclite des Materialismus, i.
254, 294. Cp. J. E. Thorold Rogers on The
Econoinic Interpretation of History {\ 888), p. 83).
Resold in the 17th century speaks of private
property as of human origin, yet approved of in
Holy Scripture. H. Grotins, at the head of the
classical school of political economy in Holland,
defends it. Pufendorft' adopts it from him, and
the theory dominated the old-fashioned eco-
nomics in Prussia, until the new school of
economists, with Ad. Wagner at their head,
pointed out the importance of correcting the
rigid theory of private rights as to ])orperty by
the recognition of what is due to the com-
munity, and thus reconciling the principle of
private interest with that of public advantage.
This naturally followed on the growth of
altruistic ideas affecting alike Protestant and
economic thought. II. Liberation of In-
dustry follows logically from that of liberty of
thought, developing the five points of industrial
independence : freedom of labour, free trade in
land, free movement of capital, freedom of in-
dustrial enterprise, and a free market regulated
by demand and supply,— it further implies the
removal of all governmental and trade restric-
tions. But between the original conception of
these princijiles in the 16th century, and their
realisation in the 18tli, lies the intermediate
economic period of III. Mercantilism, the
reign of the " regal theory " of political economy
as then held in Germany. It means that the
object of all economic effort, and legislation
directing it, is for the benefit of the state and
its head. This view of directing the economics
of the nation by royal mandate is encouraged
by the Protestant idea of the state. With the
286
CHRISTIANITY AND ECONOMICS
break-up of the old feudal and ecclesiastical
systems of social organisation a fusion is effected
of all private and corporate economics in one
political or iicdional economy. The whole com-
munity assumes the character of an economic
society, while it is directed by the central
power, — absolute monarchy {Geschichte der
Nationalokonomie von H. Eisenhart, 1881, pp.
6, 7 ; also Bau und Leben des socialen Korpers,
von A. E. Fr. Schaffle, vol. i. p. 17, 1875).
Thus Luther favoured state magazines for pro-
viding the people with food. In England the
secularisation of church property became a
measure of state policy, and, in turning public
into private property in land, had very import-
ant results to the rural economy of the country
(see T. E. Cliffe Leslie's Land Systems, p. 213
seq. and passim). Measures affecting commercial
tariffs for the encouragement of native industry,
even the proposal of graduated taxation for the
purposes of mitigating the evil effects of a
debased currency, and the rapid growth of
pauperism, which K. Marx attributes to the
contemporaneous rise of Protestantism and com-
mercial industry (see Das Kapital, Kritik der
Politischen Oekonomie, 2d ed., 1872, p. 760
seq., and cp. p. 128 ib. on the progress of
capitalism in Protestant lands), all these
aflFected the development of economic science
at this time. It simply became a method
for increasing the resources of the country.
Roscher shows how closely connected such
questions were with the doctrine of mercan-
tilism (see Mercantilism). Bornitz, Besold,
Klock are the German representatives in the
earlier part of the I7th century of this stage
of economics as a science of state finance.
Petty, Locke, North represent the same tend-
ency in a more advanced state in England.
Cromwell's Navigation Act (1651) is a practical
illustration of it. They show the influence of
Protestantism, encouraging national egoism as
a national duty. In more recent times the
various forms of state-legislation, favoured by
Prince Bismarck under the name of "practical
Christianity," or of government interference
with factory labour, as promoted by Lord
Shaftesbury in the name of Christian philan-
thropy, as well as the previous liberation of the
Prussian peasantry by Von Stein, and the
''organised benevolence" of Wichem and Huber,
the pioneer of German co-operation, are all
the outcome of Protestant Christianity and
patriotism combined, with a view to give effect
to the theory of "freedom of person and pro-
perty under a simple and strong government."
IV. The Ethics of Protestantism, as modified
by the philosophy of Fichte and Hegel, have
exercised a profound influence on the principal
writers belonging to the modern "historical
school " of political economy in Germany. The
state now comes to be regarded as the ethos or
representative of what is best morally in the
community, and the church in alliance with it
as the upholder of a higher ideal of the economic
man. Thus in the Handhuch der Politischen
Oekonomie (1st ed., 1882 ; 3d ed., 1890),
among whose contributors we mention, as mem-
bers of the historical school, L. Brentano, H.
von Scheel, and Ad. Wagner, who lay stress
on the importance of Protestant Christianity,
we are told that ethics teach "social man the
duty of not only following egotistically his own
interest, but also the welfare of others, and
unselfishly to provide, according to his ability,
the community with the requisites for the
material and spiritual elevation of his fellows "
(p. 49, 1st ed.) The state is defined as the
grandest moral institution, bound to use its
force in the pursuit of all economic interests,
and by rational state-intervention to supplement
the deficiencies of self-help {ih. pp. 62-54).
Wagener, the privy councillor (to be distin-
guished from Ad. Wagner the professor, several
times mentioned in this article), as a leading
Protestant layman in Prussia, and Bishop
Martensen, as a Danish churchman, both look
up to the state as the power which should
bring about "a just distribution of the com-
mon social product of all for all." Sismondi,
representing Genevan Protestantism, was one of
the first to discard on religious grounds the
supreme rule of laissez-faire, and calls on the
state "to regulate the progress of wealth,"
defining political economy as la phis sublime
Science de la bienfaisance. Schaffle, as the
representative of South German Protestant-
ism, is the most cautious, as weU as, next to
Roscher, the most erudite advocate of this
theory, which makes man, not money, the
object of all economic exertion, and in which
humanistic Protestantism and economic human-
ism may be said to be mixed and merged. By
humanistic Protestantism we mean the modern
form of it, which lays stress on the humanities
taught in Christianity, and by economic human-
ism we mean the more recent efforts to treat
political economy as a science which has for its
object the improved condition of humanity as
a whole. The question is no longer, says
Roscher, "what are the laws of political econ-
omy, but what ought they to be, — not an
inquiry into the principles which govern the
accumulation of wealth, but as to what is man
in his economic relations, what he does, what
he wants, what he is to be" (Geschichte der
National- okonomik in Deutschland, 1874, pp.
1033-34). To conclude, from the days of
Luther to those of Leibnitz, and down to our
own times, Protestantism, faithful at heart to
its original aim, the liberation of the mind
— though for a time diverted from this object
by yielding to the opposing opinion — submis-
sion to dogmatic assertion, — again accepting
the simpler doctrines of earlier Christianity, —
has continually exercised a weighty influence on
CHRONOGRAM— CINQUE PORTS
287
the evolution of economic thought. Political
economy itself is regarded by one school of the
present day as having gone through somewhat
similar successive stages, establishing at one
time as its foundation the principle of sturdy
self-dependence, accepting at another the silken
fetters of state tutelage, then passing on to the
absolutism of scientific dogmatism during the
era of "liberal mammonism," and rising at last
to an ethical conception of its mission as the
science of a free yet harmonious organisation of
industry, destined to attain the highest eco-
nomic interests of mankind, the highest develop-
ments of human culture.
[Frederick Seebohm, The Era of the Protestant
Revolution, 1874. — M. Guizot, De la Civilisation
en Europe, 6eme ed., 1861, 12eme Le^on. — W.
Hohoff, Protestantismus und Socialismus : — His-
torisch-politische Studien, Paderborn, 1881. The
chief value of this work consists in its quotations
from Comte, L. Blanc, and German authorities on
the economic influences of the Reformation from a
Roman Catholic standpoint, see esp. pp. 83-116,
162-168. — Alexis de Tocqueville, De la Democratic
en Amerique, 16eme ed.-, 1874, iii. pp. 8-10, 42,
213-215, 226-227.— Friedrich von Baerenbach,
Die Socialwissenschaften (1882), pp. 241, 244,
278. — T. E. Clifle Leslie, Essays on Political and
Moral Philosophy, p. 167 scq., this passage was
originally published in the Fortnightly Pi.evieiv,
July 1875.— A. E. Fr. Schaffle, Das fjesellschaft-
liche System der menschlichen Wirthschaft (1873),
i. p. 41 ; ii. 15, 527-528. — Bau U7id Leben {loc.
cit. supra), i. 691-693. — C. Kantsky, Thomas
Morus.] See Socialism in Appendix. m. k,
CHRONOGRAM AND HEXOGRAM.
Chronograms and hexograms are diagrams
"showing the intensity of a phenomenon at
various periods of time, by the rise and fall of
a curve within a system of co-ordinates express-
ing a measure and time. If this occurs in an
automatic register, observation and representa-
tion take place simultaneously. But the hexo-
gram may also be constructed later" (see
Graphical Method).
[A nnals of the A merican A cademy. Supplement,
May 1891, " The History, Theory, and Technique
of Statistics," by A. Meitzen.]
CHURCH-SEED (cherchesed, chercheomer,
chercheambre). ' * A certain measure of threshed
wheat that every man was bound to bring to
the church, in the time of the Britons and
Angles, on St. Martin's Day. But, since the
coming of the Northmen, many lordships took it
to their use and gave it according to the ancient
law of Moses by the name of "first fruits," as
you will find in the letters of King Knut that
he sent to Rome, and is called church-seed
qicasi semen ecdesiae." The above definition is
given in the Expositio vocabulorum in MSS.
St. Paul's, Liber Pilosus, Red Book of Ex-
chequer, and other Anglo-French glossaries of
the 13th century. In the Saxon laws, however,
under the head of DeprimUiis seminum we read
"And church-scot at Martinmas ; and whosoever
holds it over that day let him pay it to the
bishop and indemnify him xj fold and to the
king 120s." (Cnut, Eccles. Dooms, 8). From
this it would seem that the word is a corruption
of church-scot (cherchescaet) — the "c" becom-
ing mute — and in the Norwich MS. of the glos-
sary the termination is given as "soht."
H. Ha.
CIBRARIO, Giovanni Antonio Luigi,
Count, was born 1802, in Turin. He entered
the service of the Sardinian government 1824,
was entrusted in 1832 with diplomatic mis-
sions in Switzerland and France, and in 1833
with Austria, and took possession of Venice on
the 7th of August 1848 in the name of King
Charles Albert of Sardinia. In 1852 he was
appointed minister of finance in the cabinet of
D'Azeglio, and in the same year became minister
of public instruction. In 1 8 5 5 he was appointed
minister of foreign affairs. He died at Salo
(Brescia) in 1870. This distinguished states-
man has written an amazing quantity of his-
torical studies, principally concerning the house
of Savoy. As an economist he owes his fame
to two books, the Storia delV economia politica
nel medio evo (2 vols., Turin, 1839), translated
into French, with a preface by Wolowski (in
1859, Guillaumin, Paris), and the historical
treatise Delia Schiavitit e del Scrvaggio e
spcciahnente dei Servi agricoltori (2 vols. , Milan,
1868-69). Besides these larger works, some
financial essays, reprinted in his Opuscoli (Turin,
1841), should he mentioned. m. p.
CINQUE PORTS. The name applied to
the five towns of Hastings, Sandwich, Dover,
Romney, and Hythe, which were incorporated
for the defence of the realm and other purposes
probably by Edward the Confessor. The ' ' ancient
towns " of Winchelsea and Rye, and several
other places, corporate and non-corporate, were
afterwards added as members. Some writers
have tried to identify the five leading ports
with the five Roman fortresses, which, under
the comes littoris saxonici, guarded the south-
eastern shore, but the better opinion seems to
be that they were of Teutonic origin. It is
probable that the trading interests of the ports
first brought them into prominence. The in-
habitants were fishermen, and they were ac-
customed to resort northwards a considerable
distance to the banks at the mouth of the Yare
to dry their nets and pack their fish. This
practice developed into an important annual
fair at Great Yarmouth, which was attended by
fishermen and traders from various parts of the
Continent. The maintenance of order, and the
exercise of jurisdiction at this fair belonged to
the portsmen from the earliest period of their
history. Professor Montagu Burrows (Cinque
Ports, London, 1888) traces the origin of all
their distinctive institutions to their connection
with this fair.
!88
CIOMPI— CITE OUVRlfiRE
Jurisdiction was exercised in the "Court of
Shepway," a body composed of the bailiff, and
a certain number of freemen from each port,
but the assemblies known as the "BrodhuU"
and the "Gestling," usurped its administrative
powers, and the Lord Warden and his courte of
admiralty, chancery, and pilotage, gradually
encroached on its judicial powers.
The chief duties of the assembly were as
follows : (1) to exercise jurisdiction at Yarmouth
fair ; (2) to fix the number and size of ships to be
furnished for the defence of the realm ; and (3)
to safeguard the franchise of the ports.
The ports were at the height of their* power
during the reigns of John, Henry III., and
Edward I., when their ships constituted the
only existing English navy. During the 15th
and 16th centuries they gradually declined
owing to the filling up of their harbours, the
necessity of a state naval organisation, and
the growth of other commercial seaports. The
assemblies stiU continue in name, and the Lord
Warden may exercise certain minor judicial
functions.
[Charters of the Cinque Ports, by Samuel
Jeakes, London, 1728. — Cinque Forts, by Mon-
tagu BuiTOws, London, 1888. — Art. on "Cinque
Ports " in Encyclojocedia Britannica.] J. e. c. m.
CIOMPI (name supposed to be derived from
the Fr, compare, used by the French soldiery of
the Duke of Athens). The sudden uprising of
the Ciompi in Florence, 1378, was one of those
movements in Europe which took place during
the half-century subsequent to the Black Death,
and may possibly be regarded as due to the
dislocation of industrial conditions brought
about by the diminution in the numbers of the
people. Immediately, however, the movement
in Florence was due to (a) the rising of the
lower guilds against the upper, especially against
the great wool guild ; (b) reaction against
Guelfic tyranny ; (c) political restlessness of the
populace. Regarded from the standpoint of
history, the rising of the Ciompi may be said
to have been successful in bringing about a
relaxation of the excessive domination of the
greater guilds, but its effects at the time were
somewhat various. At first it was entirely suc-
cessful, the inferior guilds obtaining a much
greater power, and the guild of the popolo
minuto being established, but in 1382 the force
of reaction led to the abolition of this latter,
and to a considerable restriction of the advan-
tages attained. The ground gained was, how-
ever, not entirely lost.
[Oino Capponi (Muratori, Ital. Script., p.
1104, etc.). — Machiavelli, Storia di Firenze.]
E. c. K. G.
CIRCULATING MEDIUM. The circulating
medium in all civilised countries consists at the
present time to a very large extent of orders to
pay sums of money in the form of bills and
cheques. At the present time ' ' Bank notes are no
more than the mere small change of the ledger '"
(Newmarch, Address as President of the Section
of Economic Science, British Association, Man-
chester, 1861). Coin plays a large part in
retail trade, but its share in the more important
transactions is now comparatively small. The
circulating medium at the present time in this
country may be said to consist of cheques, bills
of exchange, notes, and coin ; to these book
transfers, where the accounts are under the same
administration, may be added (see Banking ;
Cash ; Clearing System ; Cukrency.)
[For details " Paper on the Proportional Use of
Credit Documents and Metallic Money in English
Banks." G. H. Pownall, Journal, Institute oj
Bankers, October 1881 ; — other papers in same
journal, and those of the Statistical Societies of
Lond6n and Manchester, etc.]
CITATION. See Jurisdiction, Scotch.
CITATION. A document issued by the
High Court in probate and divorce matters.
Probate actions, which were formerly begun by
the service of a citation on the defendant, are
now opened by the issue of an ordinary writ of
summons, but "citations to see proceedings" may
be served on third parties who may possibly be
interested in»the matter, so as to bind them by
the result. In divorce proceedings a citation is
" extracted " and served on the respondent and
the co-respondents immediately after the filing of
the petition. e. s.
CIT]6 OUVRIME. This term is applied by
French economists in a general sense to blocks
of buildings rented to working-class families on
such conditions that they may by payment of
fixed instalments become the owners of their
houses. The best known instance on the Con-
tinent is that at Miilhausen, where there is a
settlement of 7000 persons, mostly employed
in the industries of the town. Used in this
sense, it is equally applicable to groups of work-
men's dwellings in England and America which
have been purchased by the occupiers through
the medium of building societies or co-operative
banks. But the term is used in a narrower
sense to describe the famous Familistere founded
at Guise by M. Godin. The cit6 ouvriere may
be roughly described as an attempt to reconcile
the capitalistic enterprise of the modern world
with the craft association of the mediaeval
world. It is not a municipality established
to provide for certain common wants out ot
revenues levied on individual inhabitants,
but it is a manufactory so managed that its
surplus profits are api>ropriated to develop
human nature in all its mental, moral, and
physical relations. The supervision ^f the
municipality may be said to be superseded
by the organisation of industry. Sanitation,
education, and poor relief are all provided by
a voluntary apportionment of the net rewards
of common work, and public opinion takes the
place of police. Perfect freedom of volurtarj
CITE OUVHIEKE— CITIZEN
289
association has eliminated the force of com-
pulsory association. The city is dead but the
citizen is alive, and the church based on labour
has overcome the state, whose basis is taxa-
tion. The settlement at Guise, where this
form of city life has been developed to the
highest point (see the Co-operative Traveller , by
E. 0. Greening, Labour Association, 1 Norfolk
Street, Strand, 1888), comprises about 86 acres,
of which 11^ acres are covered by the iron
works, 25 by public gardens, and the rest
by the social palace, schools, institutes, and
surrounding grounds. The iron works were
opened by M. GoDiN {q.v.) in 1846, and from
that date up to 1852 he was gradually
building up the business. An ardent disciple
of the school of Fourier, he was determined to
use his business as a means of elevating his
employes, and he began to carry out his ideas
by reducing the hours of labour, abolishing
fortnightly payment of wages, altering the pay
day from Saturdays to Thursdays and Fridays,
and establishing a sick club governed by a
committee of workmen. In 1859 he bought
15 acres of ground and began to build the iirst
wing of the Familist^ire {q.v.) or social palace
for his workpeople to live in. Building after
building, institution after institution, have been
added to the original plan, and now the settle-
ment not only includes a co-operative store
with departments for grocery, bakery, con-
fectionery, drapery, boots and shoes, coals,
butchery, and every article of prime necessity,
but it provides its members with employment
in a gigantic iron work, houses them in palatial
buildings, nurses their babies as far as their
mothers desire it, educates their childi-en,
provides library, news room, billiard room,
refreshment saloon, theati'e, music master,
doctors and dispensary, assists them to wash
and dry their clothes by machinery, assures
them against the needs of old age, the acci-
dents and ailments of life, and the loss by
death of the wage- earner, and furnishes them
with all the luxuries of life, including a co-
operative garden filled with fruit and flowers.
How has all this been done ? The answer is,
by the capitalist sharing the profits of the iron
foundry among the workers, instead of keeping
them aU to himself. In 1877 M. Godin com-
menced the plan of sharing profits by giving a
. bonus on wages and accumulating the sum for
the wage -earners. In 1880 he formed the
works, social palace, etc. etc., into one gi-eat
co-operative society with certain provisions for
the whole becoming the property of the workers.
The accumulated bonuses of the workers then
amounted to £10,490, and the share capital
held by M. Godin to £150,000. The division
and appropriation of profits for the future were
fixed as follows : — after payment of material and
wages at market prices, a preferential 5 per cent
of the gross profits goes to interest on capital
VOL. I.
and the remainder is divided in certain propor-
tions between capital, labour, the latter includ-
ing mental as well as manual labour, and social
and benevolent institutions. There were, in
1884, 1452 persons employed in the foundry,
and they were divided into five classes : (1) the
director — M. Godin was director for life, and
after his death he was succeeded, in 1888, by M.
Dequenne, one of the workers ; (2) a committee
of nine ; (3) 64 associates, persons of not less
than 25 years' age, of 5 years' em])loyraent
on the works, with capital of £20 ; (3) 148
societaires or special members who had worked
3 years ; (4) 574 participants or ordinary mem-
bers of 1 year's work and not less than 21 years'
age ; (5) 656 auxiliaries of less than 1 year's
work. Besides these there were 209 outside
shareholders who had been workers but had gone
elsewhere or were on military service. Classes
(1) and (2) receive special remuneration for
management, (3) and (4) receive proportionate
bonuses on wages accumulated as share capital,
(5)onlyenjoys the benefits of amedical provident
fund. From 1880 to 1884 over £115,000 of
profits were ajtjiropriated to workers : in share
capital about £100,000, in cash about £10,000,
in education about £5000. Since then the
share of the workers in the business has steadily
increased. At M. Godin's death it amounted
to about one half of the capital. A. K. c.
[A. I'affalovich, Logement de VOuvrier et du
jMuvre (1887), pp. 448, acq. — E. 0. Greening, Co-
operative Traveller Abroad {IS8S), pp. 60-173. —
A. Perrot, Les cites ouvrieres de Midhouse (1889).
Twenty - eitjht Years of Co-piartnersMp at Guise,
trans, by Aneurin Williams, Labour Co-partnersliip
Association (1908).]
CITIZEN. The term citizen ought logically
to be exactly correlative witli the term city ;
but in actual usage this coiTclation is not
observed. The term citizen is used to express
three distinct shades of meaning ; sometimes as
equivalent to "member of a sovereign state"
sometimes as equivalent to ' ' member of a body
of townsmen invested with municipal rights,"
sometimes as equivalent to "dweller in a town "
as distinct from "dweller in the country."
The title of a well-known series, the "English
Citizen series," exemplifies the first of these
uses ; the second is exemplified in such a phrase
as "the mayor, aldermen, and citizens of Liver-
pool " ; and there would be no gross impropriety
in speaking of the " citizens of Constantinople "
although Constantinople is neither a state nor
a municipality. When used in the first sense,
the term "citizen" connotes more especially
the rights and privileges, as the term ' ' subject "
connotes more especially the duties and burthens,
of membership in a body politic. For this use
of the term citizen is derived from ancient
usage. The fully qualified citizen of an ancient
city was member of a sovereign state, and within
its bounds was a highly privileged person as
u
290
C!ITY, ANCIENT
compared either with the slave, with the serf,
or with the alien. The associations of the term
"subject," on the other hand, are derived from
the imperial and feudal phases of political
society. The political changes of the last hun-
dred years have lessened the interval between
ancient and modern conceptions of p(?litical
society, and have made the use of the term
"citizen" in the above sense increasingly
common. In the second sense referred to, as
expressing membership of a body of townsmen
invested with self-government, the term "citi-
zen " has had a more continuous use. The
establishment of the Roman Empire reduced the
free cities of antiquity from sovereign states to
municipalities. It was only as burgesses of
one or other of these municipal towns that the
inhabitants of the rural districts had any rights
of self-government. In the Middle Ages self-
government attained its full growth only in
the towns, being restricted in the country by
the power of feudalism. In some mediaeval
cities — in those of Flanders, of Germany, and
above all of Italy, — municipal self-government
expanded into something like the sovereignty
of the Greek city. It is only in modem times
that town and country have been generally
assimilated in point of self-government. In
the third of the above senses, as expressing no
more than the fact of dwelling in a town, the
term " citizen " is of comparatively little im-
port for politics or economics (see City:
Ancient ; Medieval ; Modern), f. c. m.
CITY
Ancient, p. 290 ; Mediaeval, p. 292 ; Modem, p. 295.
City, Ancient. The city with its corre-
lative ideas of citizen and citizenship is the
special feature of the stage of political develop-
ment reached by the ancient civilisation of
Europe. Cities are to be found in the history
of oriental civilisation along the river valleys
of the Nile, Tigris, and Euphrates ; but they
were hardly more than gigantic collections of
waUed-in populations depending for their exist-
ence on the conquest of some monarch or the
cult of some god, and destitute of any inherent
life of their own. The inhabitants were slaves
and serfs rather than citizens. It is ancient
Greece and Italy that gave birth to true city
life, the life of self-governing freemen ; and the
political history of these countries is the history
of a number of cities, their growth, their revolu-
tions, their wars and their alliances, their con-
quests and their defeats. This preponderance
of city life is reflected in Greek and Latin
literature. To the ancient Greek city, society
and state seemed identical terms, and Roman
statesmanship knew no other method of concili-
ating the conquered than that of enrolling them
on the civic registers of Rome. The history of
the conquest of the European world by Rome
is in fact the history of the conquest and founda-
tion of a multitude of cities, and of their con-
nection by a system of roads. The Roman
empire was mainly a confederation of cities
under an emperor or chief magistrate elected
by the citizens or soldiers of the conquering
city, and, when it fell, the cities that were its
members survived as units of government, and
the roads that connected them as channels of
commerce for modern civilisation.
The origin of the Greek or Italian city is lost
in the legendary past, but in all probability it
grew out of the union of some great leaders of
patriarchal clans or families, who, after subduing
the aborigines, seized on and settled round some
commanding position, safeguarded their new
settlement with walls, and sanctified it with
religious worship. The city-state thus began
as a military, but soon became a commercial
colony. Around the original dominant families,
supporting themselves by the produce of the
surrounding fields, cultivated by the help of
the conquered natives, and submitting, for all
the purposes of mutual protection, to the com-
bined government of the heads of the families
or clans, there would be gradually collected a
mixed population of settlers, traders, and
refugees. The latter contributed to the wealth
and impoi>tance of the settlement, but had no
voice in its management. As these outsiders
grew in numbers — and this was especially the
case in maritime settlements — and were called
on to assist in protecting it, they naturally
claimed a voice in deciding questions of peace
and war, in dividing the spoils, and in making
laws. The internal history of these ancient cities
is largely taken up with the struggles between
the bodies of old and new settlers for political
power. In some cities the old families held
their own, and then the government was called
an aristocracy, in others the wealthier classes
belonging to the old or new families secured
power, and then it was called an oligarchy, in
others the mass of independent inhabitants
gained power, and then it was called a dcTno-
cracy. Often these various forms of govern-
ment alternated with each other according to
external or internal changes of conditions, and
sometimes a single individual, relying on the
support of the excluded classes, seized the reins
of government, and then it was called a tyranny.
Except in cities like Athens, Sparta, and Rome,
where conditions were, for a long time, especi-
ally favourable to one form of government, the
political equilibrium remained very unstable.
The political power for which the inhabitants
of an ancient city contended was something
unknown in the mediaeval and modem world.
(1) each city with the country dependent on
it, was originally no part of a larger state oi
system to whose authority it had more or less
to bow, but was an independent sovereign
power, waging war and making peace on its
own account, like the governments of large
CITY, ANCIENT
291
European kingdoms in the present day. The
chief officers of the city had not merely to pre-
serve peace at home, they had to defend it from
foreign foes, they had to play the part of
generals and diplomatists as well as of magis-
trates and councillors, and each citizen had to
be ready to fight as well as to vote, to run the
risks as well as reap the rewards of war. (2)
the city was, in the eyes of the ancient citizen,
his church, and the city magisti'ates were ex
officio priests. He might continue to take part
in the ancestral worship of the family, the clan,
and the tribe, but the gods and temples and
ceremonies of the city overshadowed the divini-
ties and altars and festivities of the hearth ;
and where, as at Athens, the state religion gave
rise to the state drama, the city wielded the
power of the pulpit and the stage. Everywhere
the secular arm of the state was supported and
consecrated by its spiritual authority, and
patriotism and piety became indissoluble senti-
ments. Exile carried with it all the terrors
of excommunication, and the cityless man be-
came a social outcast without gods and without
duties.
One consequence inevitably followed from
the supreme position of the city-state. The
individual liberty of the citizen was greatly cur-
tailed, and against the demands of the state
he had no rights. In such a small community
the tax upon person and property was universal
and practically unlimited, and private life was
never free from state interference. There were
state regulations about dress, food, marriage,
exposure of deformed children, education,
religious observances, political services, suc-
cession to property, and indeed very few
matters were left to individual choice and
conscience. Civil liberty, as we understand it,
did not exist. The liberty of the ancient
citizen was twofold — political and personal. He
was free from the dictation of any person out-
side the city, and he was free from the
dominion of any person inside the city. He was
neither the subject of a king nor the slave of a
master, but he was the servant of the constitu-
tion. Whether the constitution was aristo-
cratic, oligarchic, or democratic, the essence of
citizenship was everywhere much the same. It
consisted in the privilege to own land, to serve
in the ranks of the heavily armed soldiery, to
vote at the civic assembly, to elect and be elected
to office, deliberative or judicial.
The government of the city-state always
turned on the general assemblage of the body
of citizens, whether the title to citizenship
rested on birth, wealth, or personal freedom ;
but subject to this principle, the functions of
government were distributed, and the control
of government exercised very differently under
an aristocratic, oligarchic, or democratic system.
Under the latter system, as developed at
Athens, the public assembly was practically
omnipotent. It supervised all the chief
functions of government, it voted taxation, it
debated on and passed laws, it appointed sub
committees to act as courts of justice and
financial and administrative commissioners, it
elected its executive officers, it exacted an
account from every official at the end of hia
term of office, it received ambassadors, and
decided questions of peace and war. The dis-
tinction of judicial, legislative, and executive
powers was recognised, but the division
rejected. In an aristocratic or oligarchic con-
stitution a large portion of the functions of
government was invested in irresponsible officers,
or in a small council of state, elected possibly
by the whole body of citizens, but rendering
no account to it. There were also mixed forms
of government to be found, such as that of
ancient Rome, where the popular assemblies
were large, but had little practical control
over state policy, which was directed by the
senate, consisting of all those who held or had
held the chief executive and judicial offices of
the state. Below the citizens, occupied chiefly
with war and politics, are to be found in most
city-states a body of inhabitants not possessing
political rights, but enjoying a large amount of
civil privileges in return for special taxation.
These aliens consisted either of conquered
"natives," cultivating the soil in a serf-like
dependence on the citizen owners, or immigrants
carrying on commerce in a more independent
condition. Many of the latter might have been
citizens of some other city, and were from time
to time, under a democratic regime admitted to
the full privileges of citizenship in their adopted
place of residence. At the bottom of the social
structure in every city-state came the slaves.
No form of constitution in the ancient world
made any difference in this respect, and a
democracy of freemen was at bottom an aristo-
cracy of slave-owners. Thus at Athens and in
the dependent country, there Avere at one time
over 400,000 slaves, as against 10,000 resident
aliens and 21,000 male citizens of full age ;
and at Rome the increase of slaves was pro-
digious as conquests extended. These slaves
were not only employed in domestic service,
but in mining, manufacture, and agriculture.
Much of the commercial and clerical, and even
the professional work was done by them, so that
free labour found itself hemmed in on every
side by servile labour. Slaves formed, in fact,
the bulk of what may be called the working
classes ; and as slaves multiplied, manual
labour naturally became despised by the free
citizen. Two gigantic evils ensued. First,
there was always danger of servile revolts ; these
when they broke out, as w^as often the case,
had to be put down with relentless cruelty,
especially in small states where the body of
citizens formed a minority of the inhabitants.
Second, class antagonism was engendered
292
within the civic circle. Finding very few
openings for his energy, enterprise, or intel-
ligence ; forced into no intimate social relations
with the rich by common industrial work ;
feeling the contrast between the real inequality
of fortune and the nominal equality of political
power, — the poorer citizen was filled with envy
and hatred against the rich. He began to look
to the state as a means of re-adjusting the
distribution of wealth. Civil war became the
order of the day. If the poor got the upper
hand, then confiscation and banishment, if not
massacre, followed ; if the rich maintained their
position, it was only by means of doles and
bribes. The state was either paralysed by
internal conflict or demoralised by corruption.
A period of disturbance destroyed the delicate
organism of the city polity ; loss of civic
independence and absorption into the Roman
empire were welcomed as the only refuge from
the weary round of revolution. The city-state
lost its local sovereignty, and became an organ
of imperial administration. Slavery, however,
which was the curse of the city-states, was
equally the curse of the Roman empire. It
spread from the towns to the country. It had
poisoned the life-blood of citizens by corrupt-
ing the artisan ; it destroyed the nurseries of
soldiers by supplanting the peasant.
[See La CiU Antique, by Fustel de Coulanges,
Strasburg, 1864. — History of Civilisation in
Ewrope, by Guizot (trans.), ch. ii. — Aristotle^ s
Politics, by Newman, Oxford, 1887. — Historical
Essays, by Freeman, 2d series. — Public Economy
of Athens, by Bockh. — History of Greece, by
Grote. — History of Rome, by Mommsen.] a. k. c.
City, Medieval. After the downfall of
the Roman empire and the recolonisation of
Europe by the various bands of invading tribes
it was the cities planted or fostered by Rome that
safeguarded the political heirloom of ancient
civilisation. But when their inhabitants found
breathing space to look round, they found the
world completely changed. The centre of
political power had drifted from the town to the
country, and in the towns themselves the
secular traditions of Rome, which had found
support in civic aristocracies, resting on the
sovereignty of Caesar, were overshadowed by the
spiritual influence of the Christian clergy looking
more and more to the supremacy of the Pope.
On the one hand the status of citizen with his
urban dependents had given way before that of
the chieftain with his rural retainers, and the
citadel was being eclipsed by the castle ; on the
other hand the prestige of the curia and the
magistrate was paling before that of the church
and the bishop. In many a town through the
dark ages the buckler of religion was the only
weapon of defence against the arm of worldly
power, and the altar the only asylum for tlie
victims of oppression. But as the two great
powers of the Middle Ages became organised
into feudalism and clericalism, municipalism
was left to fight for itself. With the re-settle-
ment of Em-ope and the revival of the demand
for manufactures the cities naturally became the
centres of industry and exchange. They found
themselves, however, no longer independent
states like the cities of ancient Greece and Italy,
nor units of an imperial rdginie, but the frag-
ments of an old system or the factors of a new,
surrounded on all sides by a fierce military
aristocracy looking with greedy eyes on their
growing wealth. Increase of resources natu-
rally inspired the townsfolk with the spirit of
resistance, and about the 12th century there was
a general movement among them for securing
a distinct status in the mediaeval world. Where
the feudal regime was weak, and where muni-
cipal traditions were strong, as in the south of
France, north Italy, and the eastern portion of
Spain, or where natural conditions were favour-
able, as on the northern coast of Europe, on
the Rhine, or on the Adriatic, there the towns-
folk easily succeeded in winning quasi-sovereign
powers, waging wars and making peace, forming
alliances and embarking on conquests like the
cities of old. But in the north of France, in
England, Flanders, and Germany, where the
feudal rigvme was strong, or where civic life was
not deeply rooted in the soil, but was a plant
of recent growth, there the cities, whether
Roman or Teutonic in origin, had to engage in
a tough struggle with their feudal lords, whether
barons, bishops, or abbots, to secure some
measure of self-government. Although fight-
ing separately, they found a centre of support in
the power of the rising monarchies of France
and England and in the prestige of German
imperialism, and by the tacit acquiescence or
active assistance of their respective allies the
communes of France, the towns of England, and
the free imperial cities of Germany, won valuable
privileges.
The revival of civic life in the cities of western
Europe is therefore the common feature of the
11th and 12th centuries, but the development
of that life varied greatly with siurounding
conditions. The reception of a fierce feudal
nobility into the bosom of the Italian republics,
the commercial enterprise of the Hanseatic
League (q.v.), coupled with the weakness of the
central power in Germany, the natural ad-
vantages of the Flemish towns, the frequent
appeals of the French communes for the interven
tion of the Crown, the closer touch of town and
country in England, necessarily reacted on the
civic politics of each country. But, in spite of
the differentiation of structure by environment,
certain features were general in most of the
mediaeval cities. They were based on work, not
on war, and they flourislied rather by commerce
than by conquest. Whether, like most Englisli,
German, and Flemish cities, the mediaeval city
gradually grew out of the new rural colonisation ;
CITY, MEDIEVAL
293
or whether, like the French, Italian, and Spanish
towns, it was a revival of old urban life, still
the mainspring of its existence was the demand
of the country-folk for the industrial products
of the townsfolk. The shopkeeper and the
merchant Avere in most cases the founders and
restorers of civic life in the Middle Ages, and
its humble origin explains the timidity that
often characterised its action. Even when the
cities rebelled against their feudal lords, they
did so in self-defence, and were eager to purchase
terms of peace. It was only the Italian cities
with their feudal nobles that developed the
haughty and aggressive spirit of the ancient
republics, and made a business of bloodshed
rather than of barter. The close of the period
of conflict between the cities and their lords
was in most cases marked by articles of peace
called charters, and even in those parts of
Europe, where no actual conflict broke out, the
granting of charters became the fashion.
Though diff'eriug in style and substance, these
charters confen'ed much the same public liberties
everywhere — exemption from arbitrary taxa-
tion, right to local jm-isdiction, the privilege of
enfranchising the villein who had been received
for a year or a year and a half within the city's
walls, and the power of electing officers and
raising militia. To these public liberties
private liberties were generally added, such as the
right of citizens to marriage without the consent
of their lord, the right of leaving their property
to their children, and the like. But such
privileges were not gi-anted without fixed pay-
ments to the feudal lord on the part of the
community in lieu of the uncertain exactions
that had been previously levied in the shape of
poll taxes and transit dues from individual
traders. One important result followed from
such fixed payments, namely, freedom of trade
within the area belonging to the feudal lord, an
area which gradually extended with the exten-
sion of the domain of the feudal over-lord or
king. As the wealth of the cities increased
under these favourable conditions, the fixed
payments, which had taken the place of the
old services and taxes, were supplemented by
demands for extraordinary subsidies, and in
settling these extra payments the cities came
to be represented in the council of the nation,
like the other feudal tenants, and an urban
commonalty was eventually formed by the
bond of common interests. When once the
status of the city was more or less secure, its
civic constitution underwent a change. The
democratic equality of an age of confusion,
based on individual strength and courage, gave
way to the oligarchical inequality of a more
settled state of society, based on Avealth and
intelligence. The meeting of all the inhabitants
of the city to resist feudal aggression was super-
seded by the meeting of the chief owners of
houses and shops to promote commercial enter-
prise. Trade being more and more the gi-eat
interest of the city, the great merchants grew
in prestige, and in their associations or guilds
gained political power.
The origin of the civic Gilds {q.v.) is to be
sought in remote antiquity. The simple idea
(see Stubbs) of a confraternity united for the
discharge of common or mutual good ofiices,
supported by contributions of money from each
member, and celebrating its meetings by a
periodical festival, may find parallels in any
civilised nation at any age of the world. The
ancient guild is simj)ly the club or associa-
tion of modern life. It was formed on the
analogy of the family gi'oup, and was in many
cases consecrated by religious ceremonies. The
ends it subserved were very various — relief in
poverty, sickness, old age, or in temporary difli-
culties, in loss of property, in making pilgrim
ages, dowry on marriage, repair of roads and
bridges, and churches. The tendency to unite
in frith guilds or clubs for mutual protection
became general throughout Europe in the 9th
and 10th centuries. In parts of the continent
these guilds were roughly repressed, but in
England and in the more inde]iendent towns of
the continent they formed more and more the
basis of urban life, and as trade and commerce
became the chief interests of the towns, mer-
cliants and traders naturally formed their guilds
or associations on the analogy of those already
existing. As the maintenance of the privileges
and immunities of towns became more and more
a matter of money payment, the wealthy part
of the commercial community that made itself
responsible for this payment, and thereby pro-
tected the town and its trade from feudal
encroachment, absorbed civic power. In
many cases charters of incorporation were
granted or confirmed to the chief guilds or
guild. In fact these corporations were invested
A\-ith an urban lordship, ranking side by side
with the smaller rural lordships, exercising
jurisdiction, enacting bye-laws, levying taxation,
organising the militia, repairing the city walls,
in short, carrying on all the functions of govern-
ment within a limited area. The membership
of a guild then became recognised as the pass-
port to civic privileges, and so long as the
membership in some guild was open to every in-
habitant with a stake in the city, the constitu-
tion remained more or less democratic. But
the enhancement of the commercial privileges
secured by the cities made the merchant guilds
more and more reluctant to admit new mem-
bers. Below the merchant guilds and outside
the constitution, there were formed crade or craft
guilds of the small manufacturers or artisans,
weavers, shoemakers, carpenters, and the like.
The greater folk of the large capitalists stood
over against the lesser folk of the small capital-
ists, and as the numbers of the latter increased
with the growth of manufactures, and the influx
294
CITY, MEDIEVAL
of countrymen into the towns, a struggle for
power ensued between the two classes of guilds,
and in some of the continental cities, especially
in the Rhine valley, took the form of civil war.
The result of this struggle was in many in-
stances the enlargement of the civic constitution
by the admission of the craft guilds, but these
in turn became exclusive, and largely directed
towards securing markets for their goods, while
with the growth of capitalist manufacturers and
the separation of masters and men in various
industries, the artisan population of modern
times began to grow up and form a fresh urban
community. With the spread of the Reforma-
tion a strong tide of feeling set in against guilds
in general, and we find in England a succession
of laws passed in restraint of their authority.
Although shorn of some of their powers and
privileges, the merchant and trade guilds
managed to survive in a less exclusive form,
and proved valuable sources of revenue in times
of emergency. Henry VIII., Elizabeth, the
Stuarts, and Cromwell alike received money out
of their coffers, and in return were content to
leave them the real centres of civic power.
In spite, however, of the prevalence of the
oligarchical form of civic government, the medi-
aeval cities were the nurseries of modem freedom,
of civil and religious rights. Within their
walls there grew up the professional classes —
lawyers, doctors, teachers, writers, and the like,
who gradually formed the intellectual leaders
of the commonalty. The separation of munici-
pal and ecclesiastical authority in the persons
of the magistrate and town council and the
bishops and clergy, tended to create a liberty
of thought and action such as had been un-
known in the ancient world with its identifica-
tion of church and state, and prepared the way
for the Reformation movement. At the bottom
of the social scale the influence of civic life was
equally beneficial. Although the mass of the
townsfolk were in a very degraded condition, yet
they were freemen and not slaves, like the
artisans of ancient Greece and Rome, or serfs,
like the rural population outside the city walls.
The town labourers, too, enjoyed some portion
of civil liberty and knew how to combine against
oppression, and, while struggling to raise them-
selves in the town, found a response from their
brothers on the land. The barriers between
the rich and the poor were regarded as fixed,
not as in the past by a supposed law of nature,
but by a contrivance of man. The church had
from early times set its face against slavery ; the
city bred the spirit that eventually killed serf-
dom. While the growth of the capitalistic
classes, the rise of the professional classes,
and the increase of the wage-earning masses
were gradually modifying the life of the cities
from within, their external relations to the mon-
archical regime which was being consolidated in
most parts of Europe during the 14th, 15th,
and 16th centuries, were slowly but surely modi-
fying civic life from without. In France, Spain,
Holland, and England, if not in Germany and
Italy, the cities began to lose their local inde-
pendence and quasi-sovereign powers, and to
take their place in a more centralised system
of national government. In Germany, owing
to the weakness of the central authority; and
in Italy, owing to the absence of any centre of
national authority and the standing conflict
between the adherents of the imperial and papal
principle, the great Hanseatic cities and the
republics of Lombardy, were able for a longer
time to maintain their independence, but the
outbreak of the Thirty Years' War in Germany
and the invasion of Italy by Spain and France
undermined their sovereign strength, and in
those countries, too, the cities began to sigh
for the strong hand of central control visible in
western Europe. The signs of central control
were to be seen in the limitation of local
administration of justice, in the extension of
national taxation, in the formation of a national
army and navy, and, in some countries, in the
nomination of civic magistrates by the central
government. The ideas of self-government
nurtured in the seedplots of cities were being
transplanted to the national soil, and what
the citizens lost in local privileges they regained
in national rights. The conception of national
free trade, national freedom of thought, national
freedom of action, took the place of that of local
liberties and immunities. In a country like
France, with a strongly centralised government,
and with an undeveloped system of national
representation, the decay of local independence
was too rapid for national well-being, but in
England the spirit of local independence took
fuU possession of the central government. With
the growth of industry in the 17th and 18th
centuries and the spread of democratic ideas
that found their most emphatic expression in
the French Revolution, the system of commercial
monopolies and privileges was shaken to the
centre. With the improvement of communica-
tions by road, river, and canal the demand for
national free trade and the destruction of re-
maining barriers between town and country or
districts and provinces became louder and louder,
and with the fall of the old commercial system
civic constitutions cried out for reform.
Ghent may supply an example of the
mediaeval city on a very large scale. Favoured
by natural conditions, it was one of the
earliest places of the north-west part of
continental Europe to become the centre of
trade and industry ; and to develop the power
of defending its growing wealth. Towards the
close of the 12th century it purchased com-
mercial and political privileges from its feudal
lord, the Count of Flanders, and secured some
increase of municipal self-government. Civic
jurisdiction took the place of manorial, and
CITY, MODERN
29S
although at first, as in other cities, the local
magisti-ates were appointed by the feudal lord,
yet in time the power of election was granted
to the citizens. A later charter gave the power
of fortifying the city and of raising a
militia. By the beginning of the 15th cen-
tury the external circuit measured 9 miles,
the city area was broken up into easily de-
fensible districts by the arms of the river, the
banks being connected by drawbridges, and
at the sound of the famous bell Koland, 20,000
armed men prepared to fight for their liberties.
The constitution of the city Avas originally
democratic though controlled by the feudal
authority above it, but, when municipal
charters had conferred complete self-govern-
ment, the power of the merchant guilds
gradually transformed it into an oligarchy. In
the 14th century the city was torn asunder by
the internal factions of the merchant and craft
guUds. The latter, especially those of the
wool-weavers, had been established very early
in Flanders owing to the wealth of the manu-
facturing industries and the necessity of defend-
ing them against the merchants, and it Avas
only after a fierce and bloody struggle that
political power was redistributed on a broader
principle by the absorption of the merchants'
guilds into the trade guilds. The final shape
the constitution assumed in the 15 th century
was as follows : — The population was divided
into fifty-two guilds of manufacturers and into
thirty- two ti'ibes of weavers, each fraternity elect-
ing annually or biennially its own deans and sub-
ordinate officers. The senate, which exercised
functions legislative, judicial, and administra-
tive, subject to the feudal court of appeal
sitting at Mechlin and to the sovereign authority,
consisted of twenty-six members. These were
appointed partly from the upper class or the men
who lived upon their means, partly from the
manufacturers in general, and partly from the
weavers. They were chosen by a college of eight
electors who were appointed by the sovereign
on nomination by the electors. The whole
city in its collective capacity formed one of the
four estates of the province of Flanders. The
quarrels of Ghent with its liege lord generally
arose from the demands of the latter for extra-
ordinary subsidies to raise a mercenary force.
If the subsidy was refused, war as often as not
ensued, and though the burghers might be
defeated on the open field, yet they were
unassailable behind therr walls against the
armed force of feudalism. It was only when
standing armies took the place of feudal militia
and political passions divided the city, that
Ghent had to submit to the loss of its liberties.
[Motley, History of the Dutch RepMic. —
Froissart. — Philippe de Comines. — Hallam's
Middle Ages. — Guizot, Civilisation in Europe
and France. — Sismondi, Histoire de la chute de
V Empire Roviain et du D6clin de la Civilisation —
Histoire des Republiques Italiennes du Moyen Age.
— Stubbs, Constitutional History. — Hallam's Con-
stitutional History of Europe during the Middle
Ages. — Freeman's Essays, 2d series. — Gneist's
Self- Government in England and History oj
English Constitution. — English Guilds, by Toul-
min Smith. — Guilds, hj C. Walford. — Wealth of
Nations, by Adam Smith, bk. iii. ch. iii. and iv. —
Hanse Towns, by H. Zimmeru. — Histoire des
Frangais by Lavallee, vol. i. — Maurer's Geschichte
der Stadt-verfassung in Deutschland. — Bryce's
Holy Roman Empire.'] a. k. c.
City, Modern. The modern city is in
some respects a revival of the ancient city of the
Roman empire. It is a unit of administration
in a larger state, and its powers and privileges
are strictly dependent on the central authority,
whatever be the nature of the latter. It
difiers from its prototype : first, because the
principle of its government is democratic,
not aristocratic ; second, because the scope of its
governmental authority is strictly defined by
statute law, and not by custom or conquest.
Residence or payment of rates in a certain area
are the modern titles to urban citizenship ;
popular election or selection by an elected body
is the general method of appointing the munici-
pal administrator ; bye-laws form the extreme
limit of the city council's legislative power ; and
rates raised in a certain manner are the main
sources of civic revenue. The time of residence,
the amount of the rates, the method of elec-
tion, the qualifications requisite for municipal
honours, the extent of administrative functions
and of the by-laws, the incidence and assess-
ment of rates, may vary enormously in the
ditferent countries of Europe, in America, in the
British colonies and Indian empire ; but in all
parts of the world of modem civilisation, with
the exception perhaps of Russia, the above
features characterise the modern city. Any
man, and in the most advanced countries any
woman, is at liberty, by taking a certain course
of action which is open to all, to exercise the
rights of citizenship in an urban community.
He can be only prevented from exercising such
rights by his own choice, fault, or misfortune.
Physical, mental, or moral obstacles, that is to
say personal impediments, may stQl exist, but
there are no insurmountable barriers of law or
custom.
The subordination of the modern city to a
central authority shows itself chiefly in the
sharper line which is drawn in modern times
between local and national affairs, only those
affairs being local which are by their very nature
rooted in a clearly defined area. The mediaeval
city in the time of its strength had, as we have
seen, within its boundaries almost complete
self-government. It administered its own
justice, largely based on customary precedents,
it assessed its own rates and taxes, and handed
over a lump sum to the central government, it
preserved its own peace and order, and it raised
29G
CITY, MODERN
its own militia. The only sovereign power it
did not possess after the rise of national govern-
ment was the right of making peace and war.
The modern city has almost entirely lost the
right of local jurisdiction, it raises its own rates
but has its taxes collected for it by national
officials, it is in many cases responsible for its
own peace and order, but it has no control over
an armed force, and has to ask for its help if
it requires it. On the other hand it exercises
many local functions which in the Middle Ages
were either left to the church or to private
enterprise or to compulsory service, or were
disregarded. Poor relief and education are now
supplied or supervised by the chief civic body
or by co-ordinate bodies. Sanitation is a matter
of public concern not of private caprice, roads
and bridges are constructed and repaired at the
public expense not by means of private tolls,
and lighting and water supply, in old times left
to nature, are controlled if not provided by the
municipality. The line drawn between local
and national affairs varies in certain points in
different countries, but, speaking generally, local
affairs are those matters that touch on interests
which are more immediately connected with the
city's welfare, which the ordinary self-interest
of the citizens is supposed to be capable of
managing, and which do not admit of uni-
form regulation, e.g. roads, bridges, markets,
harbours, lighting and watering ; while national
atlaii-s are those in which the nation as a whole
is more immediately concerned, which would
not be provided for by civic self-interest, and
which require uniformity of treatment. Such
are civil and criminal justice, based on general
principles of legal rights and penalties, national
defence, postal communications, commercial
regulations, and the provision of revenues re-
quired for effecting such purposes. Between
the two fairly distinct classes of local and
national affairs come those that are local in
their application, and yet national in their
interest — such as sanitation, police, poor relief,
and education.
In the case of sanitation, the administration,
though generally left in the hands of the city,
tends more and more, with the spread of
sanitary science, to be supervised by the central
government. This at least is the principle on
which local government in Great Britain is now
conducted under various sanitary acts, and
other countries are beginning to follow its ex-
ample. In the case of police there is great
diversity of practice in modern cities. From
one point of view nothing is more distinctly a
local affair than the preservation of peace and
order within a given area, but from another
point of view, namely, the grave danger to the
nation as a whole of any local outbreak in a
large centre of industry, it becomes a national
affair. In all European countries as well as in
America the police in the capital is under
national not municipal control, but in the pro-
vincial cities practice varies according as the
more or less direction is left to the central
government. But in no country is the city left
responsible to its own citizens alone for the
efficiency of its police force, and in some cases,
as in France and Belgium, there is a national
or state police acting side by side with the local
police. In the administi-ation of poor relief
there is also much divergence of practice.
Sometimes the local body that administers relief
is a committee appointed by the municipal
council — this is the case in Germany and in
some American cities ; sometimes it is the
municipal council itself, as in France ; some-
times it is a separate local body for the most
part locally elected but supplemented by justices
of the peace, as in England ; but in all countiies
there is a tendency towards central control of
local bodies in the matter of poor relief, and in
this respect the local government board of
England has led the way. Lastly, popular
education is locally administered, but as a rule
by bodies elected ad hoc, if not by a committee
of the municipal council. The local body as a
rule acts under state laws and sometimes by
help of state subsidies, but it raises a local ra:te
where schobls are civic and not voluntary estsrt)-
lishments.
But however much the scope of local affairs
and the methods of administering them may
vary in different countries, yet in all there is
a large and on the whole an increasing
amount of central control, financial and ad-
ministrative. This control is exercised in
England chiefly through the central depart-
ments, in America through the state, in France
and Germany through the national executive,
which has a voice in the appointment of the
mayor and burgomaster, but in each case it is
vital and vigilant. The local bodies are no longer
independent organisms self-acting ; they are the
appendages of a larger organism. Local self-
government has given way to local government.
Manchester may be taken as a typical ex-
ample of the modern English city. Although
a flourishing town in the Middle Ages, and
possessed of certain limited rights of self-
government exercised through the court-leet,
yet it did not become a municipality propel
until the passing of the Municipal Reform Bill of
1835. It became a City in 1853 and a County
Borough in 1 8 8 9 . With a population of 7 1 4, 4 2 7,
1911 ; it is now the third (if Salford is included,
population 1911, 231,380, the second) largest
city in Great Britain. Its municipal business is
administered by a Lord Mayor and City council
of 123 members, 93 being councillors elected by
the ratepayers in 30 wards, and 30 aldermen
co-opted by the councillors. The Lord Mayor
(title granted 1893) is elected by the council for ,
a year, and is paid ; the rest of the council is
unpaid. The council administers the sanitary
CITY, MODERN— CIVIL LAW
297
acts, maintains the jjolice force, makes and
repairs urban roads, controls building opera-
tions, and supplies electricity. It also,
in virtue of special acts, supplies the town
with water and gas. It manages the City Art
Galleries, the Free Library, the Ship Canal,
Higher and Elementary Education includin^^
the Municipal Secondary School, the municipal
School of Art, and the School of Technology,
the Principal of which is on the Council of
the Victoria University of Manchester. The
Guardians of the Poor for the varidus Poor
Law Unions are elected by the ratepayers or
magistrates. Justice isadministered by officers of
the crown, a stipendiary police magistrate, the
Manchester city justices, the mayor and ex-
mayor being ex q^cw justices, a recorder for more
important criminal cases, a county court judge
for small civil suits, and, finally, the assize judges
as the highest criminal and civil court.
The town council's legislative power only ex-
tends to that of passing by-laws ; the reason-
ableness of by-laws can be disputed in a court
of law, and they are not binding like acts of par-
liament. The corporation and town council can
sue and be sued like an individual. It must
meet four times a year at least, it must appoint
a finance and police committee, it must send in
its accounts to the local government board, it
cannot borrow money except with the consent
of the local government board or some other
central department, and it cannot raise money
except in certain specified ways, chiefly by a rate
on occupied houses, and for certain specified pm--
poses. It it wants to have its powers in any
way enlarged it must apply to parliament, whose
creature it is.
\Local Government and Taxation in the United
Kingdom, Cobden Club Series. — Local Govern-
ment, Chalmers (English Citizen Series). — De-
mocracy in America, De Tocqueville (tr. Henry
Reeve). — A merican CommonwealthyBryce. — Stein's
Life, by Seeley. — Maurer's Geschichte der Stadt-
Verfassung in Deutschland.] A. K. c.
CITY OF LONDON, COMPANIES OF.
See Companies, City of London.
CIVITj law, in the widest sense of the term,
denotes the law of the state, as distinguished
from the law Christian or Canon Law (q.v.)
In a narrower sense the term is used to denote
the Roman law, the great storehouse of rules
and principles from which the institutions of
modern states have been in great part derived.
The history of Roman laAv begins with the un-
written customary rules observed by the gentes
and curia} which made up the ancient city-state,
and with the leges or written laws in which
the sovereign people declared its will. When
the plebeians made good their claim to political
rights, the most important rules of the early
law were roughly codified in the Twelve Tables
(450 B.C.), and in process of time new laws
came to be made by the assembly of the plebeian
tribes ; a plebiscitum had the authority of a lex.
As the ti-ade of the city increased, it was found
necessary to supplement the old civil law by
rules of a less formal and more rational character,
such as might be applied to traders and others
who were not Romans ; these rules formed the
so called law of nations, i.e. the law administered
by Roman magistrates to men of all civilised
nations. This wider laAV was afterwards identi-
fied with the law of nature, a conception
borrowed from Greek philosophy. Nature
implants in man the instincts which lead him
to form societies and states, and nature endows
man with reason, the power which enables him
to improve legal rules, and to administer the
law in a spirit of equity. With these philo-
sophic notions the Romans combined great
practical skill ; their forms of conveyancing,
their system of accounts, and the procedure of
their courts have exercised and still continue
to exercise an important influence on all the
commercial transactions of the modern world.
The success of their imperial policy gave them
a wide field for legislation and administration ;
but empire brought with it a change in the
character of the civil law. The public law of
the ancient city was subverted in the interest
of a centralised despotism ; the private law,
i.e. the law relating to property, contracts,
family relations, etc., was gi'eatly developed
and improved ; the emperors began by using
the senate as their instrument of legislation ;
then they dispensed with formalities and
assumed the right to make constitutions or
new laws by their own authority. In applying
the Roman law throughout the provinces,
magistrates were much embarrassed by the
number and complexity of legal rules and text-
books. Several attempts were made to codify
the whole law ; and Justinian finally gave his
sanction to a code of imperial constitutions, a
digest of the works of the best jurists, and a
book called the Institutes, which was to form
the basis of legal education. These three works
form the Corpus Juris, the authoritative exposi-
tion of the civil law.
In the history of Roman law we may study
the origin of those commercial conceptions of
property and contract which modern economists
make the basis of their science. According to
the old customary law, property belonged to
family groups ; the paterfamilias had no very
extensive rights of alienation ; things necessary
to the family existence, such as land and slaves,
were alienated with the cumbrous form called
mancipation, other things only with the forms
of a fictitious lawsuit. By the later law, the
dominus or owner had extensive and wsll-
defined rights of use and abuse ; he could
alienate inter vivos, and, within certain limits,
by will, at his own discretion. The full rights
of dominium were conceded to persons not
recognised as owners by the formal customary
298
CIVIL LAW
law ; possession of land allotted by the state
came to be equivalent to ownership ; and equit-
able ownership came to be as safe, under the
protection of the praetor, as the dominium of
the Quiritarian or ancient Roman law. A thing
which could legally be owned was said to Ije in
commercio, a thing to be disposed of; such
things were corporeal or tangible (land, goods,
money, etc.) or incorporeal (debts and valuable
rights). Immovable things (land and house
property) are distinguished from movable
things (goods, etc.) It is to be observed that
the Eoman law does not attach any special
importance to property in land ; the dominus
of land came to have very much the same
freedom of alienation as the owner of goods ; a
person not the owner of land acquired rights
over it only by virtue of some definite contract
or transfer of property rights on the part of
the owner. The complication and difl&culty of
property law arise from the various arrange-
ments by which the rights constituting full
ownership may be separated from one another
and vested in different persons. The custody
and use of a thing which belongs to A may be
transferred by agreement to B ; A may be
restricted in the use and alienation of his
property by reason of rights vested in B : in
other words, B may enjoy a servitude over the
property of A. B may have a right-of-way over
the land of A, a right • to use the land for his
own convenience, and this we may call a posi-
tive servitude. Or he may have a right to
forbid the erection of a building on A's land
which would obstruct the passage of light to a
neighbouring house, and this we may call a
negative servitude. Rights of way and rights
to light are prsedial servitudes ; they cannot
be claimed unless by the owners or occupiers of
neighbouring property. There are also personal
servitudes, rights over the property of another
enjoyed by an individual without regard to his
ownership or occupation of property. Of these
the most important is usufruct, the right to use
and take the fruits or profits of property belonging
to another. Where money and goods are treated
as capital, one person may have the usufruct or
quasi-usufruct, the capital stock being preserved
intact for the persons interested in the corpus.
The law of contract exhibits the same gradual
extension of individual liberty as we observe in
the law of property. Primitive custom hardly
permits a person to alter his rights by his own
act, or by private agreement with another. But
in time reasons are found for enforcing certain
kinds of agreement. These are (a) real contracts,
i.e. those which are concluded by transfer of a
thing. If e.g. a person actually receives a thing
by way of loan or deposit, he is compelled to
restore the thing or its equivalent. Barter is a
real contract ; it becomes binding when one
party has actually performed his part of the
bargain, do ut des. In the case of (6) formal
contracts, Avhere the agreement is binding be-
cause the parties have used some solemn form ;
they have exchanged the words of question and
answer known as a stipulation (verbal obligation),
or they have joined in making an entry of the
debt in the creditor's ledger (literal obligation).
Further, the law recognises consensual contracts,
which owe their binding force to the agreement
of the parties. In an action on a formal con-
tract, claim and defence must be founded on the
strict letter of the law ; in an action on a con-
sensual contract, plaintiff and defendant might
be ordered to do what was fair and right. To
the class of consensual contracts belong the
most important commercial transactions — sale,
letting and hiring, partnership, and mandate.
Such were the lines on which the Roman lawyers
constructed their system of proprietary and con-
tractual rights. To give effect to the rights
recognised by law is the ofiice of courts and
magistrates. At Rome and elsewhere the reign
of force precedes the reign of law ; self-redress
is the rule of aU early communities ; it is only
by degrees that the state assumes authority to
decide private disputes. First we have custom-
ary rules by which money payments might be
made in atonement for wrongful acts ; there
are also cusloms and forms by which private
transactions are placed under public protection
— a sale, a will, or a contract is made in presence
of the people, or of witnesses representing ihe
people, and the community is thus bound to see
that the parties perform their duty. Finally,
disputes when they arise are referred to arbitra-
tion, and forms of process are prescribed by the
magistrates. Of the forms of action known to
the oldest Roman law, one was a request that
the magistrate would appoint an arbitrator ;
another took the form of a solemn wager, each
party depositing a stake which was forfeited if
he failed to prove his case. On the analogy of
this action by wager was framed the amdictio,
a remedy which seems to have been introduced
in the interest of creditors and the money-
lending class. There were also forms of execu-
tion, by which a creditor could seize his debtor's
property and hold it as a pledge, or lay hands
on the debtor himself and bring him before the
praetor. If the debtor did not discharge or
formally contest his liability, the creditor might
take him away and detain him in custody ;
after the lapse of a prescribed time the debtor
might be sold into slavery or put to death.
These early forms of process were superseded by
an improved system, under which cases were
sent by a magistrate to a private arbitrator,
each case being reduced to a. formula, in which
the issue to be tried was exactly set forth.
Cases not suited for arbitration were tried by
the magistrate himself ; by the imperial legisla-
tion arbitrators were almost altogether dispensed
with, and all questions of law and fact were
decided by the judges.
CIVIL LAW
299
When the Roman empire was broken up, the
nations of Europe framed for themselves those
laws which are generally described as the feudal
system. Feudalism, as Sir H. Maine points
out, combines the surviving forms of Roman
law with the customs of the barbaric tribes
which overran the empire, and with the Chris-
tian sentiment which bound men together by
the tie of mutual service. The object of the
whole system was to fix the social order by
defining each man's duties, and by connecting
these duties as far as possible with the tenure
of land. The defects of the system were that
it left too little room for individual enterprise,
and that, by making each man look only to his
immediate superior, it strengthened small local
powers at the expense of national governments.
With the revival of learning and the Reforma-
tion there came a demand for greater liberty,
and about the same time the renewed study of
Roman law directly and powerfully influenced
the laws of continental nations ; but the feudal
customs held their ground until, in the 18th
century, political writers began to speculate on
the possibility of framing laws of a more simple
and rational character, based on general notions
of justice and humanity. It was almost taken
for gi-anted that social inequalities and abuses
were due to bad laws ; philosophers drew up
ideal codes, and sovereigns, like Frederick the
Great, Joseph IL, and Catherine of Russia,
busied themselves with large schemes of legisla-
tion. In France, the Revolution swept away
old institutions ; the Convention began, and
Napoleon carried through the work of providing
the people with a new system of laws. There
are, of course, infinite diff'erences of detail in
the laws of modern states, but in all of them
we find the distinctions, classifications, and
expedients of the Roman law, adapted to the
existing condition of society. It is, therefore,
not surprising that socialist writers should
endeavour to break down the rigid legal ideas
which the modem world has derived from the
Corpus Juris. To the socialist, property does
not seem to fall into the domain of private
rights ; he regards it as forming part of a
common social stock ; he will not permit con-
tracts to be rigidly enforced, for to him a con-
tract is only an arrangement between indi-
viduals, to be revised or set aside if the general
interest seems to require it.
The history of our own law possesses a
peculiar importance. Though deeply indebted
to the Roman jurists, English lawyers never
accepted the Corpus Juris as an authoritative
text-book ; they worked out a system of their
own on the basis of the common law, i.e. of
the custom common to the whole kingdom.
English customary law was never codified, in
whole or in part ; it was handed down in the
form of an unwritten tradition, of which the
freemen themselves, assembled in their local
courts, were the interpreters and the guardians,
When the king's judges began to go circuit,
administering justice in every part of the
country, their decisions were accepted as the
most complete expression of the common law.
In applying legal rules to land, the judges
began by expounding the feudal tenures with a
subtlety which savours of the logic of the
schoolmen ; but their bias was in favour of free
alienation ; they invented or permitted devices
by which entails were barred, and settlements
brought within strict limits. The tendency
towards freedom of disposition was also apparent
even in our early legislation, and the chancellor,
in the exercise of his equitable jurisdiction, did
much to enlarge the power of an owner to deal
with land in the way of commerce. Feudal
restraints have now been almost entirely re-
moved ; the modern law gives to an OAvner in
fee simple all the rights enjoyed by the dominus
of Roman law. But the transfer of land is
beset with difiiculties ; legislation has removed
many of the sul)tleties of the old law, but the
statute-law is so voluminous and complicated
that conveyancing is still an art reverenced
by practitioners and little understood by the
general public. The acts passed in England
and Ireland for the benefit of tenants and
labourers, represent the result of efforts to
combine some of the ideas of social democracy
with the rigid notions of individual ownership
which commended themselves to the judgment
of legal experts. Of those who are most active
in promoting changes in the land laws, some
would be content with " free trade in land " ;
others again would nationalise or municipalise
the land, with a view to having it managed for
the general good, on principles inconsistent
with individual ownership and freedom of
disposition. Political discussion is much em-
barrassed by the obscurity of the subject ; the
economist or the legislator who resorts to legal
treatises for information is bewildered and
sometimes misled by the technical character of
the language employed.
English law has always professed to favour
trade ; but the trade of old time was carried
on under the narrow regulations which were
rendered necessary by the privileges of cor-
porations and companies. Even in the 18th
century mercantile law was almost undeveloped ;
in the early editions of Blackstone's Com-
mentaries only a few pages here and there are
given to the subject. Lord Mansfield was then
beginning the long series of his decisions,
applying the principles which he derived from
his study of Roman and English law to the
business of a great and rapidly advancing
commercial nation. Since his time, every
species of contract and security has been made
the subject of prolonged and repeated legal
discussion ; it would almost be possible to write
a history of English commerce from the law
300
CIVIL LAW— CIVIL LIST
reports alone. Freedom of contract has been
the avowed policy of the courts ; the law leaves
men free to dispose of their property and services
at their own discretion, and compels them to
carry out the bargains which they choose to
make. But all private bargains are controlled
by public policy ; the law will not permit, for
example, a wager to be made in the guise of
a contract of insurance ; and agents have often
been forbidden to plead mercantile usages which
would enable them to make profit of their agency
without the knowledge of their principals. The
policy of the common law would not permit
partners in a concern to limit their liability ;
but this principle has been departed from in
modern legislation relating to joint stock
companies. In studying these and other topics
belonging to mercantile law, we perceive that
rules of law are not the arbitrary invention of
legislators or judges ; they arise naturally out
of the usages and transactions of ordinary life.
Some difficult problems are suggested to the
jurist by the conditions of modern commerce.
Free trade and open competition lower the
standard of profit, and capitalists form trusts and
syndicates with a view to obtaining the control
of great markets : is it necessary or desirable
that the law should limit their freedom of
action ? Trade unions claim to dictate terms to
employers and labourers : where shall we draw
the line between lawful and unlawful com-
bination ? These are legal questions, but they
are not to be solved by the application of any
legal formula : the law merely gives an authori-
tative form to the notions of justice and expedi-
ency which prevail in the community at large.
[The history of law may be studied in Ancient
Law and other works of Sir H. Maine ; for the
legal analysis of the ideas of property, contract,
etc., see Holland's Jurisprudence, and works of
Austin and others there cited. Roman law is set
forth in the Corpus Juris Civilis and in the
numerous commentaries thereon ; a compendious
view is given in Colquhoun's Summary of the
Civil Law. ' For the laws of modern European
nations, reference may be made to Roger et
Sorel, Codes et Lois Usuelles. — Stobbe, Handbuch
des Deutschen Privatrechts, etc. English law is
expounded in Blackstone's Commentaries, — Smith's
Mercantile Law ; for the rules relating to bills of
exchange, sale of goods, and bankruptcy, the
works of Judge Chalmers may be consulted with
advantage. The Anglo-Tndian Codes (edited by
Mr. Whitley Stokes) contains a compendious state-
ment of the chief rules of English law relating to
contracts, etc. ; these rules apply to the natives of
India if, and in so far as, their occupations bring
them within the circle of British civilisation. A
native merchant at Calcutta frames his contracts
according to British law, while the peasant culti-
vator's rights are determined by the custom of his
village. Lord Mansfield's most famous judgments
may be found in Smith's Leading Cases ; see espe-
cially Carter v. Boehm (insurance), and Miller v.
Race (property in bank-notes), and observe the
use made by an English judge of the maxims of the
civil law. Lassalle's System der Erworhenen Rechte
is an interesting study of Roman law by a jurist
who became one of the leaders of socialism.] t. e.
CIVIL LIST. The arrangement by which
an amount was set apart under this head for
the ordinary service of the establishments of the
royal household and other expenses of the
crovm dates from the Restoration (1660). The
hereditary revenues arising from the crown
lands, and certain minor taxes, were appropriated
for this purpose, the amount being about
£680,000 a year (temp. Will. IIL) From
this the incomes of the lord chancellor, the
judges, ambassadors at' foreign courts were
defrayed, together with the pensions granted
by the monarch as well as his personal expenses.
This arrangement, which was open to many
abuses, lasted to the end of the reign of Geo. IV.
When WiUiam IV. ascended the throne, a
select committee of the House of Commons was
appointed to inquire into the matter, and resolved
that it was expedient that the civil list should
be applied only to such expenses as affect the
dignity and state of the crown and the proper
maintenance of the royal household, and that
many expenses which up to that date had been
included in it, and had no immediate connection
with these objects — which were really part of
the expenses of the civil government of the
state, ought to be removed from the civil list
and placed under the cognisance and constant
control of parliament. These charges were
therefore transferred to the Consolidated
Fund (q.v.) and the civil list established
mainly on its present footing ; some pensions,
however, were included in it.
According to Parliamentary Paper 22, Session
1837, — being the report from the select com-
mittee of the House of Commons, appointed to
inquire into the accounts of income and expendi-
ture of the civil list, from 1st January 1831
to 31st December 1836 ; with an estimate of
the probable future charge of the civil list of
Her Majesty, — the civil list of Will. IV. was
apportioned for the following purposes :
1st Class Privy Purse . . £110,000
2d Class Salaries of the several
Departments of the
Royal Household,
and Superannuation
and Retired Allow-
ances . . . 130,300
3d Class Tradesmen's Bills . 171,500
4th Class Royal Bounty, Special
and Secret Service . 23,200
5th Class Pensions . . . 76,000
£510,000
The report proceeds to state that, in con-
sidering an estimate for the future civil list of
the sovereign, the committee had been guided.
CIVIL LIST
301
to a considerable extent, by the expenditure
during the late reign. The payments pro-
posed were divided under five heads described
as below.
Class I
The privy purse of the sovereign has been
for upwards of half a century (now more than
a century), fixed at £60,000. During the late
reign (Will. IV.), there being a queen consort, a
further sum of £50, 000 was allotted to this class.
Under existing circumstances, your committee
recommend that an annual sum of £60,000 be
provided for this branch of the royal expenditure.
Class II
The second class comprehends the salaries of
the great officers of state, those of the officers
and menial servants of the royal household, and
the superannuation and retired allowances
payable to persons of the latter class. The
committee, concurring in the opinion expressed
in the report of 1831, "that it was not con-
sistent with the respect due to her Majesty to
scrutinise the details of her domestic household,"
have not undertaken any minute investigation
into that branch of the subject ; but they have
received, as already stated, a very full analysis
of the whole of this branch of expenditure.
The principal officers of state in attendance
on the sovereign were the lord steward, lord
chamberlain, master of the horse, and groom of
the stole. It was not proposed to fill up the
office of gi'oora of the stole, or to create any
analogous office in the household of Her ]\Iajesty.
It was also proposed to reduce the number
of lords-in-waiting from twelve to eight, and
of grooms-in-waiting to eight from thirteen.
The consolidation, when a vacancy should
arise, of certain other offices was recommended.
In considering the amount to be recommended
for this class, your committee feel it their duty
to call the attention of the house to the fact
that no application is now made to parliament
for the grant of pensions for the servants of the
late king. With these explanations, your com-
mittee recommend the estimate of £131,260
for the second class of the civil list.
Class III
Considering the disbursements which have
taken place in the late reign under the head
of bills of tradesmen, your committee recom-
mend the proposed estimate of £172,500 for
this branch of the royal expenditure.
Class IV
The fourth class of the civil list of his late
Majesty included the following heads : —
Royal Bounty .... £9,000
Home Secret Service . . . 10,000
Alms and Charity . . . 4,200
£23,200
After much consideration, your committee
have determined to recommend that the sum of
£10,000, now charged on the civil list for secret
service, may be transferred to the consolidated
fund by act of parliament, to be applied to the
same purposes, and under the same authority,
as heretofore.
The provision for this class will consequently
be reduced, as a charge on the civil list, to
£13,200.
Class V
The committee approached the consideration
of the pensions charged on the fifth class of the
civil list with a full sense of the attention
which the subject has exacted. Your com-
mittee refer to the following passage in the
report of 1831 : — "The house must recollect,
that the principle on which the sum is allotted
by parliament for the purpose of the civil list is
as a payment for the personal advantage of the
sovereign, and for the support of the dignity
of the crown, in lieu of the hereditary revenue
which at the commencement of each reign the
sovereign sacrifices for the benefit of the public :
some provision ought in all cases to be made
for such payments, as it miglit be presumed
the sovereign would have been desirous of
making had he remained in possession of the
hereditary revenue. That one class of such
payments would be pensions to those of his
subjects whom he wished to favour cannot be
doubted." In conformity with this opinion,
your committee recommend that the provision
for the grant of pensions should continue to
form a part of the civil list of Her Majesty.
But in order to guard against the sujjposition
that an enactment founded on this principle
should in any degree interfere with the inquiry
into pensions, of which notice has been given
in the House of Commons (if it appears fitting
that such inquiry should be instituted), it is
the opinion of your committee that, in place of
gi-anting a sum of £75,000 for civil list
pensions, Her Majesty should be empowered to
grant in every year new pensions on the civil
list to the amount of £1200 ; these pensions
to be gi'anted in strict conformity with the
following resolution of the House of Commons,
passe'' on the 18th of February 1834 :
"That it is the bounden duty of the respon-
sible advisers of the crown to recommend to
His Majesty for grants of pensions on the civil
list, such persons only as have just claims on
the royal beneficence, or who, by their personal
services to the crown, by the performance
of duties to the public, or by their useful dis-
coveries in science, and attainments in literature
and the arts, have merited the gi'acious con-
sideration of their sovereign, and the gratitude
of their country. "
Your committee recommend that this resolu-
tion should be engrafted in the Civil List
Act, and that annual returns of the pensions
granted, and the names of the several parties,
302
CIVIL LIST
should be laid before Parliament. The civil list of
Queen Victoria wasfixed accordingly at£385, 000.
ArrangeTuentswere also made as the Queen's chil-
dren grew up and for other members of the Eoyal
Family. At the accession of King Edward VII.
thecivil list wasfixed at the following amount: —
Glass I Privy Purse .... £110,000
Class II Retired Allowances, Salaries,
and Wages .... 125,800
Class III Expenses of Household . . 193,000
Class IV Works 20,000
Class V Royal Bounty, Alms, and
Special Services . . . 13,200
Unappropriated Monies . . 8,000
£470,000
At the accession of King George V., 1910, the
same amount was passed. On the death of King
Edward V 11. , the Queen Dowager became entitled
to an annuity of £70,000 provided under §5 of
the Civil List Act. The Prince of Wales being
entitled to the revenues of the Duchy of Corn-
wall receives no further provision, but on his
marriage, £10,000 a year is assigned to the
Princess of Wales to be increased to £30,000
should she survive the Prince. Under the
Prince of Wales's Children Act (1889) provision
was made for annuities of £10,000 to each of
the King's younger sons on reaching the age of
21, with an increase of£l5,000a year on his
marrying, and an annuity of £6000 a year to
each daughter on her attaining her majority or
marrying. Further charges on the Consolidated
Fund are the payments in each year of the Civil
List Pensions to the extent of £1200 a year, and
a maximum provision of £18, 000 a year to meet
pensions to former members of the households
of King Edward VII. and of Queen Victoria,
The comparison between the charge for the
late and the present reigns stood as follows :—
1901 1910
Civil List £470,000 £470,000
Pensions transferred to Consoli-
dated Fund . . . 25,000 18,000
Provision for other members of
Royal Family . . . 126,000 146,000
£621,000 £634,000
CIVILISATION. Ricardo pointed out (PHn-
cvples, ch. V.) that the natural price of labour
varies greatly, and "essentially depends on the
habits and customs of the people." The closer
political and industrial communication estab-
lished between civilised, half- civilised, and un-
civilised peoples since Ricardo's time has con-
firmed the truth of this observation and shown
the difiiculty of applying many economic maxims
universally when local conditions vary gi-eatly.
The industrial life of each people harmonises
with its environment of political structure,
customary morality, and current intelligence.
Any observed type of industrial organism is
greatly determined by the conditions of civilisa-
tion existing there and then, both in regard to
the wealth of the community as a whole and
the economic relationships between its parts.
The family, in its various forms, is the one
constant social element, and offers the best
basis for economic observations (F Le Play,
Les Ouwriers Uurop^ens, I.)
1. It is at first sight natural to ascribe the
poverty of any tribe to the physical conditions
under which they live, such as the barrenness
of the soil, or the rigour of the climate. Such
hindrances set definite limits to progress at any
given time, but every increase in intelligence
or social improvement removes them farthei
back ; they form a relative, not an absolute
check to the increase of prosperity. The success
of the Dutch in forming a rich community
despite disadvantages of every kind, shows how
skill and energy may overcome nature and over-
pass limits that would otherwise prove insuper-
able barriers. The example of Sweden may
likewise be cited. The use to which the wealth
of a people is put depends on the current view
of utility or enjoyment; it may be spent in
warfare, embellishment, or extravagance ; it
may be devoted to improving the country and
the condition of the people. Unless some por-
tion is carefully devoted to these latter purposes,
a civilisation will be short-lived, however bril-
liant it may be. The rapid decline of some East-
ern empires and of the glories of Athens may bt
thus explained ; the Romans, on the other hand,
devoted much energy to developing the resources
of their empire, and gave it more stability.
2. Though the chief economic activity of
societies of men has always had the same object
of securing sustenance, clothing, and shelter, they
have been, and are, grouped for these purposes
in diflerent ways. We may distinguish four
types : (i) In the early village community
(Maine's Village Community, Laveleye, Primi-
tive Property, see Agricultural Community)
the work is undertaken collectively, and wealth
forms a common fund. Unwritten custom, ad-
ministered by patriarchal or elected authority is
supreme ; and individual energy is devoted to
the common good of a small self-dependent
group, (ii) In municipal societies, like the
mediaeval cities, the inhabitants are organised
according to their callings in separate guilds ;
the status in life of each inhabitant, generally
speaking, is determined by the standing of
the guild, on the regulations of which the con-
ditions for labour and rate of pay depend. The
individual cannot rise out of his sphere in life,
and to hold a good position in his o%vn guild is
cJie chief object of ambition (see Gild), (iii)
By national organisation the central govern-
ment may direct the economic energies of a
whole nation, so that each village and each
town shall contribute as much as possible to
the maiatenance of national power. Corbert
may be specified in this connection, and the
various economic systems which were criticised
so eff'ectively by Adam Smith (Wealth of
Nations, iv., see Commercial System), (iv) In
modern society each individual is left free, so
far as possible, to pursue his own greatest ad-
CLASSICAL ECONOMISTS— CLASSIFICATION
303
vantage, and, for this purpose, employs his
labour or his capital in any direction which
seems likely to be profitable, without being
hampered by family ties and local regulations ;
or he unites in voluntary associations where it
appears that he can reap a greater measure of per-
sonal advantage (seeCo-oPERATiON; Companies).
It may be noticed in regard to the distinct
types of economic organisation found under
different civilisations, that the higher forms are
extended over very large areas and give mucli
free play for individual energy. Working on a
large scale, while they are very complicated in
their details, they are far more effective for the
purposes of providing food, clothing, and shelter
than the simpler machinery found in less de-
veloped societies. Again, the history of any
one great civilisation shows how the industrial
organisms of the simpler type have been in turn
displaced by more effective institutions ; though
fragments of the old may remain, cramped prob-
ably by regulations that have become unwise
since they are out of date. Hence we may find
in an old society some arrangements which
appear to be wholly at variance with modern
modes of thought, which only become intellig-
ible when understood to be survivals of institu-
tions once really important, though now mere
machronisms. While much interest attaches
to the study and working of any economic sys-
tem, the higher civilisations with their more
effective arrangements for organisation offer the
best field for investigating the causes which
affect the growth and maintenance of national
wealth. w. c.
CLARKSON, Thomas (born 1760, died
1846), a leader in the crusade against the slave-
trade, the evils of which he first realised when
competing at Cambridge, 1785, for a prize to
be given for the best essay on the subject Anne
liceat invitos in servitutetn dare. Clarkson won
the prize, and published his essay, translated
and enlarged, 1786 (2d ed. 1788). In a
subsequent essay On the impolicy of the
African slave trade, 1788, he argued that the
ti'affic which he had proved to be iniquitous
was also unprofitable. Among many publica-
tions on the same subject may be noticed
History of ... the Abolition of the African
Slave Trade . . ., 1808. In a new edition of
this work, 1839, there is a preface describing
Clarkson's later labours in the cause of the
slave. To the second series of his philanthropic
efforts belong Thoughts on the Necessity of
Improving the Condition of the Slaves in the
British Colonies with a View to their Ultiviate
Emancipation . . ., 1823 ; and The cries of
Africa to the Inhabitants of Europe . . .
( ? 1822). Clarkson also wrote. Not a labourer
wanted for Jamaica, to which is added an
account of the newly erected villages by the
peasantry and their beneficial results, 1842 ;
and The Grievances of our Mercantile Sea-
men a National and Crying Evil, 1845 (see
Abolitionist).
{Biographical Sketch of Thomas Clarlcson, by
Thomas Taylor, l%?>^ . — Sketch of the Life oj
Thomas Clarkson, 1S76. — Clarkson, William,
author of An Inquiry into the Cause of the In-
crease of Pauperism and Poor Plates, with a
remedy for the same and a Proposition for Equal-
izing the Rates throughout England and Wales
(1815)]. F. T. E.
CLASSICAL ECONOMISTS. Tliis name
has been applied to Adam Smith and his im-
mediate successors, Malthus, Ricardo, James
Mill, M'Culloch, and Senior, and, less often,
to the French physiocrats.
In keeping with the Latin derivation of
"classical," and with the use of the term
"classical authors," the name might simply
denote economic writers of the first rank who
have left models which all others must follow.
A less complimentary interpretation is given by
Professor Brentano, who compares classical eco-
nomics to classical sculpture, where, he says,
personal peculiarities are ignored in favour of
broad general human characteristics, and of an
"abstract man" without scars or wrinkles.
Economists, he says, belong to the classical
school when they reason deductively from the
assumption of an "abstract (economic) man."
The justice of this description need not be dis-
cussed here. See Deductive Method ; His-
torical School; M'Culloch ; Malthus;
Mill, James ; Physiocrats ; Ricardo.
[Brentano (Prof. L.), Die classische National-
okonomie, Leipzig, 1888. — Bohm-Bawerk(Prof. E.),
" Review of Brentano's Class. Nationalokonomie."
— Gottingische Gelehrte Anzeigen, June 1889. —
Dietzel (Prof. H.) "Die classische Werth-tlieorie,"
Jahrb. fir Nat, ok. und Statistik, 21st June 1890
cp. paper by the same writer, ibid. May 1891. —
Gide (Prof. Ch.) Principles of Political Economy,
pp. 16-20, Eng. Transl, Heath & Co., New York,
and Isbister, London, 1891.] j. b.
CLASSIFICATION is described by Mill
{Logic, vol. ii. p. 258, 4th ed., bk. iv. c. vii.) as
"a contrivance for the best possible ordering of
the ideas of objects in our minds ; for causing
the ideas to accompany or succeed one another
in such a way as shall give us the greatest
command over our knowledge already acquired,
and lead most directly to the acquisition of
more. " From this description we may conclude
that classification is more than a matter of
neatness or convenience. We can classify things
correctly only in so far as we can see them in
their true relations, and to see them in their
true relations is nothing less than to know their
true nature. ' ' The value of classification, " saya
Jevons {Principles of Science, vol. ii. p. 345),
"is co-extensive with the value of science and
general reasoning." Or, as the same writcT
puts it elsewhere, "Science can extend only so
far as the power of accurate classification ex-
tends," p. 421. It is not, therefore, surprising
304
CLASSIFICATION— CLAY
that the theory of classification should have
been discussed at length by the most eminent
writers upon scientific method, or that success
in classification should be one of the distinguish-
ing marks of scientific genius.
Classifications have frequently been distin-
guished as natural and artificial, or as Ihey
might better be termed, scientific and arbitrary.
In artificial classifications "some characters
arbitrarily chosen serve to determine the place
of each object ; we abstract all other characters,
and the objects are thus found to be brought
near to or to be separated from each other
often in the most bizarre manner. In natural
systems of classification, on the contrary, we
employ concurrently all the characters essential
to the objects with which we are occupied,
discussing the importance of each of them ;
and the results of this labour are not adopted
unless the objects which present the closest
analogy are brought most near together"
(Ampere quoted by Jevons, Principles of
Science, vol. ii. p. 351). Or, as Mill puts it in
his Logic(h\i. i. ch. vii., vol. i. p. 137 e^ seq.), some
objects are separated from each other by difi"er-
ences of kind, that is to say, by an indefinite
and inexhaustible number of particular differ-
ences ; other classes of objects are separated
only by certain specific diff'erences which are
not indices of any others.
But too much must not be made of these
distinctions. The diff"erence between an arti-
ficial and a natural classification is only one of
degree. Any classification, however subordinate
the diff'erences upon which it is based, tells us
something about the nature of the objects
classified. The classification which is useless
for the purposes of one science may be all-
important for the purposes of another science.
Thus crystals will be classified by the chemist
with reference to their chemical composition,
and by the crystallographer with reference to
their peculiar crystalline form, and the two
classifications will be altogether discrepant
with each other. Again, the progress of know-
ledge has shown that hardly any distinctions
of kind are absolute, that indefinite variation,
not orderly grouping, is the way of nature, and
that scientific precision is to be found not in
drawing distinctions between classes, but in
tracing the laws of development. Even before
the idea of evolution had attained to its present
distinctness, it was remarked that in the
sciences known par excellence as classificatory,
the sciences of botany and zoology, classification
was based not on definition but on types. In
other words it was found that the individual
forms of animal or vegetable life clustered
themselves around certain types to which few
if any conformed with exactness, whilst all were
closely akin. But since a type in this sense
is but the compendious symbol of a number of
nearly related classes, it is clear that a classifica-
tion by types is either an inaccurate classifica'
tion or else a classification which has not been
fully carried out.
In the moral and political sciences, including
political economy, classification is beset with
peculiar difficulties and dangers. The most
obvious of these lies in the fact that none of
these sciences possesses, or is ever likely to
possess, a complete scientific vocabulary, the
terms of which have the same precise sense for
every student, whilst they remain undefaced by
loose popular use. Classification is at every
step dependent upon nomenclature ; and it is
only in sciences which, like botany, possess a
complete and precise technical nomenclature
that classification can be carried out to the
utmost extent. But a more serious hindrance
to classification is to be found in the nature of
the subject-matter of moral and political science.
Their subject-matter is far more complex than
the subject-matter of botany or zoology. If it
be true that practically every individual in the
vegetable or animal kingdom embodies a more
or less considerable variation from a type, how
much more is this true of every human being
and of every human institution. Anybody
who compares with the classifications of natural
science the ^classifications, say, of feelings or
motives in a treatise of psychology, wiU feel
how much less adequate is the latter to the
object aimed at by the writer. And in the
study of society Mr. Herbert Spencer's De-
scriptive Sociology affords a striking example of
the difficulties which beset classification and of
the limited advantages to be derived from it.
When we look closely into ideas or institutions
which at first sight appear very similar, we
usually find diff'erences of a momentous nature.
This may be exemplified by the well-known
hazard in predicting from some instance in the ^
past the working of a new institution which
seems to resemble it. It may almost be said
that in the sphere of moral and social science
the only true kinds are individuals. The most
sagacious and suggestive wiiters upon these
topics have shunned elaborate classification as
they have shunned the use of highly technical
language.
[J. S. Mill, Logic. — W. S. Jevons, Principles oj
Science. — J. N. Keynes, Scope and Method of Poli-
tical Economy, pp. 166-8. — K. Menger, Methode
der Socialwissenschaften (1883), especially Ap-
pendix IV. (classification of economic sciences).
— K. Menger, Grundzuge einer Klassifkation der
Wirtschaftswissenschaften (1889). — H. Spencer,
Classification of the Sciences. — P. Geddes, Classi-
fication of the Sciences.'] r. c. m.
CLAY, Henry, bornin Virginia 2d Aprill777.
After receiving but a poor and elementary educa-
tion ; he became a lawyer and removed to Ken-
tucky, where he entered on a political career of
national importance, and three times in his life
— in 1824, 1832, and 1844 — was a candidate for
CLAYTON— CLEARING SYSTEM
306
the presidency. Although not an author, Clay
is noteworthy in economics as intimately
associated with the development of the so-
called "American system" in the United
States, or the policy of protection to manu-
factures by means of tariff duties, and the
liberal encouragement of internal improvements
under national authority. In 1806, he became
a member of the U.S. Senate, and for nearly
forty years, with the exception of brief periods,
was a member of this body or of the House of
Representatives. His most important speeches
bearing upon the subjects of protection and in-
ternal improvements are the following : Manu-
factures, 6th April 1810 ; Internal Improve-
ments, 13th March 1818 ; Protection to Home
Industries, 26th April 1820 ; Internal Improve-
ments, 16th Jan. 1824 ; American Industry,
30th and 31st March 1824 ; Influ^n^e of the
American System, 2d, 3d, and 6th Feb. 1832 ;
Introducing the Compromise Bill, 12th Feb.
1833 ; Support of the Compromise Act, 25th
Feb. 1833 ; and On the Tariff, 1st March 1842.
In favour of protection he argued that it
was necessary to establish a home market for
agriculture, as American power of production
was increasing in a ratio four times greater
than foreign powers of consumption ; that the
United States should not permit itself to be a
commercial slave ; that a well - established
system of manufactures promoted political
peace with foreign countries ; that manufactures
would bind the various interests of the coxmtry
into a closer union. Clay repeatedly insisted
in 1820, 1824, and 1832, that the question of
protection must be decided in face of the fact
that European nations maintained similar
systems. "I, too, am a friend to free trade,"
he said in 1820, "but it must be a free trade
of perfect reciprocity." It will be noticed that
the arguments referred to are mostly of a
political nature ; by 1832, Clay advanced more
prominently reasons of a more strictly economic
character ; and then argued that through the
tariff of 1824, the commodities which had been
protected were cheaper, and that products of
agriculture commanded a higher price owing to
the creation of a home market. Little was
said about the mercantile theory of balance of
trade. The advocacy of internal improvements
undertaken by the national government in the
first third of this century, was due to reasons
which would not be appreciated at the present
time. Settlements west of the seaboard were
scattered, and it was difficult, and in many
cases perilous to reach the advance guard of
western emigrants. Improvements were urged
not only on political but on economic grounds.
The agricultural products of Ohio were of little
value as long as the only commercial outlet
was the Mississippi, reached by the Ohio river.
Even Jefferson, who in general with the
Republican party favoured the strict construc-
VOL. I.
tion of the powers of the constitution, yielded
to the general demand that the national
government should actively assist in building
roads and canals and improving rivers. In
judging then the position of many public men
of the United States at this time in regard to a
wide interference of the state in industrial
affairs, one must bear in mind the political ex-
igencies due to the fact that it was impossible
to secure from the several states harmonious and
wise action, necessary for an inter-state route.
Clay was one of the founders of the Whig party,
and in general acted in harmony with it on
political questions. For his speeches on the
United States Bank, see the following : A
National Bank, 1811 ; The Bank Charter, 3d
June 1816 (delivered at Lexington, Kentucky) ;
Veto of the Bank, 12th June 1832 ; and for his
speeches on the sub-treasury system in which
he urged the necessity of convertible paper
money, and argued against relying upon the
precious metals as the sole crn'rency, see speeches
delivered 25th Sept. 1837 ; 19th Feb. 1838 ;
20th Jan. 1840. From 1842 till 1849 Clay
retired from active political life, although retain-
ing the position of adviser of the Whig party.
He died in 1852, For life and works see JVwks
of Henry Clay, edited by Calvin Colton, 6 vols. ,
New York, 1863. The last two volumes contain
tlie speeches. d. k. d.
CLAYTON, David, author of ^ Short System
of Trade, or an account of tohat in trade must
necessarily he advantageous to the nation, and
what must of consequence he detrimental, London,
1719. "Multitudes of people fully employed
in beneficial trades " being advantageous, the
importation of foreign manufactured goods is
"of consequence detrimental." The writer
alludes to "a pamphlet published about two
years since, entitled 'A short but thorough
search, etc.', which is now again reprinted
with some alterations and large additions."
F. Y. E.
CLEARING SYSTEM
Clearing Houses, p. 306 ; London Bankers' Clearing
House, p. 306 ; Provincial Clearing Houses, p. 307 ;
Foreign Clearing Houses, p. 807 ; Statistics, p. 309 ;
Other Classes of Clearings, p. 310 ; Stock Exchange
Clearing, p. 310 ; Beetroot Sugar Association, p. 310 ;
London Produce Clearing, p. 311 ; Railway Clearing,
p. 311 ;• Cotton Clearing, p. 311.
CLEARING HOUSES. The circulation of a
bill of exchange, draft, or cheque through
several hands accomplishes something more
than the settlement of the original transaction
out of which it arose. It completes many in-
termediate business operations by the delivery
perhaps of a single document instead of by
telling over a quantity of currency several
times. It thus effects important economies of
currency and of labour. But for the final
liquidation of the document there is still re-
quired the trouble of presentation, the provision
of currency, and the labour of counting this,
besides the risk of storing and of carrying it.
306
CLEARING SYSTEM
In some or all of these points a clearing system
carries economy yet further. The principle of
the clearing system is payment by " set-otf," or
the "clearing" off certain claims by counter-
presentation of other claims, leaving only a
single balance to be settled by actual payment.
Economy to this extent may be obtained by the
least developed system of clearing, as existing
in many towns, where each bank presents to
the other banks all drafts which it holds on
them without requiring payment at the time,
settlement being made subsequently by paying
the balances between the cross deliveries. The
next advance is the establishment of a clearing
house or common place of meeting. By this
means presentation may be made to many
different members within the compass of a
single room, and each of those members will
have but the labour of a single journey. A
further economy is secured in the settlement
by book entry of the final balances resulting
from the claims mutually admitted. "With this
arrangement the use of currency is eliminated
from the whole chain of transactions, from the
first drawing of a bill or draft to its final
payment. The system is effective entirely in
proportion to the economy obtained, and our
estimate of its value must depend upon (a) the
completeness of the chain of adjustment ; (&)
the magnitude of amounts discharged ; (c) the
number of drafts presented ; (d) the number of
parties making and receiving presentation ; and
(e) the difiiculties of separate presentation, other-
wise necessary. Great diversity may exist in
the arrangements. It will therefore be de-
sirable to describe the methods adopted at some
of the chief clearing houses of the world.
The London Bankers' CLEARika House,
established between 1750 and 1770, now in-
cludes (1891) twenty-six members, all being
bankers, doing cash deposit business in the city.
The clearing -room is a large apartment of
irregular shape, lighted from the roof. Around
the walls and in a double row in the centre are
placed desks allotted to each bank, according
to the extent of its business. The banks are
placed in alphabetical order, so that the clerks
can pass around the room and deliver the
* * charges " without confusion or risk of error. In
describing the operations it is necessary to use
technical terms and to remember that the " out "
and the " in " clearing comprise the same items,
having regard to their presentation by one bank
and their reception for payment by another.
Thus the "out" clearing of each bank, i.e. the
cheques, etc., for which each bank has to receive
payment, becomes part of the "in " clearing of
every other bank, i.e. the cheques, etc., which
every other bank has to pay. The ' ' out" clearing
is taken down at the bank ofiices in sheets or
books in separate "charges," according to the
bankers drawn upon, whilst the "in" clearing
is taken down in the same way at the clearing
house by clerks who go there for the pur-
pose.
The first "clearing" is held from 10.30 a.m.
till 12.0 noon, all drafts having to be delivered
at the desks by 11. The clerks receiving the
" charges " enter the items in their " in " clear-
ing-books, and cast them, agreeing the totals
with amounts placed on the back of the last
cheque. When this is completed the clerks
leave the house, taking the drafts to their re-
spective offices. No balances are struck for
this clearing, the total of each "charge" being
carried forward to the beginning of the second
clearing. This opens at 2.30 p.m., and con-
tinues until 4, when the last delivery must be
made. The arrangements differ from those of
the morning clearing only in the fact that the
deliveries are continuous and frequent through-
out the afternoon. At 4 the doors of the house
are closed, and no more drafts can be presented.
As soon as the last drafts have been despatched
from the banks, the "out" books are cast close
and sent down to the house to be agreed with
the "in" books of the other banks. Differ-
ences in adding the figures together are rectified
by the bank in error, but differences in items
are altered by the " out " clearers to agree with
the " in " cjearers. Subsequently the difference
may be reclaimed by production of the draft.
Drafts refused payment are returned at any time
during the afternoon by inclusion in the "out "
charges to the banks by whom they were pre-
sented. "Returns" are also received at the
house after the close of the clearing, and up to
5.0 P.M. The totals having been agreed, the
balance between the "out" and "in" amounts
is struck by each bank with every other one,
and the last "returns " are charged and allowed
on either side. All these balances then form
items in a general balance-sheet, which is pre-
pared by the head clearer of each bank, and
shows at foot the final balance which his bank
has either to pay or receive. This balance is
settled with the clearing house by means of
transfers made at the Bank of England between
the clearing house account and those of the
various banks. Of course, if the final balance-
sheets are all correctly made out, the total of
the transfers to the credit of the clearing house
will exactly equal the total of the amounts
transferred from that account to those of the
creditor banks. Errors are charged or credited
to the banks in the next day's clearing.
Country Cheque Clearing. — Besides the clear-
ing between the city bankers, a clearing for
drafts drawn upon banks throughout England
and Wales is held daily at the London clearing
house. In economy of labour this is the most
complete example of the advantages of the
system, its net result being, shortly, this — that
every country banker can make presentation of
any number of cheques, drawn on any of about
2100 country banking offices, by sending ont
CLEARING SYSTEM
307
letter to his London agent ; he can receive pay-
ment therefor by one line in his London banking
account, and can in the same manner make due
payment for any number of cheques drawn upon
himself. The clearing is limited to cheques
or drafts on demand, and by the boundaries
of England and Wales, being one day's post
from London. With only the most insignificant
exceptions it embraces every bank outside the
metropolis, from Land's End to the Tweed.
The particulars of the arrangement are as
follows. Every country bank has as London
agent one of the London clearing bankers, who
conducts on his behalf the clearing now referred
to, as well as other business that he may re-
quire to do in London. Each country banker
makes up daily all the cheques drawn on other
country banks which he has received, and for-
wards them by the evening mail to his London
agent, accompanying the parcel with a detailed
list of the items. The London banker, receiv-
ing them on the following morning, after ex-
amination of the parcel, sorts the cheques
according to order of the various clearing
bankers, as agents of the banks drawn upon,
charging them in "out" clearing books, and
delivering them at the clearing house. The
meeting for this purpose is held daily from 12.0
noon till 2.15 p.m., the cheques being entered
at the house in "in" clearing books, and the
totals agreed in the same manner as in the
town clearing. No balances are struck until
the day next but one, when the head clearer of
each bank prepares a balance-sheet, composed
of the various balances he has to pay or to
receive, on account of the cheques exchanged
two days before. The final balance shown
between his own bank and the clearing house
is carried forward as an item in the general
balance-sheet prepared at the close of the day's
town clearing. On the first day, when the
exchanges are made, the cheques received by
each bank as "in" clearing are taken to the
office and sorted afresh in order of the country
banks on which they are drawn. They are
then entered in books, and sent down by the
evening's post, accompanied by lists. The
country bankers, receiving them the next
morning, have the whole day for examination,
and then, in the daily letter to their London
agents, advise them to debit their account with
the total. On receipt of this advice the London
bankers are able to make payment at the clear-
ing house as already described. Unpaid cheques
are returned through the post by the banker
refusing them, direct to the banker whose name
is stamped across them, and the particulars are
communicated (technically advised) to the
London agents, who claim the amounts from
the agents of the bankers to whom they have
been returned.
No official figures are available to show either
the number, or the total amount, of the cheques
included in the country cheque clearing. Cal-
culations appear to show that the number of
cheques passing thus through London has prob-
ably reached 20,000,000 in a single year, with
a total value of about £450,000,000. In this
case the economy of currency is considerable,
but the economy of labour is even greater, and
still more important is the expansion in the
business of the country bankers rendered pos-
sible by it, as it enables them to otter theii
customers facilities for the negotiability of their
cheques equal to those enjoyed by customers of
London Banks. [See Clearing House, App.]
Peovincial Clearing Houses. There are
(blearing houses or systems at Manchester,
Liverpool, Birmingham, Newcastle, Leeds,
Sheffield, Bristol, Leicester, and Nottingham.
The aggregate amount dealt with by these
clearing houses was £507,600,000 in 1898,
£624,800,000 in 1903, and £824,000,000 in
1912. In several instances the clearing includes
cheques drawn not only on the members actually
j>resenting, but also on their branches within a
specified distance of the centre. At Sheffield
the local clearing circle has a radius of some
twenty-five miles. There are also various de-
grees of economy and convenience in the manner
of paying the balances due. Sometimes they
are settled by bank notes, sometimes by trans-
fers between their accounts at the Branch Bank
of England, or by payments made and received
through the London agents. In Scotland there
are clearing houses at Edinburgh, Glasgow,
Aberdeen, Dundee, Greenock, Inverness, Leith,
and Paisley. The arrangements generally in-
clude note exchanges, and also a highly organised
system of clearing for drafts on any or all of
the numerous branches. In Ireland the only
clearing house is at Dublin. In Canada there
are clearings at Montreal, Toronto, and Hali-
fax ; in Australia, at Melbourne and Sydney.
As all the Australian banks have many branches
their internal transactions do much to diminish
the necessity for clearing houses.
Foreign Clearing Houses. In the United
States great use has been made of the clearing
system. Although not introduced there till
1853, when the New York Clearing House was
established, the number of such institutions,
and the extent of their transactions, already
exceed those of Great Britain. This is due not
only to the general readiness with which the
Americans avail themselves of every economic
arrangement, but more particularly to the
peculiarity of their banking system. None of
the banks in the United States have any
branches, but there is a considerable number of
large banks, which increases continually. The
deposits of the 7488 National Banks were
over £1,150,000,000 in 1913, whilst the
whole banking deposits of the country, about
£3,500,000,000, are divided among 25,993
banks. {Report, Comptroller of the Currency,
308
CLEARING SYSTEM
1914.) Each bank being a separate institution,
there is little of that internal clearing per-
formed in every large bank by the cancellation
of drafts appearing on both sides of the books.
Thus the clearing house becomes a necessity,
even where the total amount of banking business
is comparatively small. In 1890 there w'ere 60
clearing houses operating in the United States ;
in 1913, 162 including New York. All these
institutions have arrangements much alike, con-
forming generally to those of the New York
Clearing House, where the method of transacting
business differs entirely from that adopted in
London. The New York Clearing House includes
64 members, whose representatives meet once a
day only, at 10 A.M. Each bank sends two
representatives, a clerk and a messenger, who
arrive before the hour named, at which time
every clerk is required to be at his appointed
desk, with his messenger standing outside it.
At a signal from the manager, who is stationed
in an elevated desk overlooking the room, every
messenger moves forward to the desk next his
own and presents to the clerk there a sealed
envelope containing the cheques drawn on the
bank for which that clerk acts, with a slip
pasted outside showing the particulars of the
items and their total amount. He presents also
a list printed with the names of all the banks,
and having the amount presented entered
against each of them. The clerk receiving the
envelope signs for the amount and returns the
list to the messenger, who goes to the next
desk in the same manner, and so on until he
has made the circuit of the room, and delivered
all his envelopes. The whole operation of ex-
change is thus performed in about ten minutes.
The clerks receiving the envelopes, without
opening them, enter the amounts on printed
lists, and make up the total, which, compared
with the total of the list of envelopes de-
livered by their own messengers, gives a balance
to be paid to, or received from, the clearing
house. The messengers then take back to their
respective offices the envelopes received, and
the clerks remain behind to report their amounts
to the managers, and to agree on the balance
due. This done, the clerks leave the house ;
the whole clearing having occupied probably
less than one hour. The debtor banks have
then to pay over to the clearing house, by 1.30
P.M., the balances due from them, after which
the creditor banks can receive, at the same
place, the balances in their favour. Neither
in New York nor in any city in the Union is
there any bank occupying a position similar to
that of the Bank of England, and therefore the
balances cannot be paid by transfer. Formerly
they were paid in legal-tender notes, or in
gold coin, but this entailed a vast amount of
labour. On one day, in 1879, the value of
coin passing through the clearing house Avas
£1,660,000, and its weight was about 15| tons.
Besides cost of time and labour involved in
handling the coin, much loss was suffered by
abrasion. Subsequently the clearing banks
made a deposit of gold in the vaults belonging
to one of their number, and certificates were
issued against it for $1000, |5000, and $10,000
each, which were passed in payment of balances.
Kecently this plan has been abandoned, and
payment is made, as to the chief amounts, in
certificates issued by the United States Treasury
for gold coin deposited there, and as to lesser
amounts, in legal-tender notes and minor coins.
There is not at present any system similar
to that of our country cheque clearing, and
the inconveniences suffered by the banks in the
United States for want of such a system aflFord
a good illustration of the advantages derived
from it here. In the absence of due facilities
the banks have a custom of forwarding cheques
drawn on one town to any town in its vicinity
to which they may be making remittance, on
the chance of the bank there having to remit
to the town on which the cheque is drawn.
Frequently, however, this turns out not to be
the case, and the cheque is sent backwards and
forwards between one town and another, some-
times remaining out for many days before
finally presented, and, if unpaid, taking as
many days more in return. The enormous
distances comprised within the limits of the
Union would render it difficult, if not impossible,
to arrange for a general system of clearing
through a single centre. The course of develop-
ment will therefore probably be in the direction
of the establishment of local clearing circles.
On the continent of Europe, the entirely
different degree in which banking has progressed
has tended greatly to restrict the use of clearing-
houses. Although the earliest system of clearing
of which anything is known was that which
existed for some centuries at Lyons, France has
even now made but little progress towards
adopting this economy. The Paris Chamber of
Compensation, established 1872, is the only
one in the country, and its transactions are
very small. Several causes have led to this,
chief among which is the small extent to which
the daily transactions of trade are carried out
through banks. Cheques were quite imknown
before 1859, and their use has not even now be-
come general. Business is chiefly carried on by
means of notes, coin, and small bills, the latter
being generally payable at the offices or resi-
dences of the drawees. On one day, 31st March
1913, the Bank of France collected in Paris
400,375 bills, payable at 97,495 dwellings, the
total value being £10,285,480. The Bank o(
France, through which the greater part of the
banking operations of the country is carried on,
had in 1913, 127,963 current accounts at Paris
and at the 217 branches and auxiliary offices of
the Bank. The need for a clearing house is
still further lessened by the fact that the greater
CLEARING SYSTEM
309
part of such business is carried on through three
banks only, namely the Bank of France, the
Societe Generale, and the Credit Lyonnais. As
these establishments have between them some
1402 branches, they are able to settle a large
proportion of their transactions within their
own offices. The Bank of France has special
arrangements for this purpose, and the amount
annually "cleared" within its walls is seven
or eight times as large as the total passing
through the Chambre de Compensation. A still
greater amount is probably that which is aflected
by the arrangement under which the operations
of the Bourse, not only in Paris, but in the
other chief cities, are liquidated within the
Bourse itself by means of the "Compagnie des
Agents de Change de Paris." These remarks
apply with little variation to the banking
arrangements in the other countries of Europe.
Where there is no general use of cheques there
is no gi-eat necessity for a clearing house, and
throughout the continent a "bank" exists
more as an establishment of credit than as a
medium of currency. In Berlin, the clearing
was established by the Reichsbank so recently
as 1884, as part of a general movement to
extend the use of cheques. There, also, the
transactions of the stock exchange are, and have
been since 1871, liquidated by "set-oif" in a
separate institution, the Bank des Berliner
Cassen - Veremes: A clearing liouse exists at
Hamburg, continuing arrangements long carried
on by the Bank of Hamburg ; and clearin.i^^s are
also conducted by 24 branches of the Reichsbank.
A clearing house was established in Brussels
in 1908, and has gi-eatly assisted business in
Belgium. At Vienna, arrangements which previ-
ously existed among several banks, were con-
solidated, in 1872, into a regidar clearing house.
Its operations have not been very considerable,
nor have they shown any tendency to in-
crease. The operations of the Bourse are
liquidated separately by the Wiener Giro- und
Cassen - Vereine. In 1881 the amounts so
liquidated were fom-teen times as gi-eat as those
passed through the clearing house. In Italy,
thirteen clearing houses were established by
royal decree in 1881, to assist the resumption
of specie payments, but the development of
banking there did not require their continuance,
and only those of Rome, Milan, Florence,
Genoa, Catania, and Bologna still exist, besides
that at Leghorn, established long previously.
Statistics. Full tables of the amounts
passing through the various clearing houses of
the world cannot be given here, but a few of
the most important figures wiU show the extent
to which currency at least is economised by
the system. Some considerations should always
be borne in mind in connection with tables of
clearings which are otherwise likely to mislead.
The amounts cleared at one time or place, as
impared with other times or places, do not
directly indicate the relative extent of trade or
of banking development. They may vary with
(1) the number of separate members included
in the clearing ; (2) the proportion they bear
to the whole banking system of the place ; (3)
the existence there of other institutions having
similar objects ; (4) the manner in Avliich returns
are made. In connection with point 1, it is
evident that the greater the number of banks
in the clearing the greater Avill be the proportion
of their whole transactions passing through th«
house. The larger any individual business is,
the larger will be the proportion of its transac-
tions cancelled in its own office. The same
applies to point 2, because banks outside the
clearing, though they may clear through mem-
bers of it, have still a large number of transac-
tions settled internally, and thus removed from
view. This also applies with still gi'eater force to
banks with many branches. Point 3, the extent
to which aiTangements are in existence for liqui-
dating separately any particular class of financial
engagements, must obviously materially affect
the amounts cleared. The remarks already
made on this subject as to the clearings at Paris,
Vienna, and Berlin sufficiently show its import-
ance. On the other hand, the absence of special
settling days for bargains between members of
the Stock Board in New York tends to increase
the amounts passing through tlie bankers' clear-
ing. Point 4, the totals of one side only are
usually quoted, but in the earlier returns of
some American clearings, and in some con-
tinental clearings at the present time, both
cheques brought in and those taken away ar^
included, thus doubling the figures.
[jQudon — Annual Average
Clearings.
Millious.
1868-1877 £-1,941
1878-1887
1888-1890
1891-1900
1901-1910
vear 1912
" „ 1912
1913
1913
1913
1913
5,747
7,454
7,501
11,831
15,962
347
19,624
15,129
12,392
3,682
between
over in
aompari
Ik
Manchester.
New York ....
162 Other Clearing Houses,
U.S.A
Paris, Bank of France
Berlin, Reichsbank —
24 Clearing Ollices .
With regard to the proportion
amounts cleared and balances paid
settlement, their relation will depend generally
upon the number of members in the " clearing,"
but it may also be affected by other circum-
stances. Thus the balances paid in the London
Clearing House are very largely increased by
the Bank of England clearing on one side only,
the debtor balances of all the other banks being
thus increased to the extent of the whole of their
claims upon the Bank, which are by the present
arrangement paid in as "credits" at the Bank
tflO
CLEARING SYSTEM
counter. In point of economy of currency,
however, this is immaterial as the final settle-
ment is made by book entry.
Other Classes of Clearings. The prin-
ciples of clearing have been applied, with more
or less completeness and success, to the settle-
ment of transactions in commodities other than
money, and some examples of those arrange-
ments must now be briefly referred to. Whilst
the clearing houses described above have differed
only in the degree of their organisation, institu-
tions for dealing with commoditiei/^are capable
of variation in another direction. They may
deal with either or both of two terms instead
of with the single term, money. A number
of bargains in any movable property may be
settled by the principle of "set-off"," either as to
delivery of the property or as to payment of its
value, or as to both of these points. One feature,
however, is common to all clearings, and that
is uniformity of the article dealt in. A clearing
can only be held under these circumstances, as
it is the essence of the principle that the last
buyer or receiver is equally satisfied by delivery
from the first seller as he would be by delivery
from the person of whom he actually bought.
These conditions are present in bargains in
stocks and shares, and it is in connection with
stock transactions that the most extended ap-
plication of the clearing system to dealings
other than those in money has been made.
The Stock Exchange Clearing has been
in operation in London since 1874, and though
its use is neither obligatory nor universal among
the members of the stock exchange, it has un-
doubtedly effected a very material saving of
labour. Nothing whatever is known of the
amounts settled by its means, although, no
doubt, they are already very considerable, but
it cannot be said to effect any economy in cur-
rency, as the transactions liquidated there would
otherwise be settled by cheques. Still, those
amounts, whatever they may be, are so much
withdrawn from the returns of the Bankers'
Clearing House.
The clearing is held within the precincts of
the stock exchange, and is under the sanction
and control of the committee. It is not applied
to the settlement of general business, but only
to bargains in certain stocks, and those such as
are the subject of frequent speculative transac-
tions. These comprise most classes of foreign
government bonds and some particular English
railway stocks. As it is not in universal use
among the members of the exchange, any dealer
who desires to settle his bargains through the
clearing is able to do so only with regard to
certain stocks, and even in those is limited to
his bargains with such other members as also
clear. The clearing is carried on entirely by
means of balance-sheets and tickets ; neither
stock nor money in any form being received at
the clearing house. On the settling day each
member forwards to the clearing house a balance-
sheet for each particular stock, giving on the
one side the amounts of the stock purchased
and to be received by him, and on the other
the amounts he has sold and has to deliver,
together with, in each case, the name of the
seller or buyer. At foot is shown the net
balance which he has to receive or to deliver.
At the clearing house each item in this list is
ticked off" or cancelled against the corresponding
item in the sheet furnished by the other party,
until the balances only remain outstanding.
The total of the balances of stock deliverable
will then exactly equal the total of the balances
of stock receivable, although the items making
up each total will be diff"erent. Those who have
to deliver stock are then furnished with tickets
giving the separate amounts into which their
balance has to be divided and the parties to
whom they are to be delivered ; whilst those
who have to take in stock receive tickets show-
ing by whom it will be delivered. The receiver
pays to the party delivering the stock its value
at a fixed price, which is settled on the account
day, and is called the "making -up price."
All diff"erences between this price and those at
which the yarious bargains were made are settled
directly between the dealer and those with whom
he has dealt. No particulars are obtainable of
the transactions which are settled in this
manner, but as the clearing is chiefly used by
those dealers and brokers who transact specula-
tive business, and the stocks which clear are
only the most speculative and "active" classes,
it is probable that the bargains "cleared" are
among the heaviest in each "account." The
existence of this arrangement is therefore a
consideration of some importance in any com-
parison of the returns of the London Bankers'
Clearing House before and after 1874. The
liquidation of transactions on the Boiirse at
Paris is much more complete in its organisation,
and applies to all the operations of the Agents
de Change. In Vienna and Berlin the com-
pensations effected by the institutions already
mentioned also cover the greater part of the
Bourse transactions.
The Beetroot Sugar Association of
London established (in 1888) some arrangements
for clearing bargains in beetroot sugar upon the
following basis. The bargains to be cleared
must always have reference to sugar of a certain
range of quality, and to lots of 500 bags, each
containing a certain weight. A broker having
sold a quantity of sugar, starts a filiere for each
500 bags, describing thereon the ship or ware-
house marks, and all other necessary particulars.
The filUre is a sheet of paper printed at the
head with the conditions of sale, and with
spaces for insertion of the particulars referred
to. It contains also a series of transfer forms
which are filled up and signed by each success-
ive holder, transferring the property to a new
CLEARING SYSTEM
3U
purchaser. At the same time the purchaser
signs a coupon form which is printed at the
side of the transfer, quoting the date and hour
of the sale. This is detached, and retained by
the seller as evidence to determine any liability
consequent on delay in passing on the filiere.
Any pm-chaser requiring delivery of the sugar
can send the filUre to the clearing house,
instead of passing it on, and his name is then
communicated by the officials to the first seller
who tenders him the warrant direct. The
filUres may pass from hand to hand within a
limit of six days, at each transfer a stamp being
affixed for the clearing fee. The differences
between each of the successive bargains are
calculated to the profit or loss of the seller. In
the former case, the clearing house issues
a cheque in his favour ; in the latter case
notice is sent of the amount due, which he
is required to pay immediately to the bankers
of the association. All the intermediate parties
being struck out, any difference in the quality
or weight of the sugar ultimately delivered
concerns only the first and last parties, who
settle it between themselves. The arrangement
appears to be very complete, and as the advan-
tages are considerable, it is already largely used.
1 1 must therefore make a great difference in the
amoimts of money passing in the trade. It is
not unusual iov filler es to pass through twenty
hands before delivery of the sugar, and as a lot
of 500 bags is worth, roughly, about £600, the
transactions represented in such a case would
amount to £11, 400, of which eighteen transfers
amounting to £10,800, would be struck out,
leaving only one amount of £600, and sundry
small differences to be settled by actual pay-
ment. Besides this economy, there is the
saving in clerical work, the avoidance of risk
in delivering warrants from hand to hand, and
of delay in tendering warrants, with a con-
sequent saving of much expense in demurrage.
London Produce Clearing. An instil u-
tion under this name was started in 1888, to
regulate and adjust bargains in colonial and
foreign produce. At first its operations were
confined to coffee and sugar, but they have since
been extended to wheat and silver. The chief
object of the company is to guarantee both to
buyer and seller the fulfilment of bargains for
future delivery. This it does upon payment
by the contracting party of a margin sufficient
to secure the company from loss. Indii'ectly,
a certain amount of economy by clearing is
effected, because transactions accumulate on
either side during the month, and are settled
at the end by payment of balances only. In
this case also bargains are for commodities of
a certain quality, and in specified quantities,
or multiples thereof. If the clearing came
to be extensively used, there would be a great
saving in the amounts of cheques drawn. Other
institutions upon the same lines are the ' ' Caisse
de Liquidation" at Havre, and the "Waaren
Liquidations Casse" at Hamburg. For the
"Cotton Brokers' Bank" in Liverpool, v. Cotton
Clearing. In the tea-trade, the Tea Clearing
House is only for economy of labour, by pro-
viding a central office for the lodgment and
delivery at the various docks and warehouses
of warrants, and orders for various purposes.
Further, it is to be observed that by the exten-
sion of the warehouse system, a species of clear-
ing is effected as regards the handling of goods,
by warrants, which are used for intermediate
transfer, whilst delivery is only made to the
last buyer. Among the most important ex-
amples are the warrants of Connal's Stores
at Glasgow, for pig-iron ; and, in the United
States, the certificates of the United Pipe Line
for petroleum, and the system of grading and
storing wheat as adopted at Chicago.
Finally, the Railway Clearing House
requires some notice, although it has other
objects than settlement by "set-off'." Its
main purpose is to settle all the balances that
arise out of through-booking, and to split up
into different proportions the sums that are
received for transport of goods or passengers,
where they pass over different lines. For this
purpose the railways send to the clearing
house daily reports of all compound tickets
issued at each station, and of all amounts
charged for through carriage of goods. All
spent tickets collected are also sent up to be
compared with the accounts rendered. From
these particulars the various companies are
debited with the amounts received by them, and
credited with their proportion of the work done
according to the mileage of theii- line covered,
the haulage, and the ownership of coaches,
trucks, or tarpaulins used. Of course the
principle of clearing is brought into play in
effecting the settlement of all these claims. A
regular debit and credit account is kept with
every railway, and it is only called on to make
payment when a considerable sum is cwing, or
when the set of the balances is all one way.
[See Clearing House, App. ; also Our CleaHng
System and Clearing Houses (Howarth). — CleaHng
Iloiises et Chambres de Compensation {Fran9ois);
and also various papers in Journcd, Institute oj
Bankers, vol. iii. 1881-82, and subsequent years
As to amounts settled outside of clearing houses,
see " Proportionate use of Credit Documents and
Metallic Money in English Banks" (Pownall), /o«r-
nal, Inst. Bankers, vol. ii. 1880-81.] r. w. b.
Cotton Clearing (Cotton Brokers' Bank).
The prmciple of payment by "set-off" of
differences has been applied to the very heavy
monetary transactions arising from dealings in
cotton at Liverpool. The system employed is
fully described in the Bankers' Magazine for
July 1887. No fewer than forty-six different
forms for contract, orders for delivery, etc., may
have to be employed in the process, and eleven
312
CLJ&MENT
more connect the "Cotton Brokers' Bank,
Limited," as the association through which
the business passes is termed, with the clearing
conducted by the branch Bank of England at
Liverpool. The numerous forms mentioned are
requu-ed to meet the various requirements arising
out of the re-sale of the bales of cotton dealt
with. These may pass through many hands
after being in the possession of the original pur-
chaser, before being finally disposed of. In-
surance against risk by fire, the possibility of
need for arbitration, in case of dispute and of
appeal against an award, the difiierent methods
of dealing according to the special rules in
force, whether the cotton comes from America
or India, all the various incidents which may
arise in the conduct of a very complicated
business, are provided for through these ar-
rangements, as well as the ultimate disposal
of the money arising therefrom. The result
has been a vast economy in labour, as well
as in the use of the cu'culating medium.
"Formerly all cotton was paid for in cash.
Now all the effects, whether cash, cheques,
bankers' drafts, or transfers (both by post and
telegraph) are lodged with the Bank of England
for the credit of the Liverpool Cotton Bank,
Limited, clearing account. The members of
the cotton bank then transfer the amounts re-
quired from one to another at the cotton bank,
and at the end of the day the cotton bank
sends the completed pay list to the Bank of
England, and the ultimate receivers have cheques
for their amounts. The object of the clearing
house of the Cotton Association is to settle the
very numerous sales and re-sales of an individual
parcel of cotton by collecting and distributing
the 'differences' due by, or to, the respective
buyers and sellers. Formerly each transaction
was settled, as any ordinary purchase or sale
is, by the parties concerned ; a very great
economy in the labour of the process, as well as
in the use of the circulating medium, is obviously
eflfected by means of the * cotton bank ' and its
connection with the Bank of England " {Bankers'
Magazine, 1887, p. 591). The arrangements,
though apparently simple, must have required
an immense amount of technical knowledge and
intelligence to put into shape.
CLEMENT, Ambroise, born at Paris 1805,
died there 1886. From 1838 to 1848 and
from 1850 to 1860 A. Clement was secretary
to the mayoralty of Saint Etienne, and, in
this capacity, rendered important services to
that city, for example, successfully opposing,
the establishment of store houses for grain
(Greniers D'abondance, q.v.) desired by the
imperial prefect of the Loire. He was one of
the organisers and workers from the beginning
in the Didionnaire de V6conomie politique,
and wrote many articles in the Joxirnal des
4conomistes. His works are noteworthy on
account of the firmness of their principles and
their logical accuracy. He was faithful all
his life to the principles of his master, J. B.
Say, as his following works show ; Rccherches
sur les causes de l' indigence (1846 in 8vo). — Des
nouvelles idees de r^forme industrielle, referring
in particular to the project for the Organisation of
labour by M. Louis Blanc (1848 in 18mo) ; £ssai
sur la science sociale (1867, 2 vols, in 8vo). — Le
bon sens dans les doctrines morales et polUiques,
or the apjjiication of the experimental method
to philosophy, moral sciences, and political
economy (2 vols, in 8vo) ; finally, La crise
ioonomique et sociale en France en 1886 (large
8vo), his last work. A. c. f.
CLEMENT, Pierre, born at Draguignan
1809, died 8th November 1870. He held a high
ofiicial post in the ministry of finance, and
entered the Institute (^Academic des Scien^ces
morales et politiques) through the imperial
decree of 14th April 1855 — All PieiTC Clement's
works consist of historical investigations con-
scientiously written, laboriously treated, and
touching on financial questions, approached on
the economic side. The following is a list of
his principal works in order of publication :
Histoire de la vie et de V administration de Col-
bert pr4c4d^e d'une dtude sur Nicolas Fouqiiet^
1846 in 8vo (his best work, which obtained a
prize from the Acad^m-le Frangaise in 1848) ; Le
Gouvemement de Lmiis XIV. (1683 to 1689)
a continuation of the preceding (honoured with
the second Gobert prize by the AcadAmie des
Inscriptions et Belles-lettres in 1848). — Jacques
Ooeur et Charles VII. (1853 in 18mo, prize from
the Acad6mie Frangaise). — Histoire du systeme
protecteur en France de Colbert A 1848 (1854 in
8vo), a work written in the spirit of free trade ;
Portraits Mstoriques (1855 in 18mo). — Trois
dramies historiques (in 18mo). — Engv^rrand de
Marigny, Beau/ne de Semblangay et le Chevalier
de Rohan (in 8vo and in 18mo) ; lastly M. de
Silhouette, Bouret et lesdemiersfermiersgdn^raux
(1872 in 18mo), this work was completed by
Alfred Lemoine and published after the death
of P. Clement. It was due to the labours of
Pierre Clement that an important publication,
Les Lettres, Instructions, et Mimoires de Colbert
(1861-73, 7 vols, large 8vo), undertaken by
the imperial government was successfully com-
pleted. The AcadAmie Frangaise voted its
highest honours to this collection. a. c. f.
CLEMENT, Simon (fl. 1695-1720), merchant
of London, In 1696 he was concerned, along
with other merchants, in an infringement of
the Navigation Act (q.v.) by allowing a ship
to be worked with a crew less than three-fourths
of whom were English sailors. A plan which
he proposed in 1708, for the importation of
pitch and tar, was favourably considered by
the government. From 1712-1714 he appears
to have resided at Vienna ; and in 1720 we
find him presenting a memorial on behalf of
the widow of William Penn, whose will was
CLERGy, BENEFIT OF— COASTING TRADE
313
disputed. He publislied A Discourse of the
General Notions of Money, Trade, and Exchanges
as tJiey stand in relation each to other, attempted
by way of Aphorism, etc., by a Merchant,
London, 1695 ; and The interest of England as
it stands toith relation to the trade of Ireland
considered, etc., London, 1698, 4to. Clement's
pamphlets are well worth studying. Though not
free from mercantilist errors, he anticipatcui
in some respects the conclusion of later writers.
He pointed out that ' ' silver and gold . . . arc
to be considered but as a liner sort of com-
modities ; and as such are capable of rising
and falling in price, and may be said to be of
more or less value in divers places, according
to their plenty or scarcity. Bullion then may
there be reckoned to be of the higher value,
where the smaller weight will purchase the
greater quantity of the product of manufacture
of the county." In an appendix, "offering
some further reasons against raising the value
of our coin," he opposed the views expressed by
William Lowndes {q.v.) in his Essay for the
Amendment of the Silver Coins (1695). Davc-
nant quotes with approval Clement's "judicious
observation," in his pamphlet on the trade of
Ireland, "that if any one oflers his goods
cheaper than the usual price, that will then
become the market price ; and every one else
must sell at the same, or keep his goods."
[Cal. of Treasury Papers, xxxviii. 56 ; evii. 40 ;
cix 22 ; clxxxii. 37 ; ccxxviii. 18. — Davenant,
Essay, etc. on the Balance of Trade (1699), 123 ;
Brit. Mus. Catalogue; Cat. Bibl. Bodl.] w. a. s. h.
CLERGY, Benefit of. "Originally con-
sisted in the privilege allowed to a clerk in
orders, when prosecuted in the temporal court,
of being discharged from thence and handed
over to the Court Christian, in order to make
canonical pm-gation." — (Stei)hen's Cvmvien-
taries on the Laws of England, vol. iv. bk. vi.
ch. xix.)
CLIENT. This word is derived through the
French from the Latin cHctis (cluens from cluere,
to hear), which in one of its derivative senses
signified a person who employed a patronus or
advocatus to assist him in his cause (see
Smith's Diet, of Antiquities, s. v. cliens).
A client is a person who engages a barrister
or solicitor for the purpose of obtaining their
professional advice or assistance. It is a rule
of professional etiquette that a barrister should
be engaged through the agency of a solicitor.
Hence the solicitor is called the client of the
barrister he briefs. The person whose cause is
in question is also said to be the client of the
barrister. The relation between barrister and
client is not, like that of solicitor and client, a
contractual one, a barrister not having a right
like a solicitor to sue his client for his fees.
This rule, that only an honorarium is due to a
barrister, is derived from Roman law. E. A. w.
CLIENT, Stockbroker's. The stockbroker
regards his principal very much as a solicitor
regards his client. In most cases a novice has
to be advised as carefully about his investments
as a litigator is advised by his solicitor, a. e.
CLIFFE LESLIE. See Leslie, T. E. Cliffe.
CLIPPED MONEY. Until 1663, English
coins were not marked or milled on the edges,
and the practice arose of clipping small pieces
off the coins. By 3 Henry V. c. 6, clipping
washing, or filing the coin of the realm was
declared high treason. This act was repealed
by 1 Mary, sess. 1, c. 1, but its provisions
were re-enacted and extended by 5 Eliz. c. 11,
and 18 Eliz. c. 1. The introduction of milling
tended to prevent clipping, but during the 17th
century clipj)ing was a common offence owing
to the large gains resulting. Notwithstanding
the re-coinage of Elizabeth and the issue of new
coins in subsequent years, the amount of clipped
coins steadily increased, the new coin being
melted down or exported. It was estimated
that the coinage had lost one-third its weight.
In 1695, provision was made for restoring the
coinage to its full weight : the cost, amounting
to £2,703,164, being met from the hearth-tax.
[Lowndes' Essay fm- the Aviendment of the Silver
Coins, 1695. — Macaulay's History of England, vol.
iv. — First Nine Years of the Bank of England,
by J. E. T. Rogers, Oxford, 1887.] J. E. c. M.
CLOFF OR CLOUGH. An allowance of 2
lb. in every cwt. after tare and tret have been
deducted. It is given to cover small losses in
retailing. j. e. c. m.
COALITIONS. See Tiiade Unions.
COASTING TRADE. Coasting trade is
trade carried on by sea between the various
ports of the same country or state, and there-
fore in the case of this country includes the
intercourse between Great Britain and Ireland
(39 & 40 Vict. cap. 36, § 140). From the
time of EKzabeth, if not before, the coasting
trade was reserved to British subjects by various
acts of parliament including the navigation acts
of 1651 and 1660 ; but by the act of 17 Vict,
cap. 5, this restriction was swept away, and all
nations have since participated in our coasting
trade. As, however, only 121,000 tons of
foreign shipping were entered in 1888 in the
coasting trade, compared with the 27,000,000
tons of British shipping, the eliect of this free
trade measure may be regarded as more moral
than material. Many foreign countries have
followed our example in this respect, allowing
ships of other nations to share in their coasting
trade, but there are still several notable excep-
tions, such as France, Russia, Spain, Greece,
and the United States, where this trade is still
reserved to the national flag. If the policy of
allowing the utmost competition in carrying
goods to and from our shores • is a riglit one, it
is difficult to maintain that the same competi-
tion is undesirable in trade between the vari-
ous ports. The great Indk of the articles so
k
314
COASTING TRADE— COBBETT
carried are raw materials, such as coals, bricks,
timber, and the like, for which the cheaper
carriage of the sea compared with that of the
railway is a necessity, and we do not wish to
endanger this cheap carriage by excluding com-
petition. The regulations imposed on ships
and cargoes in coasting trade are much less
stringent than those on foreign-going ships.
The following are the principal regulations pre-
scribed by the act 39 & 40 Vict. c. 36.
Foreign ships are subject to the same regula-
tions as British as to stores, etc., and may not
be subjected to higher local dues (§ 141).
Under the following section (142) no goods are
to be carried coastwise except those laden at
some port or place in the United Kingdom,
but under recent regulations in pursuance of
the Revenue Act of 1884, a ship arriving from
abroad is allowed to ship non- dutiable goods
for coasting after discharging part of her cargo,
and conversely a vessel which has been convey-
ing goods coastwise is allowed to retain part of
the cargo on board for exportation abroad.
The master of the coasting ship has to keep a
cargo book in which he enters particulars of the
goods taken on board and discharged at the
various ports, for the correctness of which he is
liable under a penalty of £20 (Customs and
Inland Revenue Act 1879, § 9). Before leaving
any port, a document called a traoisire has to
be signed by the collector of customs, and is
the authority to the master to clear for the
next port (39 & 40 Vict. c. 36, § 145).
Fishing boats are exempt from even the light
regulations of the ordinary coasting trade, and
are entitled to carry from one part of the coast
to another, besides their own fish and fishing
appliances, a variety of bulky goods, such as
ashes, bavins for bakers, bricks, stones, slates,
clay, sand and gravel, lime, tiles, timber, and
hay and straw. Fishing boats, however, exceed-
ing 15 tons burthen must be registered under
the Merchant Shipping Act of 1854.
The following table shows the growth of the
coastiug trade of the United Kingdom since 1860,
at intervals of ten years.
1850.1
1860.2
Tons.
Tons.
Tonnage employed in the gene-
ral coasting trade-
British. ....
10,979,574
11,342,532
Foreign ....
82,443
Intercourse between Great
Britain and Ireland —
British ....
1,585,057
5,558,656
Foreign .
Total-
••
19,780
British. ....
12,564,631
16,901,188
Foreign ....
Total
102,223
12,564,631
17,003,411
1 Foreign vessels not admitted to the coasting trade
previous to 1854.
2 Before 1856, vessels employed between Great Britain
and Ireland were returned as entered at ports in Great
Britain only. From 1856, entries at Irish ports are in-
cluded.
1870.
1880.3
1888.
Tons.
Tons.
Tons.
Tonnage employed in
the general coast-
ing trade-
British .
11,357,651
16,046,071
17,955,119
Foreign .
74,079
88,212
103,024
Intercourse between
Great Britain and
Ireland-
British . .
6,852,868
9,878,950
9,049,090
Foreign .
15,677
10,316
18,436
Total —
British .
18,210,519
25,924,021
27,004,209
Foreign .
Total
89,756
98,528
121,460
18,300,275
26,022,549
27,125,669
In 1913, the figures were :-
British ....
Foreign ....
Divided as follows : —
1912. British-
Sailing Vessels 2,513,450
Steam Vessels 30,025,552
32,5897002
1912, Foreign-
Sailing Vessels 45,409
Steam Vessels 256,324
301,733
A. E. B.
COBBETT, William, born at Farnham,
Surrey, 1762, passed his early years in farm-
labour, and, ^fter a few unhappy months in a
lawyer's office in London, enlisted (1784) in
the 54th regiment of the line, and served with
it seven years in Nova Scotia. Retiring as
sergeant-major, in 1792 he began his literary
career as well as his married life. He settled
in Philadelphia, but he was too stout a cham-
pion of England against France to be left in
peace, and in 1800 he found himself again in
England. He was at first well received by
Pitt and his supporters, but soon broke off
connection with all political parties, becoming
convinced that corruption, and place-hunting,
and waste of public money prevailed with little
difference among Whigs and Tories. He was
thus a radical reformer ; but neither republican
nor revolutionist. His ideals lay as much in the
past as in the future. He deplores the Protest-
ant Reformation, but, since there is now no
hope of return to monastic charity, he lauds
the old poor law, as being with Magna Charta
the foundation of English liberties (see Man-
chester Lectures). He talked not of abstract
rights of man, but of rights of Englishmen,
founded on the old laws of England ; his desire
was to make the poor labourers as comfortable
as in his father's time. This was his strain in
the Political Register, which he issued week by
week for over thkty years (1803-1835). There
was only one serious break, from 1810 to 1812,
when the editor lay in Newgate, under punish-
ment for a severe article on flogging in the
3 Before 1873, vessels employed in conveying ashes,
bavins, bricks, tiles, clay, lime, gravel, iron ore, fresh
meat and fish, hay and straw, timber and wood, and
various other raw materials were omitted in the retume
I of tonnage.
COBBETT
315
araiy. In prison, besides studying Tull's Hus-
baiidry, he wrote his letters to the people of
Salisbury, best known by the title Paper against
Gold.
On his release he continued from his Hamp-
shire farm to edit the Register. Embittered in
spirit and reduced in fortunes, he was never
more full of vigour in mind and body. The
"White Terror" under Lord Sidmouth drove
lum in 1817 again to America, but he
kept up his Register from his iarm in Long
Island, and retm-ned in 1819 to his native
country, with the bones of Paine as proof
positive of his political conversion. Bankrupt
through lawsuits in 1820, he quitted Hamp-
shire for Kensington, still keeping tight hold
of his pen. In the reformed parliament of 1832
he sat as member for Oldham till his death in
June 1835.
His work in parliament was far sm-passed in
brilliancy and originality by his earlier achieve-
ments as a journalist. He was right in think-
ing that he was ' ' of most weight as a spectator
and commentator." As an agitator or man of
action he showed little tact, taste, or know-
ledge of men ; he was not a man of the world
any more than he was a worldly man. The
gi-eat obstacles to social reform seemed to him
to be political, and it was because of what he
thought to be their evil political influence, that
he disliked the gi-owth of the stock -jobbing
yommercial aristocracy of his day. He was in
his eccentric way a labom-er in the cause of
popular education ; he was an agricultural
improver, importing the "locust tree,"^ and
trying to induce English fanners to grow
Indian corn ; he tried to revive cottage indus-
tries, especially straw-plaiting. He was in-
tensely national, and yet his writings did more
than most men's to make the American nation,
and in a less degree the French, better under-
stood by his countrymen. His strength lay in
his clear logic and wonderful command of good
homely English, as well as in his happy
epithets. His chief failing was his vanity,
pardonable in one who owed all his success to
his own pertinacity, and all his education to
his own diligence.
The discussion of economics apart from
politics had no interest for him. Even his
favourite subject, taxation, is treated simply
with the sturdy common-sense of one whose
views are limited, but whose powers of expres-
sion are boundless. Like Swift, he made
excursions into economical regions, not because
he was at all anxious to find truth there for its
own sake, but because some prevalent economic
error or other seemed to be hindering some
project of reform which was dear to him. His
antipathy to the economists of his time was
not due to any general economic theories of his
1 The acacia, which was then better known under its
American name of " locust tree. "
own fundamentally different from theirs. He
denounced Malthus, and he denounced Ricardo,
because he saw their doctrines affbrded too easy
a handle to his political enemies, the ' ' borough-
mongers." But, in his diatribes against a
potato-diet, he uses arguments identical with
those of Malthus ; and, in protesting against
the new corn law of 1815, he states the case as
Eicardo or any free-trader would have stated it.
"There are few articles" (he says in his letter
' ' To the Journeymen and Labourers of England,
Wales, Scotland, and Ireland") "which you
use, in the purchase of which you do not pay a
tax. On your shoes, salt, beer, malt, hops,
tea, sugar, candles, soap, })aper, cofl"ee, spirits,
glass of your windows, bricks and tiles, tobacco.
On aU these and many other articles you pay a
tax, and even on your loaf you pay a tax,
because everything is taxed from which the
loaf proceeds. In several cases the tax amounts
to more than one-half of what you pay for the
article itself ; these taxes go, in part to support
sinecure placemen and pensioners ; and the
ruffians of the hhed press call you the scum of
society." For the most part, when Cobbett
has hold of an economical truth, he can put it
more clearly than another man, and there is
little fault to find except the exaggeration
which seems to be inseparable from all political
writing. The " Letter to the Luddites " (30th
November 1816, Weekly Political Register) is
not only one of Cobbett's most characteristic
and ingenious papers, but it contains one of the
clearest popular descriptions ever penned of
the economical benefits of the invention of tools
and machinery. If he treats taxation as if it
were the only cause of distress, we must
remember that in his days, and indeed till the
repeal of the corn laws, it was probably the
most potent cause. Even dm-ing the course
of the French War, when there was more ap-
parent reason for high taxes than in 1816, he
was never tired of declaiming against excessive
expenditure and over-taxation ; and his letters
on Paper against Gold are simply one skirmish
in his general attack on these evils. The letters
in question are a lively, and in the main an
accurate history of the suspension of cash
payments by the Bank of England in 1797,
and the effects of it on the cm-rency. He gets
his principles not directly from the economists,
but from Paine's Decline and Fall of the English
SysteTJi of Finance (1796) ; he compares the
English inconvertible notes to the French
assignats ; and is not careful to avoid the
exaggerations of the " Ultra-bullionists, " who
explained all the high and low prices of those
times by the state of the currency. His
assertion that the bank neither would nor could
ever return to cash payments was not confirmed
by facts. But, with all its defects, the book is
valuable for its pictures of the opinions and
conduct of average Englishmen at a momentoua
316
COBDEN
period in the economical history of the country.
In the same way we owe much to the Register
for its glimpses of English working men, and
their views in the darkest years of this century.
Of Cobbett's numerous works the following are
of most importauce economically : — •
The Weekly Political Register, 1803 to 1835.—
Paper against Gold, 1810, 1811, reprinted 1817.
— Rural Rides (reprinted from the Register), 1830.
— Two-penny Trash, 1831. — Tour in Scotland and
in the four northern Counties of England, 1833. —
A Year s Residence in the United States of America,
1818. — Cottage Economy, 1821. — Manchester Lec-
tures, 1832. — Surplus Population and Poor Law
Bill, 1835. — Legacy to Labourers, 1835. — Legacy
to Peel, 1835. — Legacy to Parsons, 1835.
[His biography is given by himself incidentally
throughout his works (for example, in Advice to
Young Men, 1830, and in the Year's Residence
in America). — See also William Cohhett, a Bio-
graphy, by Edward Smith, 2 vols. (Sampson Low,
1878).— George Gilfillan, (second) Gallery of
Literary Portraits, 1849. — Adolf Held, Sociale
Qeschichte Englands, 1881.] J. b.
COBDEN, Richard, born 1804, died 1865.
In 1841, being already a well-known and
vigorous writer on public questions as well as
an active advocate of free trade, he entered
parliament, having contested Stockport, the
borough which first returned him, in 1837. In
1857 he was not returned. In 1859 he was
returned, while absent in America, for Roch-
dale, and sat for this constituency till his death.
In these pages it is impossible to enter into the
details of his public life.
Cobden was supposed, especially by those
who did not know him, to be a mere advocate
of laissez faire ; and the school which he was
reputed to have founded was nicknamed the
Manchester school, chiefly by Germans, and
especially by German socialists. He might have
been excused if he set great store on the liberation
of industry from fiscal absurdities and shackles,
and thought that the best service government
could do to society was to let it alone, for he
had abundant experience of the mischief which
the meddlesomeness of government does. But
he was far too wise and experienced a man to
be satisfied with mere negations, and there were
few persons who interpreted the constructive
side of politics with more acuteness and more
perseverance. Perhaps one of the most obvious
illustrations of this statement, made by the
writer who probably knew him more in-
timately than any other person, was his negotia-
tion of the commercial treaty with France. A
commercial treaty is in direct antagonism to
laissez faire, and at the time was criticised on
this ground. Similar to this was his attitude
on national education, on which he entertained
opinions which have not yet been accepted,
though the country is manifestly bent on accept-
ing them in the end. His views on foreign
politics too, and especially the politics of
trade, are gaining ground among the most
thoughtful and intelligent public men. Cobden
always refused public office, mainly owing to
his antipathy to a statesman who was then in
the ascendant. j. t. r.
[In this reference the notice of Cobden's sensitive-
ness preserved by Bagehot is interesting. Bagehot
remarks in his vivid sketch of Cobden and his
work : " He said at Drury Lane Theatre, in tones
of feeling, almost of passion, curiously contrasting
with the ordinary coolness of his nature, ' I could
not serve with Sir Robert Peel. ' " Bagehot's Bio-
graphical Studies, 1881, p. 336.]
Cobden's early life was in many ways a fit
training for his later career ; he passed from his
father's farm at Dunford near Midhurst in Sussex
to a London warehouse, and became traveller for
his firm ; in 1832 he began business in Manches-
ter on his own account, and his cotton printing
works at Manchester and Salden brought him
the wealth which enabled him to conduct the
long campaign against the corn laws.
Cobden is associated with three gi'eat politi-
cal movements, the first for the repeal of pro-
tective duties, especially the repeal of the com
laws, the second against wars and military
expenditm-e, and the third in favour of com-
mercial treaties. The two first of these were
parts of a comprehensive but simple political
programme, which he held consistently through
life. Like his friend Bright, he looked at
political questions with the eyes of a man of
business, and without much (if any) respect for
tradition. In two early pamphlets, England,
Ireland, and Armrica (1835), and Russia
(1836), he gave his ideas to the world substan-
tially in the shape which they ever afterwards
retained in his mind, though the necessity of
negotiating commercial treaties seems to have
been recognised by him only after the force of
England's example had proved evidently insuffi-
cient to convert other nations to free trade.
The general spirit of his whole policy is well
expressed in the motto quoted by himself (in
England, Ireland, and America) from George
Washington : — ' The great rule of conduct in
regard to foreign nations is, in extending our
commercial relations, to have, with them, as
little political connection as possible." We,
he contends, have no commission to administei-
justice to the whole world ; and our interference
will do more harm than good. We must set
our own house in order and provide for our o^vn
people first. Further, if we are to pay our great
national debt we must have a larger population
and a larger trade ; and, if we are to have these
we must throw off" our feudal traditions and our
habits of excessive military and civil expendi-
ture, and above all our protective duties. After
the repeal of the corn laws, Cobden's opposition
to all indirect taxation became more, and not
less, pronounced ; and his failure to prevent
the war with Russia (1854), and the war with
COCHUT— CODE NAPOLEON
317
Cliina (1857) only increased his ardour in
preaching a policy of what has been, not verj'
happily, called non-intervention, or, not truly,
peace at any price. His efforts to secure com-
mercial treaties have been sometimes sup-
posed inconsistent with his general principles
(see Mallet's Free Exchange, 1891, where this
objection is well rebutted). The "Manchester
School " of politicians has ceased to play a
distinct part in our parliamentary life, partly
no doubt because its programme was inadequate
to the problems of the new era, and largely also
because many of its most important principles
from being paradoxes have become truisms.
Besides the "Cobden Club," the Financial
Reform Association, advocating direct taxation
and the abolition of all taxation of goods, may
be considered to represent his disciples. In
matters of economic theory he drew his inspira-
tion from Adam Smith ; and, though he added
little or nothing of his own, he had a remark-
able power of making clear to a popular audience
the several steps of an economical argument.
As Bagehot said of him, Cobden "was not the
discoverer of the free-trade principle. He did
not first find out that the corn laws were bad
laws. But he was the most etiectual of those
who discovered how the com laws were to be
repealed, how free trade Avas to change from a
doctrine of the ' Wealth of Nations ' into a
principle of tariffs and a fact of real life "
('Ragehot's Biographical Stiulies, 1881, p. 337).
His association with Bastiat was of first-rate
importance for the cause of repeal, but it has
induced too many of his followers to adopt the
economics of Bastiat as a whole (see e.g.
Mallet's Free Exchange, p. 23, "without
Bastiat, Cobden's policy would not have been
elaborated into a system "). The economical
writings of Perronet Thompson had an influence
on Cobden of which he gave practical recogni-
tion by editing them for the League.
[The political loritings of Richard Cobden, with
an introduction by Sir Louis Mallet, C.B. (1878).
This includes the pamphlets of 1835 and 1836
above mentioned, the four later pamphlets (1)
"1793 and 1853" (2) "How wars are got up in
India" (3) "What next, and next?" (4) "The
Three Panics," and letter on "Rights of Belliger-
ents."— Speeches on Questions of Public Policy
(ed. John Bright and J. E. Tliorold Rogers), new
ed. 1878. — Translation of the treatise of M.
Chevalier on the Probable Fall in the Value of
Gold with a Preface (1859). — Financial Reform
Tracts, No. 6. (on the Budget of 1849).— Life of
Cobden by John Morley (1882).
See also Bastiat's Cobden et la Ligue (1854). — H.
A.sh worth's Recollections of R. Cobden and the Anti-
Corn Law League (1876). — J. E. Thorold Rogers's
Cobden and Modern Political Opinion (1875). —
Bagehot's Biographical Studies (1881). — "The
Policy of Commercial Treaties," John Morley,
Fortnightly Review, June 1881.] J. B.
COCHUT, Pierre Andre, who was born at
Paris 1807, and died there 1890, was from 1838
to 1869 one of the most laborious and valued
contributors to the Revue des deux Mondcs. His
style was brilliant, his mind firm and indepen-
dent. His articles were much valued, particu-
larly those on Algeria. The Rapport general
sur VAlgerie, which was altogether his work,
was about to be distributed officially to the
chambers at the time when the revolution of
1848 broke out. It was then that he published
Les associations ouvi'ieres (1 vol. in 8vo, 1851),
a work which -is still not out of date. Soon
after appeared. Law, son systhne et son ipoque
(1 vol. in 18mo, 1853) which, while brilliant in
style, shows itself to be the work of an economist
and a financier of the best school. Long a
contributor to the National, he wi-ote afterAvards
in Le Temps. Questions of price and money
occupied his attention much, and his opinion in
these matters carried great authority. From
1870 to 1885 he was a director of the Mont de
Pi6te at Paris, a post which had been offered
him as far back as 1848. He was president of
the Socidte de Statistique de Paris, 1888, and
also vice-president from 1881 of the Sociite
d' economic politique. a. c. f.
CODE NAPOLEON. Before the French
Revolution there were two kinds of law in France,
the droit 6crit or Avritten law, and the droit cou-
tumier or customary law ; and the latter varied
so much from place to place that Voltaire said
a traveller changed his law as often as he
changed his jjost-horses. Consolidation Avas
attempted from time to time ; the most suc-
cessful efibrt in that direction was Colbert's
Ordonnance ; but practically the chaos remained
until, on 4th August 1789, the Constituent
Assembly ordered a code common to the whole
kingdom to be drawn up ; but Cambaceres
failed for various reasons to accomplish the task
then set him. Napoleon ordered the work to
be taken up ; he appointed a commission, con-
sisting of IVonchet, Bigot de Preameneu, Malle-
ville, and Portalis to prepare a code. They
did so, basing their labours largely on the then
existing French legal traditions, together with
the Institutes, the Pandects, the Codex, and the
Epitome Juliani. The successive portions were
subjected^ to public criticism ; the suggestions
of the various tribunals and iribunaux de com-
merce were invited ; the Tribunal of the year X.
then discussed the clauses, but when they had
got as far as the end of part iii. of the civil
code. Napoleon found them troublesome and
withdrew the code, expelled the opposition, and
broke up the remainder into committees which
were to discuss the clauses with the Conseil
d'etat. This was done ; and the various portions,
as they successively passed the Corp)s Lig'islatif,
were separately promulgated between the years
1804 and 1810. These portions, independent
of one another, are (1) the code civil, (2) the
code de procedure civile, (3) the code de com-
318
CODICIL— COKE
meree, (4) the code d' instruction criminelle,
and (5) tlie code p6nal. This code superseded
all previous legislation, and where it does not
provide for every case, much is left to the equity
and good sense of the judge. This, with
the multiplicity of co-ordinate jurisdictions in
France, has brought about considerable conflict
of decisions, and as precedents have there but
little binding force, there is some considerable
uncertainty as to what in a doubtful case the
decision may be. The brevity of the code is
condemned by Savigny and Austin, the latter
of whom points out that there is an absence of
definition of terms and of statement of guiding
principles. The result of this has been the
growth of a very full literature of the com-
mentary order. On the civil code, which treats
of civil rights under the three main heads of
persons, property and its modifications, and the
modes of acquisition of property, the commen-
taries of Duranton, Troplong, Toullier, Demo-
lombe, Sirey and Gilbert, and (German)
Zacharia may be consulted. The code de
commerce treats of commercial law under the
following heads : — (1) commerce in general :
traders, traders' books, partnership and com-
panies, partition of property, stock exchanges,
stockbrokers and brokers, pledges, agents and
common carriers, sales and purchases, bills of ex-
change, promissory notes and limitation ; (2)
maritime commerce : ships and other vessels,
seizure and sale of ships, shipowners, the captain,
hiring and wages of crews, charter parties and
freight, bills of lading, the freight, bottomiy,
insurance, average, jettison and contribution,
limitations of actions, exceptions or bars to
actions ; (3) bankruptcies and fraudulent bank-
ruptcies : dealing with bankruptcy, fraudulent
bankruptcy, reinstatement ; and (4) jurisdic-
tion in commercial cases : the organisation of
the trihunaux de commerce, their jurisdiction,
their procedure, and the procedure in courts of
appeal. With reference to the code de com-
merce, the following works may be consulted :
Napoleon Argles, French Mercantile Law, 1882,
and references therein, pp. xvii-xxiv ; Mayer's
French Code of Commerce, 1887. — Alauzet, Commen-
taires ; — and with regard to the development of
French law and legal tradition, Laferri^re, Histoire
du droit frangais. A. D.
.CODICIL. A document executed for the
purpose of modifying the directions of a will,
and subject to the same requirements as to form
as the will itself {see Will). e. s.
COINAGE, The Right of. ''In constitu-
tional law the right of coining has always been
held to be one of the peculiar prerogatives of
the Crown, and it is a maxim of the civil law
that mon^tandi jus principitm ossihus inhaeret"
(Jevons, Money, p. 65). A hard use has often
been made of this prerogative, A. Smith says
{Wealth of Nations, book i. ch. iv.) ''In
every country of the world, I believe, the avarice
and injustice of princes and sovereign states,
abusing the confidence of their subjects, have
by degrees diminished the real quantity ol
metal which had been originally contained in
their coins." J. S. Mill has expressed himself
much to the same effect {Principles of Political
Economy, book iii. ch. vii. § 2). Governments
found it their interest "to interdict all coining
by private persons ; indeed their guarantee was
often the only one which would have been relied
on, a reliance, however, which very often it ill
deserved." The English standard for the gold
coin has remained unchanged in fineness since
1600, and the number of grains of fine gold in
the pound sterling since 1717, when Sir Isaac
Newton was master of the mint. The process
of coining requires to be carried on with great
scientific care. See Alloy ; Assay ; Better-
NEss ; Brassage ; Bullion ; Mint.
[W. S. Jevons, Money. — Lord Liverpool, Letter
to the King on the Coinage. — F. A. Walker,
Money. — E. Seyd, Bullion and Foreign Exchanges.
— W. Bagehot, A Universal Money, — Select Tracts
on Money, printed for the Political Economy Club,
etc.]
COINAGE, Decimal. See Decimal System.
COKE, Roger (fl. 1643-1696) was the third
son of Henry Coke of Thorington, by his wife
Margaret, daughter and heiress of Sir Richard
Lovelace of Kingsdown, Kent, and grandson of
Sir Edward Coke. He was educated at the
University of Cambridge, where "he became
well-vers'd in several parts of learning, and
wrote a treatise against Hobbes' Leviathan."
His principal study for some time was mathe-
matics, but he also took great delight in
commercial questions. "Tho' in his day he
had good speculative notions in trade, he was
not so successful in the practice of it." He fell
into distress, and the "best support he had "
was an annuity of £100, which was settled
upon him by his nephew. " He lived for some
years within the rules of the Fleet, and died a
bachelor about the 77th year of his age." In
his writings Coke, erroneously assuming the
accuracy of Samuel Fortrey's {q.v.) statistics,
maintained that English trade and commerce
were decaying ; but he made many sound sug-
gestions for their improvement. He denounced
the trading corporations, which had "the arti-
ficers at their mercy," and suggested that they
should be made free to all English citizens.
The Statute of Apprenticeship (see Apprentice-
ship, Statute of) in his view prepared materials
for the Poor Law to work upon. He advo-
cated the repeal of the laws of naturalisation
and of the acts restraining the importation of
Irish and Scotch cattle. The exclusive privi-
leges of the trading companies (see Foreign
Trade, Regulation of), which restrained
English foreign trade within narrow limits,
should be abolished. The Navigation Act
{q.v.) had, in his opinion, secured the monopoly
COKE— COLBEKT
319
of the foreign trade of the country to a few
merchants, to the detriment of the producing
classes. Similar laws had been found by ex-
perience to be mischievous in their operation,
and, in support of his objections, he quoted the
evidence laid before the committee on trade in
1668 (v. Free Trade). He maintained that
the free importation of raw material and of
foreign manufactures should be permitted.
This would lead to "plenty and cheapness"
of all things needed by "the poor artificers,"
and to the increase of trade and commerce.
Amongst Roger Coke's works may be mentioned
— 1. A Detection of the Court and State of England
during the four last reigns and the interregnum,
consisting of private Memoirs, etc. . . . Also an
Appendix discovering the present state of the
Nation, 2 vols., London, 1694, 8vo. — 2. A Dis-
course of Trade, in Two Parts. The first part
treats of the reason of the decay of the strength,
wealth, and Trade of England. The latter of the
growth and increase of the Dutch trade above the
English, London, 1670, 4to. — 3. England's Im-
provement. In two parts : in the former is dis-
coursed how the Kingdom of England mxiy he
improved in strength, employment, wealth, and
trade : in the latter is discoursed how the naviga-
tion of England may be increased, London, 1675,
4to. — 4. A Treatise wherein is demonstrated that
the Church and State of England are in equal
danger with the trade of it : Treatise 1. Reasons
of the increase of the Dutch trade : Treatise 2,
London, 1671, 4to. — 5. Reflections upon tlie East
Indy and Royal African Companies : vnth an-
imadversions concerning the naturalisation of
foreigners, London, 1695, 4to.
[Coko's Detection, etc., 4th ed. (1719), 1. xiil. —
MacCullocli's Literature of Political Economy
(1845), 4to. — Adam Smith's Wealth of Nations,
ed. MacCulloch, 4th ed. (1853), xxxvii. 536.—
Carthew's Hundred of Launditch, iii. 109. — Brit.
Mus. Catalogue^ w. a. s. h.
COLBERT, Jean Baptiste, born at Rheims
1619, died at Paris 1683. The son of a wool-
merchant, Colbert became one of the greatest
ministers France has ever seen ; he formed part
of the establishment of Cardinal Mazarin from
1649 to the death (9th March 1661) of that
statesman, who on his deathbed recommended
him to Louis XIV. Appointed immediately,
16th March 1661, intendant of the finances, he
succeeded, on the day of the arrest of Nicolas
Fouquet, — 5th September 1661, — to him as
superintendent, directing the finances from
that date, originally under cover of a financial
council, afterwards, from 1666, as comptroller-
general. His first step was to reduce the Taille
{g_.v.\ a direct property tax ; he then established
a departmental ojQBce {chambre de justice), which
carried on its operations from 1662 to 1665,
and was only definitely closed in 1669, after
having brought in 110 millions (say £4,400,000)
to the state. After some trifling reforms, he
promulgated the customs tariff of September
1664, which, establishing a more complete unity
of plan, was certainly an improvement on the
preceding order of things. It might even have
produced real progress had Colbert, supported
as he was by Louis XIV., been more confident
in his own strength, and had he abolished, as the
Jitats giniraux of 1614 desired, all internal cus-
toms restrictions, and removed the fiscal baiTiers
to the frontier. But beyond this there remained
still to be carried out the settling of the rate of
duties. Colbert's regulations, certainly severe,
though preferable to those of his predecessors,
were rendered more strict, first in 1667, then
again in 1672, when they even were the cause
of the war with Holland.
Colbert, we must admit, while he put
down with laudable strictness, and even severity
sometimes, financial dishonesty, was carried
away by his love of system and of making
regulations for the control of commerce and
industry. Thus he established, 1664, the
two commercial companies of the East Indies
(Hindustan), and of the West Indies (America).
Notwithstanding his support, and in spite of
the liberality of Louis XIV., these two associa-
tions, based on monopoly, gradually sank. The
first vegetated on even to the times of Law
(1719), but the second died in 1674. Tho ordi-
nance of 1666 on manufactures and coi-porations
was a new manifestation, and a more regrettable
one, of his tendency towards regulation. To
organise an industrial movement, to sustain it by
custom-house regulations, always protectionist,
at times prohibitive, to create model manufac-
tures— or at least manufactures having those
pretensions, sometimes through the intervention
of the state and with the money of the taxpayer
(Beauvais, 1664, the Gobelins, 1667), at other
times (St. Gobain, 1665) through a privileged
concession ; this is the whole of the economic
method which goes by the name of the system
of Colbert. This great minister was not, after
all, systematic enough to have deserved to give
the name of Colbertism to his system. His
methodical mind only occupied itself with over-
coming difficulties, with adopting reforms one
by one, after having maturely studied the con-
sequences, particularly the immediate conse-
quences. Though a hard worker, energetic in
character, supplying the deficiencies of ignorance
through supremely good sense, Colbert was
never able to rise to the level of a general idea.
His activity gradually extended itself to the
shipping interest, the care of which was added,
1669, to his duties ; and to the arts, which he
encouraged both in France and even in other
countries by presents, pensions, or payments,
considerable in amount, especially when the
date is considered. He founded, 1663, under
the title of the Petite Acad4mie, the Academy
of Inscriptions and Belles-Lettres ; then, 1668,,
the academy of the sciences. He encouraged
the taste and the expenses of luxury, particu-
larly in the way of building, in Louis XIV., and
320
COLBERT— COLLEGIUM
even spent large sums on festivities in the
furtherance of that economic error, faire aller
le cominerce, to "make trade go." He founded
the opera in 1667. He jjresented Riquet — and
this was more useful — with the concession of
the canal to join the two seas, constructed, be-
tween 1665 and 1681, by means of the subsidy
voted by the states of Languedoc. The canal of
Orleans (1679) was also undertaken about the
same time, and the canal of Burgundy projected.
Colbert thought it his duty also to give
encouragement to the growth of the population
by pensions to large families — but all that he
did by this was to supply misery with fresh
victims. Unfortunately all this activity turned
capital aside from employment in agriculture,
which suffered the more under the administra-
tion of Colbert because he put hindrances on
the circulation of corn by regulating both the
inland and foreign trade in it.
Besides this, the passion for extravagant
expense took, with Louis XIV., a development
which ended by making Colbert uneasy. A
more serious consequence followed. The taste
for war seized the king, and Louvois, secretary
of state for the war department, 1662-1691,
overweighed the influence of Colbert in the
mind of the king, and contributed powerfully
to develop this taste, to the misery of France.
A few hard words addressed by the king to
Colbert completely overwhelmed him and re-
sulted in the illness which brought him to the
tomb. An honest soul, deeply attached to his
country, he sought its prosperity by purely
practical means. He loved his king, and
favoured peace. When the condition of aflfatrs
which surrounded him is considered — the diffi-
culties he had to overcome — the indomitable
energy with which he endeavoured to institute
reforms, and the perseverance he displayed in
bringing them about, no doubt can exist that
posterity has been right in giving him the title
of the Great Colbert.
[The " Lettres, instructions, et miynoires de Col-
bert " were collected and published by M. Pierre
Clement (1861-1873 in 7 vols. gr. in 8vo).
Besides this, among other works on this great
minister, there may be read : Histoire de la
vie et de V administration de Colbert, par Pierre
Clement (1 vol. in 8vo, 1846). — Etudes sur Col-
bert, par Felix Joubleau, ouvrage couronnt par
I'Acadimie des sciences morales et politiques (2
vols, in 8vo, 1856). — Colbert et son temps, par M.
Alfred Neymarck (2 vols, in 8vo, 1877). We may
quote among biographies of Colbert those of
Forbonnais, Bailly, Montyou, Necker, Lemontey,
Ad. Seviez, and Jean Reynaud.] a. c. f.
COLLATERAL SECURITY. See CArxiON.
COLLATION. See Succession, Scotland,
COLLECT. To obtain payment of a bill of
exchange or cheque as agent for another person.
An indorsement " for collection " does not trans-
fer the property to the indorsee ; it is merely
an authority to encash the amount at maturity.
If the indorser becomes insolvent before matur-
ity, the indorsee has to account for the proceeds
to the estate, and cannot set them oft' against
a debt due to him from the indorser. e. s.
COLLECTIVE GOODS include all those
desirable things which are not appropriated by
particular individuals to the exclusion of others,
but are available to all members of the com-
munity, e.g. turnpike roads, great rivers such
as the Thames, public museums, free libraries,
the right to a free education. Such goods con-
stitute a very important element of national
wealth. Compare Marshall, Principles of Econ-
omics (2d ed.), bk. ii. ch. ii. § 4. J. N. K.
COLLECTIVISM is the theory which teaches
that land and capital, or the means of produc-
tion, should be the property of the whole
community in order to secure effective produc-
tion and equitable distribution. It is thus not
a different doctrine from that which is now
usually meant when the Avord socialism is used.
''The word is new, but the idea is found in
every system of radical socialism" (^. de
Laveleye, Le Socialisme Gontemporain, 3""® 6d.,
1885, p. 285). M. Paul Leroy Beaulien, in
his book Xe CoUectivisme (1884, 2""' ed., 1885),
which is in large measure a criticism of
Schaffle's Die Quintessenz des Socialismus, de-
fends the neologism on the ground that it
is more definite than Socialisme, which he
understands in a large and vague sense as
nearly equivalent to what is in England called
state interference. The name " coUectivist "
was at one time appropriated by the socialists
who opposed what they called the authoritative
communism of Marx. Bakounin (q.v.) declared
himself "a coUectivist and not a communist"
at the fourth general meeting of the Inter-
national (q.v.) in 1869 (J. Garin, L'Anarchie
et les Anarchistes, 1885, p. 79). The whole
subject will be found fully treated under
Anarchism and Socialism, vol. iii. and App.
[Authorities quoted in the text.] B. C.
COLLEGIUM. This term in ancient Rome
signified a corporate body composed of indi-
viduals in partnership for the pursuit of some
common end. Collegia existed at different
times for the pursuit of the most various ends,
religious, social, and political, but the collegia
of most interest to the economist were the
Collegia Artificum and the Collegium Merca-
torvm. The free workmen in Rome from very-
early times were organised according to their
respective trades into collegia. The foundation
of the system is variously ascribed to Numa
Pompilius and to Servius Tullius. Authorities
agree, however, in fixing the original number
at nine, and the extreme antiquity of the
system is vouched for by the fact that among
the nine was a collegium of workers in bronze,
but none of workers in iron. Early in the
4th century B.C., a collegium of merchants was
added to the number, and in later times the
COLONIES: DESCRIPTION OF
321
publicani appear to have formed a collegium.
There is, unfortunately, very little positive
evidence as to the precise constitution and
importance of these collegia. Like the medi-
aeval craft -guilds they appear to have com-
bined a social and religious with an industrial
side. It cannot be ascertained to what extent
their organisation applied to the provinces ;
but they apparently resembled the craft-guilds
in being local organisations. The collegium
of the sailors, however, resembled the Com-
PAGNONNAGES (q.v.) in possessing local branches
in the provinces. The original nine collegia of
craftsmen were always exempt from the repres
sive legislation which was from time to time
promulgated against other collegia, and they
continued to exist in Italy until the Middle
Ages, when the compagnonnages and craft-
guilds were developed from them. Owing no
doubt to the preponderance of slave over free
labour in Rome, the collegia of workmen had
little direct influence on history. They never
appear to have attained an importance at all
comparable with that of a Trade Union in
modern times.
[Smith, Dictionary of Roman Antiquities, 1891.
— Mommsen, History of Rome. — Mommseu, De
CoUegiis et Sodaliciis, Kiel, 1843.] a. H.
COLONIES.
Colonies, description of, p. 321 ; Colonial Policy, p. 322 ;
Colonial Lands, p. 323 ; Public Debts, Colonies, p.
324 ; Trade and the Flag, p. 324 ; Metliods of Govern-
ment, p. 326 ; Currency, British Colonies, p. S2«3 :
Denominational Currency, p. 328 ; Government by
Companies, p. 329 ; Colonisation, Systems of, p. 333.
COLONIES. The definition of the term
"colony" is elastic, and its use is much
governed by accidental circumstances, e.g.
Ceylon is styled a "colony," and Burmah
not, because they are directed by diiferent
departments of state at home.
Modern colonies, which are those treated of
here, have been founded by the nations of western
Europe since the time when their energy sent
them one after another in quest of profit and ad-
venture away from the Mediterranean lands which
had fallen into the power of the Mohammedans.
They fall into four economic types: — (1)
Factories, those established for trade with
natives ; (2) Provinces, for exploiting, more or
less explicitly, the countries taken possession
of; (3) Plantations, for industrial occupation
through employment of capital ; and (4)
Colonies proper, for complete industrial occu-
pation. . Other than economic motives have
influenced the origination of modern colonies :
religious liberty sent out the Jews of Portugal
to Brazil ; the Puritans to New England ;
religious enterprise the Jesuits to Paraguay ;
political disaffection sent cavaliers to Barbados ;
social offences supplied Australia with her first
colonists.
1. The Factory system was the earliest, and
VOL. I.
was prosecuted with great vigour by the Portu-
guese, who, in rivalry with Venice and Genoa,
drew a chain of factories from Madeira to Japan.
When Portugal fell (1580) for a time into the
clutches of Spain, the Dutch stepped in and
secured many of their positions ; in time the
French and British followed up the Dutch.
The Portuguese factories were royal enterprises
nominally, but were farmed out ; the Dutch
were purely commercial undertakings, governed
by the approved methods of trade found suc-
cessful in Holland, and adopting a method
known in present days as limitation of output,
where thought necessary. The concentration of
aim upon profit proved eventually their weakness.
The yielding of heavy dividends promptly and
regularly can hardly be an adequate basis for
great human movements such as colonisation,
and a clear example of the failure of such an
attempt is to be found in the brief duration
of the Dutch power in Brazil, 1624-1654.
2. Provinces. In these the inhabitants al-
ready in possession are governed and, in most
cases, made use of for industrial employment.
The story of Spanish colonisation is iound in
the histories of Mexico and Peru. The Span-
iards were misled by the idea that gold and silver
were identical with wealth, and fanatical in
their preference for ecclesiastical system over
humanity. The end of their dominion was
sudden. In thirty years the Spanish empire
in the new world was gained ; it lasted two
hundred and fifty years ; in another thirty
years it fell, leaving behind but Cuba, Puerto
Rico, and the Philippine Islands. Still, the
Spaniard did a little for the economic develop-
ment of those countries : he taught the use
of horses, of ploughs, and of money. France
has recently formed a new province in Africa, but
its interest is mainly military, and the econo-
mical value of their rule in Tonquin and Cochin
China, to either party, is at present obscure.
The greatest example of the province in the
history of the world is undoubtedly that agglo-
meration of peoples, nations, and languages
called "India." The economic and the educa-
tional value of the relationship between Britain
and India has continually become more and
more important, as that relationship has gradu-
ally taken its legitimate form.
3. Plantations. This type of colony has
furnished a varied and interesting chapter in
the history of each of the colonising countries
of western Europe. When regions entered upon
were inhabited by races in primitive stages of
industrial life, these were either brought into
service, as in Brazil, Ceylon, and the mines of
Mexico and Peru, or pushed aside, as in North
America. The primary purpose of these planta-
tions was the employment of capital, not the
application of the planter's labour — which
indeed the climate as a rule rendered impossible.
I Native labour was brought into subjection.
Y
322
COLONIES : COLONIAL POLICY
Gaols at home were emptied of their lawful
inhabitants to furnish labourers for Virginia,
and the sad history of the extermination of the
natives of the West Indies by the Spaniards,
and the crushing of the natives of Mexico, Peru,
and BrazU by Spaniards and Portuguese was
marked by the most disgraceful subordination of
moral principle to industrial circumstances ever
practised on such a scale and in so gross a manner
— the deportation and enslavement of African
negroes (see Slavery and Slave Trade).
This extraneous supply was resorted to on
the extermination of the inhabitants of the
West Indies, the proof of ineffectiveness of
those of Brazil, and of the inability to domesti-
cate the Red Indians of North America ; and
it has resulted in the settlement of an important
fraction of the Negro race in the western hemi-
sphere. Recent years have witnessed the de-
velopment of a system of regulated voluntary
migration of tropical labourers from the east to
the ^vest under the name of Coolies (see Coolie
System).
In spite of the mediaeval character of the
Virginia or Jamaica planter in many respects,
he was more the prototype of the modern agri-
culturalist or manufacturer in England than
was the New England or Pennsylvania farmer
who owned his land, employed his own capital,
and with his family supplied a considerable
part of the labour. And as time went on
plantation - owners were only represented by
"attorneys" and managers, and yet their
revenues, being derived from invested capital,
were always regarded as profits, not rents.
What has changed is the political and social
status of the labourer. He still remains eco-
nomically dependent so long as he has no
capital, but his condition is gradually im-
proving.
4. Colonies Proper. England only, of all
European countries, was in a position to put forth
vigorous reproductions of herself throughout the
18th and the 19th centuries. Of recent years
(1910), since the settlement of northern Europe
and the formation of the German empire, the
spirit of colonisation has developed both in
France and Germany, but at present few of the
Colonies of either of these nations have a revenue-
suffieient foi the cost of administration.
Emigration from European nations con-
tributes an element to the primarily English
life of the United States, and the English
colonies of North America, South Africa, and
Australasia. The Dutch settlement in South
Africa, and the French remnants in Canada
and Mauritius, show a certain persistence.
A conspectus of the present situation shows a
varied spectacle. Relics of four empires,
Spanish, Portuguese, Dutch, and French, strew
the seas ; but all of them are of the factory,
province, or plantation type. Nations, once
European colonies, occupy the western con-
tinent from the St. Lawrence to Cape Horn,
British, Spanish, or Portuguese in origin and
in economic character. The British empire
stands out unique in magnitude, in variety,
and in promise. It shows every type in full
working order. Factories flourish, as Lagos,
Hong-Kong, and Singapore ; provinces, as
India, Burmah, Fiji ; plantations, as Ceylon,
Mauritius, Guiana, and the West Indies ; and
reproductions of the British nationality in the
dominion of Canada, in South Africa, and in
Australasia. Besides these, are the military,
naval, and commercial out-stations of Gibraltar,
Malta, Cyprus, Aden, St. Helena, Bermuda,
and the Falkland Islands.
[For full accounts of the present condition of
European colonies, see the list of books at the end
of this article, and also "British and Foreign
Colonies," Sir R. Rawson, address to Statistical
Society, London, 1884. — For a continuous history,
see E. J. Payne, Ev/ropean Colonies, Macmillan,
London, 1877.]
Colonial Policy. The economic policies
which have prevailed have been applications
in new fields of policies already in vogue in the
home countries. To reap the advantages of
the new territories either by direct acquisition
of their products or by exchange at enormous
profit, and to appropriate these advantages as
against other European nations, was the chief
aim of the attention devoted to colonies
throughout, and is to some extent in active
operation at this day. Holland still derives
a substantial revenue from her remaining
possessions, and the reiteration of the question
"of what use are the colonies to us?" shows
that in England economic advantage is still a
prominent factor in the Englishman's care for
the "empire." The chief differences in policy
lay in the exact relationship of the home
government to the new communities ; some
reserved full control, as Spain and Portugal ;
some reserved only partial control, and dele-
gated considerable power to the original
companies, and afterwards to the colonial
governments ; but all agreed in regarding them
as fresh sources of supply, or fresh markets for
home products. It seemed to contemporary
statesmen plain common sense to provide that
the colonies should be content to supply what
their territory was able at once to produce,
to buy and sell in the markets of the home-
country alone, and not to compete with her in
foreign markets. The aggi-egate of these
restrictions, monopolies, and privileges consti-
tutes what is usually set forth as the "colonial
system," which prevailed for some three hun-
dred years. But this system must not be
considered as consisting only in these restric-
tions. A brief consideration of it as designed
by Colbert, for example, or as nursing the
young colonies of North America, shows that
at its early stages the advantage was not all on
COLONIES: COLONIAL POLICY— LANDS
323
one side. If Great Britain monopolised the
products of lier colonies, and restricted them
to herself for their purchases, this was in
some important respects only confining them
to their best customer and their cheapest
market. And besides this, the imperial army,
navy, and credit were behind them, and left
them free to their industrial pursuits. But as
the colonies grew stronger the necessity for
fostering lessened, and the situation began to
be disadvantageous. Practical protests in the
way of smuggling began to shake the legal
position, and the eventful year 1776 saw both
the declaration of independence of the thirteen
British colonies in North America, and the
reasoned demonstration that restrictions were
operating perniciously, in Adam Smith's criticism
of the whole system. It may be said that his
condemnation is based on the cessation of the
idea that the colonies were property, and the
substitution for this of the economic idea that
we and they were concerned in the production
of as much material wealth as possible, and
that it was not to the advantage of either that
restrictions based on "artificial" (or non-
economic) relations should continue.
In the general movement towards free trade
as British economic policy, the Navigation Act
was modified, and eventually abolished (see
Free Trade). The diff'erential duties in favour
of her colonies were relinquished, and the
country which was the latest to apply the
restrictive method strictly was the first to
abandon it. The issue has been a complete
dissolution of the old relationship, relaxation of
control has proceeded to the bitter end, and
the spectacle is now seen of colonies, not only
not tied to the mother country, but setting up
tarifis which put her on the same footing as
every other nation — in some cases even care-
fully excluding her products as much as theirs.
Some, indeed, are only accidentally protec-
tionist, raising their customs duties for revenue,
as South Africa and New Zealand, but two at
least, Canada and Victoria, are avowedly pro-
hibitive in their intentions. This situation
has given rise to many proposals for a
resumption of economic relationship by means
of a commercial union of the empire, a British
"ZoUverein," and this constitutes the most
burning question of economic colonial policy
at this day. It should be noted that the vari-
ous members of the United States of America
form a compact union with free intercourse
within, and protection against outsiders ;
that neither Holland nor Spain have allowed
their colonies commercial independence, while
France is moving towards restriction again for
hers ; and that the German political economist
List in urging Germany to begin colonies, did so
on the supposition that the old system of
union rather than the new system of absolute
freedom would be the basis of relationship.
The efiiects on the economic growth of a
community of its being a "colony," depend
largely upon the relative force of the national
and cosmopolitan feelings. In early days of
rivalry and hostility between nations, the
connection was of vital importance, because
people would not incur expatriation, nor would
capital venture itself beyond the nation's
protection.
But now what colonies secure is only some
advantage in the movement of capital, not
an exclusive advantage. The feeling that the
Government of the empire is, somehow, behind
them, that they are in some ways still under a
department of state, operates with considerable
effect in their favour, and is preparing the
public mind for the extension of the invest-
ments of trust funds to colonial government
securities. As to advantage in the movement
of labour, the colonial relationship cannot be
said to count for very much in the face of the
preponderance of emigration from Britain and
Germany and Sweden to the United States ;
but prpbably less skilled and professional
labour would go to Australia were it not a part
of the Empire. Looked at broadly, it may be
seen that to the ex-colonies of North America,
and the present colonies in Australia, there has
been a movement of capital and labour which
has enabled Chicago, Melbourne, and Montreal,
to attain their population and opulence with a
rapidity far outstripping anything known in
the old world with all its inheritance of endow-
ments and equipments for industrial develop-
ment.
The effect on the home countries of having
colonies was more important under the old
system than now. Then they were direct
sources of revenue, or monopolised spheres ot
trade. The increase of intercommunication
through facilities in travelling, the settling
down of the new free trade policy, and the rise
of competitors in manufactoring industry on
the continent, have brought into full view
what the outer empire means for British
industry to-day. We can see clearly how it has
been a field for emigration, and so has assisted
in the rise of wages ; an outlet for capital, and
so has helped to check the fall of interest and
of profits ; a market for manufactures, and so
has called into action the law of increasing re-
turns, and eff'ected a cheapening of commodities
in spite of the rise of wages ; and a source of
agricultural supply which has checked the
operation of the law of diminishing returns.
It has contributed largely to the development
of our manufacturing powers, and has thus
helped to pay back the debt which List says it
owes when he bases the British empire on the
capacity of Great Britain for becoming a predomi-
nantly manufacturing nation. [See Colonial
Policy, Recent Developments, in App.]
[Colonial Lands. The tenure of laud has
324
COLONIES : COLONIAL POLICY— PUBLIC DEBTS
in the main been on the simple basis that the
crown was possessor, and could grant lands in
•perpetuvmi or on leases, and in colonies which
acquired responsible governments these govern-
ments have taken over the rights of the crown.
The raising of revenue by the sale of lan^ has
been common, especially in order to allure
immigration. Gradually a more far-sighted
policy is being adopted ; the colonies are ceasing
to live on capital in this way. Victoria now
carries the proceeds of public sale of lands to a
reserve fund ; New Zealand, since 1879, has
reserved the whole, Tasmania about one half.
An important question of policy is raised by
the supposition that the colonists at any given
time are, corporately, the possessors of the
lands of their territory — a supposition which,
on its face, is barely reasonable for Victoria
with a population of a million in a region
larger than England and Wales, and incon-
gruously absurd when the 60,000 people at
present in Western Australia lay claim to a
third of the Australian continent. The im-
portance of this to the mother-country lies in
the consequent claim of the colonists to restrict
farther emigration at their discretion.
The Public Debts of the Colonies. The
colonies have borrowed capital, as corporations,
to the extent of something like 390 millions at
present outstanding. But exception is taken,
and with justice, to this being regarded as
analogous to the national debts of European
countries rather than to the debts of traders
who have legitimately bon-owed for use as
capital. The chief portions of the national
debts of the continental nations, of Britain, and
even of the United States, have been borrowed
for the expenses of war ; the chief portions of
these colonial government debts have been
borrowed for public works, especially railways.
The interest on the debts is largely provided
by the receipts from these public works, and
from this source much of the debts themselves
will gradually be paid off. It is maintained by
some, but denied by others, that in some cases
colonies have been too sanguine, and have
drawn somewhat in excess of what is easily
repaid, but only because they may have con-
structed more public works than they were
immediately able to make remunerative.
[See papers by Sir F. Dillon Bell, " Indebtedness
of the Australian Colonies in relation to their
Resources," with discussion, Roy. Col. Inst. Pro-
ceedings, vol. xiv. thereon ; and by H. F. Billing-
hurst, " Colonial Indebtedness," Journal of Inst,
of JBanlcers, March 1889, and discussion. — W.
Westgarth, "Australasian Public Finance,"
Colonies and India, March 27, and discussion,
April 3, 1889. The first principles of this subject
are well discussed by Dr. Sidgwick in the third
book of his Political Economy.]
The rate of interest in the colonies has proved
a clear index of their growth, of the increase of
confidence in their stability and future, and of
the security of their commercial connection
with the home country whether the political
continues or not. Loans to private borrowers
used to range at fancy rates until the formation
of joint-stock companies in England with boards
of directors composed, partly at least, of well-
known Englishmen. Sixtyyears ago government
loans were at 6 per cent, and even then taken
only at a discount, but gradually the rates
fell until, in the period from 1895 to 1905,
the 4 per cent of some colonies were at a
premium, and Canada issued a 3 per cent loan,
while the Australian colonies were advised
severally to consolidate their loans at that
figure. The " ' inscribing " of stock, permitting
the amount to stand in the names of individuals,
has attracted investors to whom changes of
investment are objectionable ; the lengthening
of the periods of redemption has operated in
the same direction. The conversion of the 3
per cents in England, the tendency towards
3 per cents of municipal corporations in the
United Kingdom, with a fluctuating taste for
foreign investments, all incline the flow of
capital to the colonies. Of this, however, they
have availed themselves so freely that during
the past few years the rate at which they can
borrow has again shown a tendency to rise.
[See paper in Proceedings of Roy. Col. Inst. , vol.
ix., by Dr. J. Forbes Watson, "Character of
England's Colonial and Indian Trade contrasted
with her Foreign Trade."]
Trade and the Flag. — This is a figurative
expression for the connection between commercial
intercourse and political union. Much argu-
ment is used and masses of statistics have been
compiled on both sides of the question, which is,
indeed, of very great interest and importance.
To those who regard the political connection
as effective in the commercial sphere, it is of
extreme importance that the political connection
should be retained, and strengthened, if need
be, by judicious improvements ; this is the
primary consideration with many of those en-
gaged in the Imperial Federation propaganda,
though not a plank in their oflBcial platform.
Those who think that purely economic con-
siderations are now — perhaps ought to be
always — adequately powerful to guide peoples
in the pursuit of material well-being, regard
lightly the continuance of political ties, especially
when so attenuated as those between the English-
speaking countries and the mother country have
become. They hold that natural propensities
are self-acting, and will operate in keeping up
a close commercial relationship, and that govern-
ment relations are either worthless because quite
unnecessary, or pernicious because distorting the
natural procedure.
It is evident that the influence of statistics
upon this discussion is limited ; but the feder-
ationists can certainly at present point out some
striking figures, such as Great Britain's exports to
COLONIES: COLONIAL POLICY— TKADE AND THE FLAG
325
France being 1 6s. a head of French population,
when those to Australia are 196s. ; and U.S.A.,
English-speaking but outside the flag, 15s., to
Canada's 45s. But the opponent replies, (1)
that this trade is due to the large loan opera-
tions : and the question then resolves itself, so
far, into the fundamental question of the
mobility of capital and labour, is this helped or
hindered by the political connection ? and (2)
that the Canadian tariff is not so hostile, —
but this may be one consequence of the flag.
[See Forster, Art. in Nineteenth Century^ Feb.
1885, and the publications of the Imp. Fed.
League generally, and on the other side Sir T,
Farrer, Free Trade versus Fair Trade, 4th edition,
1887, and the publications of the Cobden Club.
The subject, however, is not to be discussed as
between protectionists and free-traders, as the chief
men on both sides claim to be the latter. The im-
perial unionists are reinforced, however, by the
fair-traders and by the supporters of national econ-
omics ; see S. S. Lloyd's translation of List. ]
A problem of growing interest is the claim of
the colonists to consider themselves as owing no
effective allegiance to the mother country. The
elaborate tariff's, already mentioned, form tlie
backbone of the problem. There are also the
questions of the right of the colonists at any
given time to stop farther immigration from
Britain or elsewhere into lands which British
policy has secured from possession by other
nations, and the British navy has secured from
physical aggression ; and the right of the colon-
ists of the day to throw possible embarrassment
on the future development of the colonies, and
their utility to the mother coimtry by injudicious
allotments of the land of the colony, and in dis-
regard of the fact that the inhabitants of Great
Britain and Ireland pay interest on a vast debt
partly acquired in maintaining the sovereignty
of the seas which has kept France and Germany
out of Australia, while the colonists are under
no liability for this debt. New effects of eco-
nomic conditions upon social and political
organisation will present themselves in some of
our colonies. For example, Victoria is a state
in which labour more or less skilled, and guided
by higher average of intelligence than in Europe,
is the prime political power ; fixed property and
even movable capital being secondary in influ-
ence. The interest that depends on uncertainty
will not be wanting to political economy in
view of these new phenomena.
Colonial policy as regards this country is far
from having arrived at the stable position which
seemed promised by the steady displacement of
the old system during the first three-quarters of
this century. The removal one by one of the
restrictions on colonial trade by Mr. Huskisson
between 1814 and 1825, the abandonment of
differential duties, and of the Navigation Act,
1850, seemed to point to an era of complete
freedom. But the gradual adoption of protec-
tionist policy by several important colonies
has reversed the position by placing barriers,
which oppose Great Britain most, because in
freedom it is her trade which would naturally
be the largest. And so the colonies are drawn
into the vortex of the great protection versm
free -trade agitation. Two parties aim at a
new colonial policy : one bases its recommenda-
tions on the conception of national economics
in preference to cosmopolitan ; the other, on
the greater amount of real "freedom" which,
under present circumstances, Avould result from
freedom within this vast empire of 300 million
people, though combined with protection against
outside protectionist nations. The means of
reaching their goal is the same for both parties,
a commercial union of the empire. The opposi-
tion has also two parties — the free-traders who
prefer the amount of free trade at present in
force, with hope that it will by its own virtue
continually increase, and so break down barriers
both colonial and foreign ; and the colonists
who severally place their own colonies in the
front of their schemes, and are content to be
protectionist for their own reasons. On each
side, therefore, there is a band of free-traders
and a band of protectionists — Mr. W. E. Forster
and Mr. Goschen have taken a place side by
side with the disciples of List ; Sir Thomas
Farrer and the Cobden Club are the allies of the
protectionists of Victoria and Canada. Mean-
while the bounty of nature, the extension of
industrial ideas as determinants of national
ambitions and national policies, and the con-
tinuous development of science and civilisation,
combine to cause a rapidity of industrial progress
in British colonies which exceeds all known else-
where, except in our own ex-colonies, the United
States. And in spite of obstructions, and while
waiting for general agreement as to the next steps
to be taken, the mother-country largely benefits
by the industrial prosperity of the outer empire.
For systems on which colonies have been founded,
see Colonisation, Systems of.
[The library of the Royal Colonial Institute con-
tains books of reference, statistical publications,
and histories, both general and special, to the
number of 9500 volumes (catalogue price 2s. 6d.,
oflSce of the institute), and 219 colonial journals
and newspapers are regularly taken, tiled for a
year, and then deposited in the British Museum.
Statistical Abstracts for the colonies are published
annually by the Board of Trade, and Returns of
Trade and Navigation monthly. For British
colonies see Historical Geography of the British
Colonies, Introduction, vols. i. ii. (others follow-
ing), C. P. Lucas, Oxford. — Official Reports on
Colonial Products (1887).— The Colonial Office
List, published annually. — British and Foreign
Colonies, Sir E. Rawson, Statistical Society, 1884.
— Synopsis of Tarij^s and Trade of the British
Empire 1888, and Sequel, Sir R. Rawson, London,
1889. Ax\,ic\Q?,milciQ Proceedings of the Roy. Col.
Inst, 1874 onwards. — TTie Colonies and India,
a weekly journal, London. For History : Adam
Smith's ch. viii. in bk. iv. — Smith's polemic
326
COLONIES: METHODS OF GOVEENMENT
against the colonial system is criticised by Lord
Brougham in An Inquiry into the Colonial Policy of
European Powers, 1803 (see Brougham, Lord).
— Merivale, Lectures on Colonies and Colonisation,
delivered 1839-40-41* corrected edition, London,
1862. — Payne, European Colonies, London, ^1877,
and Seeley, Expansion of England, London,* 1882.
— Dilke, Problems of Greater Britain, London,
1890. — Caldecott, English Colonisation .and Em-
pire, London, 1891. — These form an adequate
library for the preliminary study of colonial history.
The Statistical Abstracts of the Board of Trade and
the Statesman's Year-Books supply some economic
statistics for foreign countries, revised annually.
Foreign Works.
French: Leroy-Beaulieu, De la colonisation
chez les peuples modernes. — Louis Vignon, Les
colonies frangaises. — Jules Duval, L'Algirie et les
colonies frangaises (all, Librairie Guillaumin, Paris).
■ — J. Rambosson, Les colonies frangaises (Paris,
1868). — L. Deschamps, Histoire de la qicestion
Coloniale, 1891. — Notices statistigues sur les
colonies frangaises (Berger Levrault, Paris, 1883).
— Anmbairespiibliispar chaqv^ colonic. — Tableaux
annuaires. — Rembe maritime et coloniale. — Also
French Colonies and their Resources^ J. Bonwick
(London, 1886).
German : Roscher, KolonieUy Kolonial politik,
und Auswanderung (Leipzig and Heidelberg,
1856).— K. E. Tung, Deutsche Kolonien, 1884.—
Deutsche Kolonial Zeitung, organ der D. Kolonial-
gesellschaft, Berlin, every Saturday.
Dutch. — Bijdragen tot de Taal-Land-en Volk-
enkunde der Nederlandsch- Indie, began to appear
1886, 'Sgravenhage. — A copious bibliography of
works on Dutch colonies is prefixed to Catalogue
of Amsterdam Exhibition, Colonial Section (Ley den,
1883). — Information respecting the system of
Dutch administration and colonisation in the East
Indies and the Cape to the French Huguenot emi-
gration from Europe to South Africa towards end
of 17th century is given in ITie Voyage of Fran-
gois Legvxit, of Bresse, to Rodriguez, Mauritius,
Java, and the Cape of Good Hope. London :
printed for the Hakluyt Society.
Portuguese. — Bulhoes, Les Colonies Portu-
gaises, 1878. — Martins, 0 Brazil e as Colonias
Portugue'ms, 3d ed. 1888. — Corvo, Estudos sobre
as Provincias Ultramarinas, 4 vols. 1883-87. —
Annuario Estatistico de Portugal (official by the
ministry of public works, Lisbon), As Colonias
Portuguezas, fortnightly ; Boletim da Sociedade de
Geographia de Lisbda, monthly ; Boletim official
da Angola, ditto, da MogamMqu^.
Italian. — Bolletino delta Societd AJHcana
D^Italia (Napoli, fortnightly).
A Revue Coloniale Internationale was issued at
Amsterdam with French, English, and German
articles in 1885, but lasted only three years ; it
is of interest as showing readily different points of
view.] A. c.
Methods of Government. A colony
(Lat. Colonia; colere to till, to cultivate) may
be defined as distant possessions or dependen-
cies of a country ; more particularly the word
signifies communities of settlers in a new or a
foreign country politically dependent on a parent
state. Colonies are lawfully acquired by a
country in respect of other states either by title
of occupancy, or of cession, or of prescription.
As to the rules of international law relating to
the acquisition of colonies and the disputes
which have arisen on the subject, see Hall's
Int. Law, pt. ii. ch. 2.
According to our municipal law English sub-
jects who occupy a new country carry our com-
mon law with them, as far as it is applicable to
their circumstances ; and the crown, apart from
parliament, has no legislative power over them.
On the other hand countries acquired by con-
quest or cession, called crown colonies, retain
their own laws till they are altered, and are sub-
ject to the absolute legislative control of the
crown, except in so far as parliament interferes
with the prerogative of the crown in this
respect, for over all our colonies and depen-
dencies, however acquired, parliament has
supreme legislative authority (cp. Dicey, Law
of the Constitution, Lecture IL ; Todd, Parlia-
mentary Government in the British Colonies).
Conquered and ceded countries cease to be
subject to the legislation of the crown if the
crown has^granted them a representative legis-
lature.
The government of each colony is carried on
in the name of the crown under a governor who
is appointed by the crown, and who, in our
self-governing colonies is advised by ministers
responsible to the legislature, like our cabinet
(as to the veto of the governor in respect of
colonial legislation, and other restrictions on
such legislation, see Dicey, op. cit. Lecture III.)
The legal supremacy of the imperial parliament
over the colonies is only exercised in cases
which do not involve any encroachment on
the province of colonial self-government.
British dependencies may be either directly
under the government of the crown or they
may be under the immediate government of a
chartered company, such as the old East India
Company and Hudson Bay Company, or the
present South African Company. When the
East India Company was abolished, and India
was brought under the direct control of the
crown, the control of the government was not
assigned to the colonial secretary, but to a
special secretary of state for India. Hence
India is not styled a colony. E. A. w.
Currency in British Colonies. In theory
British currency followed the British flag to
the New World " plantations," which were the
beginning of our colonial empire. In practice,
however, itwas only the denomination of sterling,
and not the sterling coin, which followed the first
settlers. With new countries to develop, they
required from the mother country not coin, but
commodities in exchange for the produce they
shipped home. Barter was the common mode
of conducting the internal exchanges, — tobacco^
COLONIES: CURRENCY IN BRITISH COLONIES
327
sugar, rum, indigo, wampum, skins, and timber,
forming the more usual media. It was not
until, with increased production, trade sprang
up between some of the British colonies and
the Spanish Islands and the Spanish Main, that
metallic money began to flow in. This money
was Spanish silver (the real and its multiples
up to the "piece of eight" reals, see Dollar),
which the colonists rated in denomination of
sterling at arbitrary prices, the dominant rating
of the first half of the 17th century being 4s.
for the piece of eight, based on the popular
currency (Barbados, Bermudas, Jamaica) of the
real as a "Spanish sixpence." Clipping and
competitive raisings of the local ratings of
Spanish silver in the several colonies led, soon
after 1650, as a rule, to the 5s.-rating of the
piece of eight, which was familiar in England
before that date, and which is preserved to the
present day as the basis of "Halifax currency" ;
whilst, by the close of the 17th century a
6s. -rating was partially established both on
the mainland and in some of the West India
Islands. Meantime, other colonies had adopted
the accepted silver- parity of 4s. 6d. for the
piece of eight, and in 1652 New England had
struck the silver "pine-tree coinage" (Is., 6d.,
3d., 2d.) for its own use. Shortly after 1700
complaints of the evils of colonial currency
began to pour in on the Board of Trade and
Plantations, and in 1704 a royal proclamation
was issued fixing the maximum rating of a
piece of eight at 6s.-" currency " with other
silver coins proportionately rated for concurrent
circulation. Thus arose ' ' proclamation money, "
i.e. the colonial rating of silver coins at a tliird
above their accepted sterling value. As this
proclamation was generally disobeyed ("owing
to the liberty that trading men will always
take in their own bargains "), the act 6 Anne,
cap. 30 was passed, making it felony to pay
or receive the specified silver coins above pro-
clamation rates. The result was entirely un-
expected, for (1) the West Indian colonies
evaded the act by conventionally overrating
the gold coins of Spain (see Doubloon), and
so passing in practice to a gold standard ; whilst
(2) the mainland colonies (now the United
States) issued inconvertible and unsecured
paper money in profligate profusion. The
gold standard persisted in the West Indies
into the present century ; but on the mainland
tthe standard coin continued to be the silver
Spanish dollar. In 1739 and 1740, it should
be added, the question of colonial cuirency
engaged the attention of parliament, but no
practical results followed.
In the years round 1800 the colonial empire
of Great Britain, whilst it was diminished by
the loss of the United States, was increased by
the settlement of Australia, by the gain of the
Cape, Ceylon, and British Guiana from the
and some additional West Indian Islands from
the French. And, further, the decade from
1810 to 1820 witnessed two important changes
in the Spanish and British monetary systems.
For (1) Spain lost the American colonies from
which came the supplies of bullion which had
made the Spanish dollar the universal coin for
some three centuries ; and (2) in 1816 the
United Kingdom adopted gold as the sole
measure of value, reducing silver coins to the
subsidiary position of mere tokens. The now
bewildering complexities of the colonial cur-
rency systems, the stoppage of the supply of
the Spanish dollar, and the novel experience
of retaining silver in circulation at home, led
the imperial government, after striking rix-
doUars (worth Is. 6d.) for Ceylon, guilders
(worth about Is.) for British Guiana, and
"anchor money" equivalent to i-, -}, ^, and
^ of a Spanish dollar for Mauritius and the
West Indies, to pass an order in council and
proclamation on 23d March 1825, for the pur-
pose of introducing British silver and copper
coins into general circulation throughout the
colonies. Apart from the fact that tokens
representing the standard gold sovereign were
wholly unsuited to silver-using colonies such as
Ceylon and Mauritius, there was the funda-
mental en'or in the legislation of 1825 that
the Spanish dollar, then worth 4s. 2d. sterling,
was rated at 4s. 4d. for concurrent circulation
with sterling coins. And, further, no account
was taken of the fact that, following the monet-
ary system of Spain, most of the colonies re-
garded the gold doubloon (sterling value 64s.)
as the equivalent of sixteen silver dollars. Con-
sequently British silver was undervalued some
3 per cent as against the dollar, and a further
5 per cent as against the doubloon, with the
natural result that the scheme of 1825 was
abortive. Taught by experience, the imperial
government in 1838 revoked the legislation of
1825, so far as respected the colonies "in
America and in the West Indies," and ordained
that throughout the West Indies the dollar
and doubloon should be rated at 4s. 2d. and
64s. respectively, for concurrent circulation
Avith sterling coins. No limit was placed on
the tender of the doubloon, the dollar, or
British silver. Consequently, though in the
following years the several West Indian Islands
formally passed acts assimilating their currency
to that of the United Kingdom, the gold
sovereign has been unable to circulate in com-
petition with the shilling, and the doubloon
has been driven out. The history of currency
in the West Indies may here be completed by
stating that, when in 1876 the gold- price of
silver made it profitable to re-introduce the
then practically unknown dollar, acts were
forthwith passed demonetising that coin, and
leaving the field to British silver coin, and the
notes of the Colonial Bank. The exceptions
328
COLONIES: DENOMINATIONAL CURRENCY
are (1) the Bahamas, where, by a popular —
but not legal — over- valuation of the gold U.S.
dollar at 4s. 2d. , the practical standard is the
gold currency of the United States, with British
silver iii subsidiary circulation, and (2) British
Honduras, where in 1886 the silver dollar of
Honduras was made the legal standard. ' At
various times endeavours have been made to
induce the West Indies to impose a limit on
the legal tender of token silver ; but local
opinion is not ripe for this reform.
In other colonies the history of currency has
no unity except in the principle that, since
1838, "currency areas" have been recognised,
e.g. Ceylon and Mauritius have been allowed
to adopt as their standard the Indian rupee,
which dominates the " currency area " in which
they are included by virtue of trade-relations,
etc. ; the currency of Spain has been adopted
for Gibraltar ; in Hong Kong and the Straits
Settlements the Mexican dollar (see Dollar)
has been established as the proper standard for
colonies trading with silver-using China, which
recognises no coin but the Mexican dollar ; and,
lastly and chiefly, Canada has adopted the
gold currency of the neighbouring United States,
a weight of fine gold, which is the exact equiva-
lent of the U. S. gold dollar, being the standard
of value. Newfoundland stands alone in hav-
ing a standard (gold) coin peculiar to itself,
viz. the two-dollar pieces struck at the British
mint. But numerous colonies (Canada, Ceylon,
Mauritius, Hong Kong, the Straits, etc.) possess
tolcens of their own. In concluding this brief
survey of the history of metallic currency in the
British colonies, the most important matter of
aU remains to be noted, viz. the discovery of
gold in Australia in 1850, and the subsequent
establishment of the Sydney and Melbourne
branches of the Royal Mint in 1853 and 1866
respectively, for the coinage of sovereigns and
half-sovereigns (only), which are now legal
tender equally with the coins struck at the
London mint.
As regards paper currency, space forbids
more than the brief mention that, except in
the American colonies, there was practically no
paper money in circulation in the British
colonies before this century ; that at the Cape
and in Ceylon and British Guiana we inherited
a damnosa hereditas of inconvertible paper,
which under British mismanagement increased
in volume, and drove out coin in the first forty
years of this century ; that during the same
period Jamaica and Prince Edward Island
debased their currency in a similar fashion ;
that in Ceylon and Mauritius government note-
issues have been established, which are fully
secured, and have at least one-third of the
reserve in coin ; that the modern policy
appears to be to ensure (always in the case of
new issues, and as far as possible in the case of
existing issues) the two essentials of security
and convertibility, leaving it open whether the
issue shall be by the government or by a bank.
But much of the paper which circulates in the
British colonies is not adequately secured.
The following is a classified list of the
colonies as regards cm-rency : —
I. Sterling Standard.
(a) With 40s. limit on silver :
Australasia, the Cape, Natal, British
Bechuanaland, Fiji, St. Helena.
(&) With a £5 limit :
Malta.
(c) With no limit :
West India Islands, British Guiana,
West African Colonies, Falkland
Islands.
II. Non-Sterling Standard.
({a) U.S. gold dollar:
The dominion of Canada (sovereign
legal tender at $4-66).
(h) Newfoundland gold dollar :
Newfoundland (eagle and sovereign
legal tender),
(c) Spanish (Latin Union) "bimetallic"
standard :
Gibraltar.
f (d) Mexican silver dollar :
Hdng Kong, the Straits Settlements,
Labuan, British North Borneo.
(e) Indian rupee :
India, Mauritius and Ceylon.
(/) Honduras dollar :
Biitish Honduras.
[The Currency of the British Colonies, anon.,
London, 1848. — £arlp Coins of America, Crosby,
Boston, 1878. — Conference MonStaire Interna-
tionale de 1878, Paris, 1878.— 27ie Mrniey of
the British Umpire, by Mr. A. Leslie Probyn in
Vol. XXL of the Proceedings of the Royal
Colonial Institute, 1890. — Coins of British Pos-
sessions and Colonies, Atkins, London, 1889. — •
The acts of the several colonies, colonial histories,
and pamphlets of the last and present century,
dealing with currency in individual colonies, and,
particularly, the valuable MSS. in the record
oflSce.] R. c.
Denominational Currency. In connection
with colonial currency the term Denomina-
tional Currency requires explanation. It has
been used by writers of repute ; but it is illogical
and unscientific, and it would be desirable to
get rid of it. In transactions with many of
the English colonies, especially the North
American and West Indian colonies, even as
late as the middle of the present century, the
term ''currency," as opposed to "sterling,"
was well known ; and perhaps "currency," in
a strictly limited and almost local sense, with-
out a defining, or rather a confusing, epithet,
is the simplest name to adopt for the state of
facts which we proceed to explain.
"Currency," it will be found, implied the
current use, in account, of the denominations of
a standard coinage to represent values widelj
COLONIES : GOVERNMENT OF, BY COMPANIES
329
varying from the standard, produced by the
mis-rating of coins foreign to the standard.
The original colonists of the Americas natur-
ally adopted in their new home the denomina-
tion of money with which they were familiar,
and made it their money of account. At first
their transactions were almost entirely in com-
modities. When coins became in request, those
which came to them were foreign coins, chiefly
Spanish and Portuguese (v. Currency in
British Colonies). They consequently at-
tempted to adapt these coins to their familiar
denominations of account, in other words, to rate
them to the pound. This rating was incorrect ; it
varied in ditierent colonies, and was often made
worse by further attempts to correct it. Hence a
pound's worth of dollars, according to local rat-
ing, was a very different thing from the number
of dollars equivalent in intrinsic value to the
pound sterling ; and it usually fell considerably
short of that equivalent, as was shown by the
high rates of exchange which prevailed against
the American and West Indian colonies for
many years. The £ s. d. in which the colon-
ists reckoned did not correspond in value either
with those denominations in the sterling of the
mother country or with similar denominations
in neighbouring colonies. There thus existed a
number of differing pounds of account, each of
which came to be known locally as a " currency
pound."
The same state of facts is not likely to be
repeated except in the dependencies of a domin-
ant country. In Ireland, during a good part
of the 18th century, the moidore was the pre-
valent coin apart from debased half-pence and
farthings, and Irish "currency" was in the
same position as that of the Plantations.
0. A. H.
Government of Colonies by Companies.
Adam Smith, in a passage which has been
quoted with approval by at least one modern
writer of authority, states that "the govern-
ment of an exclusive company of merchants
is perhaps the worst of all governments for
any country whatever." The statement, if it
were unchallenged, would stand for ever as a
condemnation of all past or present projects
conferring territorial sovereignty on a company.
But this dictum of Adam Smith's is somewhat
too sweeping and somewhat out of accord with
the facts. So far as it is good, it needs eluci-
dation.
The possession of ten-itorial sovereignty by
private individuals or companies, the subjects
of some supreme government, is apparently
associated with a special set of conditions.
It has rarely been found except at those times
and in those parts of the world in which rival
nations have been actively competing for new
trade or settlements. In the 17th century,
when the power of Spain was broken, and Eng-
lish. Dutch, French, and Danes were rushing in
to share the spoil, the method which national
caution dictated to the new comers was that of
the chartered company ; and the early history
of North America, the West Indies, and Guiana
is virtually the history of many such companies ;
the rest of South and all Central America was
too secure in the hands of Spaniards and Portu-
guese to offer a field for rivalry. The struggle
for the trade of the East was a struggle of
companies. The latter half of the 18th cen-
tury was a time of continual fighting ; the
present century has been a time of recovery
and development on the lines settled by that
fighting ; there was no room for that rivalry in
new fields which produced the privileged com-
panies ; Australia was the great addition to the
Avorld in this period, and there was no question
who should colonise it. In our generation a
fresh example of the theorem has arisen ; Africa
has been suddenly presented to us as the great
prize open to all nations, and the recent efilor-
escence of chartered companies is the result.
The encouragement of such companies springs
from the timidity or caution of governments.
Companies rush in where the messenger of
government fears to tread. If they succeed,
the government of their country gladly supports
them, and may ultimately reap the fruits of
their labours ; if they fail, no blame is taken
by the government. If their actions prove
premature or inconvenient they can be dis-
avowed, the company being made a buffer to
ease off friction or conceal the reality of some
blow at a rival.
Not that acquisition of temtory or the govern-
ment of a new domain has been the original
aim of any of these companies. In ancient and
modern instances alike the profits of trade have
been the guiding motive in their formation.
Certain arrangements for the preservation of
order have been included in the charter, and
formed the germs of any government which
afterwards grew up. It will be found that in
their essence there is no difference between the
chartered company of the 17th century and that
of 1890. All through the document on which
they base their rights the prominent idea is the
security of their business ; all through the his-
tory of their operations their real anxiety is the
development of their trade. The real difference
between ancient and modem companies is to be
found in the extent of their commercial privileges
and the influence of modern conscientiousness
or timidity.
It will be useful, for reference, and wiU illus-
trate the activity of enterprise in the 16th and
17th centuries, to give a list, Avhich is at least
approximately complete, of the numerous com-
panies which obtained charters for exclusij
trade in nearly all the knoAvn quarters
globe previous to the 19th century.
The Merchant Adventurers' Company apji^Btigf^^f^'
to have been the first body of men froi
330
COLONIES: GOVERNMENT OF, BY COMPANIES
nation who obtained a charter (dated in 1564)
for foreign trade. The Muscovy Company was
probably next, and its charter is quoted as a
precedent for others, e.g. for the Company of
Cathay, which received its charter in 1576.
The Turkey Company was formed about the
same time : the Company of Adventurers for
Guinea and Benin, followed ten years later.
The East India Company of London was incor-
porated in 1 600, and thus preceded by three years
the great Dutch Universal East India Company,
which was destined to drive it into difficulties
out of which arose the only company (commonly
known as the British East India Company),
which became a mighty territorial sovereign.
The governor and company of Merchants of
London for the discovery of the North -West
Passage were incorporated at this period. And
the first half of the seventeenth century was
rich in companies, the majority turning their
eyes towards America. The Virginia Company,
the Bermuda Company, the Newfoundland
Company, the first African Company (which was
reconstituted four times), the Dutch West India
Company, an Amazon Company, a Guiana Com-
pany which never did anything, the New Eng-
land Company, the Providence Company, the
Canada Company, the Massachusetts Bay Com-
pany, the Nova Scotia Company, rapidly suc-
ceeded one another. There were also the French
East and West India Companies — the latter
known as theCompany of the Islands of America,
and Canada Company formed during the same
period ; an English West India Company was
projected but never became a reality. Most of
the charters granted after 1650 are reconstitu-
tions of old companies on a new basis, as in
the case of the New Royal African Company.
Charles 11. 's reign teems with such new grants.
The Hudson's Bay Company's first charter was
granted in 1670.
An alternative method of encouraging colon-
isation, which must be noticed here, was the
grant to a body of lords proprietors, or some-
times to a single lord. All the British Caribee
Islands were so granted in 1627 ; Maryland in
1669 ; the Bahamas and Carolina in 1670. In
the case of these grants there seems to have
been a clear understanding that the sovereignty
rested with the crown ; whereas the companies
merely reserved a fixed nominal tribute to the
sovereign in case he should come into their
dominions ; and when, as in the case of Virginia,
the Bermudas, or more recently India, the
Crown was required to intervene, a suspension
or complete alteration of the charter was
necessary.
It is well to mention the notorious South
Sea Company, early in the 18th century. And
the list of older companies is closed towards
the end of that century by a new departure
in economical history, a politico -philanthropic
settlement, namely the Sierra Leone Company.
The old charters and grants -svhich conceded
their rights to the above-named companies or
to lords proprietors were very much on the
same lines and often almost in identical terms.
Apart from arrays of names and verbiage, they
were simpler documents than any recent charters.
The monopoly, their raison d'Stre, the "sole
privilege to pass and trade " to certain places
is the leading provision in all. The necessary
powers for securing the enjoyment of that
privilege of trade and of the assigned territory
are given, and this carried a right to exact
customs duties from traders not members of the
company. A governor and court of directors
were usually instituted, and empowered to
make laws, levy fines, and imprison. In some
cases full jurisdiction of life and death is con-
ferred, together with the power to declare martial
law ; in others power to make peace or war with
heathen natives is also delegated ; in one case
(the Amazon Company) we find mention of
* ' all customary privileges for sending ships, men,
ammunition, armour, and other things." Pro-
visions regulating the admission of members are
usual, and the term of duration is commonly
limited to a moderate period, though in the case
of the Royal African Company it was for 1000
years. Briefly, the old charters regarded two
things : 1st, the monopoly of trade ; 2d, security
against intruders or foreign foes. They were
somewhat vague in language, and left each
company to work out its own development
according to circumstances. No kind of super-
vision by the supreme government was sug-
gested ; but in some cases a right of interference
was preserved by the curious legal fiction of
making the area of the grant a part of an
English borough.
It was a part of the policy of the companies
to induce settlers to go out to their lands, and
to keep these settlers in a kind of tutelage ; if
this was necessary to their first success, it was
also essentially the cause of their troubles.
The government of a few individuals who
while attracting free settlers directed every-
thing avowedly for their own profit, and denied
the right of those settlers to enjoy the fruit of
their own industry, was clearly indefensible.
The operations of aU the companies which made
something of a permanent start, such as those
of Virginia and Bermuda, were very early dis-
turbed by complaints of their monopoly. De-
privation of profits bred discontent ; discontent
proved difficult to handle. The domain of the
company often became a scene of confusion ;
and discredit was cast not only on its monopoly,
but upon its power to govern. It was this con-
dition of affairs which Adam Smith reprobated ;
but the real root of the evil here was the exclu-
sive privilege operating injuriously to others of ,
the same race and ambition.
Government in the proper sense did not
greatly enter into the schemes of any companies-
COLONIES : GOVERNMENT OF, BY COMPANIES
331
In most cases the disputes just referred to began
so early in their history, and became so serious,
that all future responsibility for the government
really rested with the crown, which gradually
absorbed the area of its own grant. Such was
the case of the Virginia Company in 1624,
some eight years after it was incorporated ; the
question of reform was mooted by the proposal
to renew the charter for trade only, ' ' but not
for the government of the country, of which
the king will himself take care." In 1631
this plan took final shape, the protests of the
"adventurers" delayed it, but they could not
stifle the voices of dissatisfied Englishmen ; the
administration of the company's territory fell
in to the crown, and the company paid the
charges.
In one notable instance, under a special set
of circumstances, a government of remarkable
power and energy grew up almost against
the will of the administrators. The British
East India Company started with no ambitious
scheme of government ; they were content to
have established their factories on the coasts of
the Carnatic and Bengal, provided they could
oust theu' foreign European rivals from the
trade. The intrigues of the French forced them
to fight, first for their existence, aftenvards for
quiet possession ; the flame of war once lighted
was not easily quenched ; the brand had fallen
amongst a restless and inflammable people ; the
small band of the company's servants had to
choose between conquest and death. The man
for the hour was at hand ; success followed
Clive's arms, and a British company became the
lords of a vast empire. In this case the climate
and distance had confined the numbers of ad-
venturers of British race to but few besides
the company's own servants or licensees ; the
directors were hardly hampered by internal dis-
content, and the objects of their earlier adminis-
tration were a people who expected to be ruled.
It would have been a strain on any nation
to support the continued wars which for nearly
half a century taxed the resources of the great
East India Company ; it was natural that
support from the government should be asked
for, and that its enjoyment should be accom-
panied with some measure of control. Never-
theless the government of India, even after
the institution of the Board of Control in 1784,
was in reality the government of the company ;
and that it was enlightened and careful, that
it gradually handled with success the most
diflicult problems which confronted it, that it
swept away gi-eat national evils such as child-
murder and thuggism ; in short, that it was
conducted by a peculiarly able set of English-
men on the lines most approved at home, will
hardly be denied. The rule of the company
came abruptly to an end in 1858, not so much
because it was proved a failure, as because a
gi*eater crisis than ever had arisen, and the
interests of all classes in this country had be-
come bound up with the possession of India,
so that the sense of national responsibility waa
stronger than before.
What the East India Company did in the
old world the Hudson's Bay Company partly
accomplished under quieter conditions in North
America, laying the foundations of two great
provinces of the Canadian dominion. The same
thing might have been done by many of the
old companies had conditions been equal.
Indeed, as Mr. Merivale suggests of the
Dutch India companies, the government of a
company in those days was likely to be more
generally beneficial than that of a nation. There
was greater regularity and economy of adminis-
tration ; a sharp check was kept over employes ;
if the court of directors itself wished to tyran-
nise or squeeze, it at least kept its subordinates
in order. It is true that Adam Smith draws
an exactly opposite picture ; but it will be ad-
mitted by all who read history fairly that this
great man was blinded by his hatred of mono-
polies of all kinds, and failed to give credit even
where credit was due.
The weak point of a company's government
was apt to be in its external relations. On the
one hand was the fear of embroiling itself and
its nation ; on the other the reluctance to
throw away money. This is excellently illus-
trated by the later history of the Dutch West
India Company in Demerara and Essequibo.
The Spaniards were constantly encroaching
without warrant on the limits of the Dutch
colony ; the Dutch governors were eager to
drive them ofi" once for all ; but the company,
partly actuated by its anxiety not to cause a
national breach, partly avowing the need of
economy, declined to take a step which might
have saved endless trouble afterwards.
The fact is that to govern with capacity a
company must first be rich. It is chiefly this
which Mr. Merivale has in mind when he states
that the prosperity of companies declined as soon
as they substituted empire for trade. Sovereignty
brought large establishments and lavish expendi-
ture. Because the means failed it is not a fair
inference that the administration of trading com-
panies is inherently rotten. The monopoly ot
the old companies produced factitious prosperity;
this led them on to extravagance ; and in but
few cases could they withstand the simultaneous
undermining of their monopoly and the unex-
pected strain of then* own engagements.
The Sierra Leone Company at the beginning
of this centmy is hardly a fair example of the
trading company. Its operations were mixed
up with philanthropic interference, which is
proverbially unbusiness-like. And after all,
its government was hardly less successful than
that of the West African colonies under the
British crown.
The Sierra Leone Company was the last of the
332
COLONIES: GOVERNMENT OF, BY COMPANIES
older attempts to make a trading company self-
administering. The charter of the Falkland
Islands Company was purely a trading charter.
A colonial government had been established
before Mr. Lafone obtained his grant. No posi-
tive monopoly was granted by the charter ;
the company was empowered to carry on opera-
tions for taming wild cattle and breeding stock,
for establishing whale and seal fisheries, to
enter into any sort of trade with the islands
generally, and to contract for the performance
of any services either to the government or
individuals. These objects were not such as to
demand a charter, the only practical aim of
which appears to have been to give prestige ;
the effect, however, has been to create a mono-
poly in that distant colony which is bitterly
assailed by the few independent islanders.
It would not be right to omit all mention of
the Sombrero Phosphates Company, holding
the island of Sombrero in the West Indies
under a lease which makes the lessees responsible
for the maintenance of order amongst their
employes and any other inhabitants, and so
far creates a small dependent government.
But broadly speaking, except that the East
India Company lived on, ever approximating to
state government, it may be said that colonisa-
tion by chartered companies dropped into abey-
ance in the 18th century, and that after a lapse
of nearly a hundred years the system suddenly
burst again into life in the charter of the British
North Borneo Company.
This charter was the first, and the example,
of the modern grants. It was the result of a
number of concessions in the same district com-
ing into the hands of one man and forming a
responsibility which he could not bear alone.
The revival of the idea of a chartered company
was not unnatural, in view of the extent and
delicacy of the interests concerned. But the
precise stipulations of the new charter gave it a
stamp widely different from that of the old
grants.
The German New Guinea Company was the
next in the field. And the Royal Niger Com-
pany, the Imperial British East Africa Com-
pany, and the British South Africa Company,
all received charters on the new British model
within the space of three and a half years ; all
three absorbing individual and competing in-
terests which the government of Great Britain
was disinclined to support. The German East
African Company followed in the steps of the
British Company of similar title.
Modem philanthropy and respect of human
life, the natural timidity of governments, and
the special caution which characterises that of
Great , Britain, have laid an indelible mark on
the new British charters. There is, of course,
no exclusive enjoyment of trade ; on the con-
trary, monopolies are carefully prohibited ; but
there is the exclusive right to grant concessions
within the territory assigned, and to deal with
it for the company's advantage ; power is also
taken for the establishment of any kind of
business. At every point the control of the
crown, through one of the principal secretaries
of state, is jealously reserved ; without reference
to him no transfer of territory can be made, no
dealings with native or foreign powers are final.
The discouragement of all slavery and of the
liquor traffic is specially enjoined ; interference
with native religions is forbidden ; considera-
tion of the customs of natives is required in the
administration of justice.
As already suggested, it is in these precau-
tions that the real difference between the older
and modern grants lies. It is nothing more
than the difference of the spirit of their age.
Both contemplate the necessity of administra-
tion, and make some sort of provision for it.
But in the older cases a free hand is left to the
directors ; in the modern every precaution is
taken against collision with foreign states or
oppression of native races. There is no founda-
tion for any attempt to differentiate ancient
and modern chartered companies by the extent
of their administrative purpose. This has
always been the creature of circumstance, and
it may be that when the history of existing
companies some day comes to be written, one
or more may be found to have rivalled the
success of the British East India Company.
A real difference in regard to method of
government is found between the British and
Dutch companies on one side, and the French
and German companies on the other. The dis-
tinction applies alike to old and modem charters.
The Britons and the Dutch are above all things
traders, and traders who rely on their own
resources ; their charters are for trade, and the
companies are left to stand or fall by them-
selves ; intervention of the national government
closes the company's rule. The French and
Germans carry with them their fatherland ; the
imperial power must be close behind them ;
the sovereignty of their companies is the dele-
gated sovereignty of the supreme government ;
the administration of justice and certain execu-
tive functions rest directly with the govern-
ment ; and all foreign relations are controlled
by it. The German New Guinea Company
and the German East African Company are
veiled forms of the German government, hence
the warships and bombardments which mark
their operations.
The obvious result is that the progress of the
aided companies is at first more obtrusive ;
avowed dominion by the national government
must come more rapidly ; and, in the case of
nations like the Germans and French whoae
policy is exclusive, this involves restrictions
affecting the world. On the other hand the
real grip of a district, which is the foundation
of good administration, may never come by this
COLONIES: SYSTEMS OF COLONISATION
333
method. By the British plan the ground is
carefully prepared for empire first ; if the pro-
ject is successful, there is little question that
colonial government will take firm root, when
Its time comes at last.
If we have dealt chiefly with British com-
panies it is that in British hands the chartered
company has been most widely and successfully
used. In its present form the British chartered
company is shorn of every objectionable feature.
It may be a great pioneer of trade and confer
lasting blessing on unopened districts. It may
keep open tracts of land which would other-
wise be closed by a selfish policy. But the
government which encourages fresh companies
must be prepared eventually to administer a
new territory ; and the real question of policy
is brought down to this — whether, while there
is yet room for expansion, a living empire must
be a growing emphe.
[The locus dassicus on the subject of government
by companies is Adam Smith's excellent chapter
bk. iv. oh. vii. and esp. pt. ii., where his dis-
tinction between ** regulated " and "joint-stock"
companies is worth noting. See also Sir G. C.
Lewis's essay on The Government of Dependencies,
circap. 143. — Merivale's Colonisation andColonies,
pp. 50-60 (ed. 1861).— T^Ae Calendars of State
Papers {Colonial) (1574-1674, 3 vols.) are a mine
of history, and Mr. Sainsbury 's prefaces are useful.
— Sir W. Kaye's History of the East India Company
is one amongst many works on that subject. A
sketch of the Dutch West India Company is found
in Motley's United Netherlands. References to
other special companies are scattered ; but for the
Hudson's Bay Company consult Pari. Paper 547 of
1842 ; and for recent charters the London Gazette
of 8th November 1881 (British N. Borneo), 13th
July 1886 (Royal Niger), 7th September 1888
(Imp. Brit. E. African Co.), 20th December 1889
(Brit. S. African Co.)]
[See African Companies, Early ; African
Companies, Recent ; East India Companies,
British.] c. a. h.
Systems of Colonisation. In its economic
or industrial aspect, colonisation must be
deemed the outcome of modern necessities
and the offspring of modern instincts. The
settlement of colonies took place, indeed, in
early times, but it proceeded usually in ways
and from causes other than those recognised
by modern systems. With the Phcenicians,
colonies were little else than trading stations ;
to the Greeks they represented more, being
founded oftentimes in response to political
exigencies ; the Roman colonies, united to the
mother state by a common bond of citizen-
ship, while at times little more than military
settlements, were at times again a means of
relieving distress or discontent. Nor was there
any sign of conscious colonisation even at
the close of the Middle Ages, when the dis-
covery of America threw open a new world to
Em-ope. About that time two chief motives
led to settlements beyond the borders of the
country or city whose citizens formed the new
inhabitants. 1. The desire to form trading
stations, as, for instance, in the cases of Venice
and Genoa in the Mediterranean, of Spain and
Portugal in the new world, and afterwards
in the case of companies, such as the East
India Companies. 2. The desire for adventure
resulting at times in settlement. During the
IGth and 17th centuries, the first of these ob-
jects met with encouragement from the new
school of statesmen as Lord Bui-ghley and
Oliver Cromwell in England, Richelieu and
Colbert in France. In the case of the former
country, too, political conditions and love of
adventm-e combined to add tlie notion of settle-
ment to that of trade. There was, however,
no conscious regulation of the new settlements
with a view to their rapid industrial develop-
ment. Colonisation, in its true sense, was un-
known, whether the system adopted was pro-
prietary or more immediately dependent on
the crown. The growth of a system of colonisa-
tion may be best traced in the history of the
British colonies. Here, indeed, relations of the
colony to the mother country were fully recog-
nised, especially by such jueasures as the
Navigation Acts {q.v.) The system thus
inaugurated was that of political freedom, but
commercial restraint for the advantage of the
mother country. An attempt to interl'ere with
the former led to the loss of the American
colonies, and in consequence to a change of
policy. The colonies were governed more from
home, but every encouragement was offered to
their commercial development, as the effect of
the trade restrictions (differential) imposed on
both sides was to confine colonial products to
the most important market in the world, though
this might have the effect of limiting the
sources from which England might derive
her supplies of raw material. Thus matters
stood at the beginning of the 19th century.
In reality there were four points on which a
decision had to be arrived at : — 1. The position
of the colony as an outlet for the rapidly in-
creasing home population. 2. The settlement
of this population so as to promote best the
development of the colony. 3. In consequence,
the political relations of the two countries. 4.
The commercial relations of the two countries.
The first two of these are those which relate
most closely to the subject of colonisation, the
others being in part their consequence, and from
their nature involving a consideration of general
administrative and commercial policy.
The colonies were supplied with immigrants
from home, but these being in general either
convicts or paupers (cp. Wakefield, Art oj
Colonisation, Letter xxi.) were of doubtful ad-
vantage. In the next place, the new popula-
tion, enticed by the offer of free grants of land,
spread themselves over a larger surface than
they had capital to cultivate. In 1829 the
334
COLONIES: SYSTEMS OF COLONISATION— COLQUHOUN
system of free grants was opposed by Edward
Gibbon Wakefield {Letter from Sydney, by R.
Gouger) and in 1830 the Colonisation Society
was formed. Its members attacked the system
of transportation, and their accusations were
confirmed by the report of the select committee
in 1838, soon followed by the cessation of
transportation.
Meantime the efforts of "Wakefield were con-
centrated on the second of the two questions.
Labour was needed on the land. It must be
restrained from undue diffusion. "When the
need of labour had been felt at a much earlier
date in the American colonies it had been met,
in the southern states at least, by the employ-
ment of slaves. This remedy was out of the
question. Now "Wakefield proposed to cope
with the matter by a reconstruction of the
system according to which the public lands were
disposed of. Free grants were to be abolished
and the land to be sold at a price determined
according to the circumstances of the case. It
was further proposed to apply the proceeds to
the promotion of immigration, and also to the
improvement of the means of communication (cp.
Eeign of Victoria, vol. ii. pp. 405-408). The
important principle was that of the sale of land
at a sufficient price. So far as the substitution
of "sale" for "free grant" was concerned, it was
adopted by the instruction of 1831, with refer-
ence to Australia (Grey, Colonial Policy, letter
vii.), advocated in the Durham report and given
fuU efi'ect to by the Australian Land Act of 1842.
But when it was attempted to put the plan
more fully into practice, a difficulty occurred in
the interpretation of the term "sufficient."
This was shown in the history of the efforts of
the South Australian Company (cp. "Wakefield,
Art of Colonisation, letter ix. and also despatch
by Sir George Gipps, Pari. Papers, 1843, No.
323).
The efibrts of "Wakefield were in fact directed
to the discovery of means whereby capital and
labour might be introduced into the colony in
such a manner and in such proportions as to
lead to its more stable development. For the
fullest accounts of his system, see The Art of
Colonisation, by E. G. "Wakefield ; Lectures on
Colonisation, by Herman Merivale ; Colonisation
avec les peuples modemes, par P. Leroy Beaulieu.
The two latter works are extremely critical in
nature, though perhaps the most searching criti-
cism of all is to be found in the above-quoted
despatch from Sir George Gipps.
It remains to consider the effect of colonisa-
tion on the home country. Its condition may
be affected directly or indirectly — directly by
the loss it sustains of population and capital,
indirectly by the consequences involved in the
development of a colonial trade. The question
of emigration has attracted and continues still
to attract a considerable amount of attention.
"While there must be considerable difference of
opinion as to the benefit it confers, the three
following propositions may be regarded as estab-
lished. 1. It cannot be a permanent safeguard
against over-population. 2. Unless concurrent
with an increase of prudence in marriage and a
rise in the standard of comfort, it can ameliorate
but little the condition of the working classes
from whose number the emigrants are theoreti-
cally drawn. 3. It is highly beneficial in reliev-
ing the congestion which from many incidental
causes has taken place in particular districts.
The exportation of capital, implying as it
does the employment of such capital in circum-
stances more favourable than would have been
the case at home, prevents the rate of interest,
from falling. (For this and for its other effects
see Merivale, Colonisation, Lecture vi.)
The development of the colonial trade which
involves the same better distribution of energy,
has in consequence a beneficial eff'ect on the
condition of the people in the home country
(see Colonial Policy).
[Works cited in text, and more particularly, H.
Merivale, Lectures on Colonisation. — P. Leroy
Beaulieu, Colonisation chez les peuples modemes ;
Roscher, Kolonien, Kolonialpolitik und Auswan-
derung. — Colonel Torrens, Colonisation of South
Australia. ] * e. o. k. a.
COLQUHOUN, Patrick (bom 1745, died
1820), lord provost of Glasgow, police magis-
trate in London, in the course of an active life
contributed to social science some thirty publi-
cations ; among which may be distinguished :
(1) Treatise on the Police of the Metropolis,
1795 ; (2) Treatise on Indigence, 1806 ; (3)
Treatise on the Population, Wealth, Power,
and Resources of the British Empire . . .,
1814. Sir R. Giffen, in his Growth of Capital
(p. 101), utilises Colquhoun's estimates of
national wealth ; and, while admitting that
"many of his details are fanciful," considers
that "he was most unjustly decried by
M'CuUoch" {Ihid. p. 50). Colquhoun himself
confesses that his statistics are not accurate :
"all that is attainable is approximating facts,"
he pleads. His general remarks are often
sound ; for instance, advocating savings banks,
"The great desideratum in political economy
is to lead the poor by gentle and practicable
means into the way of bettering themselves."
He has just views on the education of the poor
{Indigence, ch. v.), and on the growth of the
population {Wealth, Power, and Resources, ch.
i.) On currency he is less happy (Letters to
Dr. Boase, Brit. Mus. AddU. MS., 29,281).
[In a Biographical Sketch ... by 'larp6s
(Colquhoun's son-in-law, Dr. Yeats) there is a
catalogue of Colquhoun's publications. It does
not include Considerations on the means o/
affording prqfttaMe employmemi to the redund-
ant population of Oreai, Britain and Ireland,
published anonymously 1818 (Lowndes).]
F. Y. E.
COLTON— COMBINATION
335
COLTON, Rev. Calvin, born in Massa-
Dliusetts 1789, died in Georgia 1857. At
first a Presbyterian clergyman, he soon entered
the ministry of the Protestant Episcopal Church.
This he relinquished for journalism, and in
1852 became professor of political economy at
Trinity College, Hartford, Conn. He advocated
very strongly the policy of protection to home
industries^ and was a devoted follower of Henry
Clay. He wrote works on travel, and on religious
and political subjects. Among his economic
works are The Crisis of the Country, 1840. —
The Junius Tracts, 1843-44.— TAe Rights of
Labour, New York, 1846, pp. 96 ; and a more
extensive work. Public Economy for the United
States, New York, 1848, pp. 536. He edited
the works of Henry Clay, and in all his economic
writings dwells principally upon the theme of
protection. d. e.. d.
COL WELL, Stephen, born in Virginia 1800 ;
entered on the practice of law in his native
state ; early removed to Pittsburg, and re-
linquished his profession to become an iron
merchant in Philadelphia, where he lived the
remainder of his life ; died 1872. He devoted
much time to the study of political economy,
wrote largely for the periodicals of the day, and
associated himself with the protective party.
Among his more extended writings may be men-
tioned The Relative Position in our Industry of
Foreign Camonerce, Domestic Production, and
Internal Trade, Philadelphia, 1850, 8vo, pp.
50 ; and an American edition of Frederick
List's National System of Political Economy,
Philadelphia, 1856, pp. 497, for which he wrote
a preliminary essay, pp. Ixxxiv. His best
known work is The Ways and Means of Com-
mercial Payment, Philadelphia, 1858, in which
he attempts a full analysis of the credit system,
with its various modes of adjustment ; he argues
that a mistake has been made in previous
analyses in not making a radical distinction
between money of the precious metals and
forms of credit ; the historical inquiry into the
growth of the credit system is of considerable
value, and the whole work exhibits independ-
ence of thought ; he did not accept the view
that the quantity of money is the controlling
factor in determining prices. His other writ-
ings of economic interest are. The Claims of
Labour, and their Precedence to the Claims of
Free Trade, pp. 52, 1861. — Gold, Banks, and
Taxation, pp. 68, 1864 ; and State and NatioTial
Systems of Banks, Expansion of the Currency, the
Advance of Gold, and the Defects of the Internal
Revenue Bill of June 1864, 8vo, 1864. At
the close of the civil war in 1865 he was ap-
pointed a member of the revenue commission,
and in 1866 made a valuable report on taxa-
tion. In this document Colwell's special reports
are upon The Influence of Duplication of Taxes
upon American Industry ; upon Relations of
Foreign Trade to Domestic Industry and Internal
Revenue ; upon Iron and Steel ; and upon TFool
and Woollens. He also elsewhere made reports
upon High Prices and their Relations with Cur-
rency and Taxation, 1866. — Over -Importations
and Relief, 1866. — Financial Suggestions and
Remarks, 1867, pp. 19. See if emoir by Henry
C. Carey, Philadelphia, 1871, pp. 35, in which
(p. 32) will be found a list of writings, thirty-
two in number. d. e. d.
COMBINATION. Combinations for the
purpose of controlling the production, exchange,
and distribution of wealth, have assumed so
many forms that it is only possible here to give
an outline of the subject^ — the reader being
referred to other pages for a detailed examin-
ation of each class.
I. Production. Some forms of wealth can
only be produced by the assistance of large
capital, and in some industries production on
a large scale is distinctly economical (Mill's
Polit. Econ., bk. i. ch. ix.) Hence capitalists
have united in various combinations recognised
by law : —
(1) Partnership. Where two or more persons
agree to combine property, labour, or skiU in
business, and to share the profits between them.
(2) Company. Where a number of persons
are incorporated into a company either under
act of parliament or by charter from the crown,
the liability of members being either limited
or unlimited (see Companies).
Combinations of producers have also been
formed with the object of controlling the pro-
duction of some one or more commodities so as
to secure if possible a monopoly of production.
The following types of this method may be
mentioned : —
(1) Pools. Where a joint committee of dele-
gates from several producing establishments
control the production (see Pools).
(2) Syndicates. Where one firm or company
agrees to take all the produce of other firms in
the same business at fixed prices : the amount
of the produce being often limited by agreement.
The copper syndicate formed by the Soci6t6
Industrielle et Commerciale des Mdtaux de Paris
is the most famous of this class.
(3) Trusts. Where the stockholders in
several corporations transfer their shares to
trustees, who become registered in their places
as owners of the stock and so obtain complete
control of the management. Usually the share-
holders receive ti-ust certificates in exchange for
their shares. The complete legality of such a
proceeding has been maintained (Polit. Sci,
Quarterly, Dec. 1888), but in at least one
American case it has been held that a corpor-
ation whose members enter into such a trust
forfeits its corporate character (see Trusts).
Companies are sometimes formed with the
object of establishing a monopoly of production,
by buying up the business of all persona
engaged in the trade. The Salt Union which
336
COMBINATION— COMBINATION LAWS
has purchased many of the salt properties in
England and Ireland is an example of this class.
Various forms of combinations are found to
exist between sellers and buyers : —
(1) Wholesale firms are frequently bound by
agreement with their customers (retail dealers)
not to sell except to retail firms.
(2) Distributors or intermediate dealers, often
combine to buy at a low price from producers
and to sell at a high price to consumers. The
milk exchange of New York bought milk at
two to three and a half cents per quart and
sold it as high as seven or ten cents.
(3) Combinations or agreements between
seller and buyer that the latter will sell again
only at a certain price are very numerous in
America, though such agreements have been
declared illegal.
In a separate class may be placed the com-
binations entered into by carrying companies
either to secure if possible a monopoly of trafiic
or to prevent competition by agreeing on a
scale of rates and charges.
[For examples of these various forms of com-
binations see Report of Committee of State of
New York upon Trusts, 1888. — Report of Com-
mittee of Canadian House of Commons on Com-
binations regarding manufactVA-e or sale of Pro-
ducts, 1888. — Quarterly Journal of Economics,
1889, Boston, vol. iii. No. 2. — Political Science
Quarterly, 1888. New York, vol. iii. Nos. 2, 3.—
Sidgwick, Polit. Econ., bk. iii. oh. x., and Marshall,
Principles of Economics, bk. v. ch. viii., discuss
the theoretic aspects of monopolies. — Cournot's
treatment of the abstract theory of monopoly
{Recherches, ch. v. Du Monopole) has influenced
most subsequent writers. Much light is thrown
both on the theory and facts of the subject by the
following: Hadley, Railway Transportation. — C.
W. Baker, Monopolies and the People.]
II. Distribution. In all the leading indus-
tries the employers and the employed have
formed their respective associations for the pro-
tection of their own interests. The terms upon
which the labourer is to give his services are
not arranged by him and his employer individu-
ally, but by the respective associations to which
they belong. Mill, regarding wages as paid out
of capital, did not think that combinations of
working men could raise wages without adding
to capital ; but more recent economists look on
wages as a share of the produce, and admit that
by combination wages may be raised (Sidgwick's
Polit. Econ., bk. ii. ch. x. ; Marshall's Econ-
omics of Industry, London, 1879 ; and The
Principles of Economics, 1891 ; Walker on
JFages. See Trade Unions).
Combinations on the part of labourers to
obtain higher wages or shorter hours of labour
are not illegal, but it seems that a combination
of tenants to obtain a reduction of rent may,
under certain circumstances, amount to an illegal
conspiracy.
III. Prodttction and Distribution.
In
order to avoid the conflicts that arise between
employers and employed difierent forms of " pro-
fit sharing " have been tried (see Co-partner-
ship, App.), the employer agreeing to handover
to the workers, in addition to their wages, a
share of the profits (see Profit Sharing).
IV. Distribution and Consumption. In
order to secure to consumers the profits made
by producers, various forms of co-operation have
been introduced in. which the capital is sub-
scribed by the consumers. This idea has been
specially successful in saving to the consumer the _i
profits of the retail dealer by the establishment
of co-operative stores, and there is a growing
tendency to apply the same principle to actual
production (see Co-operation). j. e. c. m.
COMBINATION LAWS. The object of the
series of statutes known as the combination
laws was to enforce the provisions of the statutes
of labourers of Edw. III. and of Elizabeth which
authorised the justices in quarter sessions to
fix wages. One of the first acts, 3 Hen. VI.
c. 1, after reciting that the yearly confeder-
acies of the masons tended to destroy the force
of the statutes of labourers, enacted that such
meetings should not be held under pain of im ■
prisonment. In 1548 a more general statute
was passed » (2 & 3 Ed. VI. c. 15) which pro-
hibited all conspiracies and covenants not to
make or do their work but at a certain price,
under penalty, on a third conviction, of the
pillory and loss of an ear. In subsequent years
the following acts relating to particular trades
were passed prohibiting combinations for rais-
ing wages or reducing the hours of labour in
the trade, viz. 7 Geo. I. c. 13 (journeymen
tailors) ; 12 Geo. I. c. 34 (wool trade) ; 22 Geo.
II. c. 27 (hatters) ; 17 Geo. III. c. 55 (sHk
weavers) ; and 36 Geo. III. c. Ill (paper trade).
In 1799 a general act was passed, but it was
repealed and replaced in the following year by
40 Geo. III. c. 60, which prohibited all com-
binations for obtaining an advance in wages oi
lessening the hours of work. This act, pays
Mr. Justice Stephen (History of the CHmvnal
Law of England, London, 1883, vol. iii. p.
208), "applies in the most detailed, specific,
uncompromising way the principle upon which
all the earlier legislation had depended. ... I
should not describe it as a system specially
adapted and designed to protect freedom of
trade. The only freedom for which it seems
to me to have been specially solicitous is the
freedom of the employers from coercion by
their men."
The first attempt to modify this system of
legislation was the 5 Geo. IV. c. 95, which
repealed all the previous statutes so far as they
related to combinations of workmen, and declared
that persons joining combinations of workmen
for obtaining an advance in wages or lessening
the hours of labour, or for other specified pur-
poses, should not be liable to any prosecution foi
COMBINATION LAWS— COMFORT
337
conspiracy. The act was considered to have en-
couraged combinations for obj ectionable purposes,
and in the following year (1825) it was repealed
and replaced by the 6 Geo. IV. c. 129. This
new act, whilst it repealed the previous statutes,
did not in express terms legalise combinations
of workmen — the legality of such combinations
was left to be dealt with by the common law —
it simply rendered men liable to punishment
for the use of threats, intimidation, molestation,
and obstruction directed towards the attainment
of the objects of trade unions. A few altera-
tions in the act were made by 22 Vict. c. 34.
The recommendations of the royal commission
of 1867 on trade unions led to the repeal of
the 6 Geo, IV. c. 129, and the 22 Vict. c. 34,
by the 38 & 39 Vict. c. 31, and the 38 & 39
Vict. c. 32, which declared that the purposes
of a trade union were not to be deemed un-
lawful by reason merely that they were in restraint
of trade, and carefully defined what acts should
be deemed criminal oflFences. The protection
afforded by these acts was greatly diminished
by the gi-adual extension of the common law
docti'ine of conspiracy, and at length, in 1875,
the act was repealed and replaced by the Con-
spiracy and Protection Act, 38 & 39 Vict. c. 86
(CoNSPiiiACY ; Common Law, Doctrine of).
[The followiug writings set forth the sequence
and import of these laws : G. Howell, Handbook
of the Labour Laws. — Jevons, State in Relation to
Labour. — J. E. Davis, Labour and Labour Laws.
— Report on Strikes and Lockouts of 1888 by the
Labour Correspondent of the Board of Trade,
Parliamentary Papers, 1889, C 5809.]
J. E. c. M.
COMFORT, Standard of. This expression,
together with the synonymous " standard of
living," has been generally employed by
economists in connection with the question of
Population (g'.u) Among the "preventive
remedies " of over-population described by
Malthus (g'.v.) in his essay is included
"moral restraint," and this is defined (ch. ii.)
as a ** restraint from marriage from prudential
motives." By this is meant the fear of los-
ing, as the consequence of entering upon the
responsibilities of the married state, the com-
mand of adequate means of subsistence. The
means, which will be regarded as adequate, will
vary according to the conception formed by the
individual, or the class to which he or she
belongs, of the elements which make up sub-
sistence ; and it is this conception which is
implied in the tenn ** standard of comfort," or
*' standard of living." It may, therefore, vary
from age to age, from country to country, from
class to class, and even fi*om individual to
individual. The term may be analysed in
different ways. We may regard the constitu-
ent elements of subsistence as consisting of
(1) food, (2) clothes, (3) shelter, etc. ; or we
may, using a cross-division, consider with
VOL. L
Senior {Political Economy, p. 36) that the
range of man's desires rises in an ascending
scale from (1) necessaries to (2) decencies and
(3) luxuries. And hence the term has some-
times been employed in a narrower, and
sometimes in a wider sense. In an earlier and
less advanced stage of civilisation the proportion
assigned to the element of necessaries in the
conception formed by classes and by individuals
of their standard of comfort is greater than it
is at a later stage, and among these necessaries
the supply of food is accorded the most pro-
minent place. And therefore the question of
population has very generally been considered
either solely or chiefly with reference to food,
and it has also been argued by M'^Cullocii
and others that the habitual use of a cheap
staple article of food by a nation may lead to
inconvenience and danger, because in the event of
a scarcity or famine of that food, there would
be no cheaper food on which to fall back, and
the standard of comfort would not permit of
temporary contraction. It has been said that
' ' you may take from an Englishman, but you
cannot take from an Irishman." If a famine
of wheat should occur, the Englishman could
fall back on some cheaper food ; but experience
has shown more than once that the Irishman has
nothing on which to fall back if tlie potato
fails. But General Walker lias pointed out
( Wages Question, ch. vii. ) that, so far as regards
the temporary contraction of the standard of
comfort, this argument does not appear to take
suflicient account of the fact that there are other
constituent elements of the standard besides
food, and that therefore the habitual use of a
cheap food may allow of greater expenditure in
other directions, which may be curtailed, should
food become scarce, and its price advance. A
similar failure to realise the elastic comprehen-
siveness of the term " standard of comfort " has
been shown (cp. Sidgwick, Principles of Political
Economy, bk. i. ch. vi. § 3) to attach to
another line of reasoning in wliich it has been
introduced. Modern socialist writers (see
Socialism), such as Rodbertus and Lassalle,
have spoken of an ''iron and cruel law" of wages,
which is always forcing wages down to the level
of a bare subsistence. For, if they rise above
this level, there is a tendency to an increase
of population, and the greater competition for
employment, which is consequent upon this,
tends in its turn to occasion a decline of wages.
This law is undoubtedly based on the concep-
tion of a standard of living or comfort, which
will be maintained in such a way that, if the
earnings of man and woman rise above the
amount sufficient to secure this standard, popu-
lation will increase, and, if they fall below, it
will decrease. But the conception is often,
though it is not always, interpreted by socialist
writers in a narrow sense as referring to the
bare necessaries of life, and not more widely as
z
338
COMFORT— COMMERCE
including its decencies and luxuries. It is used
as if the standard of comfort were limited to
physical needs, and did not comprehend moral
requirements. As a matter of fact it consists
of the necessaries, decencies, and luxuries of
life ; and the desire to retain command over the
possession of the two last may become more
powerful even than the want of the first as
a restraint on the increase of population. The
nature of all three may undergo considerable
change and exhibit great variety. The house,
which would now be a decency in England,
would have been thought a luxury two or three
centuries ago. The clothes, which would be
deemed extravagant to-day, except in theatrical
performances, would then have been considered
necessary articles of apparel. The tobacco,
which is regarded as a decency in Turkey, is
still perhaps a luxury in England, and the wine,
which is a decency in England, is a prohibited
luxury in Turkey. And so the standard of
comfort varies in different ages, countries, and
classes ; and in the case of the lower as of the
higher ranks of society it may advance from
time to time. The origin of the socialist law
of wages has been ascribed to Ricardo's {q.v.)
theory of the natural price of labour, but
Ricardo's own language is sufficiently elastic
and comprehensive. "It is not to be under-
stood," he says (ch. v.) "that the natural price
of labour, estimated even in food and necessaries,
is absolutely fixed and constant. It varies at
different times in the same country, and very
materially differs in different countries. It
essentially depends on the habits and customs
of the people." And again he remarks, "The
friends of humanity cannot but wish that in all
countries the labouring classes should have a
taste for comforts and enjoyments, and that they
should be stimulated by all legal means in their
exertions to procure them." The effects of the
standard of comfort on the movement of popu-
lation are of course not immediate ; and the
consequences of an alteration in it take some
time to make their influence felt. And hence
J. S. MiU has argued (bk. ii. ch. xiii. § 4) that,
"when the object is to raise the permanent
condition of a people, small means do not
merely produce small effects, they produce no
effect at all. Unless comfort can be made as
habitual to a whole generation as indigence is
now, nothing is accomplished." In a similar
way General Walker has shown {Wages
QiLcstion, ch. iv.) that, if through some sudden
mischance wages sustain a serious fall, a positive
" degradation " of labour may follow, and the
labourer may have no power or strength to
maintain his old standard of comfort without
external assistance.
It should be noted that some ambiguity
may arise regarding the unit selected for con-
sideration in connection with the standard of
comfort. The term may sometimes refer to
a single individual, whether male or female,
and sometimes to a family as a whole. In
the discussion of questions of population the
conditions, which are necessary in order to
maintain the requisite supply of labour, are
generally present to the mind of the writer ; and
then the standard of comfort must be under-
stood as referring to the family as the unit
rather than the individual, for the wages of the
labourers must be such as to enable them to live
themselves, and to maintain their wives, and
bring up their children, according to the
standard of comfort, which they consider
necessary for a family in their rank of life.
But the earnings possibly of the wife, and
possibly also of the children, may be called in to
assist those of the man, and so from the point
of view both of income and expenditure the
family is treated as the unit. There are
however, other cases in which shorter periods
of time are in view than those sufficient to allow
of the standard of comfort producing its full
influence on the movement of population, and
then the term is often employed with reference
to the individual rather than the family. An
example of this may be found in the comparison
made between the earnings of men and of
women (cp. Females and Children, Earnings
OF ; see also Davies, D.)
In addition to the books mentioned above,
some typical budgets of working men, showing
the chief items of their expenditure, and the
proportionate amounts spent on the different
items, have been compiled abroad, especially by
Dr. Engel and M. Le Play, and more recently
in our own country by the Board of Trade.
L. L. p.
COMMANDITE, Sooi^fix^ en. Form of
joint stock company. Code de Commerce, liv. i.
tit. iii. §§ 23-28. The managing partners are
liable without limit ; the investing partners are
regarded as simple lenders to the undertaking,
and their liability is limited to their investment.
Something equivalent (joint -stock company
limited, the liability of whose directors is un-
limited) is legalised by the Companies Act
1867, §§ 4-8 ; and it would appear desirable in
the interests of careful management that in-
vestors should encourage the adoption of this
form of joint-stock company. a. d.
COMMERCE. Trade in its most extended
form. "Commerce" and "trade" are words
which are used almost synonymously. But
commerce may be regarded as national, that is as
covering commercial dealings between nations ;
and trade refers more distinctly to special in-
dustries and to internal mercantile intercourse.
It will therefore be proper, keeping to the
limits thus set down, to furnish under the head
of commerce a summary of the external com-
mercial relations of Great Britain and Ireland,
of her colonies, and finally of the world. The
figures, as we shaU see, are not only interestmg
COMMERCE
339
in themselves, but will serve to illustrate some
economic truths as an appeal to actual fact
alone is able to do. It is marvellous how the
commerce of the world may almost be said to
be the creation of the past hundred years.
The close of the twenty-five years of war that
followed the French Revolution found the
external commerce of the world mainly confined
to luxuries, wines and spirits, tobacco, tea, and
so on — the rigidly protective policy of the lead-
ing nations of the earth, added to their hostility,
keeping down the national interchanges to high-
priced goods only.
In 1820, five years after the overthrow of
the first Napoleon, the imports and exports
combined (they were then "official values,"
not "declared values" as we have them now)
(Official ; Declared and Real Values) of
the United Kingdom were only £79,500,000, or
only about £3 : 15s. per head of the population
then existing, whereas in 1912 they reached
£1,344,000,000, or £29 : 3 : 8 per head. Dur-
ing the same period the commercial intercourse
between Great Britain and her colonies has
been almost wholly created, and amongst
foreign countries the movement is upon the
average very considerable. Steam carriage, the
freedom from protracted wars, the growth of
population, colonisation, and electricity have
been the main elements in that development of
commerce. In 1854 the "official values " were
discarded in the imports for computed values and
in the exports for declared values, and from 1871
the values of the imports have also been declared.
The following figures give the imports and
exports at intervals since 1855 : —
Year.
Imports.
Exports. 1
United
Kingdom.
United
Kingdom
Produce.
Foreign,
etc.,
Produce.
Total
Exports.
1855
1800
1870
1880
1885
1887
1890
1908
1912
&l/,3,5/,Z,850
210,530,873
303,257,/,93
/,11,229,565
370,967,955
362,227,56/,
1^20,885,695
592,953,/t87
7l,k,6U0,631
£95,688,085
135,891,227
199,586,822
223,060,446
213,044,500
221,414,186
263,531,585
377,103,824
487,223,439
£21,003,215
28,630,124
44,493,755
63,354,020
58,359,194
59,348,975
64,349,091
79,623,697
111,737,691
£116,691,300
164,521,851
244,134,73s
286,414,466
271,403,694
2S0,7C3,lta
327,880,676
456,727,521
598,961,130
The highest cash value of the imports was
in 1912, when they reached £744,641,000, and
the highest value of the exports was also in
1912, when the total was £598,961,000. The
increase indicated up to 1872 has since in a
measure fallen off", and it was not till 1899
that great progress was again recorded. Since
that date the progress has continued. But it
is well worthy of remark that these are values
only, and in nowise show the volume of
merchandise moved. Now there have latterly
been compiled many statistics to show that the
prices of commodities have largely fallen since
1872, when measured by a gold standard ; and
the tabular statistics supplied by Sir R. H.
Inglis Palgrave to the Royal Commission on
the Depression in Trade in 1886 are conclusive
on this point. It was therein shown that, as
compared with 1865-69, prices in 1885 fell, on
average, 20 per cent, and as compared with
1872 the drop was 30 per cent. From this
drop no important recovery has occurred up to
quite recently (1912). Hence it appears that
this country's Foreign commerce is in bulk about
30 per cent larger than in 1872. Indirectly
the shipping tonnage entered and cleared with
cargoes only at the ports of the United Kingdom
is an illustration of this expansion.
Ports of United Kingdom.
Entered.
Cleared.
In 1872
Tons.
17,905,940
76,191,000
Tons.
19,248,352
76,266,000
In 1912
Thus it is right to assume that notwithstanding
that values are, as already stated, not as high as
might liave been expected owing to depreciation
in prices, the actual commercial intercourse of
the United Kingdom has largely increased.
In 1912, 36 per cent of the imports consisted
of food and drink, 35 per cent of raw materials
and articles mainly unmanufactured (of which
49 per cent was for textile manufacture), 24
per cent of manufactured goods, 2 per cent of
metals and minerals, 1-| per cent of chemicals
and dyeing materials, leaving 1^ per cent to
be classed as miscellaneous goods, including
tobacco. In the same year, of the United
Kingdom exports, as much as 38 per cent
consisted of textiles, including yarns, 21 per
cent of metals and machinery, 8 per cent of
coal, 3 per cent of apparel, 6 per cent of food
and drink, 4 per cent of chemicals, etc., 1 per
cent of earthenware, china and glass, | per cent
of paper, over 1 per cent of leather, nearly 1
per cent of arms and ammunition, etc., nearly
2 per cent of ships, and 2 per cent of rail-
way carriages, motor cars, carts, etc., leaving
12 per cent of miscellaneous exports. These
are the returns for 1912, excluding precious
metals. In the same year the imports of
gold reached £52,688,881, and the exports
£46,538,469, while the imports of silver were
£16,778,304, and the exports £18,333,019.
Combined with the former, the following con-
trast is presented : —
United Kingdom, 1912.
Imports.
Exports.
Merchandise
£744,640,000
69,467,000
£814,107,000
£598,961,000
64,871,000
£663,832,000
150,275,000
£814,107,000
Precious metals
Excess of imports
This excess of imports is a very striking feature,
and it continues. In 1900 the excess was over
£176,000,000; in 1890, over £101, 000,000; in
340
COMMERCE
1880, £121,000,000 ; in 1870, £69,000,000.
How can this constant influx, averaging over
£130, 000, 000 annually since 1880, be accounted
for ? The figures fui-nished officially are ad-
mittedly defective on some points. The imports
of precious stones are to a large extent want-
ing ; exports of ships are included in 1899 and
subsequently, but not before. It is probable
that if we added £10,000,000 on each side for
missing items, we should be within the mark.
But this does not help us to an answer to the
question, How is the discrepancy between our
imports and exports to be accounted for ? In
the first place, these imports are valued plus
the charges for shipment to our ports, while the
exports are returned minus those charges. Let
us take 9 per cent as this addition to the exports
(the reason of this rate will appear later) as
representing the earnings of British shipping
engaged in this commerce ; and add another
4 per cent for the earnings of British shipping
carrying goods wholly for foreign countries or
our colonies, s,nd a total of some £72,000,000
results, wliich may fairly be set towards filling
up this discrepancy. There still remains much
to be accounted for. The interest remitted
home for investments abroad supplies in great
measure the solution. An estimate in the
Bankers' Magazine of 1880 of the amount of
interest accruing annually upon British invest-
ments abroad, reached a total of £70,000,000
aterling. The income from abroad has since
increased ; some foreign holdings may be
smaller but colonial are certainly larger, and
the estimate for 1911-12 in the Keport of the
Inland Revenue is over £103,894,000. The
following rough balance-sheet may, therefore,
be made respecting the commercial relations of
the United Kingdom in 1912 : —
Liabilities.
Imports (as stated) £814,000,000
„ (not stated) 10,000,000
DiflFerence may, between the foregoing
amount and that stated per contra,
possibly be an increase in foreign in-
vestments 40,000,000
£864,000,000
Assets.
Exports (as stated) £664,000,000
„ (not stated) 10,000,000
Earnings of British shipping 86,000,000
Interest on foreign investments 104,000,000
£864,000,000
This is to be understood only as a rough
approximation ; it shows, however, that but for
a further investment of capital abroad the
country would have had the call of a still larger
volume of imports.
The commerce of the British Empire may
thus be stated, the figures including the precious
metals, which in some colonies may to a large
extent be ranked as merchandise.
Imports.
Exports. (
1912.
1912. I
United Kingdom
£814,364,000
£664,143,000
Asiatic Possessions
209,636,000
235,183,000
Australasian „
88,075,000
100,267,000
African ,,
59,088,000
77,659,000
N. American ,,
117,723,000
67,277,000
S. American ,,
2,900,000
3,639,000
W. Indian ,.
11,211,000
9,952,000
European „
2,616,000
988,000
£1,805,613,000
£1,159,108,000
If to this total be added the return of the
remaining countries of the world, we obtain the
following grand total : —
Imports.
Exports.
British Empire ....
Europe
£1,805,613,000
1,952,082,000
208,851,000
196,916,000
535,386,000
112,428,000
£1,159,108,000
1,599,659,000
150,292,000
177,501,000
681,525,000
112,871,000
Russia and Turkey
Asia
America . , ...
World's Commerce
£4,310,266,000
£3,980,456,000
These figures are the latest returns available,
though not all for the same year, and it will be
seen that the exports grew to the extent of
£829,810,000 in value by the time they became
imports. T^his difference was equal to over 8
per cent on the exports, or to nearly 4 per cent
on the combined total of imports and exports.
In this way we arrive at some notion of the
earnings and profitableness of commerce, and
the worth and value of the world's shipping
industry. Thus the world invariably appears
to import more than it exports, and it is far from
indicating any loss of purchasing power that
there should be this discrepancy between imports
and exports. Taking the population concerned
as 1,623,000,000, this trade represents imports
per head to the extent of £2 : 13 : 1, and exports
to the extent of £2 : 9s. per annum. These
averages, however, are reduced by the vast
populations of Asiatic countries like China,
where the imports are not quite 3s. per head
and the exports but little over 2s. In Europe
(apart from Russia and Turkey and the British
Isles) the imports average nearly £8 per head,
and the exports about £6 ; in America (North
and South, excluding Canada) imports are
nearly £4, and exports nearly £5 per head.
The exports from Australia to Great Britain
average some £8 per head of the population of
the Colony ; from New Zealand, over £14 per
head ; from the South African Union, over £8
per head ; from Canada, over £4 per head.
[The theory of excess of imports is well stated by
Sir R. Giflfen in Essays on Finance, There is a full
enumeration of the exports other than commodities,
" invisible exports," by which imports are balanced
in Bastable's International Trade ; the heads of
British commerce are given by Sir Rawson Rawson.
His statement of the growth of tonnage and the
conclusions built on it are striking (see also
Goschen, Foreign Exchanges). For further details
COMMEEGE, BRITISH
341
see the Statistical Abstract and the Parliamentary
Papers relating to trade and commerce, passim.]
COMMERCE, British (History of). The
earliest trade of the British Isles consisted in
the exchange of tin with the Gauls, and perhaps
also with Phoenician traders.
Under Roman rule the agricultural and
mineral resources of Britain were more fully
developed. Corn was exported in large quanti-
ties. Tin, copper, lead, and iron were extracted,
but there is little evidence that these articles
were exported. London, as a centre of com-
merce, dates at least from Roman times (Tac.
Ann. xiv. 33). It was certainly the principal
port for trading with Gaul.
The English conquest which swept away the
remams of the system established by Roman
administrators, broke off active commercial rela-
tions with the continent ; even the materials
for any notice of commerce during the early
Anglo-Saxon period are wanting. Towards the
end of the 8th century traces of a revival appear —
due to the influence of the Christian Church.
The letter of protection for English pilgi-ims
given to Offa of Mercia by Charlemagne (796),
which refers to trade carried on by them, has
even been called "the first English commercial
treaty." There is no evidence as to the com-
modities exported, but it may be inferred that
raw wool had now become a leading article of
trade to the Netherlands. Commerce was
mainly in the hands of foreigners. The
settlement of German merchants, which after-
wards became the London Hanse (see Adven-
ruRERs, Merchant), existed tejnp. EtheLred II.
(979-1016), and some aliens were probably
resident before that reign. The often-quoted
law of Athelstane (925-40), that a merchant
who had made three sea- voyages should be of
right a thane, is a proof of the small number
as weU as of the importance of such native
traders. There is evidence that Bristol was the
seat of a considerable trade in slaves with the
Danish settlements in Ireland. The constant
intercourse between England and Normandy
also restored in some degree the older trade with
northern France.
The "Colloquies" of .ffilfric (11th century)
tell us what the commodities imported were.
A merchant being asked what he brings, replies,
"skins, silks, costly gems and gold, various
garments, pigments, wine, oil, ivory, orichalcum
(brass), copper, tin, silver, glass, and such like,"
hence it appears that articles of luxury were
the principal imports. During the whole
Old English period commerce was little de-
veloped (see City, Medieval). The so-called
Anglo-Saxon "laws" bear the impress of this
state of things. Beyond a few trite rules no
commercial policy is discernible. The customs
of a town regulate trade in it. There is no
general commercial law. Any settled and
definite} policy as "mercantilism" or "protec-
tion" is not to be expected. At most, the
rules bearing on the subject reflect the eco-
nomic prejudices current among the classes
who had the framing of law and usage in their
hands.
The commercial position of England in the
12th century is better known. Tlie communi-
cation -^vith Normandy increased by the Con-
quest (1066). In the middle of the century
mention is made of the import of silver in ex-
change for meat, fish, cattle, and wool, all
being sent to the manufactm-ing districts of the
low countries. The vigorous rule of Henry II.
(1154-1189) assisted the revival of trade. His
possession of Guienne gave new opportunities
for traflic in import of wine and salt thence.
Rouen was particularly favoured, being granted
a monopoly of trade with Ireland, and freedom
of commerce in London. The foundations of
the future prosperity of many English towns were
now laid. London was the scat of trade in such
Eastern luxuries as were then becoming known
through the influence of the Crusades (see Crus-
ades, Economic effects of). Bristol and
Chester had whatever Irish trade existed, and
both these towns imported French wines. Hull
was one of the ports whence avooI went abroad,
and the trade with Norway was carried on through
Grimsby. Exeter exported the tin of Cornwall,
obtaining wine and salt in return. A further
proof of the growth of the English towns i8
found in the establishment, in most of them, of
.Merchant Guilds (see Gilds). Corn was some-
times exported, but not without a royal licence
(as in 1181, see Corn Lav^^s). A particular
import — woad used for dyeing — seems to show
that a native woollen manufacture existed,
though all finer cloth came from Flanders.
The development of commerce from the
reign of Henry III. (1216) can be traced by
the attempts at legislation scattered through
the early parts of the statute-book. The in-
creased number of foreign merchants in England
is a good indication of larger trade relations.
The provisions of the great Charter, securing
them liberty in time of peace and reciprocity oi
treatment in war, must have been called forth
by the importance of their interests. Many
cases of special privileges occur ; as those
gi-anted to Venetian merchants and to German
cities ; first, to Cologne, the principal town of
western Germany, later to Liibeck, chief city of
the eastern Hanse. French cities (e.g. Amiens,
1237) also obtained special favours, mainly
consisting in relaxation of restraints on trade
imposed by customs and ordinances of English
towns. All legislation was not so generous in
character. The export of wool and import of
cloth were prohibited 1261 ; "prohibitions re-
peated 1271." In 1275 foreigners were ordered
fco sell their goods and depart within forty
days, probably to hinder Forestallers (q.v.)
Much indeed of mediaeval legislation was in the
342
COMMERCE, BRITISH
interest of tli(3 consumer rather than, as in later
times, of the producer.
Besides the general effect on commerce pro-
duced by the policy and constitutional legisla-
tion of Edward I., he dealt in some cases directly
with matters affecting trade. The Statute of
Merchants (1283) gave greater security to foreign
as well as native traders for recovery of debts,
while the Charta Mercatoria (ISOd), — which by
its enumeration of the various nationalities
affected shows the extent of the body of foreign
traders, confirmed and extended privileges which
aliens had gradually obtained. Full security
was given to all foreigners to come and go free
from any personal duty ; they were allowed to
sell by wholesale to any native or alien, and
to retail spices and mercery ; any article might
be exported, on paying the duty (except wine,
for which a licence was required), to countries
at peace with England. All restrictions on
residence were removed, the export of wool
on which duty had once been paid was legalised.
It might also be moved from one part of the
country to another (see Board of Trade).
In this period there is a close connection be-
tween politics and commerce. Edward I. used
the English supply of superior kinds of wool as
a means of securing aid from the Flemings.
According to the requirements of the moment
its export was either forbidden, heavily taxed,
or freely permitted. The first prohibition
of the export of gold is found 1307 ; soon
afterwards the Staple (q.v.) comes into
notice. We cannot trace here the various
changes of the system, but it tended directly
to limit trade to the staple towns, and by
enabling the course of every transaction to be
more easily watched, made it possible to enforce
the statutes which forbade foreigners to take
their money out of the kingdom, or, in a milder
form, required one half of it to be expended on
native commodities.
The exports during the 13 th and 14 th cen-
turies included wool, sent largely to Flanders,
hides, tin, and fish. Coal was exported to
France from Newcastle in the 14th century.
Lead and iron were also at times exported, and
in good seasons corn. The imports comprised
iron from Spain, linen and fine cloth from
Flanders, wine and salt from Gascony, silks,
fruits, spices, and Greek wines brought by the
Italian fleets, which, after 1317, regularly
visited England. Furs, pitch, and timber
came from the north of Europe through the
traders of the Hanse towns ; in times of scarcity
com was imported. The trade with Bordeaux
was very active, and mainly carried on by
English ships from London, Bristol, Dover,
and Hull ; they took out wool, herrings, lead,
copper, and tin, and pilgrims as passengers ; they
returned laden with wine and wheat. In 1350,
141 ships carried 13,429 tuns of wine from
Bordeaux to England.
The difficulty of getting precise amounts of the
commodities traded in during the earlier periods
has led historians to quote gladly the exports
and imports as given in the custom accounts for
1354. The former comprise 31,651^ sacks
and 3036 cwt. of wool, sheepskins, hides,
4774|- pieces of coarse cloth, and 8061^ pieces
of worsted, representing a total value of
£212,338 :5s., of which nearly £82,000 went
in duties. The imports were 1831 pieces of
fine cloth, 397f cwt. of wax, 1829^ tuns of
wine, with linen, mercery, and grocery, the
whole valued at £38,383:16:10, paying
nearly £600 duty. These figures, however,
though instructive as showing the amounts of
commerce in certain articles, and illustrating
the great predominance of export duties in early
times, are yet very incomplete, e.g. there is
no account of the large export of minerals.
More detailed returns of the customs of the
port of London during the 14th century show
extraordinary fluctuations from year to year.
The mechanism of commercial transactions
became much more refined during the period
under consideration. Though the earliest
dealers in money and exchange, the Jews,
were expelled by Edward I. (1290), their place
was speedily taken by Italians, who supplied
the funds needed by the English kings for their
French wars, and developed the employment of
the Bill of Exchange {q.v.) Even in the ab-
sence of direct evidence it is probable that the
stringent regulations as to export of money
were evaded by the use of these instruments,
supplemented by smuggling, which the small
size of all the vessels employed in trade rendered
very easy.
The trade of Ireland and Scotland, up to the
end of the 14th century, was not important.
Bristol received the raw produce of Ireland,
principally com and skins ; there was also
some direct trade with Bordeaux. Scottish
wool was exported from Berwick, and the
produce of the fisheries found its way both to
England and the Continent.
At the opening of the 15th century British
trade, in its mediaeval form, had attained a
high development, and was increasing in
volume. Italian merchants were accorded full
privileges by Henry IV. (1409), and even
allowed to engage in the carrying trade con-
trary to the policy of the early Navigation
Laws e.g. that of Richard II. (1381). The
remarkable poem called a Libel of English
Policy (1436) gives a full account of commod-
ities exchanged between the countries of
western Europe. Spanish goods — fruit, oil,
soap, wax, and iron — reached England by way
of Bruges. The Portuguese trade, a direct one
supplied similar wares with the addition of
hides and salt. Of Italian traders the Genoese
brought alum, spices, and gold to meet the
balance due by them for the export of wool and
COMMERCE, BRITISH
343
cloth from England. The Venetians supplied
articles of luxury and were regarded with dis-
favour as leading the nation to engage in "un-
productive" consumption. Wine and salt
came from France, as formerly, but, in conse-
quence of the continual wars, through Brittany,
then practically independent. Trade with
Flanders consisted in the exchange of raw
materials for manufactures, but the growth of
a feeling in favour of native industry is shown
by the writer, who advocates a decided national
policy, holding that England by her power
over the supply of raw wool, and by her posses-
sion of Calais, which gave her command of the
Channel, could compel Spain and the Nether-
lands to support her against France.
One of the best indications of the growth of
commerce is the increasing number of wealthy
native merchants. Though some are mentioned
in the 13th century, and the names of De la
Pole and Whittington were remarkable in the
14th, it is not till the 15th century that
they become numerous, — at London, Cotton,
Smith, and BuUayn ; at Hull Taverner is noticed
as trading with Italy and enjoying special
freedom by royal licence ; Thornton at New-
castle ; the Jays, Sturmy, and notably the
Cannynges at Bristol. William Cannynge the
younger is said to have had one ship of 900
tons, and to have employed 800 men and ten
ships with an aggregate tonnage of 2853 tons.
In the 15th century the society of Adven-
turers, Merchant {q.v.) was first chartered
(1406), though a greater antiquity is claimed
for it. This body, trading with the Nether-
lands, Germany, and the Baltic coast, interfered
with the previous monopoly of the Teutonic
Hanse, which, however, still retained its privi-
leges and factory at London. The fact that the
Hanse trade supplied much needed and desired
commodities — timber for ships and bows, iron,
flax, and hemp, besides furs and Rhenish wine
— ^undoubtedly led to this favour.
Another noteworthy feature is the increased
number of Commercial Treaties {q.v.) stipu-
lating for reciprocal concessions to subjects of
the contracting parties. Engagements of this
kind were formed with Venice, the Hanse towns,
Brittany, Castile, the Netherlands, and Den-
mark, the most remarkable being those of
Utrecht with the Hanse in 1474, and the
Intercursus Magmus (1496) which reopened the
Netherlands trade after a suspension of two
The prejudice against foreign traders became
very strong during the latter part of this
century, and was still more intense in the next.
English commerce had reached a turning-point ;
instead of simply supplying other countries with
raw materials and taking in exchange finished
articles, it was sought to preserve the home
market for native produce and to place the
carrying trade, so far as English Imports and
exports were concerned, in the hands of English
merchants. The woollen manufacture, which
had always existed in a rude form and had been
improved by Flemish immigi'ants in the 12th
and 14th centuries, was now in a position to
export the coarser kinds of cloth. The com-
mercial history of the time is powerfully affected
by a movement towards what would now be
called ' ' protection. " Not to mention jnany minor
acts dealing with special cases, there is the
well-known statute of 1463 (3 Ed. IV. c. iv.)
prohibiting, by enumeration, the import of
almost all wrought goods, "that the English
artificers may have employment " ; and though
the statute was limited to the king's reign, it
was in fact re-enacted in that of Richard III.,
and regarded so late as the 18 th century as
"the wisest piece of commercial legislation."
The ideas of aiding the defence of the kingdom,
as in the laws of 1408 and 1483, requiring the
import of bowstaves by the Veiietian traders,
and of securing an abundance of commodities
specially needed for the welfare of the people,
were still prominent in the minds of statesmen.
These tendencies of English commercial policy
were supported by changes in the outside world.
The fall of the Greek empire (1453) and the
later conquest of Egypt (1517), involving the
decline of Italian commerce, altered the balance
of commercial as of political power. The con-
solidation of the French and Spanish monarchies
changed the older lines of English trade with
those countries, and the opening up of the New
World of America and India had a still greater
effect. The trade with the Mediterranean,
formerly in the hands of the Italians, was now
so important as to lead to the appointment of a
consul at Pisa, 1485 (confirmed 1490), and
after the discovery of the Cape passage to India
(1497), English trade with Portugal rapidly
increased. The Guinea traffic was opened 1530,
the North Sea voyage to Russia discovered
1553. The Levant commerce commenced 1550,
the first Levant or Turkey Company {q.v.)
was chartered 1581. Ten years later the first
voyage to India was made, and 1600 the founda-
tion of the East India Companies {q.v.)
was laid.
The movement of English commerce is shown
by the average amounts of imports and exports
during the reign of Henry VIII., which fairly
represent the first half of the 16th century ;
as estimated by Schanz, they are as follows : —
Imports, 10,060 tuns of wine ; 3028 cwt. wax,
making with other imports a total real value of
£402,092, but officially estimated at £284,360.
Exports, 98,132 pieces of cloth ; 5785 sacks of
wool; 14,056 hides; 4387 pieces of worsted;
8931 cwt. of tin, with other exports giving a
total estimated value of £427,830, officially
stated at £293,287. Comparing these figures
with the returns for 1354 given above, the
growth of the woollen industry is evident— uv
344
COMMERCE, BRITISH
stead of unwrought wool it is cloth that is
exported. Even in Flemish markets English
competition was beginning to be felt during
the 15th century, while the wider field that
the Italian and Levant trade offered proved a
further encouragement. The development of
English export trade was aided by the monetary
revolution of the 16th century. For a thousand
years there, had been no considerable addition
to the amount of money in circulation, which at
times had been even reduced. England had
kept up its stock of money by trade with Flanders
and the Italian cities, but the discovery of the
mines of Mexico and Peru led to a continuous
flow of bullion through Spain to the commercial
centres of the Low Countries, where the rapid
rise in prices stimulated the already -growing
import of English products, since there was no
rise of prices in England till 1670. The revolt
of the Netherlands gave a further opportunity
to English traders. The capture of Antwerp
(1585) was a severe blow to its trade, most of
which passed to Amsterdam and London, which
during the preceding eighty years had been
gradually gaining at the expense of other
English ports. A large body of Flemish
weavers emigrated to the eastern counties and
increased the power of that district to produce
for export. The closing of the London settle-
ment of the Hanse (decreed 1552, finally carried
out 1598), removing as it did the last trace of
a time when the commerce of England was con-
ducted by foreigners, is a significant mark of
the opening of a new period.
The 17th century is pre-eminently the period
of the Mercantile System {q.v.) The tend-
encies which had been shown under the Tudors,
and even earlier, to advance native industries by
excluding foreign rivalry, now took the direction
of encouraging exports, more especially of imi-
tating the commercial development of Holland
by securing markets and the Carrying Trade
{q.v.) The commerce of this period was mainly
carried on by companies, either joint stock or
regulated, possessing in some cases monopolies of
commerce with particular countries — the East
India Companies of eastern traffic, the Merchant
Adventurers of the German trade. There was a
steady advance in business transacted, as the
following short table proves.
Year.
Imports.
Exports.
Total.
1613
£2,141,151
£2,487,435
U,628,586
1622
2,619,315
2,320,436
U,9S9,751
1662
4,016,019
2,022,812
6,038,831
1669
4,196,139
2,063,274
6,259,m
1699
5,640,506
6,788,166
12,1^8,672
1703
4,526,579
6,644,103
11,170,682
Making due allowance for errors in the returns
for each year, taken as they are from different
sources, the general fact of increasing commer-
cial relations is plain. In addition to older
lines of traffic, all still open, there was the
East India trade at the commencement of the
century, and later the important trade to the
American "Plantations." At first the energy
and superior resources of the Dutch enabled
them to secure the greater part of the additional
commerce of Europe. The pamphlet writers of
the period are agreed on the point, and they
are probably correct. Notwithstanding this
relative inferiority, the commerce of England
was certainly prospering. The woollen industry,
now established as the leading manufacture,
was increasing its export. Indian trade replaced
the older commerce with Italy in supplying
Eastern products, but the trade with the Medi-
terranean, now carried on by the Levant Com-
pany, retained much of its importance. Sugar,
tobacco, and such rude products as timber
and hides, were imported from the American
colonies in large quantities. In spite of national
jealousy and wars, the direct trade with Holland
was large ; English goods being stored at Amster-
dam to be reshipped in the cheaper Dutch vessels.
The Navigation Laws (see Navigation Acts),
sought to destroy the advantage of these rivals,
and are generally held to have so far succeeded.
A further instance of the same spirit is found in
the complete prohibition of French goods (1678);
and, though^the measure expired at the death of
Charles II., it was practically re-enacted after
the Revolution. In other respects the policy of
protection was developed, the export duty on
wool replaced by a prohibition, and various
foreign products, which might compete with Eng-
lish goods were either excluded or heavily taxed.
Trade with Ireland and the colonies was sub-
jected to restrictions with the double object of
securing a market for home manufactures and
a cheap supply of raw materials for native
workers. In another direction, however, com-
merce was freed from restraint. The privileges
of the companies were closely questioned and
the monopoly of the Merchant Adventurers was
removed. The old * * Statutes of Employment, "
prescribing the expenditure of money within the
country, became obsolete, and the export of
buUion was legalised (1663), a reform in which
the advocates of the East India Company took a
prominent part, since this trade was carried on
by the export of silver to the East, where it
was specially prized.
By the end of the century the exports to
Holland had probably reached their highest
point. In 1703 they amounted to £2,417,890
(i.e. over 36 per cent of the total), more than
half (£1, 339, 526) being woollen goods. Trade
with France was only possible by means of
smuggling ; the Methuen treaty with Portugal
(1703) being expressly designed to give the
wines of that country an advantage over com-
petitors, of which the chief was France. The
attempt to negotiate an Anglo-French com-
mercial treaty (1714) was a failure, and the
privileges given to England by the treaty of
/
COMMERCE, BRITISH
345
Utrecht (1713) caused a development of the
South Sea trade, ending in the terrible crisis
of 1720-21. During the first half of the
18th century the most noteworthy feature of
commerce was the growth of colonial trade.
In 1704 the combined imports and exports in
the ''colony" trade were less than £1,300,000,
or about one-ninth of the whole. Between 1760
and 1770 the colonial trade was one- third of a
traffic which had doubled in amount ; in the
export trade the increased proportion was still
greater.
Among new articles of export may be noticed
hardware from Birmingham and Sheffield, and
cotton ; the latter, though steadily gi'owing, only
amounted in value to about £200,000 in 1764,
while the export of woollen goods was about
£4,000,000.
The period 1750-70 fitly covers the com-
mencement of the economic movement which
has been happily called the Industrial Re-
volution {q.v.) A series of inventions altered
the whole method of production, and the im-
I)rovement in transport made exchange easier.
As a consequence foreign trade, in spite of the
political hindrances arising from protrac-ted war,
increased at a greater speed. The official values
of imports and exports are not too inaccurate to
bring this out clearly.
Imports and Exports at intervals often years 1770-lSlO.
Year.
Imports.
Exports.
Total.
1770
1780
1790
1800
1810
£11,002,000
9,95(5,000
16,398,000
28,258,000
39,302,000
£12,142,000
11,363,000
17,636,000
34,382,000
48,439,000
£3S,1U,000
21,319,000
3lt,0Sh,000
62,61,0,000
87,7U1,000
The cotton industry shows the largest in-
crease. In 1790 the value exported was
£1,662,369 ; 1800 it reached £5,406,501 ;
1810, £18,951,994. The woollen export ad-
vanced from about £6,000,000 in 1800 to over
£9,000,000 in 1815. There was also an in-
crease in exports of hardware, earthenware, and
silks.
During this remarkable development there
was no relaxation of the Protective System.
An exception must, however, be made for
the early administration of the second Pitt
(1784-92), when the customs laws were consoli-
dated and the Eden treaty negotiated with France
(see Commercial Treaties). The break-down
of the colonial system by the establishment of
the independence of the United States did not
reduce the American demand for English goods.
On the contrary the exports thither increased
from about £2,000,000 in 1772 to £3,500,000
in 1793 and £7,000,000 in 1798.
The peace of 1815 may be regarded as closing
the period of English commerce which opened
with the I7th century ; since then the modern
system of foreign trade has arisen (see Com-
merce).
The great commercial development of Eng-
land has naturally led to the formation of
theories as to the causes which have produced
it. The principal are : (1) The mercantile
theory, predominant in the writers of the l7th
and first half of the 18 th centuries, which ex-
plains the growth of English commerce by
reference to the wise regulations and restrictions
imposed by the state. (2) The view of Adam
Smith and the English economists which
ascribes the supremacy of England to its compar-
ative freedom from restraints. (3) The doctrine
of List who regards the present gi'catness of
English industry and commerce as largely due
to the advantages given by the earlier system
of regulation and restraint. The influence of
this theory may be traced in most recent works
on economic history.
[Anderson, Historical and Chronological Deduc-
tion of the Origin of Commerce, 2 vols, fol., London,
1764. — Macpherson, Annals of Commerce, 4 vols.
4to, London, 1805. Based on Anderson for the
period 1492-1760 ; the earlier part and the conclu-
sion to 1800 by Macpherson solely. — G. L. Craik,
The History of British Commerce, 3 vols. l2mo,
London, 1844. Compiled from preceding. — W. S.
Lindsay, History of Merchant Shipping and
Ancient Commerce, 4 vols. 8vo, London, 1874-76.
Notices of Commerce in vols, i, and ii. — W. Cun-
ningham, Growth of English Industry and Com-
merce, 2d ed. 8vo, vol. i., Cambridge, 1890. — For the
mediaeval period, W. Von Ochenkowski, Englands
Wirthschaftliche Entwickelung im Ausgange des
Mittelalters,^^. 168-253, 8vo, Jena, 1879, and W.
J, Ashley, English Economic History and Theory,
vol. i. pp. 102 seq. are useful. — G. Schauz, Englische
Handelspolitik, 2 vols. 8vo, Leipzig, 1881, is a
thorough study of the later mediaeval period of
English commerce and specially of the earlier
Tudors. — J. E. T. Rogers, History of Agricul-
ture and Prices, 6 vols. 8vo, Oxford, 1866-88,
devotes special chapters to foreign trade (vol. i.
ch. viii., vol. iv. ch. iv., vol. v. ch. v.) — Leone
Levi, History of British Commerce, 1763-1878, 2d
ed. 1880, has collected evidence on the growth of
commerce in the 18th century. — Hubert Hall, A
History of the Custom Revenue of England, 2 vols.
8vo, 1885, illustrates the course and methods of the
mediasval trade of England. — H. de B. Gibbius,
History of Comvierce in Europe, cr. 8vo, London,
1891, bk. ii. ch. vii., bk, iii. chs. iii. andvi., and
Industrial History of England, cr. 8vo, London,
1890, period iv. ch. ii., gives a good brief account
of the growth of foreign trade. For legislation,
charters, and diplomatic documents, the sources
are : The Statutes of Vie Realm, 9 vols, folio,
London, 1810-22, and Rymer, Foedera, 17 vols,
fol. London, 1704-1717.
Among the innumerable pamphlets on the dif-
ferent aspects of English commerce, the following
give a view of its state at diflereut times, — Sir W.
Raleigh, Observations touching Trade and Com-
merce with the Hollanders, Works, vol. ii. Lon-
don, 1751. — J. R., The Trade's Increase, 1615. —
L. Roberts, The Merchant's Map of Commerce,
1638.— Sir J. Child, A New Discourse of Trade.
2d ed. 1690. — Davenant, Discourses on the Revemies
346
COMMERCIAL INSTRUMENT— COMMERCIAL LAW
and the Trade of England, part ii. Works, vol. i.
ed. 1771. — De Foe, A Plan of the English Com-
merce, 1728.] c. F. B.
COMMERCIAL INSTRUMENT. An in-
strument embodying a contract the benefit of
which passes to every owner of the instrument.
Where such an instrument is by cufitom
transferable- by delivery, with or without
indorsement, and is also capable of being sued
upon by the person holding it for the time
being, there it is entitled to the name of a
negotiable instrument and the property in it
passes to a bond fide transferee for value, not-
withstanding any defect in the title of the
transferor. Bills of exchange, cheques, and
promissory notes, are generally negotiable, but
if they are payable to order an endorsement is
required as well as delivery, if they are payable
to bearer mere delivery is sufficient. A hond
fide owner for value can claim payment of such
an instrument if the chain of indorsements is
complete, though one of the indorsers was not
entitled to negotiate. A forged indorsement
interrupts the chain, and a banker paying a
bill having a forged indorsement cannot, as a
general rule, debit the acceptor or the drawer
with the amount of the biU. It is, however,
provided, by way of exception to the rule just
stated, that, where a cheque, payable to order,
has been paid in good faith and in the ordinary
course of business, the banker is deemed to have
paid it in due course, notwithstanding any
forgery in the indorsement (Bill of Exchange
Act, § 60). A bill of exchange, promissory
note, or cheque is not negotiable if it contains
words indicating an intention that it should
not be transferable {Ihid. § 8, sub-§ 1), and it
ceases to be negotiable if its further negotiation
is prohibited by a restrictive indorsement {Ihid.
§§ 37 and 36). Over-due bills are not negoti-
able {Ihid. § 36, sub-§ 2). If a cheque is
crossed with the words "not negotiable" it
ceases to be a negotiable instrument, but it
remains transferable. A person taking such a
cheque, though payable to bearer, cannot claim
payment if any of the holders through whose
hands it has passed took it without a sufficient
title.
A debenture, though expressed to be payable
to bearer, is not necessarily a negotiable instru-
ment (Crouch V. Credit Foncier, Law Reports,
8 Queen's Bench, 374), but bonds or debentures
maybe made negotiable by statute — for instance,
a statute of George III. made East India Bonds
negotiable like promissory notes — and as pro-
missory notes can now be issued under seal,
debentures must be considered negotiable if
they have otherwise the characteristics of
promissory notes.
Foreign government bonds payable to bearer
are generally considered negotiable by the law
of the country in which they are issued, and are
treated as such by the custom of bankers.
brokers, and dealers ; if this is the :ase
negotialsility is also recognised in English
courts (Gorgier v. Mieville, 3 Barnewall, and
CressweU 45 ; Goodwin v. Robarts, 1 Appeal
Cases, 476). The same may be said with
regard to share-certificates issued to bearer and
other similar securities, but where share-
certificates are not issued to bearer they will, as
a general rule, not be negotiable ; thus American
railway shares are generally transferred by an
indorsement appointing the indorsee attorney to
effect the transfer in the company's books. It
has become the custom for registered share-
holders of such shares who wish to sell them to
indorse the same in blank, and, according to
the custom of the London stock exchange,
shares thus indorsed in blank pass from hand
to hand, until a buyer wishes to become
registered as owner of the shares. Shares
indorsed in blank in this manner are not
negotiable, and a hand, fide purchaser for value
taking them from a thief acquires no title
(Williams v. Colonial Bank, Law Reports, 38
Chancery Division, 388, affirmed by House of
Lords 15 Appeal Cases, 267).
Documents of title relating to goods such as
bills of lading and dock warrants are com-
mercial instruments, without being negotiable
in the strict sense ; if a document of this nature
is stolen, a hond fide holder for value taking
from the thief acquires no right to the goods ;
he is, however, protected against vendor's lien
and stoppage in transitu. The Factors' Act,
1889, provides that if a mercantile agent is,
with the consent of the owner, in possession of
documents of title to goods, any sale or pledge
of the goods made by him is valid, unless the
person taking under the sale or pledge had
notice that it was unauthorised ; in the absence
of evidence to the contrary the consent is to be
presumed. No such simple rule exists in the
case of negotiable instruments. Bankers fre-
quently make advances to customers on the
security of such instruments, knowing that they
macy not be the borrower's property, but assum-
ing that he has authority to pledge them.
Where a money dealer obtained such an ad-
vance, the House of Lords held that the banker
ought to have made special inquiries as to the
extent of the authority (Earl Sheffield v. Lon-
don Joint Stock Bank, Law Reports, 13 Appeal
Cases, 333), but a similar decision of the Court
of Appeal in the case of a stockbroker (Law
Reports [91] 1 Chancery, 270) was overruled by
the House of Lords {Times newspaper, 5th
April 1892). The question depends on the
particular facts of each case. E. s.
COMMERCIAL LAW. The body of legal
rules that fall under the phrase "commercial
law " may be divided into four classes. (1) In-
ternational rules that govern the commercial
intercourse of states. A very considerable por-
tion of international law is concerned witb
COMMERCIAL LAW— COMMERCIAL ROUTES
347
commerce, e.g. the rights of aliens, the position
of consuls, freedom of navigation, carriage of
contraband of war, breaking blockades, and the
seizure of private property by belligerents. (2)
Municipal laws of a political nature affecting
the commerce of a state, such as laws imposing
restraints on or encouraging foreign trade, laws
relating to conveniences for navigation, laws
regulating carriage by sea or land, laws encour-
aging particular trades, and laws preventing
monopolies. (3) Municipal laws relating to
the private interests of trade such as the law
of contracts generally, and of special mercantile
contracts in particular, including the law relat-
ing to the instruments of commerce. (4) The
remedies to be pm-sued for injuries to commercial
rights,
No attempt has as yet been made by the
state in England to separate commercial law
from the general body of the law, and only one
text writer has endeavoured to do so on any
adequate scale (see Treatise on the Laws of Com-
merce and Manufactures and the Contracts relat-
ing thereto, by J. Chitty, London, 1820).
Several continental states, on the other hand,
(e.g. France), have also a special commercial
code administered usually by special commercial
tribunals. 1
[The sources of commercial law may be classified
as follows : —
a. Roman law, which furnished to the early
English judges many rules which they aj^plied to
personal property.
h. The maritime codes of the commercial com-
munities of Europe. The most important of these
codes were the Consolato del Mare, the Ordinance
of Wisby, the laws of Oleron, and the Ordinance
of Louis XIV. See Pardessus, Collections des lois
viaritimes anterieures au xviile. siecle, Paris,
1828-1845. — Warnkdnig, Flandrische staats-und
Recht-geschichte, vol. 1. — Gapitula et ordinationes
maritinwe civitatis Amalfitana;, Vienna, 1844.
c. The customs of merchants which came to be
enforced if implied in contracts between mer-
chants.
d. Statutory enactments. The great charter
protected foreign traders ; bankruptcy laws were
passed under Elizabeth ; monopolies were pro-
hibited and the law relating thereto was settled
in the time of James I.
e. The decisions of the courts. To Lord Chief
Justices Holt and Mansfield, and to Lord Stowell
is mainly due the development of the principles of
commercial law.
Treatises relating to early commercial law : Con-
suetudo vel Lex Mercatoria, by Gerard Malynes,
London, 1622. — Lex Mercatoria, by G. Jacobs,
London, 1718. — Lex Mercatoria Redimva, by W.
Beawes, London, 1751.
Modern treatises : Smith's Mercantile Law,
1 The commercial code in France has been considered
to have exercised a great influence on traders by com-
pelling attention to the mode in which they are conduct-
ing their business. Recent modifications may endanger
this. See Code Napoleon.
London, 1890. — 0. Tudor, Leading Cases on Mer-
cantile and Maritime Law, London, 1884.]
J. E. C. M.
COMMERCIAL ROUTES, History of.
A. Ancieiit History. — Ancient commerce is
remarkable for concentration ; it affected a
comparatively small portion of the earth's sur-
face. The earliest peoples who rose to promin-
ence and prosperity, the Chinese, the Egyptians,
and the Aryan inhabitants of India, were mainly
occupied in agriculture and domestic manufac-
tures. None of them possessed the enterprising
spirit which leads to external trade. The
Chinese especially displayed that aversion to
intercourse with foreigners which has charac-
terised them to the present day. What trade
existed in early days was conducted overland.
The Arabs with their camels are the earliest
known merchants. Their caravans conveyed
the most valued commodities between Egyjit
and the populous districts of Central Asia and
Hindostan.
The Phoenicians, the advanced outpost of the
Semitic race on tlie Mediterranean, whose forests
gave a plentiful supply of timber for the con-
struction of ships, made the first attempt to
conduct commercial enterprise by sea. Under
the successive headships of Sidon and Tyre, the
Phoenicians undertook the trade between east
and west. Their colonies, originally commercial
factories for the collection of goods, gradually
spread over all the coasts of the Mediterranean,
while Cyprus, Malta, and Sardinia furnished
them with convenient harbours in the middle
of that sea. For more than four centuries they
monopolised the maritime commerce of the
world. They collected and exchanged gold and
precious stones from Asia, corn and linen from
Egypt, frankincense and other spices from
Arabia, wines from Italy and Greece, and the
slaves of Africa. Gradually bolder traders over-
stepped the limits of the Mediterranean. In-
stead of merely receiving eastern goods from
Arab caravans, they crossed the isthmus of
Suez and voyaged from the Red Sea to the Pers-
ian Gulf and the coast of India. Westward
they passed the Pillars of Hercules and founded
a colony at Cadiz, whence they journeyed round
the African coast as far as the Canaries, and
sought the highly-valued tin from the Tin-
Islands, identified by some with the Scilly Isles.
Few geographical discoveries of first-rate im-
portance were made in ancient times after the
Phoenicians. Their most notable rivals were
the Greeks ; first Miletus and the Ionian cities
of Asia Minor, and, after the Persian conquest,
Athens and Corinth. But the Greeks did
little more than compete with the Phoenicians
on the old routes. Their colonies extended
from the ^gean to Italy, Sicily, and the coasts
of Africa and Gaul. Their greatest traveller,
Pytheas, perhaps penetrated further westward
than Phoenician merchants had been before. The
348
COMMERCIAL ROUTES
most notable achievements of Greek commerce
were the opening up of the Black Sea trade
and the improved intercourse with Central Asia
and India, which followed the conquests of
Alexander. The Greeks succeeded, however,
in distancing their older rivals ; the political
annihilation of Tyre left the maintenance of
Phoenician reputation and interests to its great-
est colony, Carthage. But the Carthaginians,
though they checked the advance of Greek
colonisation, and almost monopolised the trade
with Spain, were unable to recover the eastern
trade of the mother city. Their maritime
ascendency was almost wholly confined to the
western part of the Mediterranean.
Carthage and Greece succumbed in turn to
Rome. But the Romans never were a mercantile
people. Their original occupations were agri-
culture and war, and they learned no new ones.
Trade they always left to foreigners, as in their
decline they entrusted the defence of the empire
to the barbarians. Roman colonies, in contrast
to those of the Greeks and Phoenicians, were
military strongholds. The extension of the
Roman empire increased geographical knowledge,
and facilitated commercial intercourse. The
growing population and wealth of the capital
made the supply of its wants a lucrative and
OBcessary business. But Rome lived on the
spoils of the provinces. It could never be a great
mart ; it had hardly any products of its own to
exchange for the imports which it received. The
chief commercial cities in the Roman period were
Palmyra, Ephesus, Alexandria, in the east,
Marseilles and Cadiz in the west. Maritime
enterprise was checked rather than encouraged
in the Roman period. It was no longer neces-
sary to pass the straits of Gibraltar when inter-
course with Britain could be conducted through
Gaul and across the Channel. The Romans were
great makers of roads, and overland trade became
more usual and important than in the days of
Phoenician and Greek ascendency. The gradual
disruption of the empire by German invaders
proved a direct blow to commerce, the extent
and security of which had been seriously dimin-
ished by the 5th century a.d.
B. The Middle Ages.—'YYiQ fall of Rome led
to a separation between east and west unknown
in earlier times. Western Europe was occupied
for centuries with almost incessant wars. The
invasion of the Germans was followed by the
advance of the Slavs, who spread over the whole
of northern Germany, and of the Huns, whose
attack was still more destructive, though ulti-
mately less successful. The Germans, who
succeeded in keeping the upper hand in the
west, were not a town-loving people. Like the
early Romans, they devoted themselves to arms
and agi-iculture. The social system they de-
veloped in contact with Roman influences was
Feudalism {q.v.), by which the occupants of
the soil were bound to render military or agi'i-
cultural services, Nations were non-existent ;
international trade unknown. Maritime enter-
prise partook of the prevalent military character.
The sailors of the early Middle Ages were the
hardy Northmen, whose aims were plunder and
conquest, not a peaceful exchange of commodi-
ties. The temporary union of western Christen*
dom under Charles the Great promised to revive
commercial intercourse, but his empire broke
up under his sons. Trade relapsed again into
insignificance.
Meanwhile the East had a separate life of its
own. Roman law and traditions were pre-
served at Constantinople, which for a time took
the place of Rome as the great receptacle of im-
ported commodities, Greek merchants brought
thither the products of Asia and Africa from
Syria and Egypt, and those of eastern Europe
from the shores of the Black Sea. But the
trade of Constantinople suffered from the short-
sighted regulations of an arbitrary government,
and was soon seriously curtailed by Arab con-
quests. Under the mighty impulse given by
the teaching of Mohammed, the Arabs reduced
in rapid succession the interior of Asia, the
northern shores of Africa, and distant Spain.
Everywhere they carried with them their Koran
and their trade. The Arabs, the earliest, be-
came in the early Middle Ages the greatest
merchants in the then world. The chief centres
of their trade were Mecca, Bagdad, Damascus,
and Alexandria. There they collected and ex-
changed the products of China, of India, and of
northern Africa. Arab ships traversed the Red
Sea and the Persian Gulf, where their most
notable ports were Yemen, Aden, and Basra.
But maritime enterprise had been prohibited by
Omar ; it was never regarded with favour by
the caliphs. The chief routes of Arab commerce
were overland ; their caravans journeyed through
Central Asia and the north of Africa. At
Trebizond they collected the products of the
Black Sea and eastern Europe, and thus diverted
much of the trade which would othenvise have
gone to Constantinople. Spain alone of the
Arab conquests was compelled, from its position,
to use the sea as a means of transit. For some
time Spanish Arabs and Moors monopolised the
trade of the western Mediterranean. Their
most important harbours were Cadiz, Malaga,
and Almeria.
The Crusades (v. Crusades, Economic effect of)
— the most important event in mediaeval history
— ^had the effect of reuniting the east and west,
which had been severed since the irruption of
the Germans, and of reviving the supreme mari-
time importance of the Mediterranean, Con-
stantinople declined ; the great Italian republics,
— Venice, Pisa, and Genoa, — founded factories
in Greece, on the coasts of Syria, and the Black
Sea. There they collected oriental product?
brought by Arab caravans, and thence conveyed
them to western Europe. From Italy the chie/
-COMMERCIAL ROUTES
349
commercial routes ran overland to southern Ger-
many. From Venice the most frequented road
proceeded by Verona and across the Brenner to
Ulm, Augsburg, and Ratisbon. From Genoa
and Pisa merchants travelled to Lake Gomo and
across the St. Gothard to Lucerne and Stras-
burg. All the goods not retained by the south
German towns passed on to Bruges, the great
emporium of the Middle Ages, where the pro-
ducts of the north were exchanged for those of
the south and east. The only serious com-
petitors of the Italian towns for the Levant
trade were the bold sailors of Catalonia, but
their mai'ket was limited to the Spanish king-
doms and the south of France.
The chief carriers of goods in Europe at this
date were the Germans. While trade between
Italy and Flanders founded the prosperity and
political importance of the great towns of
southern Germany, their fellow-countrymen in
the north found another means of acquiring
wealth. The famous Hanseatic League {q.v.),
formed 13th century, undertook the task of
conducting commerce between the east and
west of northern Europe. Their leading towns,
Liibeck and Hamburg, commanded the land
route connecting the Baltic with the North Sea.
The task of defending their trade against the
aggressions of the Scandinavian peoples, who
could block the maritime entrances to the
Baltic, forced on the north German towns a unity
and an organisation to which the less threatened
cities of the south never attained. The chief
depots of the Hanse towns were at Novgorod,
Wisby, Bergen, London, and Bruges. At
Bruges they met the southern merchants, and
received from them the products of their native
industry and those which they brought from
Italy. The nations who in later times won
maritime supremacy had not yet turned their
attention to mercantile adventure. England
was mainly an agricultural country ; its chief
product, wool, was exported to be made up by
Flemish looms. The people of Holland and the
adjacent provinces procured a scanty subsistence
by fishing and cultivating the soil. France, not
yet emerged from the condition of feudalism,
found its energies absorbed in internal struggles
and the great war vath. England. Its oldest
port, Marseilles,' had lost the importance it had
once possessed, and did not recover any notable
share in the Mediterranean trade till the
15th century.
C. Modem History. — It is no arbitrary choice
which has fixed on the fall of Constantinople as
the dividing line between mediaeval and modem
times. The Turkish conquests threatened to
bring about the same result as had been achieved
by the German migrations of the 5th century —
to break off once more the connection between
Asia and western Europe. One after another
the Italian factories in Greece and Asia Minor
were taken and destroyed. The closing of the
Levant was not completed until the conquest ol
Egypt by Selim I. in 1519, but, for seventy
years before, eastern trade had gradually been
becoming more diflScult and precarious. The
great problem created by these conditions was
the discovery of another route to the east. It
is true that the chief instrument of maritime
discovery, the compass, had been invented some
time before, and the Portuguese had already
commenced theii* famous voyages along the
western coast of Africa. They had discovered
Madeira 1419, they found the first of the Azores
1447, they reached the Cape de Verd islands
1456. But it was the Turkish conquests which
gave the great impulse to maritime enterprise
outside the Mediterranean. Bartholomew Diaz
commanded, 1486, an exploring expedition,
which had passed the mouth of the Congo when
a storm blew the ships out to sea. "When calms
returned they steered westwards ; at last, suspect-
ing that they had missed the southern point of
the continent, they turned northwards and
found themselves in Algoa Bay. Compelled to
return by his sailors, Diaz left the completion
of his work to Vasco da Gama, who, starting
Jidy 1497, found his way round the Cape of
Good Hope to India. The Portuguese were not
slow to profit by his great discovery ; for nearly
a century they monopolised the trade between
India and Europe. The great Albuquerque
made himself master of the Red Sea and the
Persian Gulf, and thus closed the ancient routes
to the Mediterranean. He also gave a capital
to the Portuguese settlements by the capture of
Goa on the Malabar coast. The trade of Portu-
gal soon extended to the islands of the eastern
Archipelago, and even to China and Japan.
Meanwhile, the Spaniards had also attempted
to solve the great problem of the age, Christo-
pher Columbus, a Genoese by bu'th, had con-
ceived the scheme of reaching India by sailing
westwards. Under the patronage of Isabella of
Castile he set out on Ids great expedition of
1492, which resulted in the discovery of America.
Ignorant of the existence of this intervening
continent, his contemporaries, believing he had
really reached India, gave the islands where he
first landed the name of the West Indies, which
they have kept ever since. Columbus himself
believed that the islands connected with Asia
*' stretched out so far to the eastward that their
distance from Europe could not be great. " The
exact position of America was not appreciated
until 1513, when Balboa crossed the Isthmus
of Darien and discovered the Pacific, of which
he took formal possession in the name of the
Spanish crown.
There is no need to speak of the further pro-
gress of discovery, of the conquest of Mexico
and Peru, of the famous papal buU which
divided the world between Spain and Portugal,
and which enabled the latter to claim possession
of Brazil (Bull of Borgia, q.v.) It is sufficient
350
COMMERCIAL ROUTES
to point out here that these discoveries revolu-
tionised the commercial routes of the world.
The Mediterranean lost its importance, the
Italian cities were ruined. Ti-ade lost its old
unity and concentration, and fell into the
hands of new peoples. The Portuguese and
Spaniards preserved the ascendency which their
precedence in the work of discovery assured
them. The great routes of commerce ran to
the west and to the east. But the central
point to which trade converged was still the
Netherlands. Antwerp, at that time a posses-
sion of the Spanish king, took the place which
Bruges had lost owing to the sUting up of its
canal and the increased size of vessels necessary
for oceanic trade. The overland routes in
southern Germany ceased to be employed for
anything beyond local exchange. The Baltic
was no longer a great commercial highway, and
the Hanse Towns steadily declined until their
league perished in the turmoil of the Thirty
Years' War (see Hanseatio League).
But the later part of the 16th century wit-
nessed another great mercantile revolution.
Antwerp was ruined by the reckless oppression
of Alva and the long war which followed the
revolt of the Netherlands. Two countries,
England and Holland, hitherto unknown in
the history of commerce, began to pose as the
maritime rivals of Spain and Portugal. The
trade which Antwerp lost was gradually diverted
to London and Amsterdam. Philip II. annexed,
1580, Portugal and its dependencies to the
Spanish crown. The defeat of the Spanish
Armada, 1588, annihilated the maritime ascend-
ency of Spain. These events led to the collapse
of the monopoly of the eastern trade so long
preserved by Lisbon. The Dutch were the first
to seize the opportunity thus ofiered. Dutch
vessels first reached an Indian port 1595 ;
within a few years Dutch settlements were
formed in Java and Sumatra. The great Dutch
East India Company was formed 1602 ; it
founded a capital for its vast possessipns at
Batavia 1618. England was not slow to follow
in the footsteps of the Dutch, and in 1600 the
first of the English East India Companies {q. v. ),
received its charter. Though the massacre of
Amboyna excluded them from the spice trade,
the English succeeded in establishing a lucrative
commerce with Hindostan. From this time the
eastern trade was open to every European
country; France, Sweden, Denmark, endeavoured
to obtain a share in it. But these countries
each entrusted the trade to an exclusive com-
pany, and thus checked the progress which
private enterprise might have effected.
Meanwhile the decline of Spain led to a
similar extension of western commerce. John
Cabot had discovered, 1496, Newfoundland for
Henry VII. ; Jacques Cartier sailed, 1534, up
the St. Lawrence and gave the name of New
France to what is now the province of Quebec.
But it was not till the 17th century that the
Spanish ascendency in America was seriously
threatened. Quebec was founded, 1603, as the
capital of the great French colony of Canada ;
by the end of the century the French had also
established themselves in Louisiana at the
mouth of the Mississippi. Between Canada
and the Spanish settlement in Florida the whole
of the western coast was successively occupied
by the English, who absorbed the Dutch pro-
vince of the New Netherlands, and the Swedish
colony on the Delaware. At the same time
France, England, and Spain shared the West
Indian islands among them, and their incessant
rivalry proved the cause of numerous wars. The
Dutch for a time took Brazil from the Portu-
guese, but they abandoned it, 1661, and from
this time confined their attention mainly to
the eastern trade, their control over which was
strengthened by the establishment of a colony
at the Cape of Good Hope. The loss of their
position in America was fatal to the commercial
greatness of the Dutch. The eastern trade,
trammelled by the system of exclusive com-
panies, made comparatively little progress, while
the commerce with America, where the European
settlements were real colonies instead of mere
mercantile d^ppots, became every year more im-
portant and lucrative. In America, too, unlike
the East Indies, trade was open to any subject
of the colonising countries.
It is impossible and unnecessary to trace here
the history of European colonies in the 18th
century. Its main characteristic is the steady
growth of the colonial power of England at the
expense of France and Spain. In the history
of commercial routes it is only important to
remember that each country set itself to mono-
polise the trade with its own colonies. It was
the age of the Mercantile System {q.v.), and
colonies were regarded as one of the chief
means by which a country could secure for itself
a favourable balance of trade. Thus the inter-
colonial trade was of small proportions, and
was of the character of a smuggling trade,
carried on in defiance of restrictive laws. The
attempt to enforce these laws, which regarded
colonies as existing merely for the benefit of the
mother-country, led, quite as much as the stamp
act or the tea duty, to the revolt of the American
colonies.
From the 15th to the 18th centuries, there-
fore, an enormous extension of European com-
merce was effected by the opening up of the
Atlantic and Pacific. The old routes of the
Middle Ages were abandoned, the Italian and
German cities lost their mercantile importance,
trade followed a vast number of complicated
routes across the ocean. But of this trade the
Atlantic coasts of Europe were still the centre,
and as long as the system of mocopoly was up-
held, this condition of things would be main-
tained. But in the later part of the 18tb
COMMERCIAL SCIENCE— COMMERCIAL SYSTEM
351
century a fatal blow was dealt to the old colonial
system by the American revolt and the French
Revolution. From this time it became impos-
sible to treat colonies merely as markets for the
goods of the motlier country. Former restrict-
tions were disregarded or abolished, a new era
of colonial independence and self-government
set in, completed when England, raised through
the results of the revolutionary wars to being
beyond all question the greatest of colonial
powers, adopted a policy of free trade. From
this time the trade of the world has lost even
the semblance of unity which was preserved as
long as the routes from the colonies led of neces-
sity to the mother country in Europe.
Great commercial changes have taken place
within the last century which must be briefly
alluded to. First, the rapid and almost un-
paralleled development of Australia and New
Zealand. In the 18 th century Australia was
only known as a convict settlement, whereas
Sydney and Melbourne are now among the
greatest ports of the world. Second, the
opening of the Suez Canal, effected primarily
by French enterprise and capital, but of which
the chief benefit has hitherto been reaped by
England. It is not too much to say that the
•Suez Canal has revolutionised the commercial
routes to the east. It has restored much of
their old importance to the Mediterranean and
the Red Sea. It has effected at least a partial
revival of the commercial prosperity of Italy
and Egypt. The overland route to Brindisi
has taken the place of the old roads through
southern Germany to Venice and Genoa. Tiio
return of eastern trade to its medieval direction
has been one of the most notable events of 19th
century history. Its political consequences
have been still more far-reaching. Third, the
development of the great trans-continental rail-
ways of Canada, the United States of America,
and Siberia, and the improved railway communi-
cation of the Near East. Lastly, the opening of
the Panama Canal, the results of which belong
to the domain rather of the future than of history .
[Adolf Beer, Allgemeine Oeschichte des Welt-
handels (Vienna, 1860, 2 vols.) — Movers, Das
phonizische Alterthum, Bd. iii. (Berlin, 1856). —
Grote, History of Chreece. — Mommsen, Rdmische
Geschichte. — Sartorius, Oeschichte des hanseatis-
chen Bundes. — Ritter, Oeschichte der Erdkunde
und der Entdeckungen (Berlin, 1861). — Peschel,
Oeschichte des Zeitalters der Entdeckungen (1858).
— Macpherson, Annuls of Commerce (4 vols., Lon-
don, 1805). — E. J. Payne, History of European
CbZom'es (London, 1877).] R.L.
COMMERCIAL SCIENCE {Handel^issen-
schaft). Strictly speaking the term commercial
science should be applied to that branch of
political economy which treats of the increase
of wealth and the economy of labour by the
operations of commerce, it being assumed that
the state does not interfere, and that every
individual is instigated by economic motives, and
by economic motives alone. In this way a dis>
tinction may be clearly drawn between Stoats-
vyissenschaft and Handelswissenschaft. But in
practice this subject of commerce has been
treated much more from the view of an art than
of a science (e.g. cp. Traits theorique et pratique
des operations commerciales et financikres, by
N. Merten ; Handelswissenschaft, by C. F.
Findeisen. In the former of these two works
the theoretical treatment is really confined to
that part of the subject concerned with banking
and exchange operations, while the latter is
practical in nearly every sense). Viewed in this
way commerce is treated with reference to the
facts of business, and thus affords a continued
series of illustrations of many points in ordinary
economic theory. Thus exchange is viewed
with a special regard to the various classes of
middlemen and the services rendered by each
to the rapid circulation of the commodities.
Again, instead of speaking of a producer or a
seller without explanation, an attempt is made
to classify producers or sellers in their various
actual forms, whether as individual operators, as
partners in a firm, or as members of a company.
The function of each is described. As there is
considerable approximation to the .character of
a handbook of commerce, a certain attention is of
necessity paid to the legal standing and obliga-
tions of the various parties involved. The
intensely practical nature of this treatment is,
however, relieved when we come to questions of
money and exchange, for here the theoretical
principles are clearly and definitely laid down.
This latter branch of the subject it is which has
attracted most attention of recent years both on
the Continent and in England, as we may see
from the labours of such writers, for instance, as
Jevons {Investigations in Currency and Finxtnce),
Giffen, Goschen, R. H. Inglis Palgrave, Ellis,
Bagehot, J. G. Courcelle-Seneuil, and others.
E. c. K. G.
COMMERCIAL SYSTEM. The fourth book
of the Wealth of Nations is devoted to an ex-
amination of "systems of political economy,"
considered, as Adam Smith explains, as a branch
of the science of a statesman or legislator. With
his accustomed sense of the due proportion of
theory to historical facts, the writer devotes
almost the whole of the book to an examination
of the commercial or mercantile system which
had reached its fuU maturity as part of the
policy of Europe, whilst the agricultural system
of his friend Quesnay is dismissed in a single
chapter on the ground that it "at present ex-
ists only in the speculations of a few men of
great learning and ingenuity in France." Any
account of the commercial system by a modem
writer must be in the main a repetition of
Adam Smith with indications of the principal
criticisms to which his work has been subjected.
The chief fault to be found with Adam Smith's
treatment, as a whole, is that he was so much
352
COMMERCIAL SYSTEM
concerned to destroy the system as part of the
practical policy of the day and as altogether
unfitted for the stage of industrial development
already attained, that he sometimes overlooks
and sometimes mistakes the conditions under
which the system arose, and under which it
answered the wants of the time. Subsequent
writers (in Germany, e.g. List, Schanz, Roscher,
and in this country W. Cunningham) have
shown that the mercantilists at any rate as
represented by their chief writers, were not
guilty of the childish sophism that money only
was wealth and that the only thing at which
the commercial legislator should aim was the
acquisition by the country of the greatest possible
sum of money by its foreign trades. In many
respects they regarded a favourable balance of
trade merely as a good symptom of other more
important national interests, such as the full
employment of labour and capital at home, a
point on which Adam Smith himself lays much
stress in his second book. In other aspects of
their system, the political power of the nation
was considered as fundamental, as in the navi-
gation laws, of which again, including the
motives at their basis, Adam Smith strongly
approves (compare Seeley's Expansion of Eng-
land). At the same time, however, it must be
admitted that before the last quarter of the
18 th century the system had ripened to decay,
the ideas which had given it vitality at an
earlier stage had been lost sight of, and the
mere symptom, i.e. the favourable balance, had
come to be considered as itself the essence of
well-being.
The following is a brief critical summary of
Adam Smith's treatment as given in book iv.
of the Wealth of Nations. He begins by an
explanation of the true functions of money in
trade, and its relation to other forms of wealth,
and shows that no particular political attention
should be directed towards the accumulation of
money, either on account of its durability or
because it is thought to be useful in foreign
wars. The argument is decisive against the
case as it is represented ; but it may be objected
that if we substitute for durability the idea of
a store of value, and if we remember that at
the end of the 17th century Pope's father, on
retiring from business, carried his wealth in
actual guineas, and recall the graphic accoimt of
Pepys hiding his money, we may arrive at a
juster view of this mercantilist point. And
the further we go back towards the mediaeval
period, this peculiar importance of money as
a store of value becomes more prominent.
Again, as regards the foreign wars, there was
a close connection between the balance of trade
and the balance of power, and even in our own
day we find Bismarck and other foreign states-
men attaching importance to a full supply of
gold in their ' ' war chests. " The ostensible object
of the mercantilists being to obtain a favourable
balance (see Balance of Teade, History of)
we have next to consider the methods by which
this end was promoted. Speaking generally,
the aim of their policy was to diminish as much
as possible the importation of foreign goods for
home consumption and to increase as much as
possible the exportation of the produce of
domestic industry. The restraints on importa-
tion were of two kinds : (1) restraints on any
foreign goods which could be produced at home
from whatever country they were imported ; and
(2) special restraints on imports from countries
with which the balance of trade was generally
unfavourable. As regards (1) Adam Smith
gives the most general arguments in favour of
free trade as against prohibition (see Free
Trade). The principal point to observe is that
Adam Smith was not in a position to state the
free trade theory with the dogmatic simplicity
of some modern writers, as he was obliged to take
into account the opinions expressed in book
ii., on the comparative advantages of employ-
ing capital in different ways, e.g. the superiority
of home to foreign trade and of agiiculture to
manufactures, especially as regards the labour
of a country. If from this point of view his
case is not so strongly put as at present, on
the other h^-nd logically we must take into
account his optimistic views on nature and
his references to the ''invisible hand," which
directs private interest so as to increase the public
good. The dangers of prophecy are incidentally
illustrated in the assertion that even the free
importation of foreign com could very little
aflfect the interest of the farmers of Great
Britain, and the free importation of cattle or
meat still less. The chapter is also noteworthy
for the famous exceptions to free trade, ad-
mitted by Adam Smith as generally advan-
tageous or at least worthy of deliberation, and
in which the older and more rational mer-
cantilists would recognise much of their own
teaching. Thus on the ground that defence
is of much more importance than opulence,
* ' the act of navigation " is described as ' * perhaps
the wisest of all the commercial regulations of
England." The taxation of foreign commodi-
ties which come into competition with those
which are produced and taxed at home is ap-
proved, though the possible extension of the
doctrine to substitutes, and to the general as
distinct from the special taxes of the foreigner,
so far as it is taken account of, is repudiated.
The cases worthy of deliberation are retaliation
with the view of obtaining better terms for oui
exports and the regard for vested interests on the
ground of humanity. (2) The restraints upon
imports from countries with which we have an
unfavourable balance are much more strongly
condemned. It was easy to show that even
on mercantilist principles, that is, taking the
favourable balance as fundamental, the rest of
the world should be considered simply as one
COMMERCIAL SYSTEM
353
great market, and that we should buy in the
cheapest and sell in the dearest country, inde-
pendently of the particular balance. Simple,
however, as this doctrine seems, it is still often
lost sight of, and forgetful of the indirect settle-
ment of international debts, so-called fair trade
writers compare the exports and imports between
two particular countries, e.g. France and Eng-
land. Adam Smith at this stage shows clearly
that it is for the interest of a nation to have
rich neighbours, and that anything which injures
a foreign nation indirectly injures the home
country. He points out also that the '* favour-
able balance of the annual produce and the
consumption " is very dilferent from the balance
of trade and "necessarily occasions the pro-
sperity or decay of every nation," to which the
mercantilists might rejoin that the one balance
properly understood, i.e. as referring to a grow-
ing export trade compared with consumption of
foreign luxuries, is one of the best signs of the
other balance.
Passing now to encouragements given to ex-
ports, we notice first of all (1 ) drawbacks. These,
as the name suggests, are duties drawn back on
exportation or re-exportation, and as they tend
to restore the natural course of trade, they are
strongly approved of by Adam Smith. The
chief dangers of drawbacks are that the com-
modity may be re-imported and the revenue
suffer from smuggling, and that, as abundant
proof has been given lately, the drawback may
really be a bounty in disguise (see Drawbacks ;
Bounties). (2) Bounties are next examined,
and receive the strongest condemnation of any
expedient of the mercantile system (see Boun-
ties). Incidentally the whole subject of the
Corn Laws is examined and it will be seen from
the different species of laws discussed that the
commercial system as a whole was much more
varied in its aims than is generally supposed.
The laws, for example, against engrossing and
forestalling were plainly drawn up in the inter-
ests of the consumer, and the same object was
apparent in the attempt to abolish the middle-
men and, to quote a favourite position of Adam
Smith, to bring the produce as near as possible
to the consumer. (3) The next expedient of
the system to encourage exports was the negotia-
tion of treaties of commerce giving special ad-
vantages to those countries with which we had
or were supposed to have a favourable balance.
Again it may be said that Adam Smith takes a
rather narrow view of the real objects of many
of these treaties. The reader may compare
List's account, in National Systems of Political
Economy, of the celebrated Methuen treaty with
Portugal. In recent times much controversy
has taken place on the advantages and disad-
vantages of commercial treaties ; they were
approved of by Cobden, and have been adopted
to a large extent practically even by this country,
but they are objected to by extreme free traders
VOL. I.
(see Commercial Treaties). (4) The last
device of the system to encourage exportation
was the monopoly, total or partial, of the colonial
trade. This question is discussed by Adam
Smith at great length, as Avas only natural, since
his work appeared in the same year as the de-
claration of American independence. The
argument, however, of the chapter is involved
and rather obscure. The principal difficulty is
caused by the constant reference to the wiiter's
peculiar views on the relative advantages of
employing capital in different ways — such as
that the near trade is more advantageous than
the distant. It is noteworthy also that one of
the cardinal objections of Adam Smith to this
monopoly is that thereby the general rate of
profits in the country is raised, and that this
element in the cost of production being increased,
we are undersold in other commodities, thus
sacrificing an absolute for a relative advantage.
If a country is so wealthy that it is naturally
exporting capital, this argument falls to the
ground. Another objection to Adam Smith's
line of treatment is that perhaps he does not
pay sufficient attention to the idea of political
power historically involved in the acquisition
or colonisation of new territory. Although
the East India Company was never a com-
mercial success, it laid the foundation of our
Indian empire. At the same time, howevei,
he was the first to propose a wide-reaching
scheme of what would now be called imperial
federation.
There remain to be noticed two other expedi-
ents of the mercantile system. As regards raw
materials and the instruments of manufactures,
the usual policy, described above, was appar-
ently reversed and importation was encouraged
and exportation discouraged or prohibited.
The explanation is to be found in the idea that
if raw material were worked up before being
exported it would be more valuable, and that a
nation should keep for its own benefit any
peculiar advantages of production. The history
of the woollen trade is most instructive on this
point. Wool in the early Middle Ages was the
principal export and source of England's supply
of money, whilst later on the export was for-
bidden and the prohibition was extended to
sheep. As regards "instruments " of production,
the living instrument — the artisan, was placed
under the same restrictions as dead capital.
The idea that the exportation of raw material
and instruments shall be discouraged has re-
cently been revived in this country as regards
our coal supplies, and one of the favourite modern
protectionist arguments is that for the higher
forms of work a nation should rely on its own
members and not let them become mere "hewers
of wood and drawers of water. "
[The principal interest of the mercantile system
is historical, though many of its expedients are still
advocated under the name of fair trade. Besides
2 A
354
COMJ^IEKCIAL TREATIES
the work* alluded to, the reader may consult the
books mentioned under the particular articles
referred to, e.g. Free Trade, Bounties, etc.]
J. s. N.
COMMERCIAL TREATIES. Treaties of
commerce seem to have been of very early
origin. Sir H. Maine (Village Communities
p. 192) has pointed out the close conneotion in
the most rudimentary societies between neutral-
ity and markets ; and in times when the same
word (e.g. hostis) was often used both for
enemy and stranger, it is plain that commerce
was hardly possible without some more or less
formal agreement. The earliest commercial
treaty extant was that made between Rome and
Carthage, B.C. 508 (cp. Macpherson's Anrials of
Commerce, vol. i. p. 60). [iii. 22, 23 Poly bins.]
The earliest treaty that occurs in the history
of England is that between Charlemagne and
Offa, A.D. 796. Throughout the mediaeval
period the foreigner was regarded as a highly
suspicious character. In Saxon times foreign
traders were only allowed to come to the country
on the occasion of four great fairs, knd were
obliged to leave the kingdom within forty days.
Attempts were made to keep in force this forty-
days regulation down to the time of the Tudors
(cp. Schanz, op. cit. inf. vol. i. p. 380). For a
considerable period aliens were liable for the
debts contracted by members of the same town
or country, and even for crimes the same mutual
obligation prevailed. One of the clauses of
Magna Charta (§ 41) refers to the protection
given to foreign merchants. More than a hun-
dred years later (1325) it was stipulated by
Edward II. that the merchants of Venice should
have power to come to England for ten years
with liberty to sell their merchandise and to
return home in safety "without having either
their persons or goods i^opped on account of
other people's crimes or debts." It may be
said generally that the principal object of com-
mercial treaties for many centuries was simply
to afford security to traders. In process of time,
however, as the mercantile system (see Balance
OF Trade ; Commercial System) was de-
veloped and this rudimentary security had been
attained, commercial treaties became the great
agents by which a nation tried to secure for
itself the advantages supposed to foUow from
this system. Treaties of this kind were severely
attacked by Adam Smith ( Wealth of Nations,
bk. iv. ch. vi.), who takes as his principal example
the famous Methuen Treaty concluded with
Portugal in 1703. The reader, however, should
compare with Adam Smith's remarks the account
of the benefits conferred by this treaty upon
English traders as stated by List {National
System of Political Economy, p. 62, Eng. trans.)
The root idea of modern commercial treaties
is reciprocity. A list of the treaties of com-
merce and navigation still in force between the
United Kingdom and foreign countries is to be
found in Leone Levi's History of British Com-
merce, 2d ed. p. 565. The treaty which has
excited most controversy is that negotiated
with France by Richard Cobden in 1860 (cp.
Finance and Politics, by Lord Buxton, vol.
i. ch. xi. ; and Lord Morley's Life of Cobden,
vol. ii. ch. xi.) In the negotiations of the
treaty the emperor of the French, by whom
alone the matter on the French side was practi-
cally settled, was influenced largely by purely
political considerations. It was, however, in this
treaty that the notion of the reciprocal advan-
tages rather than the balance of losses by mutual
concessions first found due prominence. The
principal provisions were as follows: On the side
of France prohibitive duties were to give way to
protective duties of moderate amount. On all
the staples and material articles of British manu-
facture— woollen, cotton, silk, flax, jute, hemp,
hair, and manufactures of iron and other metals,
tools and machinery, manufactures of leather,
wood, glass and earthenware, as well as on
yarns, coal and coke, and other raw materials,
etc. — the duties were to be so much reduced
that the maximum ad valorem charge was not
to exceed 30 per cent, which was to be reduced
within three years to 25 per cent, and the
duties, when practicable, were to be changed
into specific duties. Thirty per cent was to
be the maximum, but the actual amount of
duty to be paid on each article was left to separ-
ate negotiation, and in the result in most cases
it was fixed much below the maximum. Accord-
ing to Cobden the average did not actually
exceed 15 per cent. (Buxton, Finan/ie and
Politics, vol. i. p. 230.) England, on her part,
engaged to abolish at once all the remaining
import duties on manufactured goods. She
agreed not to levy a duty on, or prohibit the ex-
port of, coal ; and — the most important practical
concession to France — she agi^eed to make
great reductions on wine and brandy ; other
nations, however, being of course placed on the
same footing. Both parties engaged to insert
in the treaty a "most favoured nation clause."
The treaty was to remain in force for ten years
and then to continue from year to year unless
" denounced " by either party, in which case,
unless definitely renewed, it would lapse in twelve
months. In 1 8 7 2 the treaty was ' ' denounced "
by France at the instance of Thiers, the govern-
ment being in great financial difficulties at the
time owing to the German indemnity. The treaty
was, however, renewed next year. After a series
of attempts for a definite rcmewal on an improved
basis from the free trade point of \dew, the treaty
was practically abandoned in 1882, when as a
substitute the French government passed a law,
giving to England the be'-nefits of the "most
favoured nation " treatment. France was thus
left free to raise the duties on any article at
once, and by simple repeal of the law to treat
England less advantageously than other nations.
COMMERCIAL TREATIES— COMMISSIONS OF ENQUIRY
355
The French treaty of 1860 has been described
at some length, because in connection with it
the whole question of the principles of com-
mercial treaties has been raised and discussed.
The principal arguments for and against may
be enumerated under five headings.
(1) The opponents of commercial treaties
appeal to their failure in the past to secure the
advantages for which they were ostensibly
negotiated. So long as the Navigation Acts
remained in force, they naturally gave rise to
retaliation by other nations, and the retalia-
tion was met by reciprocity treaties with various
countries on various conditions. The complica-
tions which ensued were so great that they had
much to do with the ultimate repeal of the acts.
This is only one example of the alleged failure
of treaties in the past, but it is maintained that
on the whole they have produced more harm
than good. To this it is replied by the ad-
vocates of the system that the old ideas on
which such treaties were based were economi-
cally unsound, being survivals of the mercantile
system ; but that the French treaty and others
drawn on similar lines have proved beneficial
in recent times, and that the appeal to the
past can only be fairly made when all the
circumstances of the case are considered.
(2) It is objected to commercial treaties that,
in appearance at least, if not in reality, they
are opposed to the principles of free trade.
Even although no diff'erential duties are imposed,
and all nations are ostensibly treated with
equal favour, still it is said that if a free trade
nation arranges its tariff out of consideration
to the revenue of another country, so far that
nation is "favoured" relatively to others, and
that this amounts to an infringement of free-
trade principles. To this it is replied that
commercial treaties afford a middle way between
protection and free trade, and that if other
nations, by means of a treaty, are brought to
see the advantages of a reduction of tariff's, they
may ultimately follow the example of England
(Most Favoui;ed Nation Clause), repeal
many of these duties altogether, and eventu-
ally adopt free trade. Such was the opinion
of Cobden, and it is supported by Lord Morley,
Cliffe Leslie, and many other free-traders.
(3) It is alleged that it may prove incon-
venient to a government to have its hands
tied for a definite term of years on fiscal matters,
as England was bound, for example, not to in-
crease the wine duties nor to impose an
export duty on coal. To this it is replied
that the fixity of a tariff is advantageous for the
stability of trade.
(4) This reply leads to the further objection
that, as the time of the treaty approaches ful-
filment, there will be a great disturbance in
trade whilst the new negotiations are in pro-
gress, and again an appeal is made to the
experience with France after the first ten years
had been completed. The obvious answer is
that the disturbance is only temporary, and in
any case that a treaty subject to the possible
failure of renewal is better than none at all, so
far as the convenience of traders is concerned.
(6) The objection made by the extreme
advocates of free trade, which, if valid, would
be the strongest possible, is that there is really
no use in such treaties ; that a nation should
rely simply upon free imports to fight foreign
tariffs, and that the exports can be left to
take care of themselves. Suppose, it is said,
that England of her own accord, and without
any equivalent treaty, reduces the duties on
French wines and silks, and thus encourages
importation ; still these imports must in the
end, directly or indirectly, be paid for by
exports ; if France excludes our goods directly,
then she must accept payment from other
nations which do accept our goods. The best
answer to this argument is perhaps that given
by Lord IVlorley {Life of Cobden, vol. ii. p.
343). "The decisive consideration is that we
can only procure imports from other countries
on the cheapest possible terms on condition
that the producers in those countries are able
to receive our exports on the cheajtest possible
terms." This opinion may also be supported
by the authority of Adam Smith, who always
maintained that the near trade was more
advantageous than the remote, and the direct
than the roundabout trade.
[See Tariff Reform Movement, App. — Schanz,
Englische Handels-Politik, Leij^zig, ISSl. — Adam
Smith, M'Culloch's edition (1872), Note on Com-
mercial Treaties. — Cliffe Leslie, Essays on Fi-
nancial Reform, Cobden Club, 1872. — List,
National System of Political Economy. — Morley's
Life of Cobden. — Sir Thomas Farrer, Free Trade
versus Fair Trade. — Four Letters on Commercial
Treaties (Cobden Club), 1870.— Mallet's Free
Exchange, 1891.] J. s. N.
COMMISSARY. See Succession (Scots
Law).
COMMISSION AGENT. A person entrusted
by a principal with the sale or purchase of
goods and receiving a commission for his re-
muneration. Commission agents generally sell
or buy in their own name, and therefore deal as
principals with the buyers or sellers ; but, as
regards the mutual relations between them and
their principals, they are bound b}' the ordinary
rules of the law of agency. e. s.
COMMISSIONS OF ENQUIRY. It has long
been the practice in the United Kingdom to
appoint, under a royal warrant, commissions to
institute enquiries, to collect information, and
to report concerning matters of special public
interest as to which it is felt to be necessary to
obtain the assistance of well-informed persona
whose services are not ordinarily at the disposal
of the government. The scope of such enquiries
is carefully defined in the waiTant constitut-
ing the commission, usually described as the
356
COMMISSIONS OF ENQUIRY— COMMISSIONS, JUDICIAL
"reference," and the commission is invested
with power to summon witnesses and to call
for such records, books, and papers as in its
judgment may serve to throw light on the
subject of the enquiry. The first person named
in the reference is usually considered to be
nominated as the chairman of the committee,
and a secretary, not himself a member bf the
commission, is also appointed. The commission
itself decides the course which its proceedings
shall take. It frequently arranges, in the first
instance, for the issue of such circular letters as
may appear calculated to elicit general informa-
tion, and it then proceeds to hear oral evidence.
The first witnesses called are ordinarily those
government officers who, from the position they
occupy, may be presumed to have a special
knowledge of the subject in hand. The examin-
ation in chief is conducted by the chairman, each
member of the commission in turn having an
opportunity of questioning the witness. In some
cases, additional or assistant commissioners are
appointed to prosecute subordinate enquiries in
distant places and even in foreign countries.
These usually receive payment for their services,
as does also the secretary, unless he be in the
permanent employment of the government, in
which case it is customary to award him a
bonus when the work of the commission is at
an end. The commissioners themselves are
ordinarily unpaid. When the commission has
obtained all the evidence it considers necessary,
it prepares and presents its report, which, with
an exact transcript of the evidence and the
documents forthcoming in the course of the
enquiry, are then laid before both houses of
parliament and sold to the public. Commis-
sions of enquiry obtain and arrange in a con-
venient form a vast amount of information of
great value, and in this their main utility exists.
Parliamentary and political reasons frequently
prevent the carrying out of the recommenda-
tions of commissions, it being impossible to
dissociate from the government of the day the
final responsibility for any action taken on the
basis of their reports.
The following are among the principal com-
missions of enquiry appointed since 1830, to
consider subjects of economic interest : —
1832. Poor Laws.
1833. Employment of Children in Factories.
1836. Irish Railways.
1840. Employment of Children in Mines.
1843. Scotch Poor Laws.
1843. Irish Land Laws.
1853. Shipping Dues.
1855. Decimal Coinage.
1863. Fisheries.
1866. Duration of Coal Supply.
1867. Trades Unions.
1868. International Coinage.
1875. Labour Laws.
1876. Factory and Workshops Acts.
1881. Agricultural Interests.
1885. Housing of the Working Classes.
1886. Depressions of Trade and Industry.
1887. Gold and Silver.
1891. Labour.
1905. Poor Laws and Relief of Distress, t.h.e.
COMMISSIONS, Judicial. The general
tendency of English legislation has been to
reserve all judicial business for the courts of
justice. But in modern times certain import
ant functions of a judicial character have been
entrusted to commissions differing in many re-
spects from the ordinary courts. The motives
for establishing such commissions instead of
increasing the regular judicial staff have been
various. A particular class of cases may de-
mand such a technical knowledge of subjects
not legal as cannot reasonably be expected from
a professional judge. Thus the class of cases
which comes before the Railway Commission
requires an exceptional acquaintance with the
principles of railway organisation and manage-
ment. Or again, the judicial function to be
performed may be one which the law has never
contemplated, and for which the principles of
jurisprudence afford no guidance. Thus the
principal function of the Irish Land Commission
and the Scotch Crofters' Commission is to set
aside existing contracts of land-tenure and to
determine what is called a "fair rent." In
these cases the function of the commissions is
rather political than legal ; it is to reduce that
resistance to the fulfilment of legal obligations
which is never recognised by a jurist, although
it may sometimes be troublesome to a states-
man.
Commissions such as these differ from normal
courts of justice principally in three respects —
(a) jurisdiction ; (b) composition ; (c) procedure.
(a) Jurisdiction. — Whilst an ordinary court
of justice has usually jurisdiction to deal with
many kinds of cases, a judicial commission is
commonly confined to dealing with cases of a
particular class. Thus the main function of
the Railway Commission is to ensure impartial
treatment of all persons or corporations using
a railway, and to arbitrate in disputes between
railway companies or canal companies. The
main function of the Irish Land Commission
and of the analogous commission in Scotland is
to deal with disputes between landlord and
tenant.
(b) Composition. — In the United Kingdom,
at all events, it is the uniform practice to select
the judges exclusively from the legal profession.
But judicial commissions usually include other
persons as well as professional lawyers. Thus
the Railway Commission, as originally consti-
tuted (Regulation of Railways Act, 1873, 36 &
37 Vict. c. 48), consisted of three commis-
sioners, of whom one was to be of experience
in law, another of experience in railway business.
As recently remodelled (Railway and Canal
Traffic Act, 1888, 51 & 52 Vict. c. 25), the
COMMISSIONS, JUDICIAL— COMMODITY
357
Railway Commission consists of two appointed
commissioners, including one of railway experi-
ence and three ex-officio commissioners, namely,
a judge of a superior court in England, in Scot-
land, and in Ireland respectively. The Irish
Land Commission (Land Law Ireland Act, 1881,
44 & 45 Vict. c. 49) consists of three commis-
sioners, one of whom must be a barrister of
ten years' standing, and holds office for life,
whilst the other two need not be lawyers, and
are appointed for a term of seven years. This
commission, however, delegates most of its work
to sub-commissions. Barristers, solicitors, and
persons possessing a practical acquaintance with
the value of land in Ireland are competent
to be appointed to the office of assistant-com-
missioner. The Crofters' Commission consists
of three persons, of whom one must be an advo-
cate of ten years' standing.
(c) Procedure. — The procedure of such a
judicial commission as above described is wholly
determined either by the statutes under which
it acts or by rules drawn up by itself. There
is no implied adoption of any system of pro-
cedure followed in any of the regular courts.
At least such adoption is limited to one or two
equitable principles, such as that of hearing
both parties to a dispute, which we hardly re-
gard as technical. Appeals to a superior court
on questions of fact are not allowed, since this
would defeat the purpose of instituting such
commissions ; but appeals on questions of law
are in some cases permitted. Such commissions
as above described are for some purposes a neces-
sity of the body politic. But their unnecessary
multiplication would be a great evil. A tri-
bunal established to deal with a special class of
cases is often the readiest instrument of injustice
or oppression. Everybody is interested in the
impartiality of a court before which he may
appear as defendant. But many unfortunately
will applaud j)artiality in a court where defend-
ants belong exclusively to an unpopular class
like landlords or railway companies. As com-
pared Avitli judges who are also jurists, judges
who have had no legal discipline are less likely
to deal with causes in a severely judicial spirit,
to consider sufficiently the consequences of
making a precedent, or to uphold that stringency
of procedure which, tedious as it may seem, is
the best safeguard against passion or careless-
ness. Hitherto the predominance of the regular
courts of justice has protected us from most of
the evils which might have been feared from
commissions armed with judicial power. But
the multiplication of extraordinary tribunals
and of special procedures would break dowoi
this predominance, and with it the old English
principle of submitting to a regular court for
adjudication in the regular way every question
which can be formulated in terms of law — a
principle always precious and always difficult
to maintain, but in an age of popular govern-
ment especially invaluable and yet especially
liable to be overthrown.
[For further particulars respecting the Rail-
way Commission see the Acts 36 & 37 Vict,
c. 48, and 51 & 52 Vict. c. 25, and the Acts
therein referred to ; also the report of the
joint-committee of Lords and Commons on rail-
way amalgamation, 1872 ; and the text-books
on the law relating to railways.
Respecting the Irish Land Commission, see
the Act 44 & 45 Vict. c. 49 and the amending
Acts. See also the rules issued by the Irish
Land Commission, especially those of October
1881.
Respecting the Crofters' Commission see the
Act 49 & 50 Vict. c. 29 and the amending Act.]
F. c. M.
COMMISSIONER. See Factor.
COMMISSIONERS OF SEQUESTRATED
ESTATE. See Bankruptcy, Scotland.
COMMITTEE (with reference to cases of
lunacy). A person charged to represent the
interests of a lunatic, either as committee of
his person or as committee of his estate. Com-
mittees are appointed for those lunatics only
whose mental incapacity has been established
by the inquisition of one of the masters in
lunacy, either with or without the assistance
of a jury. The same person is frequently
appointed in both capacities, i.e. as committee
of the person and of the estate of a lunatic.
The administration of the property of a lunatic
so found by inquisition is to a gi-eat extent
imder the control of the lunacy authorities.
COMMITTEE OF INSPECTION (bank-
ruptcy). A committee consisting of not less
than three and not more than five persons,
selected from the creditors of an insolvent
debtor at the first or any subsequent meeting
of creditors, for the purpose of superintending
the administration of the bankrupt's property
by the trustee. The trustee cannot exercise
certain powers without the permission of the
committee of inspection, and tlie committee can
take the initiative in certain other proceedings.
The appointment of a committee of inspection
is not compulsory, and the act provides that in
the absence of such a committee the Board of
Trade is to exercise its functions. [See Bank-
ruptcy Act, 1883, 46 & 47 Vict. c. 52, specially
§§ 22, 57, 58 (2), 64, 74 (4), 89 (1), also
Bankruptcy Act, 1890, 53 & 54 Vict. c. 71,
R 51 Y,. s
COMMODATU]\L A term of Roman law
used to express the loan of a thing which had
to be returned in specie {i.e. in the same kind).
COMMODITY. The idea of something com-
modious in the way of usefulness is never absent
from the use of this word in an economic sense,
but to this meaning a very wide interpretation
is given by some economic writers, while others
are disposed to restrict its application much
358
COMMON ASSURANCE— COMMONS
more closely. A. Smith ( Wealth of Nations,
bk. iii. ch. iii.) defines the difference be-
tween productive and unproductive labour as
that which does or "does not fix and realise
itself in any permanent subject or vendible com-
modity which endures after that labour is past,
and for which an equal amount of labouf could
aftei-wards be procured." Ricardo (ch. i. § 1)
uses the word in a somewhat different manner.
" If a commodity were in no way useful, in
other words, if it could in no way contribute to
our gratification, it would be destitute of ex-
changeable value," and includes among "the
mass of commodities," "rare statues and pic-
tures, scarce books and coins, wines of a peculiar
quality." With J. S. Mill {Principles of Politi-
cal Economy, bk. iii. ch. ii. § 3), while other
considerations come in, the word is employed
mainly in the same sense as by Ricardo.
Mill speaks of the product of labour as "utili-
ties," among which he would class not only the
labour of the physician and the teacher, but
that of the musical performer and the actor.
This idea is further developed by H. Sidgwick
(Principles of Political Economy, bk. i. ch.
iv.) who proposes to extend the terms "produce"
and "commodities " so as to include "consum-
able services," such as the utilities developed
by "literary, artistic, and scientific culture."
In this view E. Cannan {Elementary Political
Economy, pt. ii. § 2) includes "services which
do not involve the production of a useful
material object " among "commodities." The
difficulty of exact definition of "productive"
and "unproductive" labour has led to this
extension of the use of the term "commodity."
The examples from the authors cited above
sufiiciently explain this gradual development.
The original use was wide, e.g. "Tickling
commodity, the bias of the world" {Kin^ John),
and elsewhere in Shakespeare frequently (Tt^eZ/'^A
Night, Henry IV., etc.)
COMMON ASSURANCE. The legal evi-
dences of the transfer of real property. These
have been called "common" assurances as op-
posed to special methods of transfer such as
fines or recoveries.
[Stephen's Gommentaries, bk. ii. pt. i. c. xv.]
J. E, c. M.
COMMON EMPLOYMENT, Doctrine of.
" A servant, when he engages to serve a master,
undertakes, as between himself and his master,
to run all the ordinary risks of the service, in-
cluding the risk of negligence upon the part of
a fellow-servant when he is acting in the dis-
charge of his duty as servant of him who is the
common master of both." This extract from
the judgment of Earle, C.-J., in Tunney v.
Midland Railway Co. (L.R. 1 C.P. at p. 290)
may be taken as a judicial statement of the
doctrine of common employment first suggested
in 1837 in Priestley v. Fowler (3 M. & W. 1),
and afterwards adopted by the House of Lords.
In the earlier cases various reasons were given
in support of the doctrine, but in the later cases
the tendency is to base the rule upon an implied
contract entered into by the servant with his
master that the latter should not be under any
necessity to indemnify him from the negligence
of a fellow -servant. In order to establish
common employment it is not necessary that
the servants should be employed about the same
kind of work ; it is sufficient that they are en-
gaged under the same employer for the purposes
of the same business, however difierent in detaO
those purposes may be. The relative rank of
the servants is immaterial, and a stranger who
voluntarily gives help is for the time regarded
as a servant.
The legal effects of the doctrine have been to
some extent modified by the 43 & 44 Vict. c. 42
Under that act a workman is entitled to com
pensation for injuries resulting from the negli
gence of a fellow-servant acting as a super^
intendent or imder orders issued by the master,
Special provision is made for railway servants
who may claim damages from their employer
for the negligence of their fellow-servants in
charge of any signal, points, locomotive engine,
or train upon a railway. An employer is also
made liable^to his servants for any defect in the
condition of the ways, works, machinery, or
plant connected with his business. The right
to claim compensation is, however, burdened
Avith numerous onerous conditions.
[Addison on Torts, by H. Smith, London, 1887.
— Treatise on the Principles of Obligations arising
from Civil Wrongs in the Common Law, by F.
Pollock, London, 1887. As to liability of em-
ployers in foreign countries, see Pari. Pap. Com-
mercial, 1886, No. 21. — Harvard Law Review,
December 1888. On the subject generally, see
Essays in Jurisprudence, by F. Pollock, London,
1882.— Parliamentary Papers, H. C, 1876, No.
372 ; 1877, No. 285.— Report of Select Committee,
1886, No. 192.] J.E.C.M.
COMMON GOOD (Scotland). Property be-
longing to a municipal corporation, administered
by the magistrates. A. D.
COMMONS. Upon the origin of rights of
common there are two main theories. The
legal theory, in its crudest form, traces the
primitive form of property to individual owner-
ship, and regards rights of common as being
based upon the grant or the sufferance of an
individual owner. The historical theory traces
the natural or original form of property to
common ownership, and sees in rights of
common the survivals of an era before the evolu-
tion of individual ownership. So far as the
soil of England is concerned, the balance of
probability appears to be in favour of the
view that the legal theory, with certain modi-
fications, approximates most closely to the
truth. The question may have more than
antiquarian importance, because it has a direct
bearing upon that theory of the nation alisatior
COMMONS
359
of the land which assumes as its basis the
original common ownership of the soil. If the
historical theory is correct, rights of common
represent all that the encroachments of indi-
vidual owners failed to absorb ; if the legal
theory. is coiTCct, rights of common represent
the encroachments of servile tenants upon the
possessions of individual owners. The essence
of the Mark system or Teutonic village com-
munity of freemen is that the territory of the
mark, or the soil occupied by the agi-arian
association, was owned by the community by
which it was cultivated, or by the tribe or
nation of which the community formed a part.
Community of occupation and co-tillage are
characteristic features of the Anglo-Saxon sys-
tem of farming in the dawn of agricultural history
(see Agriculture in England). Writers like
Maurer, Kemble, Freeman, Nasse, and others,
have therefore argued or assumed that the
mark system existed in this country in its pure
form, and their contentions are supported by
the researches of Sir H. Maine into the village
community (see Digby, History of the Law of
Real Property, and Joshua Williams, Rights of
Commons). If this historical view is correct,
then the manorial system is an encroachment
upon the mark system, the "land-law of the
noble " superseded the " land-law of the people,"
the mark of independent freemen was degraded
into the manor of serfs and semi-servile tenants,
and commons are a survival of the primitive
form of property which existed in this country.
This view is taken by Elton {Tenures of Kent),
who dates the encroachments of individual upon
common ownership, and of the manor upon the
mark, from the reign of Edward the Confessor.
But it is doubtful whether the mark as a system
of land ownership ever existed in this country.
As a unit of local administration it is assumed
by Stubbs {Constitutional History, vol. i. 83-86),
but even this assumption is open to question
(see Lodge's Anglo-Saxon Law, p. 82). Al-
though, as a means of farming, the mark system
indisputably prevailed and regulated the agii-
culture of the country till the present century,
Seebohm {Village Community) has shown good
reason to doubt whether the partners of the
association were ever in this country the
independent owners of the land they tilled,
and whether they were not always tenants
tilling soil over which they enjoyed regulated
customary rights, but of which they were not
the owners. He proves beyond all question
that in many cases the land was in Anglo-
Saxon times owned by individuals and culti-
vated by communities who held under their
lords by semi-servile tenure. These estates
readily adapted themselves with the slightest
possible changes to the Norman system of
manors. Thus modified, the legal theory is I
probably most near the truth. According to I
Blackstone {Commentaries, 11. 92) and Coke |
{Complete Copyholder, p. 8, etc.), rights of
common existed subsequently to manors, and
originated in the grant or the sufferance of the
lord. And this is the legal basis upon which
common rights rest. As a question of fact it
may still be disputed whether rights of common
over the wastes of a manor are exercised by the
association of farmers in virtue of their former
ownership of the soil, or by the gi-ant or suff"er-
ance of the individual owner, whose tenants
they are. But there can be no dispute that
since the Norman Conquest such rights are
legally of the nature of exceptional rights
granted over land by its real owner to his
tenants. They are of four kinds : (1) Append-
ant, i.e. attached or incident to the ten-
ancies of freeholders ; (2) appurtenant, i.e.
enjoyed by strangers In respect of land not
belonging to the manorial estate ; (3) in gross,
irrespective of land at all; {^) customary, i.e.
enjoyed by copyholders. Such rights differ not
only in origin but in kind. Thus there may be
commons of pasture, of piscary (fishing), of tur-
bary (turf- cutting), of estovers (cutting or taking
wood).
The later history of commons is a history
on the one side of attempts to extinguish the
rights enjoyed, and on the other of efforts to
resist such encroachments. At first no public
rights were recognised ; resistance was made if
at all, in the interests only of the commoners.
Opposition to the enclosure of commons entered
upon a new phase in 1845 (Gen. Inclosure Act,
8 & 9 Vict. e. 148), when the necessity of pre-
serving commons as places of recreation or as
breathing spaces in crowded districts was
recognised. Considering the untempered con-
demnation which has been passed on the
Inclosure Acts by popular speakers and writers
in recent years, it is amusing to contrast
Bentham's opinion that "the tendency of the
General Inclosure Bill seems alike favom-able
to the interests of the rich and poor." . . .
" It effects the raising of the wages of labour "
(Poor Bill introduced by Mr. Pitt, Works, vol.
viii. p. 449). Miss Martineau in her illustrations
of political economy is equally partial to enclos-
ures. We may therefore distinguish between
(A) commoners' opposition up to 1845, and (B)
public opposition after 1845. (A) Legislation
to limit and restrain the rights of lords of
manors to enclose their wastes begins with the
statute of Merton (1235) and the statute of
Westminster (1285), which protected respec-
tively commons appendant and commons ap-
purtenant. Down to the year 1800 commons
could only be enclosed by means of private acta
of parliament. But under the pressure of in-
creasing population it was necessary to utilise
every available acre. In 1801, through the
exertions of Young and Sir J. Sinclair, an In-
closure Act was passed (41 Geo. III. c. 109)
which incorporated the provisions generally in
360
COMMONS— COMMUNE
eluded in the special acts, and regulated, and
at the same time facilitated, the enclosure of
land. The following statistics of enclosures
illustrate the extent to which agriculture pro-
gressed in the latter half of the 18th century.
Between 1700 and 1845 there were 3835 en-
closure acts and 7,572,664 acres enclosefl, the
total area of Great Britain being 56,786,199
acres, and the cultivated area about 32,500,000.
Of this total number 3209 acts were passed in
the reign of George III. and 6,288,910 acres en-
closed. (B) Signs of the change of policy which
protects open spaces are previously seen in 18th
century tracts (e.g. Inquiry into the Influence
of Enclosures on Population (1786), or Ad-
vantages and Disadvantages of Inclosing (1772)),
and in the debates upon the Inclosure Bill of
1836 (see Hansard 35, 1226 and 1271). But
the new policy received full expression in 1845,
when the General Inclosure Act was passed
(8 & 9 Vict. c. 148). It was primarily passed
to facilitate the enclosure of commons and
wastes which impeded the productive employ-
ment of land, and for this object it appointed
commissioners who were to decide whether or not
enclosures were expedient. But it protects com-
mons within a certain distance of London or
large towns from enclosures, requires the appro-
priation of allotments for the exercise and re-
creation of the neighbourhood, and declares
that no village greens shall be enclosed. But
it was felt that the commissioners did not
sufficiently protect the public. And in this
direction legislation has since that time ad-
vanced. The public and not the landlord is
now treated as the real owner. The Metropolitan
Commons Act, 1866, was passed in this spirit.
In 1869 a committee of the House of Commons
reported on metropolitan commons, and sug-
gested various alterations in the existing law of
enclosures. Many of their suggestions were
embodied in the Inclosure Act of 1876. The
preamble of this act shows how completely the
spirit of legislation was changed. It expressly
forbids the commissioners to sanction any en-
closures unless they are satisfied that such
enclosures will benefit not only private interests
but the neighbourhood. Clauses in the act
also provide for the management, protection,
and preservation of commons. Commons may
now be enclosed in one of three ways — (i.) they
may be appropriated by railway companies
under the powers of their acts ; (ii.) they may
be enclosed under the Inclosure Act ; (iii.) they
may be enclosed by an individual owner who
claims to be legally entitled to enclose.
[For works relating to the subject of enclosures
see, in addition to those quoted in the text,
Fitzherbert on Surveying (1523). — Tusser's Com-
parison between Champion Country and Several
(E. E. Text Society). — Lee's Regulated Inclosure
(1556). — Lawrence's Duty of a Land Steward
^1727).— Young's Enclosure of Wastes (1801).—
Reports of the Board of Agriculture, 1793
1813. — Elton's Commons and Waste Lands. —
Woolrych's Rights of Commons. — Scruttou's Com-
mons and Common Fields. ] r. e. p.
COMMONTY (Scotch). Common or waste,'
over which there are rights of common, a. d.
COMMUNE. When a group of families
forming a tribe cease to lead a wandering life
and settle down in a fixed place of abode, the
commune springs into being. At present, in
India the village communities are considered
as composed of families descended from a
common ancestor.
The commune is society's primary organic
cell. A collection of communes united under
the rule of a sovereign power forms the state.
Primitively in all countries the commune was
a political body where autonomy reigned, and
which itself regulated all the local intereats of
its inhabitants. We see this in the Anglo-
Saxon Tunscip, in the Toumship of New
England, in the Germanic Gemeinde, in
the Gemeente of the Netherlands, in the
Gommunaut^s of the Neo-latin peoples, in the
Russian 3fir, in the Javanese Dessa, in the
Indies, and in Japan, China, and Arabia, or in
other words, in all climates and amongst all
races. As the families living on the communal
land have common interests to be considered
and provided and legislated for, it necessarily
follows that the commune becomes a sort of
institution of the economic order. This is
clearly apparent in following the birth and
development of the New England townships.
As soon as a planiation is formed, the heads
of the different families meet together in the
spring-time, every year, in a town-meeting, to
consult respecting public interests, and to
appoint the various functionaries to fulfil the
same : Churchwardens for the supervision of
matters connected with the church ; overseers
of the poor to distribute succour to the needy ;
highway surveyors to maintain the roads in
good order ; fence viewers to overlook the
hedges, gates, and enclosures generally ; wardens
for the repression of drunkenness, cruelty to
animals ; constables or police for the maintenance
of general order ; and school trustees or school-
board officers to attend to the schools and
appoint competent masters and mistresses.
Everywhere, too, at the commencement, as I
have shown in my book Primitive Property,
the commune reserved the greater portion of
its land as common pasture ground (commons),
where all the inhabitants had the right to send
their cattle to graze, and the remainder was
periodically divided up between all the families
of the commune, with the exception of the
little plot surrounding each dwelling, which
was the private property of the owner. Accord-
ing to Caesar and Tacitus, this was the agrarian
system which existed among the Germanic
races, and it may still be found at the preseni
COMM U N E— COMMUNICATION
361
day, with precisely the same distinctive charac-
teristics, in the Russian Mir and in the Javanese
Dessa. If one be desirous of studying the
working and results of this system on a small
scale, one may do so in the allmends of
Switzerland and southern Germany. The level
land lying along the shore of the lake of Brienz,
between Interlaken and Bonigen, is the all-
mend of this latter village. It is divided into
small plots where vegetables and fruit-trees are
cultivated. Each of these plots is owned by
the head of a family for his life. The com-
munal allmend comprises forests, which
supply the inhabitants with wood for firing and
building purposes, pasturage where their cattle
can graze in summer, and arable land whence
they can procure a portion of their sustenance.
The commune is thus a sort of hive which
furnishes each family with supplies, and thus
attaches it to the soil of the Alma Mater.
At the present day, owing to the growing
exigencies of civilisation, the commune is step
by step recovering the economic status it pos-
sessed at the outset. This is plainly observable
in countries where civilisation is the most
advanced, in the United States and Scotland,
for instance. The city of Glasgow may be
mentioned as an example. The city here
not only opens schools for the entire popu-
lation but also supplies the drinking water,
the gas, lights at its own expense the common
staircases of large lodging-houses, lets out
heating apparatus, stoves, and fixtures, at
a low rental ; it considers tramways to be
a part of the street, and allows them to
be worked by a company only on the fixed
condition that the price shall not exceed a
penny a mile, and that morning and evening
cars be run for workmen at half-price. The
local sanitary legislation is also thoroughly
perfected. There is complete municipalisation
of markets and slaughter-houses ; the city also
entered upon a scheme of wholesale demolition
of slums and overcrowded districts, in view of
better housing of the poor, and now it is build-
ing houses on sites it has cleared, and wiU then
enter upon the functions of house landlord ; it
has also opened a series of common lodging-
houses, having accommodation for 2000 persons
nightly, and has established a magnificent
system of baths, swimming-baths, and wash-
houses ; it maintains a corps of lady inspectors
who go about among poor families to inculcate
domestic cleanliness ; it has entered upon the
general laundry business, and is serving families
at the current prices. Museums of all sorts,
parks, playgrounds, and public libraries have
been opened to foster the progress of civilisation.
It may be seen, in fact, in all parts of the
world that the old "commune" notion is gain-
ing ground more or less rapidly, and the
socialistic ideal of the state as a providential
power doing its best to remedy the results of
social inequality, is little by little forcing itself
upon the world. Attention can only be drawn
here to this fact. Its advantages and dis-
advantages must be elsewhere discussed. One
thing, however, appears probable, that in the
future organisation of society, communes will, as
at its outset, play an important economic part.
[E. de Laveleye, Primitive Property, trans.
1878.] E. de L.
COMMUNE OF PARIS, 1871. It is widely
believed in England that the Commune of 1871
was primarily a communist institution . In deny-
ing this the better informed are apt to merely
explain the true meaning of the word Commune
(q.v.), and leave the impression that the estab-
lishment of the Commune was only an extreme
application of the principle of local self-govern-
ment (e.g'. P. G. Hamerton, French and English,
1889, p. xii. n.) This is nearly as incorrect a»
the more common belief. It is quite true that
adherents of the Commune are not properly
called "communists," the French word being
not communistes but commun/iux or commun-
ards, but it is not the case that the Commune
movement was a purely political aft'air. Local
and temporary circumstances made its short-
lived success possible, but any real strength
which it possessed was entirely contributed by
the partisans of a social or economic revolution.
About one-third of the members of the council
of the Commune were connected with the Intek-
NATIONAL {q.v.) The chief economic measure,
passed by it or recommended by its committee
on labour and exchange, which was entirely
composed of socialists, provided for the remission
of house rents for the period covered by the
siege, the gratuitous return of all articles under
£1 in value pawned at the Mont de Piete, the
establishment of a list fixing the wages of
labourers in communal contracts, and the trans-
ference of Avorkshops abandoned by their owners
to associations of workmen (y. Anarchism).
[Lissagaray, Histoire de la Commune de 1871,
Bruxelles, 1876. — J. Leighton, Paris under the
Commune, 1871. — P. Delion, Les memhres de la
commune etdu comitS central, 1871. — G. de Mol-
inari, Les Clubs rouges pendant le Siege, 1871.
— E. de Laveleye, Le Socialisvie Contemporain,
Bruxelles, 1881, pp. 273, 279-282, 309, 310.— B.
Malon, Histoire du Socialisme, 1883.] E. c.
COMMUNICATION, Means of. Modem
facilities for communication between one district
and another are so complete generally that the
fact that these facilities are comparatively recent
is not unfrequently forgotten. Their economic
value is so great that it is scarcely possible to
over-estimate it. A reference to the condition
of matters before present facilities existed in
England will enable this to be better understood.
Porter, in his Progress of the Nation, written
1842, makes the following observations on a part
of Sussex now practically included among the
suburban districts of the metropolis, and acces
362
COMMUNIO— COMMUNISM
/
sible, when Porter wrote, within four hours of
London. " An inhabitant of Horsham, in
Sussex, lately living, remembers, when a boy,
to have heard from a person whose father carried
on the business of a butcher in that town, that
in his time the only means of reaching the
metropolis was either by going on foot or riding
on horseback, the latter of which undertakings
was not practicable at all periods of the year,
nor in every state of the weather ; that the roads
were not at any time in such a condition as to
admit of sheep or cattle being driven upon them
to the London markets, and that for this reason
the farmers were prevented sending thither the
produce of their land, the immediate neighbour-
hood being, in fact, their only market. Under
these circumstances, a quarter of a fat ox was
commonly sold for about 15s., and the price of
mutton throughout the year was only five
farthings the pound." This illustration, as
every one can supply the present condition of
matters for himself, shows the effect of improved
internal communication within a recent period
and a restricted area. Mr. E. Atkinson has in
his publications. The Relative StreTigth and
Weakness of Nations, etc., recorded the corre-
sponding but even greater effect of similar
facilities in the United States of America —
"The wages for one day's work of an average
mechanic in the far East will pay for moving a
year's subsistence of bread and meat a thousand
miles or more from the distant West." These
instances of results from improvements of means
of communication illustrate comparatively recent
changes, brought about by their means, in pro-
duction, price, etc. Further development ^vill,
no doubt, be as active a factor in the future as
it has been in the past. The main part of the
comforts and conveniences of life, the whole
work of commerce, to refer to no other points,
depend on the power of ready communication,
which, in its turn, depends almost as much on
the absence of obstruction on the part of govern-
ments for fiscal and other purposes, as on the
extension of mechanical facilities (see Rail-
ways ; Canals ; Tkanspoet, Cost op Inland).
[Many economic problems presented by modern
means of communication, including remarks on
their utility to the community and the measure-
ment in money of that utility, are discussed with
great originality by Dupuit in the Dictionnaire
de VLcon. Politique, under the heads Routes et
Chemins, Voies de Communications, abridged from
certain longer memoirs to which reference will be
found under Dupuit.]
COMMUNIO. An expression of Roman law
applied collectively to a number of persons
jointly interested in some property or under-
taking. If the joint interest arises by contract,
the Roman writers speak of societas (partner-
ship) ; if it is created by accident (as for instance
in the case of joint heirs) the expression corn-
mv/nio incidens is used by later writers, e. s.
COMMUNISM is the theory which teaches
that the labour and the income of society
should be distributed equally among all its
members by some constituted authority. For
an example of what communists mean by equal
division of labour and income the following
explanation may suffice : — "Here equality must
be measured by the capacity of the worker
and the need of the consumer, not by the
intensity of the labour and the quantity of
things consumed. A man endowed with a
certain degree of strength, when he lifts a
weight of ten pounds, labours as much as
another man with five times the strength when
he lifts fifty pounds. He who, to satisfy a
burning thirst, swallows a pitcher of water,
enjoys no more than his comrade who, but
slightly thirsty, sips a cupful. The aim of the
communism in question is equality of pains and
pleasures, not of consumable things and workers'
tasks " (Buonarroti, Conspiration de Babeuf,
i. 297). (See Buonarroti.)
As communism involves the conception of
society as an industrial association for the pro-
duction of wealth, it is of modern origin. That
conception certainly played no part in the in-
stitutions attributed to Minos and Lycurgus,
nor in those suggested by Plato in the Republic.
The equal distribution of wealth among a
governing class was then upheld as desirable
wholly from a moral and political, not at aU
from an economic, point of view ; equality of
distribution, and, still more, equality of labour,
among the whole population, would have been
utterly abhorrent to the minds of Greek states-
men and philosophers, if they had been able to
conceive the idea. The practice of the earliest
Christians described in Acts ii. 44, 45 ; iv. 34,
V. 8, has generally been considered as com-
munistic, but all that is actually said is that a
number of persons sold their property and gave \
the proceeds to be distributed among their
poorer fellows, who doubtless treated what they
received as income ; in this there would have
been no communism even if the gifts had been
compulsory, and Peter's words to Ananias show
that they were not. The first exposition of
communism is to be found in Sir Thomas
More's Utopia (see More, Sir T.) published at
Lou vain in 1516. Written in Latin, the Utopia
was accessible to all the learned world of
the time ; at first in the original, and after-
wards in translations, it has had an enormous
number of readers. After a severe criticism of
capital punishment for theft, of the habit of
maintaining a multitude of idle followers, and
of the extension of pasture at the expense of
arable land. More enters on the description
of a nation numbering apparently three or
four million souls, living a simple life with-
out private property, under elected officers
who fix the duration of requisite labour
and generally direct production. Distribution
COMMUNISM
363
is supposed to effect itself without difficulty,
as the impossibility of ostentation and the
general \bundance prevent any one from de-
manding more than his fair share : " It is the
fear of want that makes any of the whole race
of animals either gi"eedy or ravenous. " Division
of labour exists, but, agricultural labour being a
"hard course of life," every one must take his
turn in the fields. The institution of marriage
is only slightly modified, but the adoption of
children is largely practised in order to keep
all the families nearly equal in size. Increase
of population, if there is any, is dealt with by
emigration. There is a small class of unen-
franchised persons or slaves, consisting of con-
victs condemned to hard labour, prisoners taken
in battle, and foreigners who have entered the
service of the Utopians voluntarily. As a sub-
stitute for the stimulus to industry provided
by self-interest when private property is estab-
lished, the fact that " all men live iu full view "
is put forward.
It is highly improbable that More considered
his book as anything more than a picture of an
entirely ideal state of society, towards which
some approximation might possibly be made in
certain particulars. Not until the era of the
French Revolution did a communist organisa-
tion of society come to be thought of as some-
thing to be actively striven for, and completely
realised at no distant date. The Civitas Solis
(1620) of Campanella {q.v.), a work of small
merit and importance (for a translation, see
Ideal Commonwealths, in Morley's Universal
Library), is far less practical than the Utopia.
The immediate precursors of the communism of
the Revolution were Morelly and Mably,
writers who, in accordance with the fashion of
their day, placed their Utopias in "the state of
nature." Morelly {q.v.), in his Code de la
Nature (1755), taught that man naturally pos-
sesses every virtue, and is only depraved by bad
institutions, the chief of which is private pro-
perty. Every one would be industrious, he
thought, if it were not that some are deterred
from labour by the enervation of riches, and
others by the desperation of poverty. He de-
clared, therefore, that it would be "in con-
formity with the intentions of nature," if every
citizen contributed to the resources of the state,
in accordance with his strength, talents, and age,
and in return were whoUy maintained at the
public expense. Every one was to engage in
agriculture between the ages of 20 and 25.
Celibacy was not to be allowed. Mably {q.v.),
who was a brother of Condillac {q.v.), in
Letters I. and II. o^ Doutes proposes aiix philo-
sophes economistes sur I'ordre naturel et essentiel
des socUtis politiques (1768), endeavoured to
show, in opposition to Merciee de la Riviere
{q.v.), that private property in land is not the
natural and necessary basis of society. On the
contrary, he said, society could exist, without
property, as is proved by the cases of Sparta, the
Jesuits in Paraguay, and the monastic orders ;
while the establishment of property in land and
inequality of condition, has been the great
source of avarice, ambition, and vanity. In
his Train de la Legislation (1776), Book I., he
maintained the same views, and incidentally
described the communist arrangements which
nature, as he thought, dictated to primitive
man; he imagines "the citizens distributed
into different classes, the more robust are
appointed to cultivate the earth, the rest work
at the rough handicrafts with which society
cannot dispense." "To exclude idleness, all
that was necessary was to encourage labour by
passing laws which should awaken in the citizens
the natural instinct which induces us to seek
the esteem of our fellows, and to fear their
contempt." But it was undesirable, he ad-
mitted frankly, to try to restore the lost con-
dition of natural equality. The rich would
resist any such attempt, and it is doubtful if
the poor would support it, and still more doubt-
ful if they "could adopt the feelings which
would be in harmony with their new position,"
if the attempt were successful.
The Revolution in France was economic aa
well as political. It made the people far more
equal in wealth than before. But a mere re-
distribution of property, even when it makes
wealth more equal, is not a communist measure,
and need not tend in a communist direction.
The creation of a gi-eat number of small free-
holders, which was greatly p'romoted by the
Revolution, is considered to have strengthened
the institution of separate property. Though
there was a large class which desired to reduce
or destroy the inequality between rich and poor,
there were but few who saw that the only way
to create and maintain equality in wealth was
to establish complete communism, and were at
the same time convinced of the practicability of
such a change. Babeuf {q.v.) and his fellow-
conspirators of 1796, who called themselves
the "Equals," were the most remarkable repre-
sentatives of this small party. How far the
Equals had actually thought out a scheme of
communism is not very easy to decide, since
the history of their conspiracy, written by their
ablest member, Philippe Buonarroti, was not
published till 1828. Buonarroti admits that
he describes their economic plans almost en-
tirely from memory ; he has probably added
many ideas which belong in reality to a later
date than 1796. In the Babouvist Utopia, aa
described by Buonarroti, every one is allotted two
different occupations, the one light and the
other hard. To give variety and change of
scene, all are employed by turns in the trans-
port and postal services. Those who will not
work are treated as thieves are treated under
the system of private property. Education,
carried on in vast boarding-schools, subordinates
364
COMMUNISM
family affection to patriotism. The increase of
population is stimulated to the utmost. Dis-
tribution is ruled by the principle of strict
equality of pains and pleasures. The transi-
tion to this state of things was to be effected by
establishing at once the skeleton of a great
national community, which would rapidly ac-
quire all property by means of free gifts and
escheats, bequest and inheritance being totally
abolished. For the existing generation ad-
hesion to the community would be voluntary.
Whether the heads of the Babouvist conspii-acy
desired to carry out some such scheme as this
or not, their immediate object was to over-
throw the Directory, and for this purpose
appeals to the love of plunder, in which they
dealt very freely, were likely to be more useful
than elaborate schemes of orderly communism.
After the discovery and defeat of the plot, and
the execution of Babeuf (May 1797), the
revolutionary spirit slumbered for a time, and
communism, which was as yet nothing more
than an incidental outcome of the desire for
destruction, slumbered also. The schemes of
Saint-Simon {q.v.) and Foueier (g-.i?.), which
soon began to occupy the attention of those
who were inclined to wish for social reorganisa-
tion, though they involve distribution by con-
stituted authority, cannot properly be con-
sidered communistic, as they lack the essential
characteristic of communism in not being
founded on the principle of equality. Buon-
arroti's book, printed at Brussels in 1828, but
not much read in France till some time after-
wards, revived to some extent the idea of com-
munist equality, and led to the publication
(1837-40) of the Moniteur rdpublieain, the
Homme lihre, and a number of other short-lived
and bloodthirsty communist newspapers. The
insignificance of the Babouvist party was shown
in the futile insurrection of 12th May 1839,
when the followers of Armand Barb^s, Martin
Bernard, and Louis Auguste Blanqui, to the
number of three or four hundred, obtained
possession of the H6tel de ViUe for a few hours.
In the next year merely destructive communism
was practically superseded in France by " Icar-
ianism," the creation of Cabet (q.v.), thought
out in England, where Robert Owen {q.v.)
was the chief teacher of communism.
Owen's communism was very different from
that of Babeuf, Buonarroti, and their followers.
It had its origin not in politics and a worship
of the abstract principle of equality, but in
practical philanthropy. The primary object of
Owen was not to destroy the existing state of
society, but to substitute for it a new state, the
superiority of which he considered he had proved.
Assistant master in an elementary school at the
age of seven, draper's apprentice at ten, mule
machine maker at eighteen, manager of an im-
portant cotton spinning factory at nineteen,
and successful in each capacity, he had every
claim to be considered "a practical man," and
it was entirely through his own experience that
he arrived at his schemes of social regeneration.
The good effects of his treatment of the factory
hands when manager and part-proprietor ol
mills in Manchester (1790-97) and New Lanark
(1797-1828) established in his mind a theory
that heredity is of very small importance as
regards character, and that "it is impossible
that any human being can form his own quali-
ties or character," which are really formed
by education and surroundings. This theory,
if admitted, is obviously an excellent basis for
communism. By its denial of moral responsi-
bility it overthrows the common argument that
poverty is generally "deserved," and that
private property is therefore just. Further, it
avoids the error of confounding wealth or
material welfare with happiness, and it was
suitable to a time when the desirability of
making elementary education more general was
beginning to dawn on the public mind. So
Owen developed from the philanthropist manu-
facturer into the communist projector. In
March 1817 he submitted to the House of
Commons' committee, then considering the poor
law, a report which he had drawn up for the
** Associatioft for the relief of the manufacturing
and labouring poor." In this he proposed that
the unemployed poor should be formed into
communities of about one thousand persons, who
should be provided with land and other requi-
sites of production by the state, and support
themselves by agriculture and manufactures.
He says nothing in the report itself about the
principle on which distribution within the com-
munities should be effected, but in a letter to
the newspapers of 30th July 1817, he argues
that men will be as industrious "in a com-
munity of mutual and combined interests as
when employed for their individual gain. . . .
Wherever the experiment has been tried, the
labour of each has been exerted cheerfully."
When working by the day, he adds, the worker
has no interest in his work, and when he works
by the piece he is apt to overwork himself.
"When employed with others in a community
of interests both these extremes are avoided ;
the labour becomes temperate but effective,
and may be easily regulated and superintended.
Besides, the principles and practices are now
quite obvious by which any inclinations from
the most indolent to the most industrious may M
be given to the rising generation." The scheme 'M
was wonderfully well received ; the Morning
Post of 9th August 1817 declared that the
"appeal, founded as it is upon genuine reason,
virtue, and humanity, cannot possibly fail of
success." But Owen, over-elated with appro-
bation, went out of his way to declare at a
public meeting on 21st August that the only
reason his plans had not been adopted centu-
ries ago was the errors of religion, which had
COMMUNISM
365
created enough bigotry and fanaticism to wreck
not only a community but Paradise itself. This
incident, which Owen grotesquely persisted in
believing to be the most important event in the
history of mankind, alienated much sympathy.
Nevertheless in 1819 a committee (appointed
by public meeting), of which the Duke of Kent,
Ricardo, Torrens, and Sir R. Peel the elder
were members, recommended the establishment
of an experimental community by means of
capital to be provided by a joint-stock company
and on the principles of private property, com-
munist distribution being strictly excluded.
Nothing came of this, as subscriptions could not
be obtained. In 1825 Abram Combe, a tanner
of Edinburgh and disciple of Owen, in con-
junction with Mr. A. J. Hamilton of Dalzell,
obtained 300 acres of land and built a common
dwelling-house for 100 families at Orbiston near
Glasgow. About 300 persons willing to form a
community were easily collected. Till a new
generation fit for equality had grown up, it was
proposed to distribute the income of the
community according to the estimated value
of the produce of each individual's labour.
Combe died in August 1827, and the whole
undertaking immediately collapsed. Mean-
while Owen was trying to establish a similar
community in America. He bought, in 1825,
the village of Harmony, Indiana, from the
Harmony Society or Rappists, who wished to
remove. He called the place New Harmony,
and invited the "industrious and well disposed"
of aU nations and creeds to come and form a
" preliminary society." Eight or nine hundred
persons came, and the preliminary society, in
wliich members were remunerated according to
the amount of their services, was soon super-
seded (January 1826) by the definitive "com-
munity of equality," in which equality (modi-
fied by difierences of need) was alone to regulate
distribution. But the miscellaneous collection
of individuals who had assembled in answer to
Owen's comprehensive invitation never became
united by any feeling of common interest, so
that by November 1826 the official newspaper
of New Harmony, edited by Owen's sons, had to
admit that ' ' New Hamiony is not now a com-
munity." Attempts were made to form several
smaller communities out of the ruins, but
these all failed, and very soon scarcely a trace
of Owen's scheme remained in America. In
England from 1827 to 1832 the Owen-
ites founded several hundred "co-operative
societies." These consisted of persons who
collected a small common capital by subscrip-
tions and opened a shop, in the hope of accumu-
lating from the profits of the business an
amount sufficient for the establishment of a
communist village. The system of sharing
profits with customers which made co-operative
societies successful at a later date had not yet
been discovered, and the Owenite societies failed,
and were soon almost entirely forgotten. Owen
himself continued a firm believer in the speedy
advent of "a new system of society." His
Labour Exchange of 1833 (see Labour Ex-
change) was intended to be in some way an
intermediate step. "The Association of all
Classes of all Nations" and "The National
Community Friendly Society " Avere founded in
1835, the first to propagate his principles, and
the second to promote the establishment of
communities founded upon them. The two
organisations were amalgamated in 1839 under
the title of "The Universal Society of Rational
Religionists." The chief product of the
labours of these bodies was the " Queen wood
community," a communist farm at Tytherley
in Hampshire, of which Owen was persuaded to
take charge in 1 8 4 1 . The experiment attracted
much attention, and its failure, which occurred
a few months after Owen's arrival, seems to
have been the death-blow of Owenism.
Etienne Cabet (q.v.), French advocate and
deputy was condemned in 1834 to five years' exile
in consequence of his violent opposition to Louis
Philippe's government. He spent the five years
in England, and after studying More's Utopia,
and no doubt submitting to some extent to
Owenite influence, began to doubt whether the
political revolution for which he had hitherto
been striving was all that was required for his
country. He returned to France in 1839 a
thorough communist, and in 1840 published
his Voyage en Icaric. Though provided with
a hero and heroine, and a somewhat thin thread
of romance, in order if possible to attract the
frivolous as well as the serious reader, this work,
like the Utopia, consists chiefly of a description
of an imaginary state where communism is
established. But while More's ideal state is
totally detached from ordinary life, Cabet's is
described as having grown, in less than half
a century, out of a state in which all the evils
of private property were rampant. Icaria is
France in 1890, as Cabet thought it should and
might be. Unlike the Babouvists, however, he
saw that the change could only be carried out
by pacific measures. "Communism," he says,
"intended for the happiness of all men, must
not begin by throwing a large party into
despair" {Voyage, p. 562, ed. 1845). "Com-
munism cannot be established and consolidated
except by the power of almost unanimous public
opinion {Ibid. p. 515)." It has been objected
that the transition to communism in Icaria is
made to begin with a bloody revolution, but
this revolution is apparently considered neces-
sary in order to overthrow a very odious politi-
cal tyranny. Democracy once established, the
change to communism is carried out peaceably
enough, it being an indispensable condition that
the rich and the owners of property, great and
smaU, should not have their habits and pre-
judices wounded {Ihid. p. 343). In his account
366
COMMUNISM
of the details of the transitory r6gime, Cabet
adopts much of the scheme propounded by
Buonarroti. In the completed Icaria, the
distribution of wealth is regulated by the
principle of equality interpreted to mean an
extraordinary, and most people would think
a very oppressive, uniformity. Every one is
allowed, so far as possible, to choose his occupa-
tion, and the stimulus to industry is provided
by regarding the idle man as a thief. Marriage,
and family life are strictly maintained. Great
importance is attached to education. The in-
crease of population is not thought to require
any checks.
For some of the French communists of the
time, Icarianism was far too moderate a
doctrine. They objected to the condemnation
of violence and to the maintenance of marriage
and the family. But the protests of Theodore
Dezamy and others were of no avail against the
wide circulation of Cabet's writings, and the
Icarian school was soon supposed to number its
adherents among working men by the hundred
thousand. Warned no doubt by Owen's numer-
ous failures, Cabet at first advocated only
attempts to convert whole nations to com-
munism, and deprecated the foundation of
small communist societies, which "would do
but little good if they succeeded, and much
harm if they failed, as they were nearly sure to
do" {Voyage, p. 564). Yet, urged on to some
kind of action both by friends and enemies, he
became himself the founder of such a society.
After a consultation with Owen, he bought
some delusive rights over a million acres in the
north-east of Texas. On 3d February 1848,
eighty-nine chosen men were despatched from
Havre as the " first advance guard " of the
multitudes who were expected to follow and
establish an Icaria in America. Three weeks
later Louis Philippe fell, and great numbers who
had before been willing to emigrate now desired to
remain in France and promote Icarianism in the
new Republic, so that only about four hundred
persons followed the "advance guard." When
they arrived at New Orleans the advance guard
had already abandoned the land in Texas,
which was altogether unsuitable. Eventually
about 280 of the colonists established them-
selves as a communist society at Nauvoo,
Illinois, a settlement from which the Mormons
had just retired. This community prospered
fairly for some time, and increased, under
Cabet's leadership, till it numbered some 600
members. On Cabet's expulsion in 1856, 180
of the members left with him and established
a community at Cheltenham, near St. Louis,
which lasted till 1864. The original com-
munity removed from Nauvoo to Icaria, Adams
County, Iowa, in 1860. Its expulsion of
Cabet had alienated sympathy in France, and
it became surrounded by various difficulties.
After the war its position gradually improved,
but in 1877 there was another schism ; the
conservatives or old party became "the Ne\»
Icarian Community," and the young party
"the Icarian Community," each numbering
thirty or forty persons. The old domain was
divided between the two new communities, but
in 1883 the "Icarian Community" decided to
remove to Icaria-Speranza, near Cloverdale in
California. (Albert Shaw, Icaria; a Chapter
in the History of Communism, 1884.)
The Icarian communities may be regarded as
relics of a movement the history of which is
nearly confined to the first half of the nineteenth
century. From 1848 socialism, of which the
fundamental principle is that the whole income
of society should be received by labour, not
that it should be divided equally, has taken
the place of communism. "The proposal to
organise society on a communistic plan ... is
one of which the serious interest has now passed
away" (Sidgwick, Pol. Econ., III. vii. § 3).
But wholly apart from the history of the
advocacy of that proposal, there have been
innumerable cases where the principles of equal
labour and equal distribution have been recog-
nised and acted on (for a considerable list, see
Roscher, Pol. Econ., § Ixxxi. notes). Religious
societies, such as the Essenes, Anabaptists,
Dunkers, Moravians or United Brethren,
the monastic orders, and the six societies
described in Nordhoff's Communistic Societies
of the United States (1875), have always
been prone to adopt a communist organisation,
whether from asceticism, or unselfishness, oi' a
desire to minimise communication with the
world. Of these bodies the American societies
are far the most important from an economic
point of view, as their industrial character is
not by any means wholly subordinate to their re-
ligion. In 1874 they consisted of about seventy
communities, with a total jiopulation of 5258.
The Shakers (58 communities or "families,"
population 2415, founded in 1792) and the
Rappists or Harmonists of Economy (pop. 110,
founded 1805) were celibate, the Separatists of
Zoar (pop. 300, founded 1842) and the Aurora
and Bethel communes (pop. 600, founded 1844)
maintained the institutions of marriage and the
family, while the Perfectionists of Oneida and
Wallingford, followers of Mr. J. H. Noyes
(pop. 283, founded 1849), practised an elabor-
ate system of polygamy and polyandry. This
was abandoned in 1879, and the society was
converted into a joint-stock company in 1880.
Most of the communities were well off, and all
were able to secure efficient but not exhausting
labour from their members. The population in
general was declining, chiefly in consequence of
the superior attractions presented to the young
people, native and adopted, by the more excit-
ing existence of the outside world. All the
societies except the Shakers and the Perfection-
ists had German founders.
COMMUNISM— COMPAGNONNAGES
367
Communist elements, the importance of
which seems to be growing, are present in the
state provision of such things as roads, drains,
lamps, parks, schools, and libraries, which are
maintained by taxes and rates levied in the
main according to the ability of the contributor
to pay, and are used in common, or equally, or
according to need. The English poor law is
communistic as regards the contributions levied
under it, but the comparison which used to be
frequently made between the workhouse and a
communist society is misleading, as the paupers
have not the direction of their collective in-
dustry, and are not in the least affected by the
increase or diminution of its produce.
The criticism of communism by economists
begins (not to include Hume's Essays, II. p.
270) with Malthus's remarks on the schemes
of Owen and Spence {q.v.) in the 5th edition
of his Essaij on Population (1817). He gives
"two decisive arguments against communism:
(1) the absence of " those stimulants to exertion
which can alone overcome the natural indolence
of man " ; and (2) the absence of checks to the
increase of population which would be brought
about by the removal of "the laws of private
property and the moral obligation imposed on
every man by the commands of God and nature
to support his own children" (ii. 276, 277).
These two arguments have been very generally
repeated by later writers down to the present
time (e.g. Sidgwick, Pol. Econ., III. vii. § 3),
and very little has been added to them. J. S.
Mill {Pol. Econ., II. i. § 3) rejected them both,
urging that both supervision and individual
self-interest in the efficiency of labour would be
more complete in a communist society than is
at present the case as regards the great mass of
labour, and that excessive increase of popula-
tion would be more likely to be repressed by
public opinion in a communist society, where it
would cause "immediate and unmistakable
inconvenience to every individual in the associa-
tion." MlII's position as to the stimulus to
industry has been strengthened by the support
which many economists have given to co-oper-
ative production, in which the stimulus is col-
lective and not individual, since each man's
labour is supposed to be made more efficient
than under the ordinary system by the desire
of each that the product of the labour of all
may be great. No one need look to political
economy to prove or disprove the advantage of
communism in the abstract. It is generally
recognised that a society is likely to be happier
the more equally the produce of its labour is
divided (Sidgwick, Pol. Econ., III. vii. § 1 ; cp.
Jevons's Theory, ch. iii.), but the remaining
economic question, "Can any kind of govern-
ment organise labour and production so as to
supply the wants of society (given the admitted
advantage of equality) as well, on the whole, as
they can be supplied by the system of private
property and competition ? " is one as to which
opinions may legitimately differ, and to which
the true answer is probably different at different
times and places.
For the "communists" of Paris in 1871, see
Commune of Paris. (See also Anarchism ;
Babeuf ; Brissot de AVarville ; Christ-
ian Socialism; Co-orERATiON ; Property;
Proudhon ; Socialism ; and Art. in App.)
[A. Sudre, Histoire du Communisme, 3™® ed.
1850. — B. Malon, Histoire du S'ocialisme, 1883. —
E. Fleury, Babeuf et le Socialisvie en 1796, 2™«
ed. 1851. — L. vou Stein, Geschichte der Socialen
Betoegung im Frankreich, 1850. — R. Owen, Life
written by Himself, vol, 1. 1857 ; vol. i. A. (con-
tinuation of appendices) 1858. — R. Dale Owen,
Threading my Way, 1874. — A. J. Booth, Robert
Owen, 1869. — M. Hennell, Ov.tline of the various
social Systems and Communities which have been
founded on the Principle of Co-operation, 1844. —
G. J. Holyoake, History of Co-operation in England,
vol. i. 1875 ; vol. ii. 1879.— J. H. Noyes, History
of American Socialisms, 1870. — A. Shaw, Icaria,
1884. — Encyclopcedia Britannica, 9th ed. Art.
"Oneida," by W. A. Hinds (a member of the
community), 1884. — Nordhoff, Covimunistic
Societies of the United States, 1875.] e.g.
[Among English economic writers J. S. Mill
(Principles of Political Economy, bk. ii. ch.
ii. § 2) makes the characteristic of commun-
ism "absolute equality in the distribution of
the physical means of life and employment."
H. Sidgwick again {Principles of Political
Economy, bk. iii. ch. vii. § 3) restricts Com-
munism and Socialism to systems which in-
volve either the almost entire abolition of
private property, or its restrictions to con-
sumers' wealth.]
COMPAGNONNAGES. These were associa-
tions of itinerant workmen in Italy, France,
and England, formed with the purpose of pro-
viding members with food, lodging, and em-
ployment; differing from the craft -guilds in
that the latter were local, while the compag-
nonnage was a widespread organisation with
local branches. A house of refuge, presided
over by an officer called the "mother" of the
lodge, was maintained in every town. Here
board and lodging were provided for members
of the society. Membership was tested by
secret signs and passwords. Such employment
as was to be found in the place was distributed
to members in rotation, the last comers having
a prior claim to those who had already had
work in the town. The origin of the compag-
nonnages is involved in legend, but they appear
to have started in Italy, and to have spread
thence through France during the 12th century
into England. In France they were closely
connected with the order of the Knights of the
Temple. They were divided into three main
branches under the names of " Enfants do
Salomon," "Enfants de maitre Jacques," and
"Enfants du pere Soubise." The two formei
368
COMPANIES
divisions contained men of various trades, but
the last was composed of thatchers and plas-
terers only. The rivalry which existed between
these divisions gave rise to sanguinary conflicts,
and the compagnonnages, originally useful in
protecting workmen against seignorial oppres-
sion, tended to assume the character of secret
societies, and to become sources of riot aad dis-
order. They were the object of much repressive
legislation from the 16th to the 18th century,
and in France were finally abolished in 1791.
[Block, Dictionnaire gin^ral de la Politique,
1873. — Dictionnaire de VEconomie Politique,l852.
— Nouveau Dictionnaire d'^conomie Politique,
1890.] A. H.
COMPANIES.
Companies, English and Scotch Law, p. 368 ; Increase
of, p. 369 ; Influence on Business, p. 370 ; Companies,
City of London, p. 371 ; Companies, Staple, p. 373 ;
Companies, Trading, p. 375 (see Foreign Trade, Regul-
ation of).
Companies. English and Scotch Law.
The primary idea of partnership is the associa-
tion of persons, mutually acquainted, for the
purpose of commercial enterprise, that is, to gain
something. Mutual acquaintance and mutual
choice and confidence result in personal relations
between the partners ; one can bind his fellows
in the way of the partnership business ; when
one dies or when his circumstances undergo a
material change, the remaining partners can
withdraw their confidence or resist the introduc-
tion of his representatives or assignees whom
they may not know, and the continuance of the
partnership then becomes impossible. As the
outside world looks to the partners themselves,
when they are known, or even when only some
of them are known, credit is given to them and
they are all either directly or ultimately liable
to the creditors of the firm. Joint-stock com-
panies as usually formed are built up by stated
contributions from those who form them ; the
element of mutual personal choice disappears ;
the shares are transferable ; the management is
carried on by the officials of the company to the
exclusion of the individual shareholders as such.
The transition from simple partnership to joint-
stock companies was hampered in England by
the persistent application by the courts, to all
forms of association, of those principles which
are applicable in fact only to simple partnerships
founded on mutual personal choice. In Scot-
Land the transition was at first rendered easy by
a diff"erent set of principles borrowed from Con-
tinental and Roman law. The Scottish com-
mon law recognises even in simple partnership
a separate quasi-personality, in virtue of which
it can sue and be sued by even its own partners,
can enter as a partner into other partnerships,
and is primarily liable for all_ the debts of the
joint undertaking. Primarily only, however ;
ultimately the partners are liable for all the
debts of the firm. A natural outcome of this
doctrine of separate quasi-personality, which
was at the beginning of last century more
broadly stated as a doctrine of separate person-
ality, was that where a joint-stock companj
took care not to introduce the names of its
partners into its collective name, but used a
descriptive name of its own (compare the French
Sociiti anonyme), the creditors of the concern
were held to have given credit not to any in-
dividual partners, but to the separate entity
which had been created by their joint con-
tributions. Accordingly it was decided in
1727 that the partners of the Arran Fishing
Company were not personally liable beyond
their shares in the company. Thus the Scot-
tish law was at that early date within easy
reach of the principle of joint-stock companies
with limited liability.
The Scottish lawyers of the day appear to
have considered that to obtain a royal charter
was a superfluous though dignified measure ;
they explain that such a charter n»eeded no
legislative sanction, such as is necessary where
monopolies are to be conferred, because the
powers conferred were already in accord with the
common law ; there might, however, be an ad-
vantage in the explicit limitation of liability
which was set forth in the charter. In England
the current? idea of the time was that limited
liability companies were, generally, contrary to
public policy ; and English ideas began to affect
the Scotch legal mind. In Scotch legal procedure
it became customary and then necessary to add
to the name of a company the names of at least
three of its partners as such ; confusion was
introduced by the Scotch use of the word
"company" to mean simple personal partner-
ship as well as joint-stock company. In the
leading case (1778) of the banking firm Douglas,
Heron, and Co., generally known as the Douglas
Bank or the Ayr Bank, it was decided that the
liability of the partners was not limited, appar-
ently because of the ^emi-personal name of the
firm ; this shook the confidence of Scotch in-
vestors in all joint-stock companies ; next the
Bubble Act, passed in 1719 after the South
Sea crash, prohibiting companies from acting
as corporate bodies with transferable shares,
was unearthed and then believed to apply to
Scotland ; and the Act 7 Geo. IV. c. 67, empower-
ing private banking companies to sue and be sued
in the name of their principal officer on certain
conditions, was believed to confirm by implica-
tion the view that joint-stock companies were
no more than simple partnerships, and that
consequently liability could only be limited by
special and separate contracts with creditors.
But even in Scotland, and even at that time,
there was a doubt as to how things stood when
the partners of a joint -stock company were
known ; and in extensive undertakings above
the rank of ordinary commercial partnerships
a favourite expedient was to obtain a ro-yal
COMPANIES
369
charter which placed the question beyond
doubt by the creation of a mercantile corpora-
tion. Such a corporation was a distinct
individual, with its own estate and liabilities,
a corporate name, and its own seal ; it could
sue and be sued, and was managed by its own
officials to the exclusion of the shareholders :
it could hold lands without the intervention
of trustees ; it had perpetual succession and
transferable shares, could make bye-laws, and
could not be dissolved except by surrendering
its charter ; and when its property was ex-
hausted, its creditors had no other funds to
look to for payment of its liabilir-ics.
Even with regard to chartered companies in
Scotland the legislature (6 Geo. IV. c. 91,
1825) empowered the crown to insert in charters
a condition of unlimited liability ; and in the
charters of the National (1825) and Commercial
(1831) Banks the liability is stated not to be
limited by the charters. An act of 1837 re-
pealed this ; and from that date, before whicli
the circumstances in England and in Scotland
had, so far as regards the powers of joint-stock
companies and the liabilities of their share-
holders, become practically the same, a long
course of legislation has step by step evolved lor
the whole United Kingdom the principle oi'
registered joint-stock companies either with or
without limited liability (see Companies, In-
crease of) ; the governing statute now being
the Companies Act 1862, upon which attend a
number of supplementary statutes bearing the
same name in successive years : the whole now
forming a mass of legislation sorely in need of
consolidation.
Where a proposed company tends to invade
the privileges of the public, legislative sanction
is necessary for its formation with the desired
powers ; for example, companies having mono-
polies such as the Bank of England and the
Bank of Scotland, upon which a monopoly of
Scottish banking was conferred for twenty-one
years, both of which have charters following
upon statutes. Railway companies and others
having aggi-essive powers are formed directly by
private acts of parliament ; and for companies of
this order a considerable measure of uniformity
in administration is secured through the opera-
tion of the various general Clauses Consolidation
Acts of 1845, and amending statutes. A. d.
COMPANIES, Increase of. The marvel-
lous expansion of joint-stock enterprise during
recent years may be clearly seen from the
following figures, which show the respective
numbers of limited companies registered in each
successive year since 1863. They are taken from
the last return issued by the Registrar of Joint-
Stock Companies, and do not include companies
incorporated under special Acts of Parliament —
as, for instance. Railway and Canal Companies
— but only such companies as were incorporated
under the Companies' Acts.
VOL I.
•6
c
-a
q
1
'6
1
a
1
^3
1
»
OQ
^
m
OQ
*-*
1S63
689
24
20
1877
80S
83
47
186U
893
17
34
1878
72(5
61
28
1865
902
29
42
1870
876
58
34
7S66
656
33
37
1880
1074
65
31
1S67
412
14
14
1881
1394
72
29
1S6S
392
20
13
188-2
1393
95
38
1869
417
13
11
1883
1416
108
106
1870
518
12
15
188h
1282
107
54
1871
668
42
31
1885
1257
73
52
1872
912
81
27
issa
1647
87
51
1873
lOGl
62
42
1887
1808
91
46
187k
1076
63
18
1888
2278
120
67
1875
1035
45
24
188!)
2455
133
70
1876
831
64
29
1890
2769
145
91
[See Companies, Increase op, Aiij^.]
The figures for 1891 showed a large falling
off, which was continued by the effects of
the financial difficulties in South America
and the Baring crisis ; but there can be no
doubt that these were merely temporary
hindrances, and that a tendency so marked
must continue to exist and will even increase
in intensity. It cannot be disputed that the
expansion of joint-stock enterprise will pro-
duce considerable economic changes ; these
changes depend on certain characteristics of
joint-stock as distinguished from private imder-
takings, the most important of which are the
following : (1) A company is an artificial unit
created by law, inaccessible to several of the
motives and independent of several of the inci-
dents to which a single trader or a private
partnership is subject. The failure of a com-
pany does not in itself affect the mercantile
standing of any person, and there may be there
fore more temptation to enter on risky enter-
prises ; on the other hand, the freedom from
any ties of personal friendship or moral obliga-
tion makes it easier to conduct business on
strict rules (e.g. in the gi-anting of credits).
A private ti'ading concern generally depends on
the continuation of one or more lives, and also
on the continued wish of a limited number
of individuals to carry it on ; a company is
generally formed for an indefinite time, and
has a much greater chance of continued ex-
istence. No one would enter into a transac-
tion with a private firm, involving the continu-
ance of its solvency for a long number of years
as, for instance, when a life policy is taken
out which may not become payable for eighty
years or more. (2) The persons engaged in
the management of a company are not so
directly interested in its success as the partners
of a private firm. It may happen, and has
happened, that directors or managers have
actually had interests hostile to the company
over which they were placed, through being
more largely benefited by the success of com-
peting undertakings, or through having sold
shares in the hope of repurchasing them at a
cheaper price. They may also for various
370
COMPANIES
reasons be desirous of creating a momentary
advance in the price of the shares, and with that
view enter into transactions showing large
profits on paper, but seriously compromising
the continued prosperity of the undertaking.
(3) Joint-stock enterprise favours the creation
of businesses carried on on a large scale*, and
renders the existence of smaller establishments
more difficult. (4) The greater publicity of
business transactions and of their results is
another of the leading characteristics of joint-
stock companies.
The expansion of joint-stock enterprise, and
the gradual absorption of private trading con-
cerns, will probably produce the following
results : (1) The profits of private traders will
be diminished — ^because the expenses of man-
agement must necessarily be much smaller in
proportion in the larger establishments, the
existence of which will be facilitated by joint-
stock enterprise, than in the smaller undertak-
ings carried on by individuals, and because the
former class will therefore be able to outbid the
latter class until their own level of minimum
profits has been reached. (2) Numerous oppor-
tunities will be created for employment with a
fixed income. The small tradesman who now
has some chance of acquiring wealth, but who
runs a constant risk of being deserted by his
customers, will become a clerk in a large estab-
lishment and thus acquire a more modest, but
much less precarious source of income. (3)
The man of real talent will have a better
opportunity of acquiring a proper position,
because he will not disappear in the crowd, but
rise from step to step in the establishment in
which he works. (4) The expansion of joint-
stock enterprise will facilitate the introduction
of improvements and inventions, as the proba-
bility of the presence of inventive persons is
much greater in large than in small establish-
ments, and as large establishments are in a
better position to try experiments which may
prove costly and unsuccessful. (5) As regards
the relations between employers and workmen,
the further development of joint-stock enterprise
will probably prove beneficial. The decrease
in the number and the increase in the size of
industrial establishments will facilitate com-
binations between employers as well as between
workmen ; but this fact will also facilitate
negotiations, and the contest will lose much of
its bitterness when the workmen are no longer
opposed to private individuals whose wealth
and manner of living is conspicuously before
their eyes, but on receiving their wages from
impersonal companies, the profits of which are
ascertainable by everybody. The publicity of
profits will also facilitate profit-sharing arrange-
ments.
It will thus be seen that the gradual sub-,
stitution of joint-stock in the place of private
enterprise will in all probability lead to a
general levelling of profits and incomes, and
will at the same time in many ways facilitate
the general production of wealth ; but some of
the above mentioned facts will, on the other
hand, tend to increase the motives and oppor-
tunities for unsound trading. It is clearly
within the province of legislation to counteract
these motives and opportunities, but it is
difficult to devise efficient means for that
purpose. It has been proposed to introduce
a system of registration requiring — in imitation
of the provisions on that subject which are
in force in some continental countries — -an
investigation of the circumstances attending
the formation of a company and the sub-
scription of a certain part of its capital,
previously to the issue of the final certificate
of incorporation ; and the existing law has
some stringent provisions with regard to the
liabilities of the promoters and directors of
companies for statements or omissions in
prospectuses ; but the object of provisions of
that sort is more the protection of investors
than the prevention of unsound trading ; they
may, in fact, even increase unsound trading
by preventing prudent and solvent persons
from joining the boards of new companies.
Unsound trading — that is, trading without a
chance of profit, or with overwhelming chances
of loss — cannot be entirely prevented, but
the legislature might, by insuring its detection,
or by removing its inducements, succeed in re-
stricting it as much as possible. Compulsory
yearly balance sheets, and a compulsory yearly
valuation of the assets by independent pro-
fessional auditors would do much in that
direction. A more active participation of the
shareholders in the meetings of the company
would also act as an efficient check on directors
and managers ; but legislation is powerless in
that respect. If the principle of reserve
liability (the liability to pay an additional
amount on each share in the case of a winding
up) was made compulsory generally, share-
holders would possibly become more watchful ;
and, as in any case stock exchange gambling
in the shares of companies would become im-
possible if such a measure were adopted, as
it would take away the possibility of obtaining
loans on the shares, one of the chief motives of
unsound management would in this way be
removed. There are many other means by
which the dangers pointed out above may be
counteracted in a certain measure, and the
attention of legislators may be usefully directed
to a subject the importance of which will, if
the present tendency continues, become more
conspicuous every year. e. s,
COMPANIES. Their Influence on Busi-
NESS. In the marvellous industrial develop-
ment of the past half century, joint-stock
companies have played a most important part.
Their influence is not to he measured merely by
COMPANIES
371
the magnitude of the capital that has been em-
barked in them, enormous although that has
been. As to the amount of that capital, un-
fortunately no exact statistics are available.
From parliamentary returns it appears that
from the commencement of the Companies Act,
1862, to the 31st December 1890, there had
been registered in the United Kingdom, com-
panies with an aggregate nominal share capital
of about £3,970,000,000. Of these companies,
however, a multitude never got beyond the
registration stage, which is only the preliminary
to an appeal to the public for capital. Others
again, which it was attempted to float, failed to
meet with support ; while many that were
constituted had to be content with a smaller
capital than was at first intended. Besides, in
the great majority of cases the nominal capital
is greatly in excess of the paid-up or working
capital. The amount of proposed capital thus
affords no guide to the amount of capital actu-
ally invested and used in business. According,
however, to the calculations of the registrar
of joint-stock companies, the paid-up share
capital of the registered joint-stock companies
of the United Kingdom carrying on business on
the 30th of April last was £775,000,000 ; if to
that be added the capital raised by debentures,
mortgages, etc., it is probably not over the
mark to estimate that the capital embarked
by our joint-stock companies thus exceeded
£1,000,000,000. But, as has been said, it is
not so much the magnitude of the capital of the
joint-stock companies as the way in which it
has been employed that has influenced business.
Joint-stock capital is essentially more venture-
some than that of individual traders. The
limitation of liability has enabled risks to be
run and experiments to be made which would
never have been ventured upon had it been
necessary for those by whom they were under-
taken to stake their whole fortune upon the
result. Hence it is that the companies have
to a large extent acted as the pioneers and
promoters of private enterprise. They have
exploited all manner of new inventions, that
otherwise might have fallen still - born, they
have opened up new territories, have developed
transit facilities all over the world, and girded
the earth with the meshes of the electric tele-
graph. Thus they have not only opened up
new fields for trade, they have also afforded the
physical means by which these maybe exploited ;
and further to some extent, by means of banks,
finance houses, and similar institutions, pro-
vided traders with the requisite capital. In
these ways they have given an impulse to
business far beyond the extent of their own
operations. To them also another feature of
recent times, the now decided tendency to a
lower level of the prices of commodities in
general, is in no small measure due. Supplies
of commodities have been increased by the
enlargement of the area of production ; cost oi
transit has been reduced : and, by steam and
telegraph, markets have been brought into such
close contact that the former need for large
stocks of goods has been reduced to a minimum.
Further, a lower standard of profits has been
established. Shareholders whose sm-plus capital
is invested in an undertaking are naturally con-
tent with a smaller return than the individual
trader who derives his whole income from a
similar business ; while the publication of
their accounts by trading companies, and the
great mobility of capital under the joint-stock
system, ensure that whenever on any business
a high rate of profit is being earned new capital
will flow into it, and, by creating keener com-
petition cause profits to be curtailed. The flow
of money into business too has been made
somewhat more direct. In the collection and
distribution of the surplus capital of the country
the banks do not play quite so great a part as
they previously did. Some portion of what
would formerly have been deposited with them,
and by them lent out to traders, now goes
direct into the hands of the companies, and this
no doubt is one amongst other causes that have
in recent years led to a continuous decrease in
the amount of bills negotiated, notwithstand-
ing the enormous increase in the volume of
business. Such are some of the influences
which joint-stock companies have exercised
upon business. That their influence has not
been altogether for good is notorious. Through
them hundreds of millions have been wasted on
chimerical enterprises, or gone into the pockets
of fraudulent promoters ; and shareholders have
suffered grievously through the ineptitude or
extravagance of the management. The question
of comparative losses and gains, however, lies
beyond the scope of these remarks.
[Compare Adam Smith, Wealth of Natioyis, bk.
v. ch. i. — J. S. Mill, Pol. Econ., bk. i. eh. ix.
§§ 1, 2.] E. J.
COMPANIES (City of London). The city
companies formerly constituted the administra-
tive machinery by means of which the munici-
pality of London exercised a minute supervision
over trade and manufacture ; while, on the
other hand, freedom of one of the companies was
a necessary qualification for the civic franchise.
Though their trade functions have with very
few exceptions (vide infra) long since become
obsolete, they still form an integral part of
the London municipality, and they administer
great revenues. The companies, therefore, are
the most important survival of the industrial
and municipal system of the Middle Ages.
It has been argued that some of the guilds,
which became later the chartered companies,
must have existed in Anglo-Saxon times, but
there is no documentary evidence in support
of this contention. The Pepperers, the Gold-
smiths, and others, were amongst the adulterin';
372
COMPANIES
guilds amerced in the reign of Henry II., and
the Guildhall is mentioned circa 1212. During
the 13th century the influence of the city guilds
increased, and gradually freedom of a guild
and the civic franchise became practically
convertible terms. Edward III. incorporated
many of the trading fraternities, and hftnself
became a member of the Linen-Armourers. In
1377 there were no less than forty -eight of
these fraternities. In the same year the right
of election of the city officers was transferred
from the wards to the companies, but this
arrangement led to tumults and discontent
amongst the citizens, and "the approved and
established practice of ancient and praise-
worthy usage " was restored {Liber Albus, 37).
The Grocers, originally founded by twenty-two
pepperers of Soper Lane (now Queen Street),
were apparently the most powerful of the
companies at this time. There were complaints
of their monopolising tendencies in 1363, but
in 1385 and the two following years they were
able to return Sir Nicholas Brembre to the
mayoralty " be strong hand of certayne craftes "
(Heath, Account of the Grocers, 443 ; Aungier,
Groniques de London, xvii. ; Bot. Pari., II.
278; Herbert, Livery Gompanies, i., 38). The
companies' charters were inquired into by the
commission of Richard II. (1389), but they
were confirmed and extended in subsequent
reigns. It is evident that in the 16th
century trade and industry had outgrown the
regulations of the Middle Ages, and the ex-
clusive privileges of the companies demanded
some relaxation. But new companies continued
to be incorporated till the reign of Charles II.
At the Reformation their trust estates, which
were charged with the support of chantries,
obits, and lamps, were vested in the Crown
(37 Henry VIII. c. 4 ; 1 Edward VI. c. 14,
§ 6). They were afterwards allowed to purchase
these confiscated lands in the reigns of Edward
VI. and James I. The terms of the grants
then made have since been held by the court
of Chancery to have vested in the companies
the same absolute property in these lands
which the act of Edward VI. vested in the
crown. "They have thus been, since the
Reformation, in the eye of the law, the corporate
property of the companies, free from any trust.
But these crown grants may be reasonably
taken to have been made in the expectation
that the income would continue to be in great
part applied to charitable uses" (Liv. Comp.
Gam., i. 40, and infra).
The seizure of the chauntry estates was
followed by a statute (2 & 3 Edward VI.)
which licensed all manner of workmen con-
nected with the building of houses, etc., to
exercise their occupations in cities and towns
corporate, though they were not free of the
corporations. This act was afterwards re-
pealed, and the position of the companies was
strengthened by subsequent legislation {v. Ap-
prenticeship, Statute of). The charters ol
James I. constituted "courts of assistants,"
the first legal appointment of which was made
by Mary on the formation of the Stationers'
Company (Herbert, Liv. Gomp., i. 118), foi
the government of the companies. The system
of forced loans from the companies, which was
extensively practised by Henry VI II., was
continued in the following reigns by precepts
from the lord mayor, and during the civil
wars there were periodical payments of large
sums of money. In 1652, a committee was
appointed to ascertain the validity of the
charters of different existing corporations,
when the Grocers' charter was called for. But
Cromwell granted them a new charter, enabling
them to make bye-laws for their own govern-
ment, and conferring on them the power of
levying a fine of £30 on each member at his
admission. At the Great Fire (1666) many
of the companies' halls were destroyed, and
important documents and deeds were burnt.
When Charles II. made himself Master of
the Corporations in 1684 by action of quo
warranto, the companies surrendered their
charters, but they were restored at the
Revolution <1 688).
The city companies have several times in
this century been made the subject of public
inquiry {v. Municipal Corporations Commission,
1833; Charity Commissioners* Reports; Educa-
tional Endowments Committee of the London
School Board, 1876-79 ; Livery Companies
Commission, 1880-84), and their present posi-
tion may be thus briefly summarised. The
extensive powers which they formerly enjoyed,
in the control of the London trades, have long
since been repealed by statute or fallen into
disuse. But some of the companies still enjoy
exclusive trade privileges {v. Apothecaries' Act,
1815 ; Apothecaries' Act Amendment Act
1874, 41 Geo. III. c. 69, § 13 ; and the
Copyright Act, 1842). There are at present
twelve "great companies" and sixty minor
companies. The civic precedence of the former,
— mercers, grocers, drapers, fishmongers, gold-
smiths, skinners, merchant taylors, haber-
dashers, salters, ironmongers, vintners, and cloth-
workers, dates from the reign of Edward III.,
and Sir R. Wilmot (1742) was the first lord
mayor who did not belong to one of the twelve
great companies. Membership was probably
never confined to the craft or the trade which
the company represented. It is obtained by
apprenticeship, real or colom-able, patrimony,
redemption, or election honoris causd. Though
there are now few freewomen of the companies,
sisters were formerly admitted on the same
terms as men, and attended the banquets
and entertainments. There are three gi'adea
of membership : the court, or governing
body, self- elective ; the "livery," limited ir
COMPANIES
373
numbers ; and the simple freemen. The
courts, consisting of the master, wardens, and
assistants, have the entire control of the
companies' affairs, the appointment of the
staff, the management of corporate property,
the administration of charitable trusts, the
admission to freedom, livery, and court, etc.
Members of the companies are entitled, in case of
poverty, to admission to almshouses, pensions, or
other charitable reliefs. Till 1835 the freedom
of the city could be obtained only through a liv-
ery company, but in that year the municipality
decided to confer it irrespective of the com-
panies on certain terms through the city
chamberlain. But the "common hall," in
conjunction with the court of aldermen, still
chooses the lord mayor. The companies'
estates lie in the city of London, in various parts
of England, and in Ulster, where they were
compelled to purchase and colonise certain lands
in 1609. The capital value of their property
was estimated at not less than £15,000,000, and
the total income thence arising, in 1879 or
1880, at from £750,000 to £800,000. The
accuracy, however, of these figures was disputed.
Their income falls into two divisions : (1) Cor-
porate Income, i.e. income which is at the
absolute disposal of the companies, estimated
at £550,000 to £600,000 per annum (1879 or
1880) ; and (2) Trust Income, i.e. income which
the companies or their courts are bound to
apply in accordance with {a) the wills of
founders, (h) acts of parliament, (c) the decrees
of the Court of Chancery, and {d) schemes
framed by the charity commissioners, and by
the commissioners of endowed schools. The
companies' corporate income is expended in
maintenance, entertainments, and benevolent
objects : such as the relief of poor members ;
education, exhibitions at Oxford and Cambridge,
University and King's Colleges, London, the
companies' schools, the London school board,
Girton and Newnham Colleges, etc. ; technical
education, the Yorkshire College, Leeds, the
technical schools at Huddersfield, Bradford,
etc, in connection Avith the City and Guilds of
London Institute, the Technical College in
Finsbury, and the Central Institution in South
Kensington ; and in the support of some of the
London hospitals. The Companies' trust
income is expended in the relief of poor
members, almshouses, etc., education, and on
charitable objects of a general kind. It
appeared (1884) that about half of the total
income of the companies was devoted, either
under the terms of benefactions or voluntarily,
to public or benevolent objects. But "the
majority of the commissioners were of opinion
that the law of trusts in its application to the
increment of the companies' city house-property
had promoted the increase of the companies'
corporate estate at the expense of their trust
estate" {Liv. Camp. Com., i. 42). The com-
missioners proposed various measures of reform,
the most important of which were the restraint
of alienation, by the application to the com-
panies of § 94 of the Municipal Corporations
Act, 1835 (5 & 6 Will. IV. c. 76), the
publication of accounts, and the appointment
of a commission to undertake (i) the allocation
of a portion of the corporate incomes of the
companies to objects of acknowledged public
utility ; (ii) the better application of the trust
incomes of the companies ; and (iii), should it
prove practicable, the reorganisation of the
companies. It may be pointed out that the
companies were formerly bound to contribute
to various public works. Amongst these may
be mentioned the employment of the poor,
military and naval armaments, the provision
of coal and corn, and the protection of the
city.
[The materials for the history of the city
companies are extensive ; see especially Riley,
Munimenta GUdhallce Londoniensis. — Riley,
Memoi-ials. — Croniques de London, ed. Aungier
(Camd. Soc.) — Liber de Antiquis Legibus (ed.
Stapletou (Camd. Soc.) — Herbert, Hist, of ilw
Ttvelve Great Livery CojnjMiiies. — Heath, Account
of the Grocers. — Norton, Commentaries on the
Hist, of Lond. — C. M. Clode, Memorials of the
Merchant Taylors, 1875. — Gross, Gild Mer-
chant.— Cunningham, Growth of English Industry
and Commerce. — Loftie, Hist, of Lond. — Rot.
Pari., Municipal Corporations Commission (1835-
37). — Livery Companies Commission (1884).]
W. A. S. H.
COMPANIES, Staple. It is by no means
difficult to understand the cause which led
merchants trading independently to form them-
selves into companies for certain purposes.
The dangers of travel, the difficulties arising
in the places where they desired to trade,
made combination almost a matter of necessity.
To satisfy those needs leagues such as the
Hanseatio League {q.v.) were formed ; but
when formed, other reasons led to the in-
troduction of an organisation much closer
and more complete than was necessary for the
two foregoing ends. In the first place,
combinations were more natural to the time
than competition, and, as in the case of in-
dustry the Gild {q.v.), so in the case of com-
merce, the company, became the cential feature.
Further than this, the formation of the com-
pany, following closely one of the primary
causes of the guild, was answerable for its mem-
bers. The sovereign made certain concessions
to foreign merchants trading in his countr}^,
and they combined to accept these concessions
and to regulate their conduct and their members
by them. Of such organisations the institutions
of the Hanse furnish many examples, the
Steelyard (q.v.) in London being one of the
most prominent among them. But in the case
of our own country, not only did the king ordei
the comings and goings of the merchant strangers,
374
COMPANIES
as to his own dominions, but it was only by
his permission and under his direction that the
English merchant could trade abroad with any
certain hope of government support should he
suffer wrong from foreign powers. In this con-
nection it is that we are forced to consider the
institution of the Staple. Individuals * had
traded and formed bands for the occasion, but
the organisation of the staple first secured to
the English trader a firm and steady footing.
The Staple was an organisation whereby aU
or the chief articles of export were ordered to
be sent for foreign sale to certain fixed places
on the continent (Schanz, vol. i. p. 329). Dif-
ferent staple towns might be assigned for the
sale of different commodities. There is a variety
of testimony as to the first introduction of this
system ; it is traced back by some to 1248, but
while there is no certain authority for assigning
it to so early a date, there is no doubt that the
system of the staple was fuUy recognised in the
reign of Edward I. In the reign of Edward
III. it becomes of the highest political import-
ance. To a large extent indeed it must be
viewed as a political institution. It was in-
troduced by the government and used by it for
certain ends of its own. In the first place the
institution of the staple in any town was a
bribe to tlie sovereign within whose domains
that town lay. In the second place, it provided
an easy means for the collection of the export
duties levied on commodities sent out of the
kingdom. It may weU be asked how far it
aided English trade. Foreign traders indeed
were permitted to enter into the staple organisa-
tion on equal terms with English. But though
this was the case, the exceptional rights of
jurisdiction and privileges granted to the com-
pany of the staple encouraged the English ex-
porter to send his commodities abroad now that
that could be done with every security and under
favourable conditions. It may have assisted
the development of trade among foreigners, but
it certainly increased the traffic of the English
on the continent. Each concession promised
to the English king by foreign princes to induce
him to establish the staple within their particu-
lar boundaries meant a corresponding advantage
to the traders who were included in the staple,
and most of these were English. The organisa-
tion of the staple was effective. The merchants
of the staple elected their mayor, who exercised
great power. He dealt speedy justice according
to the Law Merchant {q.v.) ; he rdgiilated
prices ; and it was his function to arrange the
various dues which had to be paid, and to see
that there was necessary accommodation pro-
vided for storing goods, etc.
But while the staple was the institution on
the maintenance of which the well-being of the
English trade of the 13th and 14th centuries
chiefly depended, the commercial necessities of
later years brought into prominence traders
whose main purpose it was to exercise their func-
tions outside the staple towns. The staple had
been useful, but it neither directly supported the
interests of the English trader as distinct from
the foreigner nor did it provide means whereby
the trade might be extended into new countries.
This was the work of other and chiefly of ono
other organisation. Already in the 1 4th century
there were separate bands of merchants trading
outside the staple. These were the merchant
venturers of different cities. But though they
were termed companies of merchant venturers,
it must not be supposed that they were in any
kind of partnership, or that the bond existing
between them was of any very stringent nature.
There were companies of merchant venturers in
York, Newcastle, Bristol, etc., and they were
engaged in the most different directions. Some
were adventurers to Iceland, some to Prussia,
others into the southern countries. But the
importance of these various bodies trading to
various parts was thrown into the shade by the
pre-eminence accorded to those engaged in the
trade between England and the Netherlands.
It was to them that the name of merchant ad-
venturer particularly attaches (v. Adven-
turers, Merchant). There is considerable
doubt as to their origin. Most probably their
history may be traced back (Wheeler, Treatise
of Commerce) to the grant of privileges made
by the Duke of Brabant to the English mer-
chants trading in his domain. Thereby they
became entitled to appear on equal terms before
the tribunals of the land in the case of quarrel
with natives, while special rights of jurisdiction
were gi-anted to them for settling disputes
among themselves. This particular jurisdiction,
according to Schanz, was the bond of union
ultimately developed. It is probable also that
prominent among the English traders was the
brotherhood of St. Thomas of Canterbury, and
that grants made in common to the English
were appropriated gi-adually by this society.
But as yet there was no sign of any close union.
At this time the connection of the merchant
venturers in Flanders and the Netherlands with
the organisation of the staple was very close
indeed — so close that the mayor of the staple
exercised a supervision over the traders in towns
other than the staple. But when the staple
was fixed at Calais, and when the cloth trade
with Antwerp grew into sudden importance, as
in the beginning of the 15th century, such
relations were impossible. In 1407 the right
was granted to the traders in the Netherlands to
assemble and elect a governor who might regu-
late such matters as were common to them all.
This was the second stage in the history of the
merchant adventurers. The first marked their
origin, the second their separation from the
staple. But of any formal incorporation there
Avas no mention. That such was as yet the case
is contradicted, Schanz thinks, by the fact that
COMPANIES— COMPENSATION
375
the various members belonged in England to
various companies. But this continued in after
times, when the merchant adventurers had long
won the grants they sought. The third period
in their history was under the Tudors.
Henry VII. was well aware of the import-
ance of trade between the Netherlands and
England. The conduct of that trade was
chiefly in the hands of the London merchants,
who did all they could to exclude others from
participating with them in its benefits. This
they hoped to effect by demanding from each
newcomer a certain and not insignificant sum
to pay for the costs of the governors or consuls,
and to serve as insurance or surety money.
That such an attempt could be made marks, of
course, the growth which had taken place in
the cori)orate direction. Hitherto nothing had
been done to recognise the legality of such
growth, but it was recognised at length when
Henry VII., to set at rest all doubt and to
prevent all extortion, decreed that every mer-
chant should be free to trade to the Nether-
lands undisturbed on payment of a certain sum,
much less than that which had been demanded,
to the body of the merchant adventurers. From
this moment their energies, both in the cause of
trade and of monopoly, were redoubled. On the
whole they met with support from Henry VII.
and Henry VIII., who could not fail to under-
stand their importance. In their great struggle
with the staplers, though no definite grant gave
victory to either side, they were enabled to
snatch the substantial fruits of victory by
gradual encroachment. As a matter of fact
the organisation of the staple had become anti-
quated. The new trade was not such that it
could be directed in regular channels and re-
stricted to particular places ; thus, when the
staple lost its rights over the country beyond
the towns of the staple, assert them though it
might within these towns, it had lost far more
than it retained. The traders of the staple
had to pay their dues to the merchant adven-
turers when they traded outside the particular
towns assigned to them.
The encouragement given to the younger
corporation was wise ; by it trade was taken
out of the hands of the foreigners and placed
in those of the English. Thus, indeed, it is
that the policy of this society was a part of
that great policy of adventure which marked
the end of the 15th and the whole of the
16th centur3\ And as the organisation of
the merchant adventurers grew more rigid
it lost its mobility, and in its turn it had
to see much trade fall into the hands of
new companies. The company of the merchant
adventurers consisted of traders engaged in
individual enterprises but united for purposes
of jurisdiction and having rights of monopoly.
But now new countries were about to be
opened up, and new bands of traders appear,
having common interest in the ventures they
were undertaking. They grew into importance
during the reign of Elizabeth, from whom,
by the wise advice of Lord Burghley, they
met with support. The queen and her minister
themselves were often sharers in the ventures.
There was something else done for them besides
this. The originators of the expeditions, and
thus the principal venturers therein, in return
for their toil and their risk were granted rights
of monopolising the trade in the region to
which they were setting sail. They did not
form company partnerships in the ordinary
sense of the words, they had monopoly
rights, and each expedition was separate and
distinct in which the original grantees and
their friends made venture ; but gradually
these expeditions became regular, and in like
manner it would appear the amount of each
man's venture became fixed by custom. This
process may be traced in the history of the
East India Company {q.v.), founded 1599, in
its development from the IjEVANT Company
(g-.v.), founded 1592. Among other companies
may be mentioned. Company of Merchants
trading to Spain, Russia Company, African
Companies, Eastland Company, Company of
Cathay, Turkey Company, Hamburg Company.
In due time the policy of granting monopolies
])oth to these companies as also to the merchant
adventurers became a matter of much debate
{v. pamphlets by Lewis, Roberts, Brent, and
Parker), and in 1672 the rights gi-anted and
hitherto continued were curtailed by act of
parliament (14 C. II. c. 7).
[Schanz, Englische Handelspolitik. — Ochen-
kowski, Engl, toirthsch. Entioickelung. — Wlieeler,
Treatise of Commerce. — Paraplilets by Misselden
and Malynes. There is a spirited but insufficient
description of the growth and importance of these
companies, both Staple and Merchant Adventurers,
in Richard Jones's works, edited by Whewell.]
B. c. K. G.
COMPANIES, TRADING. See Foreign
Trade, Regulation of.
COMPENSATION. 1. Forlandtakencmnp^il-
sorily. — Where land is taken under the authority
of the state for public undertakings the amount
of compensation to be paid to the owner is, il
the parties cannot agi-ee, determined by justices,
arbitrators, a jury, or a surveyor appointed by
the justices, under the Lands Clauses Con-
solidation Act of 1845 (8 & 9 Vict. c. 18). The
act does not prescribe the measure of compen-
sation, though it directs that regard must be
had to damage sustained by reason of the sever-
ance of lands or other injury done to other
lands not taken; In the case of freeholds thirty
to thirty- three years' purchase is usually allowed,
and in the case of leaseholds such a sum as
would at the expiration of the term repay a
purchaser his original outlay and compound
interest thereon. Other items that enter into
376
COMPENSATION— COMPETITION
the amount payable are injury to severed lands,
value of fixtures, loss on sale of stock, costs of
removal, and value of goodwill. Ten per cent
is added to the value of the land for compulsory
sale. Probable increase in value may be taken
into account, but no deduction is made in respect
of the probable increased value of the lands not
taken arising from the work in question. In
the case of land taken under the Artisans' and
Labourers' Dwelling Improvement Acts, 1875-
82, the compensation is to be based on the
principles laid down in the acts, and no addi-
tional allowance is to be made for compulsory
purchase (see Compulsory Taking of Land).
[Law of Compensation, by E. Lloyd, London,
1882.]
2. For Tenants' Improvement. At common
law a landlord was not bound on the termina-
tion of a tenancy to compensate a tenant for
improvements, but in particular localities "cus-
toms of the country " arose under which the
landlord compensates an outgoing tenant for
certain improvements, such as building, drain-
ing, manuring, or preparing land for crops.
These "customs of the country," though most
variable and based on no uniform principle,
came to be enforced as part of the contract of
tenancy. For lists of improvements for which
allowances are made, see Woodfall's Landlord
and Tenant, 1889. In 1875 an act (38 & 39
Vict. c. 92), was passed with the object of
introducing a general law of compensation for
England and Wales. Though based on the
Report of the Central Chambers of Agriculture,
1875, its permissive character rendered the act
largely inoperative. The royal commission on
agiiculture in 1882 reported in favour of mak-
ing the principles of the act compulsory. In
1883 a new act (46 & 47 Vict. c. 61) was passed,
under which an outgoing tenant can claim com-
pensation equivalent to the Value of the follow-
ing improvements to an incoming tenant : — (1)
for buildings, ensilage, pasture, osier-beds,
water meadows, irrigation works, gardens, roads,
bridges, water-courses, fencing, hop-planting,
fruit- planting, warping, and embankments, pro-
vided the improvement is made with the con-
sent of the landlord ; (2) for drainage, provided
notice of the improvement be given to the land-
lord ; (3) for boning, chalking, clay-burning,
claying, liming, marling, artificial manure, and
consumption of feeding stuff not produced on
the holding. The act only applies to agricul-
tural holdings, and affords no protection to a
tenant against the practical confiscation of his
improvements by additions to his rent. As to
compensation for tenants' improvements, or for
disturbance, in Ireland, see 33 & 34 Vict. c. 46,
44 & 45 Vict. c. 49. (Small Holdings, App.)
[The economic aspects of such compensation are
discussed in Sidgwick's Political Economy, bk. ill.
ch. 4. — English Land and English Landlords,
G. B. Brodrick, London, 1881. — Tenant's Gain
not Landlord's Loss, J. H. Nicholson, Edinburgh,
1883.]
3. Land Nationalisation. Some writers ad-
mit that if land were nationalised landlords
should receive compensation ; others deny this
on the ground either that the land is the pro-
perty of the people, or that private property is
injurious to the state. But property is the
creation of law, and in no sense can it be said
that the land "belongs to the people." Even
assuming that it would be expedient to abolish
private property, on the erroneous idea that
ownership was injurious to the state, com-
pensation should equally be given.
[See Land Nationalisation, by A. E. Wallace,
London, 1882. — Progress and Poverty, by H.
George, London, 1881. — Social Statics, by H.
Spencer, London.] j. E. c. M.
COMPETITION and CUSTOM. Wealth
having been produced, is forthwith — or even in
the act of production — distributed amongst
those who have been concerned in its production,
and the share of the product which falls to the
lot of each of these is determined in the
absence of disturbing causes by competition.
Competition has been defined as the free action
of individual self-interest — that is to say,
supposing a given amount of wealth to be
divided amongst four persons, the proportion
of it which each gets will depend on the extent
to which he is superior to the others in the
qualities necessary to the struggle, the strongest
for this purpose getting most and the weakest
least. But competition is more clearly seen in
its results. 1. Granting that every man seeks
to increase his pleasures and reduce his pains,
i.e. to secure an increase of pleasure for a given
amount of exertion, or a given amount of
pleasure for a smaller amount of exertion, we
see that every man will set himself to procure
the necessaries and comforts of life at a minimum
of sacrifice ; no one will work harder for a given
result than he need. The same holds good
when division of labour and exchange appear.
Every man will now strive to exchange the pro-
ducts of his labour for as much as possible ol
the products of the labour of others, for by so
doing he will increase the amount of necessaries
and comforts which his labour commands.
When this process has become general the re-
sult will be that similar exchanges will take
place on similar terms. This is commonly ex-
pressed by saying that there can only be one
price at one time for the same unit of the same
quality of the same article in the same market
(see Market). Thus a quartern loaf of house-
hold bread may be assumed to be at the same
price on the same day all over Oxford, but may
be at a different price in Bristol, Norwich, and
Durham ; a quarter of wheat of the same quality
to sell for the same sum all over England ; an
ounce of silver all over the civilised world. These
are the results of "commercial" competition.
COMPETITION
377
2. Granting that all are striving for a maximum
return to their exertions, producers will betake
themselves to those forms of production which
offer such a return, whether immediately or by
means of exchange. Labourers will go where
wages are highest ; manufacturers will embark
in those industries which give the largest pro-
fits ; capitalists will lend their savings to those
who can be trusted to pay the highest interest.
But in time all these inequalities will vanish.
If occupation A, for example, is crowded because
of the high return which exertion commands in
it, occupation B will be comparatively de.s^.rted,
with the result that the products of B will rise
in value as compared with those of A, and the
rewards of those engaged -will rise and fall pro-
portionately. Ultimately an equality will be
arrived at — that is to say, that whether by
wages, profits, or interest, equal efforts and
sacrifices will secure an equal real reward, how-
ever dissimilar the services by which they are
represented, or the money - payment in which
their reward is given. This is popularly ex-
pressed by saying that "in the long run wages
and profits tend to an equality," and is the
result of " industrial " competition.
Thus far the working and results of competi-
tion have been described in an "economic"
world, among a people, that is, who were actu-
ated by economic motives and no other. It is
commonly brought into relation with the facts
of life by saying that it is a " tendency." This
may mean one of two things— (1) In the eco-
nomic world, as we see, competition is complete
and its results are patent. The possibility, the
vision, of a gi-eater reward for his exertions will
make a man shift his wares from one market to
another, and the same prospect will lead him
to shift himself and his capital from one under-
taking or calling to another so soon as may be ;
with him no other motive can or does interfere.
Competition m actual life is a tendency in so
far as men in the absence of any counterbalanc-
ing motive are swayed by self-interest. The
expression does not imply that self-interest is
more than one motive out of many, but it is
the motive to which alone economists attend,
(2) It is sometimes assumed that competition is
a tendency in the sense that it is a force of
gi'adually increasing strength in determining
distribution. How far competition is a tendency
in this latter sense is a matter of considerable
dispute. It would be quite impossible to dis-
cuss the relative strength at any moment of the
various motives which influence human action,
as, e.g. to show the comparative force of patriot-
ism and self-interest in the average man in two
successive generations. But taking the material
world and the distribution of wealth in it, we
may have definite forces at work which are, so
to say, rivals of competition in this field.
1. Early in the centmy it was taken for
granted that the only serious hindrance in the
way of perfect competition was custom. Custom,
i.e. the doing a thing because others have done
it, has at all times been a powerful influence in
the world. It is seen in both the spheres of
competition. Custom may fix prices year after
year ; custom determines a man's walk in life,
the employment of labour and capital, often to
the exclusion of any other motive. ' ' Heralds
in Sparta," says Herodotus (vi. 60), "are not
so made on account of any special clearness of
voice, but son succeeds father." The younger
sons of the peasant owner in Auvergne leave
their native mountains to work in Paris and
elsewhere, not because wages are higher, but
because it is the tradition to do so in order to
avoid breaking up the family estate. It may
be strongly argued that custom is losing strength.
It is still powerful in the East, more powerful
in Asia than in Europe, in Europe than in
America ; it was stronger and extended over a
wider area a century ago than now ; the pro-
fessions, etc. in which it still lingers among
ourselves are gradually shaking it off ; its dis-
appearance as a factor in exchange would be an
additional illustration of the transition from
status to contract, whicli is said to characterise
the modern as distinguished from the ancient
or mediaeval world.
2. Combination is commonly said to be an
obstacle or interruption to competition, and if
competition be defined as the action of indi-
vidual self-interest, it is, at first sight, incon-
sistent with combination. Thus, e.g. if com-
petition in the above sense is thorough-going,
every workman will make his own terms v/ith
his master, will compete against his fellow-
workmen for employment, will stand or fall by
his own individual strength. The labour'
market will exhibit the spectacle of a three-
fold struggle, viz. of master against master
for workmen, of workman against workman for
employment, and of master against workman
to settle the rate of wages. Remove either of
these by combination of workmen in trades-
unions or of masters in associations, and com-
petition is p7-o tanto diminished. So, too, in
exchange ; here it is the struggle to sell and
the struggle to buy, and the struggle between
buyers and sellers which settles the price. A
combination of buyers or sellers, a "ring" of
any kind, diminishes the competition. In
Michigan, e.g. the sellers of salt, by an agi-ee-
ment to sell through a joint agent only and at
uniform rates, put an end to all competition
amongst themselves. On the other hand it
may be urged (a) that although in both of these
cases competition is in one direction weakened,
in another it is strengthened. The competition
among sellers in the labour or the salt market
is suspended only to increase their strength in
competing with buyers, to enable their self-
interest to act with greater force ; the struggle
is more severe as being between organised
378
COMPETITIOiN
bodies rather than between isolated individuals ;
(b) that all combination is really in the end
dictated by self-interest, and that no one who
joins a combination does so with the idea that
his own interest will suffer, but rather that the
interests of the individuals are bound up with
the interest of the body to which they belong.
3. A third rival of competition is socialism.
In competition, as we have seen, every man is
left to secure for himself what he can of the
wealth which he has helped to produce. Social-
ism would substitute for this "scramble" an
orderly distribution by the state. So far as we
are concerned with it here, socialism would not
directly affect production, but taking wealth
when produced, the state would distribute it by
some one of its organs. The principle of dis-
tribution is immaterial to our subject ; whether
the state proceed on some real or supposed
ground of equity, distribute according to deserts
or according to needs, it will equally put an end
to competition.
For Adam Smith the end of the statesman is
to secure that all distribution proceeds on com-
petitive principles ; the removal of all hindrances
and obstacles to the free play of individual self-
interest is the general lesson of the Wealth of
Nations; whilst at the same time the writer
shows that the results of competition are but
seldom seen in their fulness. For Ricardo com-
petition is a postulate ; his conclusions uniformly
depend on the assumption that all men know
and seek their own interest without let or
hindrance. Mill assumes competition in part,
and in part treats it as a growing force ; much
of his reasoning, like that of Ricardo, starts
from the hypothesis that competition is uni-
versal ; much again of his treatise is devoted to
showing its limitations in practice. Cairnes
has pointed out that these limitations are far
more effective than was supposed in his theory
of mutually exclusive, or, as he calls them,
"non-competing," groups of producers, but his
conclusions have perhaps no claim to finality.
Cliffe Leslie again showed, by some remark-
able instances, first, how much more lasting is
custom than was once thought, and how much
a man's actions are determined by his sur-
roundings, rather than by simple motives such
as self-interest ; and secondly, that the areas
over which anything like equality in prices can
be traced are very small, and that so far the
tendency has been for fresh inequalities to arise
as fast as the old are obliterated.
[See Adam Smith, Wealth of Nations, bk, 1.
ch. X. ; pt. 11. bk. Iv. eh. i.-vill. — Mill, Principles
of Political Economy, bk. 11. ch. Iv. — Cairnes,
Sovie Leading Principles of Political EconoTtiy
newly Expounded. — Cliffe Leslie, Essays in Pol-
itical and Moral Philosophy, xv. xvll. xxi. —
Sldgwlck, The Principles of Political Economy,
Introd. i. HI. — F. "Walker, Political Economy, bk.
ill. ch. i.] L. u. P.
COMPETITION AND Regulation. Where
one man vies with another for the advan-
tage of dealing with a third party, there is com-
petition. Simple examples are : the public at an
auction bidding against each other ; a shopkeeper
lowering his prices to attract custom. The action
of a competitor is less simple when, changing his
occupation, he enters the trade of those with
whom he competes. " The operation of compe-
tition ... by which the terms of similar
exchanges are kept approximately similar
should be carefuUy distinguished from that
other action of competition by which certain
inequalities in the remuneration of dissimila/r
services tend to be continually removed"
(Sidgwick's Political Economy, Introd. ch. Hi.
§ 3). These varieties of competition are distin-
guished by Cairnes as "commercial" and
"industrial" competition {Leading Principles,
part i. ch. iii.) The simpler process may be
illustrated by the action of physical forces
tending to equilibrium. Jevons compares the
equations of "final utility" which determine
market prices to the differential equations
which determine the equilibrium of a mechan-
ical system {Theory of Political Economy, ch.
iv.) The analogies of exact science, the formiilae
of Jevons and Walras, are less helpful when we
regard competitors as balancing the total utilities
of different occupations. The equation of
"net advantages," to ufse Prof. Marshall's
phrase (see Principles of Economics) in different
trades is not very analogous to any theorem in
mathematical physics.
Competition is contrasted with monopoly and
combination ; with governmental regulation,
charity, and custom. The preferability of
competition to these regimes is debated on
grounds which may be distinguished as trans-
cendental and utilitarian.
(1) Competition is advocated as natural in an
optimistic sense ; as consonant with justice and
abstract right. But {a) those who with Burke
maintain that the "laws of commerce are the
laws of nature, and therefore the laws of God,"
employ an argument from design which few
now accept. And (p) the other metaphysical
reasons presuppose an unreal freedom of compe-
tition. Actually, competitors do not start
fair ; inheritance and other causes favour
some ; want of capital, education, opportunity,
handicap many (Wagner, Lehrhuch der Pol.
Oekon., § 100 et seq.) Society is stratified in
"non- competing groups" (Cau-nes, Leading
Principles, ch. iii. ; Mill, bk. ii. ch. xiv. § 2).
Where mobility of labour from one group to
another does not exist, there is no presumption
that competition, thus hampered, effects an
equitable distribution. Even if perfect equality
of opportunity were attainable, natural ability
would still constitute a non-competing group.
Is it clear then that competition between work-
men is "the only way to equity, and that anj
COMPETITION
379
interference with it must involve injustice ? "
(Danson, Wealth of Households, par. 811).
Rather the coincidence of competition with
justice is "a perfectly a priori assumption,
an unproved supposition " (Wagner, loc. cit. )
(2) Rejecting the "metaphysical incubus"
of abstract principles and rights (Jevons, State
in Relation to Labour, ch. i.), let us weigh the
utility of competition. Its tendency to equal
distribution of wealth deserves place under this
head (cp. Bentham, Principles of the Civil
Code, pt. i. ch. vi. ; J. S. Mill, Utilitarianism,
p. 93). Also, in this regime, more than any
other, each individual is stimulated by self-
interest to do his best for the supply of others'
wants. " The difficulty of finding any adequate
substitute for it (the motive of self-interest) is
an almost invincible obstacle in the way of
reconstructing society on any but its present
individualistic basis" (Sidgwick). However,
"trusts" and other modern forms of monopoly
are less blamed for inefficiency than for im-
moderate charges and gains (C. W. Baker, Mono-
polies and the People, 1889).
Competition is an almost ineradicable gi'owth
of self-interested human nature. " Expellas
furca, tamen usque recurret." Combinations
resisting the tendency of this force are liable to
disruption. Professor Marshall says arbi-
trators "must not set up arrangements widely
different from those which would have been
brought about by competition." They should
follow the example of Rennie, who, when he
had to construct a breakwater, first ascertained
"the slope at which the natural action of the
waves would arrange a bank," and then "let
stones into the water so as to form such a slope "
{Economics of Industry, bk. iii. ch. viii. § 2).
Again, competition has the advantage of
tending to a definite determinate adjustment ;
affording a simple intelligible rule, laissezfaire.
Whereas the bargain between combinations is
indeterminate ; or only determinable by some
extra -economic principle not commanding
general assent (Sidg^vick, Political Economy,
bk. ii. ch. X. § 2 ; Menger, Grundsdtze, ch.
iv. ; Edgeworth, Mathematical Psychics, pp.
20-56). Jevons says {Scientific Primer, ch.
vii.), "there is no way of deciding what is a
fair day's wages" outside competition. It is
difficult even to imagine upon what other prin-
ciple certain complicated transactions of modern
trade and industry could be regulated.
Again, competition is a struggle for life
which results in the survival of the fittest.
However, the " selection " is not " natural," but
artificial ; so far as the competitors do not start
fair (Wagner, Lehrhuch, § 135 ; above (1, h)).
Nor is the "fitness" which economical com-
petition tests of the highest order. Success may
be due to cleverness in attracting business, or to
a lower standard of comfort. That a degraded
standard may result from unrestricted competi-
tion is shown in Booth's Life and Labour of the
People in London. Mere survival, adaptation to
"being" rather than "well-being, "is not an ideal.
(Sidgwick, Theory of Evolution, "Mind," vol. i.)
Against the advantages of the " struggle for
life " should also be set the allegation of trade-
unionists that in imregulated competition men
injure themselves by over-exertion (Report of
Trades- Union Commission, 1867), the infantile
mortality, and other evils ascribed to the un-
restricted employment of mothers (Jevons's
State in Relation to Labour, ch. iii.).
Further objections to competition are that it
defeats itself when the successful competitor,
having crushed out his rivals, becomes a mono-
polist (see Hadley, Railway Transportatio^n ;
Foxwell, "Des Monopoles," ^cfwe d'l^conomie
Politique, 1889). Again competition involves
much waste of effort in advertising and search
for employment ; — much waste of capital, as
when two railways are made where one would
be sufficient. Again there are many arrange-
ments which it is the interest of all combined
to adopt, but of each acting in competition to
violate ; e.g. Sunday rest, or early closing of
shops. Other disadvantages are stated by
Professor Sidgwick with special reference to
governmental regulation {Political Eco7iomy,
bk. iii. ch. ii.)
The case for interference is prima fade
stronger with respect to foreign trade ; where
the object of government is not the interest of
all parties concerned, but only of their own
country. List maintains that the freedom of
trade advocated by Adam Smith is best for the
world as a whole ; but that for particular
countries it is better to develop their own manu-
factures by protection {Das nationale System
der Polit. OeJcon.)
So far, on the supposition that all parties are
intelligent enough to know their own interest,
and free to make their own terms. The case
for interference is stronger where those condi-
tions are wanting. The plea of ignorance is
urged ' ' in those special cases where it is impos-
sible, or at least difficult, for the buyer of
goods to verify their character for himself"
(Jevons, op. cit. ; Say, Cours, 4"ie Partie, ch. x.)
Want of freedom is more difficult to define
scientifically. Absolutely free competition no-
where exists (above (1, b)). Suppose as much
mobility of labour to exist as in the case of Irish
cottier-tenants before 1881, or the "sweated"
workers in East London ; if the terms estab-
lished by the play of supply and demand are
not favourable to those classes, shall we say that
they are not free, or only not fortunate ?
The general presumption in favour of compe-
tition may be outweighed in particular cases by
the disadvantages which have been noticed.
The balance of contemporary opinion seema
inclining to the position thus indicated by
Professor Sidgwick. "It does not appear tc
380
COMPLEMENTARY GOODS— COMPULSORY PILOTAGE
me that the answer ... in concrete cases can
reasonably be decided by any broad general
formula ; but rather that every case must be
dealt with on its own merits, after carefully
weighing the advantages and drawbacks of
intervention. The expediency of such interfer-
ence in any particular case can only be decided
by the light of experience after a careful balance
of conflicting considerations."
[The authorities on this subject are innumerable.
Prof. Marshall's Principles of Economics may be
specially mentionad as showing (1) how deeply
ingrained in our nature is the principle of com-
petition, which makes itself felt even in institutions
which seem to be only regulated by custom (2) how
far from ideally perfect is the sys^Qmoi laissez-faire,
since it is theoretically possible that governmental
interposition should effect an increase of wealtli
(bk. V. Doctrine of Maximum Satisfaction). — The
views of the older authorities are considered, and
some new lights are imparted in Prof. Marshall's
Address On smiu aspects of Competition to section
P of the British Association, 1890.] P. T. E.
COMPLEMENTARY GOODS. This ex-
pression is used by the Austrian economist
Menger {Volkswirthschaft, 1871, pp. 11, etc.)
who describes goods as of first, second, or higher
rank in order of production. In the production
of bread, for example, the bread itself would be
of the first rank, flour, salt, yeast, the services
of a baker and his bakery, etc., would be goods
of the second rank ; grain, mill, and miller's
work would be goods of the third rank, and so
on. In such cases the separate goods of each
remoter rank must be combined, if they are to
produce the goods of the rank nearer the actual
consumption ; they are complementary parts of
a total. This conception becomes of special
interest when the value of the complementary
goods is considered for each separately ; and
this question has been carefully treated by
Wieser {der Natilrliche Werth, 1889, p. 101,
etc.) and Bohm-Bawerk {Positive Theorie des
Kapitales, 1889, p. 179, etc., English transla-
tion (1891), pp. 165, etc.) The discussion in
J. S. Mill {Political Economy, iii. xvi.) of some
peculiar cases of value (joint cost of production)
followed up by Jevons {Political Economy, 3d
ed. p. 197) is in many ways closely analogous.
(See also Quart. Journal, of Economics, April
1889, p. 338.) (See Consumees' Goods.)
J. B.
COMPOSITION. See Bankruptcy.
COMPOUND INTEREST. Interest that
arises from adding to the principal the interest
as it becomes due and then considering the sum
that accrues at the end of each stated time as a
new principal. For short periods of time the
compound interest of any sum differs but little
from its simple interest, but if compound in-
terest is allowed to accumulate for a number of
years, the increase is very great. Any sum placed
out at 5 per cent compound interest will double
itself in 14;^ years. Hence at 5 per cent com-
pound interest £1 would in 14|- years amount
to £2 ; in 28| years to £4 ; and in 213| years to
£32,768. At simple interest the £1 in 213|
years would increase to £11 : 13 : 9 only.
J. E. c. M.
COMPROMISE (Scots law). An actual ad-
justment of disputed claims by mutual con-
cession. A. D.
COMPTES, Chambre des. In the reign of
Philip IV., the Cour du Roy, the chief organ
of the central administration in mediaeval
France was subdivided into three bodies, for
the separate functions of administration, justice,
and finance. These bodies were the conseil du
roy, corresponding to the concilium ordi-
TMrivmi in England ; the parlement de Paris,
corresponding to our courts of king's bench
and common pleas ; and the chamhre des
comptes, corresponding to our Exchequer. The
chamhre des comptes originally followed the
king, but was fixed at Paris by an edict of
1319. Its chief functions were to audit the
accounts of the local haillis and seneschaux, to
receive payments from the royal domain and
direct taxes, and to decide judicial questions
arising from these payments. Originally it
had some voice in settling the amount and
incidence o:f taxation, but its administrative
functions were gradually curtailed by the
growing omnipotence of the controller-general
and the royal councU. In the 14 th century
the chamhre des comptes was a more important
body than the parliament of Paris, and in
1339, when Philip VI. went to Flanders, he
left the chief authority in its hands. But by
the 18 th century it had sunk into comparative
insignificance, and is rarely heard of. The
audit of accounts, which remained its chief
function, had become a mere formality, and
was often fifty years behindhand. But it must
stiU have possessed some means of enriching
its members, for its seats sold for a higher
price than those in the other cours souveraimes.
The office of conseiller in the chamhre des
comptes was sold under Louis XV. for 150,000
livres ; whereas the highest price in this century
for a seat in the parliament was 60,000 livres,
and in the cour des aides 45,000. The chamhre
des comptes was suppressed by a law of 7 th
September 1790, at which time it contained
289 officers.
[Gasquet, Precis des Institutions Politiqu^s et
Sociales de VAncienne France, Paris, 1885 ;
Cheruel, Dictionnaire Historique des Institutions
de la France, Paris, 1884.] R. l.
COMPULSORY PILOTAGE. By the Mer-
chant Shipping Act of 1854 (17 & 18 Vict,
c. 104), the master of a vessel, when entering oi
leaving certain harbours and districts, such as
t'he ports of London, of Liverpool, and of Kings-
ton-upon-Hull, the Trinity House outport dis-
tricts, or the Tyne or Falmouth district, is re-
quired to take on board a qualified pilot, and
COMPULSORY PREFERENCE— COMTE
381
to hand over to him the navigation of the
vessel. So long as the master and crew
obey the orders of such pilot, the owners are
not liable for any damage occasioned by the
fault or incapacity of the pilot. Compulsory
pilotage is based on the principle that the state
is justified in interfering to protect ships and
their cargoes from injury by other vessels owing
to an inadequate knowledge of the dangers of
navigation in specified ports and harbours and
districts. The object aimed at is not so much
to secure the safety of the vessel that is com-
pelled to take the pilot on board as to prevent
such vessel from damaging other vessels. The
risk of collision is reduced and property at sea
is rendered more secure.
[Maude and Pollock's Merchant Shi2)ping, Lon-
don, 1886.] J. E. c. M.
COMPULSORY PREFERENCE or ''Pre-
ferential Payments." In the distribution of the
property of a bankrupt and of the assets of a
company being wound up the following debts
are to be paid before all others, except funeral
and testamentary expenses, viz. one year's
rates and taxes ; four months' salaries of clerks
up to £50, and two months' wages of labourers
or workmen up to £25. These debts rank
equally between themselves (51 & 52 Vict.
c. 62 ; 52 & 53 Vict. c. 60). J. e. c. m.
COMPULSORY TAKING OF LAND. The
right of the state to take land for public pur-
poses, subject to the obligation of making com-
pensation, has been recognised by all modern
legal systems. This right, which is sometimes
called doviinium eminens or eminent domain,
may be exercised by the state itself or by
individuals acting under the authority of the
state. The object for which land may be taken
compulsorily is stated to be " public utility. "
Government would be impossible if the state
had not power to take land for the buildings
and fortifications necessary to its existence,
whilst the production of wealth would be greatly
retarded if land was not obtainable for the
construction of works of transportation and
communication. Public utility is apparent in
such cases. There is, however, great difficulty
in defining "public utility," as it must vary
in different countries owing to variations in
material surroundings. Randolph suggests (Law
Quarterly Review, vol. iii. p. 320) that under-
takings should only be held to be of a public
nature where they are such as the state itself
or its subordinate political corporations might
properly engage in, and he condemns the acts
passed in the New England states to authorise
the taking of land for the erection and mainten-
ance of water power. In the United States a
corporation taking land compulsorily ipso facto
becomes liable to make compensation, since the
written constitution recognises the right to
compensation ; in other countries provision for
compensation is made by statute. Tlie Code
Napoleon by art 545 declares, "that no one is
obliged to transfer his property unless it be for
the public utility and in consideration of a just
and previous indemnity." In the colonies, e.g.
in New South Wales, provision has been made
for resuming land for certain specified public
purposes, and the land grants usually contain a
clause relating to resumption. But in England,
though the Lands Clauses Consolidation Acts
provide machinery for determining the amount
of compensation to be paid where land is taken,
no general law has ever been passed to define
when land may be taken. Eacli taking of land
must be authorised by special act of parliament.
The Crofters Act, however, gives under certain
conditions power to the crofter commissioners
to enlarge crofter holdings.
English statutes on the compulsory taking of
land fall into three classes: (1) Where compul-
sory powers have been conferred on public bodies
for specified purposes, subject to a scheme being
approved by a government department and to
confirmation by statute. The Artisan Dwellings
Acts, 1868-1882; 33 & 34 Vict. c. 75 (school
sites) ; 44 & 45 Vict. c. 20 (post-office sites) ; and
various statutes relating to improvements in Lon-
don came under tliis class. (2) Where the statute
gives a particular corporation, such as a railway
company, power to talve land. (3) The Crofters
Act 1886, enabling a coniinission to enlarge
crofters' holdings, Small Holdings Act, 1907.
[Principles of the Lata of Compensation, C. A.
Cripps, London, 1884. — Law of Compensation,
by Lloyd, London, 1882.] J. e. c. m.
COMTE, AuGUSTE, the founder o{ Positivisme,
was born at Montpellier 1798, and died at Paris,
1857. After studying hard, especially mathe-
matics, he was received, the fom-th on the list,
at the Ecole Polytechnique. Insubordination
led to his expulsion from the school, and he
found himself without position or means. After
some fruitless efforts he attached himself, 1818,
to Saint-Simon, whose secretary he became,
succeeding in this office to the historian
Augustin Thierry ; but, in 1824, in connection
with the bringing out of the CaMchisme des
industriels, in which the Syst^nu de politique
positive, due entirely to the pen of Comte,
appeared, thwe arose a disagreement between
the master and the scholar, and Comte could
no longer content himself with the position of
disciple ; he desired to be master in his turn.
The idiosyncrasies of these two personalities,
to neither of which energy can be denied, were
certain, sooner or later, to lead to a separation.
Comte married soon after, but overwork and the
burden of worries which his disposition magnified
to a remarkable degree, brought on a serious
derangement of the brain. This attack was
successfully overcome by care and nursing, but
it would perhaps be rash to affirm that the cure
was complete.
On his return to ordinary life, after a treatment
for this serious malady which lasted nine months,
382
COMTE
A. Comte found himseli afresh in face of the
most pressing monetary difficulties. However,
he obtained in time the position of assistant to
one of the professors at the ^cole Polytechnique,
and the post of examiner to the same school.
He joined to this a place as usher in a private
institution, and, thanks to the moderation of
his requirements, was able to employ himself
quietly with his favourite occupations. It was
at this date that he composed the great work
we shall speak of later on, and which, as we
shall proceed to shew, deals rather with philo-
sophy than with economics.
With a little prudence and care he would
have been able, in this manner, to continue
the labours which he had most at heart.
Unfortunately, a professorship of algebraical
analysis which he sought for was given to
Sturm. He made an enemy of Arago, who
had been the cause of this appointment. His
temper set the backs of the whole council of the
school up against him, and he was removed
from his post of examiner, and in consequence
from that of assistant lecturer. It should be
stated that he had fulfilled both these duties in
the most complete and conscientious manner,
besides having, from 1830 to 1848, given to
the Association Polytechnique gratuitously, and
without a single omission, a course of lectures
on astronomy.
Deprived of his regular resources, separated
by mutual consent from his wife, he had to de-
pend for the means of existence on the purses
of his friends and disciples. It is to be re-
gretted that he, we may almost say, demanded
this help, with some persistence and even with
hauteur. He held that he had a right to these
subsidies in retiu-n for the services which, as
a philosopher, he rendered to civilisation. — It
was a debt the repayment of which he claimed
rather than assistance which he solicited (see
his Lettres a J. S. Mill).
His great work, on which he had laboured
for twenty years, his Cours de Philosophie Posi-
tive (6 vols, in 8vo) appeared 1839-42.
The fundamental idea to which Comte has
given the name of positivism is, that ** we know
nothing but phenomena, and that the knowledge
we have of these is relative and not absolute.
We know neither the essence nor the real mode
by which any fact is produced ; we only know
the relations of the succession or the similarity of
facts one to another. These relations are con-
stant, that is to say, always the same under the
same circumstances. The constant resemblances
which bind phenomena together, and the con-
stant successions which unite them under the
titles of antecedents and consequences, are what
are termed their laws. The laws of phenomena
are all that we can know of them. Their essen-
tial natures and their causes are unknown to us,
and remain impenetrable."
He supported this doctrine by a historic
theory which he called the Three Stages {Thiorie
des trois 4tats) — the theological stage, including
fetichism, polytheism, and monotheism ; the
metaphysical stage ; finally, the positive or
scientific stage. It will be seen that in all this
we are rather at a distance from the domain of
economics. Hence we must pause here in our
exposition of the doctrines of Auguste Comte,
contenting ourselves with reminding our readers
that, after 1845, his mind underwent a trans-
formation at which many of his disciples were
justly astonished, and in which the majority
of them declined to follow him. He, who
previously had refused adherence to any form
of worship, instituted one of which he made
himself the high priest, and which, in its philo-
sophy, borrows from pantheism, if not from
fetichism. In his eyes, to quote o'nly one ex-
ample, it is due " to pay honour to the planets,
especially to the sun and moon. " He rearranged,
rather let us say he reconstructed, his Syst^me de
politique positive, adding, as a sub -title, ou
Traiti de Sociologie in^titVAint la Peligion de
V Humanity (1851 in 8vo), he then composed a
Catdchisme Positiviste, and finally a Calendrier
Positiviste, in which he instituted saints and sub-
saints, supplementary ones, selected from all
countries ajid from aU periods of time. He even
went further than this ; he established sacra-
ments, and under his title of pontifex proceeded
to administer them — the last wanderings of a
mind elevated in some respects, but ill-balanced
and driven out of its right course by many freaks
of temperament, particularly by pride. Apart
from his theosophy A. Comte has had and still
has many distinguished disciples in France and
abroad. He may be said even to have founded
a school. We may quote among his disciples
who are dead Littre, John Stuart Mill, and
Grote the historian. a. c. f.
COMTE, Aug., and English Political
Economy. Comte's importance for the history
of English political economy is due first, and
chiefly, to his influence on John Stuart Mill.
About 1830 Mill, dissatisfied with the views of
his father and Bentham, was reading eagerly
the tracts of the St. Simonians, including, at
that time, one by Comte, which promulgated
the law of the three stages of the evolution of
science. In 1839, when Mill was planning his
Logic, he took up the study of the Philosophie
Positive. The conception of the inverse deduc-
tive method, described afterwards in the Logic
as the proper method of historical and statistical
inquiries (bk. vi. ch. ix., x.), was (he teUs us,
Autoh., 210) derived wholly from Comte. The
two men corresponded with each other on
cordial terms (1841-46), though they never
met. This correspondence, so far as published
(Lettres d' Auguste Comte d John Stuart Mill,
Paris 1877), shows that Mill had substan-
tially accepted the law of the three stages,
and had been strongly impressed with Comte's
COMTE
383
idea of a master-science of sociology, dealing
both with the present order, or statics, of
society and with its evolution, or dynamics.
The idea was not new. It may be traced to
Aristotle, and among economists Comte allowed
that Adam Smith possessed it, while J. B. Say
had discussed it with Comte himself {Lcttres,
p. 255). But Comte's exposition of it was
original and striking. He gave Mill also a
wider conception of what was meant by the
general interests of humanity, embracing 'past,
present, and future human beings as members
of one body (Aug. Comte and Positivism, 1865,
p. 135). Comte, too, first drew Mill's attention
to the importance of the working classes as an
element in all social movements ; Comte had
thought at one time of writing a special book
on industrial life. He brought Mill to admit
that in the universal consensus or solidarity of
the phenomena of society no parts could be
called independent of the others, and that the
way to study the whole body of them was not
(as Mill had said in 1830 in Unsettled Ques-
tions, publ. 1844, e.g. p. 146) Bentham's a
priori method of deduction from known prin-
ciples, but Comte's own method of first gener-
alising from history and then verifying by
deduction from known principles. We must
learn to " predict the past " before we can know
the present. The ** limited and temporary value
of the old political economy" {Autoh., p. 166)
Mill learned not from Comte but from the St.
Simonians. Comte soon found Mill was going
on a way of his own, and had no intention of
making his projected book on political econ-
omy a mere stalking horse for positivism
{Lettres, p. 254). Mill still upheld the need
of studying political economy by the a priori,
as distinguished from the inverse deductive
method, though he thought himself bound to
show the modifications of a priori results in
actual societies. Political economy must, pro-
visionally, be a separate study. In the details
of MiU's Principles of Political Economy (publ.
1848) Comte's influence is therefore not marked,
though it was working, with other causes, to
change Mill's views on the possibilities of human
nature and the final constitution of society.
After their correspondence. Mill recoiled from
the object of his first attraction, though, for
the sake of the public, he refrained from open
criticism {Aug. Comte and Pos., p. 3). He
found in Comte too little heed for individuality
and liberty. He agreed with Comte in ap-
preciating the proletariat, deploring the exist-
ence of an idle class, and of labourers degraded by
minute division of labour ; he admired his idea
that possessors of wealth should regard them-
selves as public functionaries. But he refused
to place the supreme government in the hands
of the wealthiest capitalists, or to trust to the
moral influence of a body of philosopher priests,
for the securing of a fair and generous distribu-
tion of wealth. Though he regarded distribu-
tion as being, unlike production, under no
"necessities of nature" {Autoh., p. 247) but
under laws of arbitrary human institution only,
Mill sought for progress by associations and by
democratic government and legislation as well
as by moral and intellectual improvement among
people and rulers. Comte's social statics seem
to Mill his weakest point. On the position of
women, for example, the two authors are irre-
concilable. Finally, Comte was nothing if
not systematic ; Mill was essentially eclectic.
Otherwise the influence of Comte might have
had the same effect on him as on Harriet
Martineau, who abandoned all distinctly econ-
omical work when she gave up the particular
economic doctrines she had herself helped to
popularize.
If in England the application of the "his-
torical method " to economics was (as is some-
times said) suggested by Comte rather than
by English or by German writers, it was not,
at least, through Mill's precept or Mill's ex-
ample. Cliffe Leslie's indebtedness to Comte is
not clearly acknowledged by the former [Essays,
1879, pp. 241, 411). Sir Henry Maine and
Professor Thorold Rogers seem free of all debt
to him. The controversy between Cairnes and
Mr. Frederick Harrison on "Comte and Politi-
cal Economy " (see Fortnightly Review, May and
July 1870, Cairnes, Essays in Political Economy,
etc.), served to make the issue clearer : Can
there be a political economy as a study distinct
from general sociology ? But it was after
Prof. J. K. Ingram's address to the British
Association (in 1878), which put the Comtian
criticisms in a broadly intelligible form, that
the historical economists obtained recognition in
this country as a distinct school. Prof. Ingi-am
has since followed up the attack by a History
of Political Economy (1888). Hitherto, both
in this country and in America, the tendency of
this movement has rather been to attract the
attention of historians to the importance of the
economic element in history, than to draw
away any considerable number of economists
from the study of economic theory (see His-
torical Method ; Positivism, etc.) j. b.
COMTE, Chakles, born at Sainte Eminie
(Lozere), 1782, died at Paris, 1837. His father,
a warm partizan of the Revolution, gave Comte
a rigid training which influenced him all his
life. To this may be ascribed his vote in 1804
against the establishment of the empire, and
the vote was nominative and signed with his
name. Comte had to pay the penalty of his
courage. As a consequence he devoted himself
to the study of law, and founded, June 1814, a
periodical Le Censeur (7 vols, in 8vo). Charles
Dunoyer joined him in this. The two edited
this organ, established in support of law and
liberty, and hence as hostile to the legitimist
reaction as to the pretended liberal empire, h
384
COMTE— CONCILIATION
pamphlet on the subject of the day, energetic-
ally written and frankly brisk in style, De
Vimpossibilit6 d'6tahlir une monarchic constitu-
Hormelle sous un chef militaire et particulUre-
ment sous NapoUon, brought on them a prosecu-
tion which did great honour to their spirit.
The terreur blanche obliged them, towawis the
end of the year 1815, to suspend their journal,
which they did not resume till 1817, under the
title of Le Censeur Europ4en (12 vols, in 8vo),
with the motto Paix et libcrU. In the interval
(1815-17) Comte, probably incited by Dunoyer,
took up the study of political economy, associ-
ating himself in this with J. B. Say, whose
son-in-law he shortly became. Notwithstanding
private and public persecution and prosecution,
the Censeur Europ6en was able to hold on its
existence to the date of the assassination of the
Due de Berry (13th February 1820). This sad
event rendered the maintenance of the contest
impossible, and the editors were compelled, in
face of a sentence which condemned them to
imprisonment and a heavy fine, to abandon their
straightforward and courageous publication.
Comte preferred exile to prison. He went
first to Geneva and then to Lausanne, where
he was appointed professor in natural law {la
morale). The Sainte- Alliance was alarmed at
this series of lectures given by so able a professor,
and demanded his expulsion. The Canton de
Vaud desired to resist, but Comte, in order to
avoid bringing anxiety, perhaps even worse, on
the territory which had befriended him, retreated
to England while waiting the reversal of his
sentence. He was, however, unable to defend
his case, as the government refused to allow the
registration of his notice of appeal. He then
pursued his economic studies, and published.
May 1826, his Traiti de legislation or exposition
of the general laws by following which states
prosper, perish, or remain stationary (4 vols, in
Svo), a work as much economic as judicial in
tone, but which approaches in character closer
to the Esprit des Lois than to a treatise on
political economy. The author shows himself
throughout a worthy disciple of the master
whose daughter he had married. We may add
that the Acaddmie Fran^aise, in 1828 (under
the Restauration) awarded Comte the grand prix
Monty on as the author of the work of the greatest
service to morals.
Less even than Dunoyer did he know how to
lend himself to half measures, to accept compro-
mises. Thus in 1830, being named p/oeureur
du roi for the tribunal of the Seine, after having
been elected Depute de la Sarthe, Comle could
not remain long in possession of this office, and
returned to the labour of his choice — scientific
study. The Acad6mie des Sciences morales et
politiques was re-established by royal ordinance
26th October 1832 ; he joined it and became
himself the first perpetual secreta rj-. In this
capacity he delivered the ^loge on Garat, and
composed that on Malthus which death hindered
him from reading. In 1834 he published hia
Traits de la proprUte (2 vols. 8vo), a work^, this
time, exclusively economic, and the scientific im-
portance of which is in no way behind his Traiti
de Ugislation. The following year a second
edition of the work last named appeared. Al-
though Comte had experienced a disappointment
in seeing Rossi preferred to him for the chair of
political economy at the ColUge de France,
vacant through the death of his father-in-law,
the nobleness of his nature kept him from bear-
ing any grudge against his successful competitor,
and, though he had been ill for four months, he
caused himself to be carried into the Institute
the 17th December 1836 to vote in his favour
as a candidate for election to the Academic des
Sciences morales et politiques. Some months
after he expired. Mignet, the second perpetual
secretary of that academy, read, 30th May 1846,
at a solemn meeting of that body, a notice of
Charles Comte in which full justice was done
to the lofty character of this illustrious thinker.
A. G. f.
CONCESSION. A term not used in English
law, but the word, or some similar word, is
used in many foreign countries to denote the
permission, given by the government to the
undertaking of certain works, or to the forma-
tion of certain societies or companies, in the
cases in which such permission is necessary.
This term has been current in France especially
for the last three centuries or so in the sense
of a right of property, privilege, or monopoly
granted by government — to individuals or groups
of individuals, — in land, mines, public works,
performance of stage-plays, and generally speak-
ing in anything that can be monopolised. At
present it is used most often of mines, as
in the case of the ruby mines of Upper Bur-
mah ; tramways passim ; railways, as in France,
where the "concession" is terminable, and
rights revert to the state ; trading privileges
including especially exemption from duties, as
in the Russian "concession" to the Anglo-
Siberian Company ; and banks, as in the case
of the Imperial Bank of Persia. "Concess-
ions " of the nature of patents or monopolies
have been recently (1889-90) granted by the
Boer government in the Transvaal so lavishly
and at such inadequate fees as to cause great
public discontent ; they include cordage, paper,
paints, ropes, furniture, matches, electric
lighting, and jam. The expediency of raising
revenue in such a way will be discussed under
Monopolies ; Patent. j. b.
CONCILIATION, Boards of. These boards
are established in difierent industries with
the object of preventing and adjusting in-
dustrial disputes between employers and em-
ployed. They consist of representatives of
masters and of men engaged in the industries,
with which they are concerned, who meet
CONCOURSE— CONDITIONING
385
together to endeavour to settle by discussion
and mutual agreement any disputes which may
arise. A typical illustration of their constitu-
tion and working may be found in the board
established in 1869 in the manufactured iron
trade of the north of England. Here the men
belonging to the different works select in each
case by ballot a delegate, and the employers
belonging to a single firm are similarly repre-
sented by a single delegate. The members of
the board thus constituted elect a president,
together Avith one secretary, from among the
delegates of the masters, and a vice-president,
together with a second secretary, from among
the delegates of the men. They also elect a
standing committee, as it is called, consisting
of five representatives of the men, and ten repre-
sentatives of the masters (five of whom alone are
able to discuss or vote on any question) ; and of
this committee the president and vice-president
are ex officio members, without enjoying any
power of voting. The standing committee
meets every month or, if occasion demands,
more frequently, and the board itself meets
twice a year and at other times when sum-
moned by the committee. In the first iiistance
all questions are laid before the committee.
They are submitted in writing to the secretaries
seven days before the meeting ; the written
reply of the other side is usually placed before
the same meeting, and an agreement of sub-
mission signed by the parties concerned. If
the standing committee cannot arrive at an
agreement, the referee, who is a permanent
official, is called in and can take evidence ; and
in this way all questions may be settled, except
a general advance or reduction in wages, or the
appointment of an arbitrator (see Arbitration
BETWEEN Employers and Employed). These
questions the board alone can decide, and it
also determines matters referred to it from the
standing committee, selecting an arbitrator if it
cannot itself arrive at an agreement. The ne-
cessary expenses of the board are defrayed by
the subtraction of a penny every fortnight from
the wages of every workman earning upwards
of half-a-crown a day, and by requiring each
firm to pay an amount equal to that thus sub-
tracted. Similar boards have been established
in the Nottingham hosiery trade, the boot and
shoe trade, etc. ; in the coal and iron and steel
trades in connection with sliding scales (see
Sliding Scale). The constitution of these
boards is, with some diff"erences of detail, similar
to that described, which is based on the model
of the French Conseils de Prud'hommes (q.v.)
The cotton-spinning, engineering, ship-wrights,
building trades, and the railway companies
follow somewhat different systems. The ad-
vantage of this method of adjusting industrial
disputes over that of arbitration is chiefly that
the decision is attained by friendly and informal
•liscussion and mutual concession, and there-
VOL I.
fore is more likely to be faithfully observed,
and less calculated to leave behind a feeling of
irritation. L. L. p.
District boards have been formed to deal
with disputes occurring in any trade in the
district with which they are connected, the
first having been established in London in
1890. In 1896 the Conciliation Act was passed
giving power to the Board of Trade to take steps
to arrange actual disputes or to form concilia-
tion boards where required, etc. Many volun-
tary boards appeal to the Board of Trade to
assist in the settlement of dillerences. There
has been no legislative compulsion connected
with conciliation hitherto though there is a
body of opinion in favour of it. There are
about 200 boards of conciliation and arbitra-
tion in the United Kingdom dealing with about
1500 cases annually. [See Ann. Repts. of
Labour Dept. of Bd. of Trade on Strikes and
Lock-Outs ; Laboiir Gazette (monthly journal) ;
Hept. on Rules of Voluntary Conciliation and
Arbitration Boai\ls ; Repts. of the Bd. of Trade
on proceedings under the Conciliation Act, 1896 ;
N. P. Oilman, Methods of Industrial Peace
(1904) ; A. 0. Pigou, Principles and Methods
of Industrial Peace (1905) ; also Engineering
Trades Industrial Treaty, App.]
CONCOURSE (Scots law). Concurrence or
consent, e.g. concourse of the lord advocate to
criminal prosecutions by private persons, A. d.
CONCURRENCE (Scotland). Backing a
warrant by a J. P. ^ A. D.
CONDILLAC, Etienne Bonnot de (1714-
1780), Abbe of Mureaux, younger brother of
Mably, born at Grenoble, died at Flux near
Beaugency. As a philosopher of the school of the
sensationalists, he published much-valued works
based on that system. As an economist he pub-
lished, 1776, Le Commerce et le Gouvernement
consid4r6s relativement I'un a I'autre, described
by Jevons as ' ' original and profound. " He sup-
ports the doctrines of the physiocrats, except in
regard to industry, which he considers as pro-
ductive. This work is reproduced in Mdanges
d'economie politique {Collection des principaux
<:conomistes, Guillaumin, 1847). A. c. f.
CONDITIONING. In textile industries,
mainly in the silk trade, "conditioning " covers
the process of determining the quality, net
weight, and description of raw material, or of
yarns, etc. ; a conditioning-house is an establish-
ment where at fixed charges such material maybe
prepared and arranged, and an official warranty
as to condition obtained. Conditioning-houses
and boards exist in most textile manufacturing
districts on the continent. In some places, such
as Lyons, they are public establishments, that
at Lyons dating from 1779 ; while in others
they are houses provided by committees of the
merchants themselves, and their verdict as to
weight and quality is accepted as conclusive ; but
they are, as yet, scarcely known in the United
2 c
386
CONDITIONING— CONDORCET
Kingdom, and the advantages they offer have
not "been properly recognised. The only con-
ditioning-house in London of which there is
record — it is possibly the only house of this
nature in the United Kingdom — is the Trade
Silk Condition Company, Limited, of Worship
Street, E.C., which publishes a scale of cfiarges
arranged under the following heads : — Condi-
tioning ; Weighing ; Boiling-off and Washing ;
Assay of Size ; Assay of Spin and Throw, or
Elasticity and Tenacity ; directions being given
under each head. This house has been in
operation for many years, and not only fur-
nishes the weight of the raw silk when freed
from moisture and the numerous impurities to
be found in the bales, but tests it in various
ways, and by so doing places upon the tested
article an unbiassed official stamp, which inter-
ested vendors and purchasers themselves could
hardly do. It also carries its operations further,
as the raw material is duly prepared for manu-
facture. In the same establishment wool can
by arrangement be conditioned. It will be
gathered from this that conditioning partakes
of the nature of Sampling and Grading, terms
employed in various other trades, operations
which will be found dealt with under those
heads.
Some few years ago a small establishment for
conditioning silk was started in Manchester,
but it has either ceased to exist or to carry
on operations as a separate undertaking. The
Bradford chamber of commerce, amongst others,
has for a considerable time past advocated the
establishment of a conditioning- house in connec-
tion with the wool trade of that district, such
an undertaking to be conducted by the corpora-
tion of Bradford. Parliamentary powers were
duly obtained some years ago, but this condi-
tioning-house is not yet established, although
there are some prospects of a start being made
in respect to it. Such an official undertaking
might well become a decided success, and the
Bradford standard be recognised throughout
the entire Yorkshire woollen and worsted dis-
tricts. It is evident that such establishments
are to the advantage of the manufacturers of
high quality goods, and enable them the better
to draw the line between genuine and counter-
feit materials. In this way, French, Italian,
and other continental silk manufacturing dis-
tricts have long recognised the advantages
afforded, and it remains to be seen whether,
if the Bradford corporation take the affair up
in earnest, the conditioning-house will not soon
become a recognised necessity of the textile
industries in this country.
[See for conditioning at Lyons article on " Con-
dition " in the Nouveau Diciionnaire d'£conomie
Politique and Monographie de la Condition des
soies de Lyon, par Adrien Perret, Lyon, 1878.]
CONDORCET, Marie Caritat, Marquis
de (1743-1794), bom at Ribemond near Saint
Quentin, died at Bourg-la-Reine. He won his
first laurels as a mathematician, and showed
in this study qualities which astonished the
most distinguished savants of his time. When
he was twenty the Academie des Sciences con-
sidered an £ssai sur le Calcul Integral, from
his pen, worthy to appear in the collection of
their memoirs, and, in 1769, the same learned
body received him into their number, appointing
him, in 1773, their perpetual secretary. He
soon won the friendship of Turgot, by whom
his attention was turned towards political
economy. Under the inspiration of Turgot he
wrote various articles or works, among others
Les Rifiexions d'un Ldboureur de Picardie d
M. N. . . . auteur prohibitif, d, Paris, 1775 ;
and Les Reflexions sur le commerce des bleds,
1776, two writings directed against M. Necker,
that auteur prohihitif who had brought out,
May 1775, his work Sur la legislation et le
commerce des grains. The Academie Fran^aise
admitted him, 1782, among its members.
Condorcet's activity did not slacken up to the
first days of the Revolution ; in 1781 he pub-
lished the R&fUodons sur Vesclavage des nkgres
(there is no need to say that he was an aboli-
tionist), then, in 1785, his Essais sur Vapplica-
Hon de I'analyse d la probability des decisions
rendues d la plurality des voix (in 8vo) ; in 1786,
La vie de Turgot (in 8vo) ; about 1787, De
I'influence de la Revolution d'Am4rique sur
VEurope, dedicated to Lafayette, which indi-
cates the course of events at that time ; in 1788,
Essai sur la constitution, et les fonctions des as-
semblies provinciales ; in 1789, Banque Na-
tionale (in 4to) ; and in 1790, La fixation de
Vimpdt (in. 8vo). He did not belong to the
Assemblee constituante but was member of
the Assemblee legislative and of the Convention
which succeeded it. We shall not attempt to
sketch out his career, which was frankly that
of a republican, but a friend of law and liberty
during the Revolution. It may suffice to say
that his pen was never inactive and was
vigorously supported by his eloquent words.
Proscribed as a Girondin, he was sheltered for
eight months by a devoted woman. It was
then that he wrote his Esquisse d'un tableau
historiqu£ des progr^s de l' esprit humain, 1794,
an eloquent tribute to the doctrine of the in-
definite perfectibility of man.
Learning that the penalty of death had been
pronounced against those who received the Gir-
ondins into their houses, he departed, not
heeding the prayers of his courageous hostess,
and wandered for several days. Entering a
tavern at Clamart to appease his hunger, he
was arrested by order of a member of the re-
volutionary committee, and thrown into a prison,
where he was found dead the next day when
sought for to be brought before his accusers.
He had, it was believed, taken his life with a
poison which he carried on him. Quick in
CONDUITT— CONJUNCTUR
38?
intelligence, vigorous in mind, passionately
loving what was right, his was one of the
worthiest and purest natures concerned in the
first French Revolution. A. c. f.
[For a criticism of the Esquisse, see Malthus,
Essay on Population, bk. iii. ch. i. (Bonar,
Malthus and His Work, bk. i. chs. i. and ii.)
Condorcet's application of the theory of probabili-
ties to the estimation of evidence in his ESsais
sur V application de V analyse d la probdbilite des
decisions vendues d la pluralite des voiz . . . above
noticed, claims the attention of the statistician.
A very unfavourable verdict is pronounced on
this part of Condorcet's work by Todhunter in
his Theory of Probability.]
CONDUITT, John (1688-1737), married
Newton's niece, and succeeded Newton as
master of the mint. His principal work, Ob-
servations upon the Present State of our Gold
and Silver Coins, 1730 (published 1774), is
supposed to represent Newton's views. It con-
tains a luminous statement of the principle,
that in order to keep silver in circulation, the
" rate at which gold shall be current " should be
the same as in neighbouring countries. Con-
duitt is referred to in Boulter's letters in
connection with the Irish coinage. He was a
member of parliament, and a fellow of the
Royal Society, to which, in 1718, he contributed
a learned paper on "The Situation of the
Ancient Carteia."
[Brewster, Memoirs of Sir Isaac Newton. —
Jevons, Investigations in Currency and Finance.
— De Morgan, Newton, his friend and his niece.]
CONFIDENT PERSON. See Bankruptcy
IN Scotland.
CONFIRMATION OF EXECUTOR (Scots
law). Proving a will as executor. a. d.
CONFLICT OF LAWS. One of the numer-
ous titles applied to the principles that are
followed, or which theorists think ought to be
followed, in determining whether a domestic or
a foreign law ought to be applied to a given set
of circumstances. It is a well-settled principle
that within its own territory a state is entitled
to enforce its own laws. But in many cases it
would be inexpedient or unjust to do so. The
property in question may be situated abroad,
the contract to be enforced may have been
entered into in one country by persons of dif-
ferent domiciles with reference to performance
in another country, or the document to be in-
terpreted may be expressed in the technical
language of foreign law. Hence every state
finds it necessary to apply in certain cases the
legal rules of other states. Though each state
decides for itself when and how a foreign law
shall be applied, there is a tendency to adopt a
common practice. The law of the place where
real property is situated governs all questions
as to the tenure, title, and descent of such pro-
perty, but in some countries it is held that a
deed or will relating to real property is sufficient
if in accordance with the law of the place where
it was made. On the other hand, movable
property is, as regards succession or transfer on
death or marriage, governed by the lex domicilii,
the lex situs only applying in the case of title
to a particular chattel. Contracts valid by the
law of the place where made are valid every-
where, but everything that relates to their exe-
cution is subject to the law of the place where
the contract is to be carried out. Proceedings
in courts of justice are regulated by the lex
fori.
[Private International Lata, by J. Westlake,
Q.C., London, 1880.— See also Holland's Juris-
prudence for the different principles recommended
by theorists, and for a list of the chief writers on
the subject, and art. in Law Quarterly Review,
vol. vi. No. 21, by A. V. Dicey on "Private
International Law as a Branch of the Law of
England."] j. e. c. m.
It frequently happens in the course of
judicial proceedings, that the court has to
decide whether its own ordinary law has to
be applied to the matter coming before it, or
whether some other system of law has to be
applied ; this may happen when the parties
reside in different localities, when the subject
matter of the action is situated in a place where
another system of law is administered, or when
the events or acts which form the foundation
of the proceedings have taken place in a locality
governed by another system of law. The rules
of law which determine questions of this sort
are generally classed under the head of conflict
of laws ; and the branch of law to which they
belong is called Private International Law (see
International Law, Private) ; but these
rules, though based on the same principles in
most countries, always form part of the muni-
cipal law, and are not, strictly speaking, inter-
national rules. E. s.
CONFUSIO. A tenn of Roman law mean-
ing— (1) the intermingling of things in such a
manner as to render the separation of one of
the component parts impossible {e.g. the pour-
ing together of two separate quantities of liquid) ;
(2) the extinction of a smaller right by being
merged into a larger right {e.g. a pawnee acquires
the absolute property in the pawned object).
E. S.
CONJUNCTUR. Recent German economists
use this word to denote the conditions and
opportunities of success which a man does
not owe to his owti efforts, but receives as a gift
of fortune. For example, inherited wealth, in-
fluential parentage, and even nationality and
education, give a good start in life which would
be described as due to Conjunctur. It is per-
haps most often used of the happy concurrence
of circumstances by which the speculator is
enabled to realise a fortune without labour but
at the same time without breach of the rules
of competition. Modem socialists, even of the
388
CONQUEST— CONSCRIPTION
moderate schools, contend that in modern
society ConjuTictur and not skill or industry is
the maker of fortunes ; and they would restrict
the influence of Gonjunctur by alterations in
the tenure of property and the conduct of busi-
ness (see Socialism). ,
[For a discussion of the " Wesen und Wirkung
der Conjuuctur," see A. Wagner, Volkswirth-
schaftsleh/re, Leipzig, 1879 {Grundlegung , p. 98,
seq.) — See also Marshall, Principles of Economics
(1890), pp. 656, 692 n.] J. b.
CONQUEST. The appropriation of the pro-
perty in and of the sovereignty over a part or the
whole of an enemy's country by force of arms.
Though the title is usually regulated by the
terms of a treaty of peace, the conquest is com-
plete from the time the conqueror proves his
ability to maintain, and his intention to retain,
the territory as part of his own state. As a
rule, the inhabitants retain their rights, except
in so far as they are necessarily altered by the
fact of conquest. Allegiance to the former
sovereign is dissolved, but consent is necessary
before allegiance is acquired by the new sove-
reign. Usually a limited time is given within
which the inhabitants must transfer their allegi-
ance or leave the territory. In return for
allegiance the rights of citizenship are acquired.
Municipal laws, including the rights of property,
remain unchanged, except in so far as they are
necessarily altered by the political institutions,
or are in conflict with the laws of the new state.
A country conquered by England becomes a
dominion of the crown, and the crown may
determine the form of government.
[Hall's International Law, Oxford, 1890. — Max
Wirth, Grundzuge der Nat. Oekoii,.^ considers
" Conquest " as a form of " highly ski lied labour."]
J. E. 0. M.
CONRING, Hermann (1606-1681), was one
of the most eminent of the polyhistors of the
I7th century. The estimation in which he was
held in his own time is sufliciently proved by
his epitaph, written by Meibomius — "Juris
naturalis gentium publici doctor, philosophise
omnis peritissimus practicse et theoreticse, philo-
logus insignis, orator, poeta, medicus, theologus.
Multos putas hie conditos. Unus est, Herm.
Conringius, saeculi miraculum." He was born
in East Friesland, and studied medicine at
Helmstadt, where he was afterwards professor
in that faculty ; he was also for some time
court physician to Christina of Sweden. He
early accepted und zealously propagated the
Harveian doctrine of the circulation of the blood.
His principal field of distinction lay, however,
in politics and jurisprudence. He was among
the first who formed a comprehensive conception
of a science of political economy ; he explains
his ideal of it in his dedication of a new edition
of the principal writings of Bodin, adding that
such a body of doctrine, ** Eam artem [Chre-
matisticam] in justam aliquam et integram
methodum redactam non esse," though manj
scattered contributions to it might be found in
various writers. He himself hoped to realise
this scheme ; he produced, however, only a
number of separate writings on special heads :
De re nummaria, 1662 ; De Vectigalibus and
De Aerario, 1663 ; De importandis et exportan-
dis and Dc commercio et mercatura, 1665 ; De
contrihutionibus, 1669. His historical import-
ance lies not so much in the complete treatment
of economic questions as in the awakening and
stimulating influence which he exercised both
by his books and his personal teaching. In his
great statistical work, Examen rerumpuhlicarum
totius orbis, he gives but little numerical detail,
as was natural at his period, but has many just
historical and political views (Roscher, Gesch.
der Nat. OeJc. in Deutschland, p. 264).
J. K. I.
CONSCRIPTION. Compulsory military ser-
vice. In modem times introduced by Napoleon
I., followed by Prussia, and since 1870 adopted
by all the great continental powers. On the
continent every male citizen capable of bearing
arms becomes liable to military service on com-
pleting his twentieth or twenty-first year, but
in some countries service can be avoided by a
money payftient or by passing an examination.
The period of active service varies from one to
four years. The liability to serve is universal,
e.g. in Prussia and in France ; but in some
countries, e.g. in Russia, the number from whom
full service is required is fixed every year. After
completing the period of active service the men
pass into the reserve, and are liable to be called
upon in the event of an outbreak of hostilities.
In Holland and Belgium, though the army is
based on conscription, the greater part of the
forces is formed of volunteers. Switzerland
maintains no standing army, but every citizen
is liable to serve, and the troops are called out
for a few weeks' training in the year.
The social and economic efi'ects of the military
systems of Europe have been discussed by Cliffe
Leslie [Essays in Political and Moral Philosophy ,
Dublin, 1879). Whilst admitting that the
training of a soldier tends to make the workman
more efficient, he points out that even a three
years' system postpones to a late period the
productive use of a part of the productive power
of the country, whilst a longer period unfits the
greater number of men for industrial pursuits.
Adam Smith {Wealth of Nations, bk. v. ch. i.)
thought that the progress of manufactures and
improvement in the art of war would tend to
make the soldier's a separate trade, but the
tendency has been in recent years to make the
army a national one. Whilst therefore a war
between two states in which all the citizens are
soldiers implies that the industrial population
are fighting in the ranks, it must not be for-
gotten that wars are of much shorter duration 1
now than in former times. It is very difficuH
CONSEILS DE PRUD'HOMMES— CONSOLIDATED FUND
38S
to make any comparison between the relative
cost of armies. The most recent information
will be found in Major-General Brackenbury's
Eviderice before the Select Committee on Army
and Navy JEstimates, 1887, Appendix to First
Report, and in the Journal of the Statistical
Society, March 1891, ** Statistics of the Defence
Expenditure of the chief Military and Naval
Powers," by Sir Charles Dilke. Germany, -vv^ith
compulsory service and an expenditure of
£60,000,000, can put over 4,000,000 troops in
the field in time of war ; England, with voluntary
enlistment and an expenditure of £28,000,000,
can only put 275,000. The ditierence arises
from the greater cost of living in England, the
higher rate of pay, and the large number of
foreign dependencies to be garrisoned (see
Defence, Cost of). j. e. c. m.
CONSEILS DE PRUD'HOMMES. These
councils are found on the continent in France
and in Belgium, and have for their object the
adjustment of industrial disputes by a rapid and
inexpensive method. They are said to have
originated in the experts ox prudlwmmes selected
by the mediaeval guilds to settle disputes between
manufacturers and merchants at the diiTerent
markets and fairs about the genuineness of goods
and other such matters. They were abolished
before or during the Revolution, but were re-
established at Lyons some ten years later, and
subsequently in other French towns. They con-
sist of representatives elected in equal numbers
by masters and men, and the election is con-
ducted by the maire and prifet of the particular
town or district. In Paris there are four such
conseils to deal with the many trades and indus-
tries there found. The conseil thus elected lasts
for three years, and is divided into two bureaux
or committees. The bureau particulier, con-
sisting of one master and one man, sits daily,
and the bureau g^n^ral, consisting of at least five
members, meets weekly. Disputants are first
invited to come before the bureau particulier and
to explain their differences, and arrive, if pos-
sible, at an amicable settlement. Should this
attempt fail, they are formally summoned before
the bureau g6niral, which disposes authorita-
tively of the matter in the same way as an
English arbitrator (see Arbitration between
Employers and Employed). Appeal from the
decision of the bureau general lies, however, to
the tribunals of commerce and the ordinary
civil courts, but such appeals are apparently
seldom made. Petitions for the establishment
of the conseils are addressed to the minister of
commerce. Statistics of these French conseils
show that previously to the Franco -German
war the number of cases brought before them
had grown to a maximum of some 45,000 in
the year 1868, and that after experiencing a
temporary decrease during the war until they
had fallen to some 30,000 in 1873, in 1880
they had risen again to some 40,000. Of these
some 60 per cent related to wages — but not
to their regulation for the future, simply to
the determination of disputes as to the past ;
some 13 per cent arose about dismissals ; some
10 per cent were concerned with alleged mis-
behaviour ; some 5 per cent with questions of ap-
prenticeship ; and some 13 per cent with various
other matters. The majority of cases were
settled by the bureau particulier, but a large
proportion were adjusted outside the conseils
altogether. In Belgium there are similar con-
seils to those in France, and a proposal has more
than once been made to establish something
after their pattern in England. An act, which
has proved inoperative, was passed with this
object in 1867 (30 & 31 Vict. c. 105).
[For an account of these councils see Price's In-
dustrial Peace, ch. iii. — Jevons's Stale in Relation
to Labour, ch. vii. — an article on "Conseils de
Prud'hommes," by W. H. S. Aubrey in the Contem-
porary Review, April 1883 — and a paper on "The
Strikes of the past Ten Years" by G. P. Bevan in tlie
StatisticalJournal for March 1880, vol. xliii. pp.
35 to 64.— Parly. Papers, c. 5896-17 and c. 6206-
18.] L.L.P.
CONSIDERATION. A consideration in
*' value " is not necessary to a contract in Scot-
land either by deed or not by deed. a. d.
CONSIGNEE. A person to whom goods are
shipped. A person whose orders the master of
a vessel is to follow, by virtue of the clauses of
a charter party, is called the consignee of the
vgssbI
CONSOLIDATED FUND. The division oi
the British revenue between the Consolidated
Fund and Annual Supply will be best under-
stood from the following oflicial statement de-
rived from Public Income and Expenditure,
Returns ordered House of Commons 24th July
1866, pt. ii. p. 611.
" From the period of the establishment of a
systematic parliamentary control over the ex-
penditure of the public moneys, that portion of
the total issues from the exchequer during the
financial year, which is more strictly called the
public expenditure, has always been divided
into two separate and distinct general heads.
The first of these is composed of the more per-
manent charges which have been authorised by
parliament to be paid from time to time when
due, the mode and period of payment being
under the directions of the treasury. The second
head consists of the charges annually gi'anted
by parliament, and thus brought periodically
under its immediate cognisance and control.
Since the establishment of the consolidated
fund in 1786, these two heads of public ex-
penditure have been known as the consolidated
fund charges and the annual supply charges,
so designated from the funds out of which they
are respectively payable.
The consolidated fund charges have beer
usually subdivided into —
390
CONSOLIDATIO— CONSPIKACY
The annual charges of public debt.
Civil list.
Annuities and pensions.
Salaries and allowances of certain independent
offices.
Courts of justice.
At this date [1866] diplomatic salaries and
pensions (now included among annual sup-
ply charges).
Miscellaneous charges.
The general heads of the supply charges are —
The classilied miscellaneous civil services.
Payments out of gross revenue ; or, since 1854,
the charges of collection and management
of revenue.
Army, navy, and ordnance services.
The other issues from the exchequer, consist-
ing of —
Advances by way of loan.
Sinking fund and other payments for the
reduction of the national debt have formed part
of the consolidated fund charges, or the annual
supply charges, according to the parliamentary
enactments by which these issues have been
authorised " (Public Income and Expenditure, or
Return ordered 24th July 1866, pt. ii. p. 611).
In explanation of this arrangement, A. Todd
I'emarks —
"'Formerly,' that is after 'the old system
of retaining public money at the exchequer it-
self was 'abolished,' 'the proceeds of parlia-
mentary taxes constituted separate and distinct
funds ' ; but by the Act 27 Geo. III. c. 13, § 47,
it was directed that the various duties and taxes
should be carried to and constitute a fund, to be
called 'The Consolidated Fund.'" (These per-
manent grants out of the consolidated fund are
recapitulated above in the extract given from the
Report on Public Moneys.) Todd continues :
"These charges are made payable out of the
consolidated fund by permanent statutes, from
year to year, without any renewal of parlia-
mentary authority. The principle of not sub-
jecting to the uncertainty of an annual vote
the provision for the security of the public
creditor, the dignity of the crown, annuities
and pensions to royal and distinguished persons,
the salaries of judges and other officers in whose
official character independence is an essential
element, compensation for rights surrendered,
and like charges, is one the soundness of which
is generally admitted."
(Alpheus Todd, On Parliamentary Government
in England, vol. i. pp. 733, 737, 2nd edition.)
Todd further raises a question whether in
certain cases amounts may not have been carried
to the consolidated fund which should have
been voted as part of annual supply, but those
who are conversant with the practice of the
House of Commons in • the discussion of the
annual votes will agree that little would bo
gained in the way of real economy by this
course being pursued.
CONSOLIDATIO. In Roman law this
expression was used for the extinction of a
usufruct in consequence of the usufructuary
becoming the owner of the property to which it
referred. It is also a technical term used by
writers on feudal law, and is by them applied
to the termination of a vassal's right by sur-
render, escheat, or some other cause which
restored the beneficial rights of ownership to the
lord. E. s.
CONSOLS. A stock exchange abbreviation for
"consolidated annuities," originally applied to
the 3 per cent consolidated annuities of 1751
(25 Geo. II. c. 27) which bore interest payable
on 6th January and 6th July. These 3 per
cents were converted in 1888 into stock bearing
interest at 2| per cent till 1903, and after
that date at 2^ per cent till 1923. The
amount of these consols when jBrst issued
in exchange for pre-existing securities was
£9,137,812, but they were afterwards in-
creased to about £400,000,000 : by 1888 they
had been reduced by purchase in the market
and by conversions into terminable annuities
to £322,681,000. In 1889 Mr. Goschen com-
pleted the redemption of this enormous amount
of stock, and these 3 per cents, which for up-
wards of a century were reckoned as the standard
security of the London market, will soon be
unknown there. They are now only a matter
of history. The 3 per cent reduced annuities,
although a similar, and at first a larger, issue,
were never designated consols.
But the familiar term " consols " has recently
been applied to a number of other investments.
There are New Zealand 5 per cent consols. Cape
of Good Hope 4 per cent consols, and other
government securities, which are currently
designated consols by dealers upon the exchange
simply because the word is more readily spoken
and written than consolidated stock. It is also
at times applied to other consolidated stocks
than those issued by governments (see Con-
version OF British National Debt).
CONSPIRACY, Common-Law Doctrine of.
Though there were some dicta to the effect
that a combination for the purpose of raising
wages would be unlawful, no case of a convic-
tion for such an offence occurred until the year
1825. Mr. Justice Stephen is therefore led to
conclude that up to that year an agreement to
combine to raise or depress the rate of wages
was not an indictable offence apart from statute.
The opposite view was entertained by many
persons and was enforced by the courts. ' ' Read-
ing Sir W. Erie's summing-up in this case (R. v.
Rowlands, 2 Den. Cr. Ca. 364) and his memo-
randum on trade unions together, it seems that
his view of the subject of conspiracies in restraint
of trade was this — at common law all combina-
tions of workmen to affect the rate of wages
were illegal. A limited exception Avas intro-
duced by the 6 Geo. IV. c. 129. But the
CONSTITUTUM DEBITI— CONSULAR REPORTS
391
ordinary operations of a strike which do not fall
definitely within those narrow exceptions are
still illegal conspiracies." This view was en-
forced in subsequent cases, but by the 22 Vict.
c. 34, workmen were not to be considered guUty
of ** molestation" or "obstruction" under the
act of 1825 by reason of entering into agree-
ments for the purpose of fixing wages or the
hours of labour. A commission, issued in 18b7,
recommended a relaxation of the law, and the
38 & 39 Vict. c. 31 legalised trade unions,
whilst the 38 & 39 Vict. c. 32 amended the
law relating to "molestation." The decision
in 1872 in the gas stokers' case to the eftect
that a strike might, under certain circumstances,
amount to a conspiracy at common law to
molest, injure, or impoverish an individual, or
to prevent him carrying on his business, led to
the passing of 38 & 39 Vict. c. 86, which en-
acted that an agi*eement by two or more persons
to do any act in furtherance of a trade dispute
should not be indictable as a conspiracy if such
act committed by one person should not be
punishable as a crime.
[Sir W. Erie, TJie Law relating to Trade Unions,
Loudon, 1869.— K. S. Wright, The Laio of Crim-
inal Conspiracies, London, 1873. — Roscoe's Digest
of the Law of Evidence in Criminal Cases, titles
"Conspiracy" and "Conspiracy in Restraint of
Trade," London, 1884. — Sir J. F. Stephen, Histmy
of the Criminal Law, London, 1883.] J. E. c. M.
CONSTITUTUM DEBITI. An informal
promise to pay. Such a promise gave a right
of action in Roman law, by virtue of the prae-
torian edict, quite independently of the cause
of the promise. It was frequently used, in the
place of a regular contract of suretyship, for the
purpose of guaranteeing another person's debt
{constitutum debiti alieni). e. s.
CONSTITUTUM POSSESSORIUM. An ex-
pression used by mediaeval -WTiters on Roman
law to express the fictitious delivery which takes
place when the owner of a thing transfers the
property to another, and contracts to retain the
possession as bailee for the new owner, e. s.
CONSUL. Consuls are commercial agents
appointed to reside in foreign countries for the
purpose of protecting the individual interests
of traders, travellers, and mariners belonging to
the state which appoints them. A consul is
not a diplomatic agent, and he is not therefore
authorised, except in special cases, to make any
representations to the government of the state
in which he acts. He is not entitled to ex-
emption from local jurisdiction, but enjoys
certain specific privileges essential to the dis-
charge of his duties, such as exemption from per-
sonal taxes and the inviolability of the papers
of the consulate. The most important duties of
consuls will be found in Hall's International Law
(Oxford, 1880), and in the authorities there
quoted. In eastern countries such as Turkey,
China, and Japan, the subjects of western states
are not liable to the local courts, and jurisdiction
is by treaty exercised by consular courts. (See
Consular Reports ; also Consuls and Con-
sular Reports, Appendix.)
[Phillimore's International Laiv, ii. § 272. —
Calvo's Droit International, §§ 495-99. — Hand-
huch des Volkerrechts herausgegeben von Dr. Franz
von Holtzendorff, vol. iii., Berlin, 1887.] J. E.c.m.
CONSULAR REPORTS. The ability of the
various representatives of the United Kingdom
in foreign countries to supply information of
great value to the trading community at home
has long been recognised, and every secretary
of embassy or legation, and every paid consular
oflicer is therefore required to furnish an annual
report on the trade, commerce, and navigation
of the country or district, as the case may be,
in which he is stationed. Secretaries of em-
bassies or legations are also required to report
annually on the finances of the countries in
which they act. Reports on special subjects
are occasionally called for, and information on
commercial or industrial topics of special interest
is frequently sent home by diplomatic and con-
sular officers on their own motion. These
reports are published by the foreign office, and
sold in three regular and several minor series.
1. The general series entitled ' ' Reports on Sub-
jects of Commercial and General Interest by Her
Majesty's Representatives La Foreign Countries. "
2. The diplomatic trade series, being * * Reports
by the Secretaries of Embassy or Legation on
the Manufactures, Commerce, etc., of the
Countries in which they Reside."
3. The consular trade series, being "Reports
by Her Majesty's Consuls on the Trade of the
Countries in which they Reside."
Reports from China, Japan, and Siam appear
in three minor and separate series, each headed
by the name of the country.
In the course of the year 1886 some atten-
tion was given to the possibility of rendering
these reports of greater practical value to the
commercial classes, it being the opinion of
many that foreign traders were better served in
this respect than those of the United Kingdom.
Some evidence to this effect was given before
the royal commission on the depression of trade
and industry, who referred to the subject in their
report. It cannot be said that this contention
was established, but the result of the investiga-
tion made by that commission and the foreign
office was to efiect some substantial improve-
ments. It was arranged that the reports should
be more promptly published, that the importance
of procuring full information regarding the
industry and the condition of the working
classes should not be lost sight of, and that
samples of the manufactured goods chiefly in
demand in the countries in which consuls
resided should be sent home with the reports.
The reports are now utilised by the Board of
Trade Journal.
392
CONSUMABLES— CONSUMERS' RENT
[The General Consular Instructiorts and the
Correspondence respecting the Question of
Diplomatic and Consular Assistance to British
Trade Abroad, published in 1886 (c. 4779),
contain much information on this subject. An
Index to the Eeports published from 1886 to
1890 is also available (c. 6374).] t. h. e.
CONSUMABLES. See Consumptibles.
CONSUMERS' GOODS (or Consumption
Goods) include all those desirable things which
directly satisfy human needs and desires, e.g.
food and clothing. Those desirable things
which are only useful indirectly as a means
towards the production of consumers' goods —
as, for example, machines and the raw materials
of manufacture — are by contrast spoken of as
Producers' Goods (or Production Goods). This
distinction has been carried further by Professor
Menger and the Austrian school of economists,
who divide goods into successive orders : goods
of the first order, consisting of consumption goods
as above defined ; goods of the second order, of
those things which contribute immediately
towards the production of goods of the first
order, e.g. sewing machines ; goods of the
third order, of those things which contribute
similarly towards the production of goods of the
second order, e.g. machinery used in the manu-
facture of sewing machines ; and so on. In
many cases it is impossible to draw a hard and
fast lino between goods of different orders, or
even between consumers' goods and producers'
goods ; but this does not destroy the import-
ance of the distinctions indicated. It may be
observed that while some things are in their
very nature consumers' goods or producers' goods
as the case may be, e.g. ball dresses and sewing
machines, others cannot be classified until the
use to which they are put is known. For
example, a horse may be used as a pleasure
horse or for work on a farm ; or, indeed, some-
times for the one purpose and sometimes for the
other. A thing may even belong to several
orders of goods at the same time ; as, for example,
a furnace which, while working machinery of
various kinds, also serves to warm a neighbouring
club-room or workmen's common room.
[Marshall, Principles of JSconomics (2nd ed.),
bk. ii. ch. iii. § 1 ; and Sidgwick, Principles of
Political Economy, bk. i. ch. iii. § 4 (see Comple-
mentary Goods).] j. n. k.
CONSUMERS' RENT. A term introduced
into the nomenclature of political economy by
Professor Marshall, to designate the diff"erence
between the price that a purchaser actually pays
for a given commodity and the price that he
would be willing to pay rather than go without
it. While the former can never exceed the
latter, it is clear that, as regards a large portion
of each individual's expenditure, the latter
must exceed the former. This is proved by the
fact that although a rise in the price of a com-
modity may lead a purchaser to buy less of it,
he wiU not usually give up buying it altogethei
unless the rise in price is very considerable.
Consumers' rent thus measures the surplus
satisfaction that a consumer derives from the
purchase of a commodity over and above the
satisfaction that he sacrifices in paying away
its price. In illustration, we may suppose the
case of a man who, if the price of coals were £10
a ton, would just be induced to buy one ton
annually ; who would just be induced to buy
two tons if the price were £7, three tons if it
were £5, four tons if were £3, five tons if it
were £2, six tons if it were £1 : 10s. ; and who
— the price being actually £1 — does as a matter
of fact buy seven tons. The fact that for one
ton he would be willing to give £10 shows that
the satisfaction he derives from that one ton is
economically measured by £1 0. Hence the pur-
chase of it for £1 yields a surplus satisfaction
that is measured by £9 ; it yields, in other
words, a consumers' rent of £9. Similarly the
surplus satisfaction yielded by the whole amount
of coal that he buys is measured by the differ-
ence between his actual expenditure on coal (£7)
and the sum of the prices that he would just be
willing to give for each successive ton, i.e.
£29 : 10s. In other words, the whole consumers'
rent that h^ derives from buying coal at £1 a
ton is £22 : 10s.
The term Consumers' Bent is seen to be em-
ployed analogically : agricultural rent is the
excess of the value of the total produce obtained
from a given piece of land over what is required
to remunerate the farmer for the outlay involved
in raising the produce ; consumers' rent is the
excess of the money equivalent of the satisfac-
tion derived by an individual from the total
amount of a commodity that he purchases, as
measured by the total price that he would, if
necessary, be willing to give for it, over the out-
lay actually incurred.
Since the amount of satisfaction yielded to
different purchasers by the same expenditure
may be very different, it follows that a given
consumers' rent may represent varying amounts
of surplus satisfaction. In particular, the
utilities of two commodities cannot be regarded
as even approximately represented by their
money measures, when one of the commodities
is consumed chiefly by the rich and the other
chiefly by the poor. Professor Marshall points
out accordingly that the practical usefulness of
e,stimates of consumers' rents is limited to those
cases in which the prices taken into consid-
eration are those paid in markets where the
average wealth of the purchasers is equal.
The working out of problems that relate to
consumers' rent is much facilitated by the em-
ployment of diagrammatic methods. The use
of diagrams also indicates clearly the analogy
between consumers' rent and rent in the ordin-
ary sense.
[The above account of consumers' rent is taken
CONSUMPTIBLES— CONSUMPTION
from a paper by Professor Marshall, on the Pure
Theory of {Domestic) Values, printed for private
circulation in 1879, and from the same author's
Principles of Economics. For further explanation
and for illustration of the uses to which the con-
ception of consumers' rent may be put in economic
discussions, and the limitations with which they
must be received, see the last-named work, bk.
iii. ch. iv., and bk. v. chs. vii. and viii.]
J. K K.
CONSUMPTIBLES. A Term employed
BY THE Schoolmen. The schoolmen based a
theory of interest on the distinction between
"consumable" and "durable" goods. In the
case of the former, the use of which is insepar-
able from and transferred with the article itself,
interest was in their eyes wrong. The transfer
of a consumptible, e.g. corn and wine, carries
with it the right to consume. So to require the
thing back, and also something for its use, is
to charge two prices for it, one, a fair and
proper equivalent, the other an extortion (see
Fungibles),
[Aquinas, Summa Theologice, II. ii. Q. 78, Art.
1. — Bohm-Bawerk, Capital and Interest (Eng.
trans.), vol. i. ch. i. p. 22.] l. r. p.
Consumptibles. The end of all produc-
tion is consumption, and consumptibles are
the individual material objects destined for, or
capable of, consumption. This may follow after
and extend over a longer or shorter period.
The loaf which is eaten on the day of baking,
the Suez Canal which will last, it is hoped, for
centuries, are both consumptibles ; they have
this in common that they are destined to be
consumed, and their destination is proved by
the fact. But it is not necessary that the pro-
cess even of consumption should begin at once
on the completion of production. Consump-
tibles may be in stock an unlimited period
before consumption begins without forfeiting
the title. Thus the term covers the whole
range of production, and includes all the pro-
ducts of industry. But it includes also a large
number of other things. The gifts of nature,
fruits, metals, animals, and also the forces of
nature are all to be classed under the head of
consumptibles. In some such cases the process
even of consumption may not begin for centuries,
and may continue for centuries more.
Cousumptible and kindred terms would be by
some restricted to articles that are desired for
their own sake which are ends in themselves ;
goods of the first order, in Menger's phrase. In
this sense a loaf is consumed, but not a machine.
" Used up " has been proposed as a more general
term than consumed. Another distinction is
between commodities which in order to be useful
must be used up, and those which, though in fact
they do wear away, do not confer utility by being
used up. A loaf belongs to the former class, the
Suez Canal to the latter.
CONSUMPTION. Some economists have
proposed to place consumption on the same
footing as production, distribution, and exchange
as a special department of economics. Since in
England, however, this has not been attempted
in the standard text-books, it seems best to
indicate the various problems in the accepted
divisions of the subject which would naturally
fall under a department of consumption. It
will be found that to a great extent the prob-
lems of the new department have been already
investigated under other names.
(1) First of all come questions of definition and
the explanation of the fundamental ideas at the
basis of consumption, generally treated by English
writers in connection with production. ' ' Con-
sumption," says Adam Smith, "is the sole end
and purpose of all production, and the interest
of the producer ought to be attended to only
so far as it may be necessary for promoting that
of the consumer." Later criticism has throAvn
doubt on the possibility of making such a sharp
distinction between the interests of producers
and consumers. Apart from women who are
largely employed in domestic duties, and old
men, invalids, and children, the number of
those returned in the census of any civilised
country as "unoccupied" is extremely small,
and thus the great majority of the adult males
are both producers and consumers. Accordingly
the conditions as regards health, variety, moral
and intellectual efiects on the worker of the
work done, etc., are of co-ordinate importance
with the amount and quality of the definite
commodities consumed. These questions are
often discussed under the "disadvantages" of
Division of Labour {q.v.), and sometimes
under the effects of machinery.
The principal idea in consumption is utility,
taken in the wide sense in which the term is
used in ethics (utilitarianism) ; the character-
istics of which were first analysed by Bentham.
From the consumer's point of view the chief
attribute of wealth is simply its utility — "its
power or capacity," in Mill's language, "to
satisfy a desire or serve a purpose." From
this standpoint the fact that wealth requires
land, labour, and capital for its production, that
it may be distributed in difiFerent ways according
to the laws of the state or so-called natural
economic laws, and that it may be exchanged,
are of secondary importance. The consumer
looks primarily to utility. Thus if by some
discovery of natural sources any commodity
became so abundant as to lose altogether its
exchange value, this would to the consumer be
the best thing possible. Professor Jevons was
the first to give full importance to utility as the
foundation of consumption, and in this way the
basis of economic science in general {Theory of
Political Economy). Previous writers, as Mill,
had been content with indicating broadly that
utility was one requisite of exchange value. By
the distinction between final and total utility
(see Utility), Jevons threw a new light on the
394
CONSUMPTION
whole subject. The utility obtained by the
consumption of successive portions of any com-
modity is beyond a certain point subject to a
species of diminishing return. The total utility
of the things necessary to preserve life is very
great, but the final utility of the last mouthful
of bread and butter eaten by a well-fed labourer
may be very small. The art of consumption,
even without considering the limited powers of
acquisition by an individual, consists in know-
ing when to leave off in one thing and to begin
another. The ideal is reached when the final
utilities of all the articles consumed are just
equal. If everything were to be had in perfect
abundance consumption would in each case be
carried on until the zero point was reached, and
further consumption would involve harmful ex-
cess or negative utility.
(2) The relation of consumption to production
may next be noticed. The object of consump-
tion is to obtain utility, but in general this can
only be done by the destruction, at a more or
less rapid rate, of the thing used. To replace
this destruction, when the natural supplies are
limited, is the object of production. This leads
to the distinction between productive and un-
productive consumption. The former may be
defined strictly as that part of the producer's
consumption which is necessary to keep up or
increase his efficiency, whilst the remainder is
unproductive. Thus it is impossible to separate
the individuals who compose an industrial
society into distinct classes of productive and
unproductive consumers, for the great majority
are both, though in different degrees.
Apart from this most general relation of
consumption to production, we may consider
the former as a stimulus to the latter. This is
the principal point overlooked in Mill's unfor-
tunately-worded proposition that demand for
commodities is not demand for labour. It is
the growth in the intensity and variety of the
demands of consumers which is the mainspring
of the increase of production, and thus of the
employment of labour. This point has been
forcibly illustrated by Adam Smith in his
historical survey of the way in which the
commerce of the towns contributed to the
improvement of the country ( Wealth of
NatioTis, bk. iii. ch. iv.) Mill himself also
observes (Political Economy, bk. i. ch. xiv.)
that amongst the means of increasing the
industrial activity of oriental nations must be
reckoned "the growth of mental activity
making the people alive to new objects of
desire. "
(3) Although in one way consumption
through demand determines production, in
another way production through the conditions
of supply determines consumption. For the
means at the disposal of any individual are
limited, and in many cases give little surplus
above what is requii-ed for the barest neces-
saries, and it follows that the price of tht
article is as important as its utility in deter-
mining the quantity consumed. The funda-
mental law of demand is that with every fall in
price per unit, other things remaining the
same, the number of imits demanded increases.
The consumer will aim at obtaining the maxi-
mum utility from the expenditure of the money
at his command, and, to put the matter in the
simplest form, a peck of apples may be of more
use than a single pineapple. But the price of
any article, not actually subject to natural or
artificial scarcity or monopoly, depends normally
upon Cost of Production {q.v.) Thus cost of
production has an equal reciprocal influence on
consumption. This is well illustrated in the
case of food. The introduction of a cheaper
means of subsistence often leads to the partial,
or even total abandonment of a more costly,
though in other respects superior national food,
as, for example, was the case with the potato
in Ireland. Again in the matter of clothing,
the cheapness of the commodities produced on
a large scale has driven out of use various
home-made articles, e.g. stockings. The total
result of this substitution of cheap and inferior
articles may contribute towards lowering the
standard of comfort of the mass of the people,
and in this way the effect of production upon
consumption may be most important.
(4) The connection between the distribution
and the consumption of wealth is obviously of
the closest kind, for the kind of articles
selected by the consumer will depend upon the
amount of his income. If aU incomes were at
the same level of moderate competence there
would be no scope for the higher forms of
luxuries, which require exclusive use for their
enjoyment. Accordingly we find that socialists
who aim at comparative equality of incomes
lay great stress on all forms of social enjoyment,
e.g. theatres, picture-galleries, music, etc.
Again, historically, we find that the forms of
wealth at different times have been largely
determined by its distribution. The produc-
tion of works of art in mediaeval Italy, and
game preserving in England, are examples of
the mode in which consumption varies with the
interests of dominant classes.
(5) The question of consumption may next
be considered from the point of view of govern-
mental control or laissez-faire. In former
times almost every government thought it a
most important part of its duty to lay down
what various classes, or even individuals, might
or might not consume, and we find sumptuary
laws of the most detailed kind. In mediaeval
England, for example, both clothing and food
were subject to the strictest regulations. A
person must be of a certain social standing to
be entitled to wear silk, or to eat more than
three courses at a meal. In oriental countries
this idea has reached its fuU development in
CONSUMPTION
395
the caste system. In modern times in progres-
sive societies the tendency has been in con-
sumption, as in production, to rely more and
more upon laissez-faire, although public opinion,
distributed through different social orders,
still exercises considerable influence, especially
in matters of dress, houses, furniture, etc. In
some respects, however, the government stjU
exercises a direct or indirect control over con-
sumption, and it is held to be justified in doing
so in cases where the consumer is not the best
judge of his own real interests, or of the real
value of the article consumed. Thus in most
countries the sale of intoxicants and the pre-
scription of medicines have been placed under
legal restraint. At the same time also laws
with detailed provisions have been enacted
against various forms of adulteration and
fraud. The interests of consumers who are
considered unfit to judge for themselves, e.g.
children, have been specially considered. In-
directly government influences consumption
mainly by taxation, and some taxes are advo-
cated principally for their social eff"ects (see
Taxation).
If the department of consumption ever
assumes in the text-books a position of co-
ordinate importance with the other depart-
ments, it might well be made to embrace
various other topics at present scattered
through ditlerent parts of economics.
Such, for example, is the question of the
poor and poor-laws (see Charity, State),
the advisability of protecting the limited
natural resources of a nation, the necessity of
considering the ultimate social effect of certain
forms of trade which, for the time being, may
be profitable (see Free Trade), and various
questions on the distribution and inheritance
of wealth, e.g. the eff'ects on national consump-
tion of a system of peasant proprietary.
(6) Lastly, the light thrown by the study of
consumption upon social progress may be con-
sidered. Consumption being largely deter-
mined by distribution, is itself in turn one of
the best signs of the way in which the national
wealth is distributed. Statistics as to the
consumption per head of various articles in
diff"erent nations, or in the same nation at
diff"erent times, often give the best evidence
available on the wealth of various classes. In
making such comparisons, however, regard
must always be paid to a possible change or
difference in tastes and habits, and also to the
cost of the various articles considered, whether
influenced by natural or governmental causes,
and to the use of substitutes. A relative
falling-off" in the rate of the consumption of
008*66 may be due to an increase in the use of
cocoa, and a decrease in the use of intoxicants
may be ascribed, not to diminished consuming
power, but to higher moral development. But
when proper precautions are taken, statistics of
consumption furnish a good outline of the
material life of the mass of the people. The
mere fact, for example, that so many articles
are continuously produced on a larger scale
shows, not only that they are consumed in
increasing qua titles, but also that larger
numbers of people are able to purchase them,
and thus the contention of the socialists that,
through production on a large scale, wealth is
being concentrated in a few hands, is shoAvn to
be an error, because the articles produced can
only be consumed when spread over a wide
area. In making comparisons of national
progress from the consumer's standpoint, it
would be most useful if index numbers based on
the average consuming power of various classes
were constructed (see Index Numbers).
[The subject of consumption is specially treated
in Koscher's Political Economy, and in Schonberg's
Handbook, by Professor Lexis. A useful develop-
ment of Jevons's theory is given in Mr. Wicksteed's
Alphabet of Economic Science ; and in Mr. J. N.
Keynes' Scope and Method of Political Economy,
at p. 101 et seq., there is an interesting discussion
of the question whether the consumption of wealth
should or should not be regarded as constituting
a distinct department of political economy ; with
notices of numerous economists who have adopted
this arrangement.] J. s. N.
CONSUMPTION, Taxes on. The provision
of an adequate revenue for the purposes of govern-
ment has from the earliest times been effected,
in part, by means of taxes on consumable
articles. Adam Smith ( Wealth of Nations, bk.
V. ch. ii. art. iv.) ascribes the invention of
such taxes to "the impossibility of taxing the
people in proportion to their revenue by any
capitation," but it would appear that the failure
of direct imposts in mediaeval times resulted in
an increase and extension of a previously exist-
ing method of raising revenue, rather than in
the institution of a system which is, in its
essence, that of contribution in kind. Taxes
on consumable commodities have been com-
mended by economists on the gi'ound of their
convenience, it having been found possible by
means of such taxes ' ' to raise a considerable re-
venue . . . the payments of which by con-
sumers are made in insensible portions, where
it would have been impossible to collect the
same amount by direct taxation at comparatively
long intervals. Taxation is in this respect like
bleeding" (Professor Nicholson, Encyclopedia
Britannica, 9th ed., art. "Taxation"). It has
also been urged in favour of this system of
taxation that it may be assessed so as to leave
no doubt concerning what ought to be paid, or
when it ought to be paid, and Montesquieu
{Esprit des Lois, liv. xii. cap. vii.) says in
favour of taxes on commodities that they "are
felt the least by the people because no formal
demand is made for them. They can be so
wisely contrived that the people shall scarcely
know that they pay them." On the othei
396
CONSUMPTION— CONTIN^I^ONTP A.BANT^^
hand, while Ricardo affirms that a tax on
necessaries will not be borne by the working
classes {Principles of Political Economy, ch.
xvi.), Adam Smith distinguishes between the
eflfect of taxes on necessaries and on luxuries,
observing {Wealth of Nations, bk. v. ch. ii.
art. iv.) that in the former case the tflx will
eventually be shifted to other shoulders than
those of the immediate consumer. M'Culloch
adds that the process by which this is brought
about is slow and difficult, and that "there is
in most cases a great risk in imposing or in-
creasing taxes on necessaries, lest the wages of
labour should not sustain a corresponding rise,
and the condition of the labourers be in conse-
quence depressed." Professor Sidgwick empha-
sises the fact that the taxation of commodities
is "incompatible with any very exact equalisa-
tion of the burden of taxation," but he adds
that the system has " the merit of avoiding the
worst inequalities which taxation proportioned
to income would cause . . . since it enables
those persons whose needs are greatest to diminish
their share of taxation by abstinence from cus-
tomary luxuries " {Principles of Political Econ-
omy, 1883, pp. 565, 566).
It is generally believed, with Adam Smith,
that taxes on commodities take out or keep out
of the pockets of the people more than almost
any other taxes, in proportion to what they
bring in to the state, although it may be
doubted whether, under a well-ordered tariff and
modern administration, any serious ^ objection
arises under this head (see Cost of Collection
OF Taxes).
Taxes on commodities have also been resorted
to for other purposes than the provision of
revenue, e.g. the discouragement of the con-
sumption of intoxicating liquors, and the pro-
tection or encouragement of home industries by
means of the imposition of duties either on im-
ported foreign manufactures or on raw materials
sent abroad (see Protection). Such taxes
may be levied either by the collection of a duty
from the importer, producer, or manufacturer,
in which case it is usual where the duty is at
all heavy to permit the dutiable articles to be
warehoused under the supervision of the revenue
officers until such time as delivery for consump-
tion takes place, or by the collection of an
annual licence duty from the person using the
article, as in the case of carriages and guns.
The imposition of a licence duty in respect of
the manufacture of or dealing in certain articles
has practically the same effect as a duty on the
articles themselves.
As to the incidence of duties on commodities,
the summary of opinion given by Professor
Nicholson in the article above referred to may
be cited : ** Where production takes place under
free competition, the tax will, owing to the
tendency of profits to equality, be transferred
to the consumer, but when the article is
practically monopolised, a tax must fall on the
monopolist." For a more minute discussion of
these cases, see Pantaleoni, Theoria della pres-
sione tributaria, and Cournot, Eecherches, ch. vi.
The majority of the leading treatises on political
economy specifically deal with this subject (see
also Custom, Customs Duties ; Excise), t. h. b.
CONTINUATION or CONTANGO. Under
the word Backwardation {q.v.) the process
by which a person who, being unable to deliver
stock which he has sold, borrows it, has been
already described. In the same way, one who
has bought stock or shares which he cannot pay
for is obliged to borrow the money, and this he
can often do from the person who has sold the
stock or securities in question. But the seller
charges him a " contango." Under normal cir-
cumstances the contango, or rate of continuation,
somewhat exceeds the ordinary rate of interest
at which money can be borrowed from the
banks, for the banks do not lend to the full
market- value of the securities lodged with them,
whereas one who "contangoes" retains securi-
ties to the bare amount of his loan, and has no
claim until the next settling day against the
person whom he trusted to fulfil the bargain.
A great deal of business is done by money-
dealers, wfio borrow at a low rate and re-lend
on the stock exchange in this way. A. E.
CONTINENTAL SYSTEM. The great war
from 1803 to 1814 was primarily a duel be-
tween France and England, in which the other
powers of Europe were engaged, sometimes on
one side, sometimes on the other. But thei
war had this peculiar characteristic, thati
neither of the two chief belligerents could
attack each other directly. The battle of
Austerlitz annihilated the coalition which Pitt
had formed, and secured the supremacy of ^
Napoleon on the mainland. Almost at the
same time Nelson's victory at Trafalgar
destroyed the naval power of France, and put
an end to all ideas of invading England. Thus
the two states were forced to fall back upon
indirect modes of warfare, and each sought to
cripple the other's commerce. The measures
adopted by Napoleon for this purpose in his
famous decrees from Berlin and Milan have
received the name of the " continental system."
England retaliated by a series of orders in,
council, of which the two most important were
issued in 1807.
There was no novelty in the questions raised i
or the means adopted in this war, except the
vast scale on which mercantile hostilities were '
carried on. In all the wars of the 18th
century England had sought to cut off France
from commerce with its colonies. The result
had been to throw this trade into the hands oi
neutral powers. To prevent this, England had j
laid down the rule of 1756, that a neutral had J
no right to relieve a belligerent by carrying on ,
a trade in time of war, from which it would be
nc-bTiTTriNENTAL SYSTEM
397
excluded during peace. The harshness with
which England employed its maritime ascend-
ency to enforce this rule induced the states of
northern Europe to conclude an Armed Neu-
trality {q.v.) in 1780, and again in 1800. The
principles which they asserted were that ' ' free
ships make free goods," that a neutral may
Carry any commodities, except such as are con-
traband of war, and that a blockade can only
be respected when it is effectual.
The essential difficulty of measures against
the commerce of an enemy was that they
must necessarily affect the interests of neiitral
states. This difficulty became very prominent
in the war with Napoleon. On IGth ]\Iay
1806, the Whig ministry in England notified
to the ministers of neutral powers that the
whole coast from the Elbe to Brest was block-
aded against the introduction of contraband of
war or of goods belonging to the enemies of
England, while the coast from Ostend to the
Seine was subject to a rigorous blockade. This
measure gave Napoleon a pretext for issuing
the Berlin decree on 21st November 1806.
The preamble asserted that England had
violated the law of nations : (1) by extending
to private property on sea a right of capture
which on land only applies to property of the
state ; (2) by extending to unfortified towns
and ports a right of blockade which is only
applicable to fbrtilied places ; (3) by declaring
blockaded places before which there is not a
single vessel, and "places which all the united
forces would be incapable of blockading, such
as entire coasts and a whole emi)ire." On tlieso
grounds he decrees that — (1) the British Islands
are in a state of blockade ; (2) all commerce
with them is prohibited ; (3) every English sub-
ject in countries occupied by French troops, or
those of their allies, will be made prisoners of
war ; (4) all property of an English subject is
lawful prize ; (5) all merchandise belonging to
England, or obtained from her manufactories or
colonies, is lawful prize ; (6) no ship coming
direct from England or English colonies shall
be received in any port.
This measure went far beyond anything
which England had ever attempted, and was
the more preposterous as France had no naval
power by which it could be enforced. Probably
the wisest course for England would have been
to leave France to meet the discontent of her
subjects and allies, and the hostility of neutral
states, of which the United States were the
most important. In that case the Berlin
decree would almost certainly have been a dead
letter. But if the continental system owed its
origin to the action of France, it owed its
efficiency to the action of England. Without
waiting to see what attitude would be assumed
; by neutrals, the Whig government issued an
:i order in council on 7th January 1807. After
:' reciting the purport of the Berlin decree, it
ordered that no vessel should be allowed to
trade between one port and another belonging
to France or her allies ; that neutral vessels
attempting such a voyage should be warned by
English men-of-war and privateers ; and that
if they disregarded the warning, they should
be captured as lawful prize. This order failed
in its avowed object of compelling France to
withdraw the decree, or inducing neutral states
to insist on its withdrawal. On the contrary
English goods in the north of Europe were
rigorously confiscated by French troops. Mean-
Avhile the Whig ministry fell, and the Tories,
who succeeded to office under the duke of Port-
land, issued a second and far more stringent
order in council, on 11th November 1807.
This decreed that all ports belonging to France
or her allies, or to any country from which the
British flag was excluded, should be regarded
as in a state of blockade ; that all trade in
articles produced in such countries should be
condemned as unlawful ; and that every vessel
trading from or to such countries, or carrying
theh' produce, should be captured as lawful
prize.
Napoleon promptly answered this order by
the Milan decree, 17th December 1807. Its
chief provisions were as follows : — Every slnp
of any nation which submits to the order of
11th November is declared denationalised, and
considered as British property ; (2) the British
Isles are declared in a state of blockade "by
sea as well as by land." Every ship going to
or from a port of England or English colonies
is declared to be good prize ; (3) these measures
shall ' ' continue to be in force until the British
government returns to the principles of the law
of nations, which regulates the relations of
civilised states in time of war."
Thus the continental system, carried to its
logical extreme by both the two gieat belliger-
ents, threatened to pvit a stop to the commerce
of the whole world. It was of course im-
possible to enforce with absolute strictness
the provisions either of Napoleon's decrees
or of the English orders. A vast system of
smuggling was the inevitable result, and goods
were carried to the blockaded ports, though their
price was necessarily enhanced by the compara-
tive scantiness of the supply, and by the risks
run in conducting the trade. Perhaps the
most curious thing is that this smuggling was
connived at, and made a source of revenue, by
the two states who were responsible for the
prohibitions. Both England and France issued
licenses for the evasion of their respective
decrees. Napoleon is said to have amassed by
their sale the sum of 400,000,000 francs;
while in England the number of commercial
licenses mounted from 791 in 1805 to 18,356
ia 1810.
Although thus limited by licensed and un-
licensed evasions, the results of the continental
398
CONTINENTAL SYSTEM— CONTRABAND
system can hardly be over-estimated. It was
a principal cause of the ultimate fall of
Napoleon. To render the system efficient and
complete he must make himself master of the
whole of Europe. This impelled him to those
enterprises in Portugal and Spain, and especi-
ally to the great expedition to Russia, 'which
contributed essentially to ruin his power. And
again the sufferings caused among the peoples
of Europe by the scarcity and dearness of com-
modities which they had learnt to regard as
necessaries excited a discontent against French
domination which had not existed at the begin-
ning of the revolutionary conquests. The
French had always professed to be the enemies
of dynasties but the friends of the people, and
their professions had long been believed. The
continental system destroyed that belief, and
the Napoleonic empire fell before the popular
hostility which his measures against England
had excited.
With regard to England, the policy or im-
policy of the orders in council was hotly debated
at the time, and can hardly yet be regarded as
a matter on which opinion is absolutely formed.
That they did in the end serve their purpose as
measures of hostility against Napoleon is
absolutely demonstrable. But they did this at
considerable cost. In the first place they
inflicted enormous hardships upon English
manufacturers, who were to a great extent
deprived of the market for their produce. No
doubt these hardships were lessened by the
system of licenses, but this in itself is indefens-
ible on any principles of commercial morality.
The almost unanimous petitions from the chief
manufacturing towns prove that they had un-
doubted grievances to complain of, and that
these were, to a great extent, due to the policy
of the government.
But the most harmful result to England was
undoubtedly the quarrel with the United
States. It was inevitable that the enmity of
neutrals should be directed less against the
state which originated the continental system
than against that which had the power to
enforce it. In 1808 Congress passed an act of
embargo, prohibiting aU intercourse with Eng-
land and France as long as the two countries
maintained their decrees. In the hope of con-
ciliating the last great power which was not
hostile, England modified the orders in council
in April 1809, by opening to American vessels
the Baltic, the North Sea, part of Italy, and
the foreign possessions of the Dutch. But the
quarrel was not healed, and it was further
aggravated by disputes arising from the English
claim to search American vessels for deserters
from the navy. To make matters worse,
Napoleon offered to withdraw his decrees, on
condition that England should revoke the
orders in council and abandon ''the new prin-
ciples of blockade which they had laid down. "
To this the English ministers would not agree,
and at the end of 1810 the American ambas-
sador quitted England.
The loss of the American market, and the
prospect of a quarrel with the United States,
increased the ill-feeling in England against the
orders. The Whigs, who were responsible for
the policy in its origin, now turned round and
denounced it. At last, in 1812, Brougham
carried a motion in the Commons for an inquiry
before a committee of the whole house. The
evidence was almost conclusive, and after a
one-sided debate, the government avoided a
division by announcing that the orders would
be abandoned. They were repealed by an order
of 23rd June 1812. But it was too late to
avoid the war with America, which lasted for
two years with little credit to either country,
and was terminated by the treaty of Ghent in
1814. (See Blockade ; International Law ;
Paper Blockade.)
[The Berlin and Milan decrees will be found
in the Moniteur : the orders in council in the
London Gazette. They are quoted in extenso
by Leone Levi, History of British Commerce,
part ii. oh. iv., Appendix. — See also Alison,
History of Europe, vol. viii. ch. 1. — Life and
Tim^ of l^ord Brougham, by himself, vol. ii. ch
X., and Speeches, vol. i. — Spencer Walpole, Life of
the Right Hon. Spencer Perceval, vol. ii. ch. viii.—
For the fullest criticism of the policy of the orders
in council, see Hansard, Parliamentary Debates,
sub. ann., 1812.] R. l.
CONTRABAND. A term used to denote
articles in which trade is carried on contrary to
the provisions of (a) international law and
comity, (&) the revenue laws of a nation.
(a) It has been generally admitted amongst
civilised nations that the subjects of a neutral
power are entitled to continue to trade with
those of powers at war with each other without
rendering their goods liable to capture and for-
feiture. In order to enable this right to be
exercised without detriment to the position of
the belligerents, international jurists have
endeavoured, with some limited success, to
lay down the rules which should be observed
in trade so carried on, and those rules have
frequently been embodied in treaties. It is
now well established that the carriage and sale
to a belligerent of instruments and materials
which are, by their own nature, fit to be used
in war, are inconsistent with neutrality. "If,"
says Lord Grenville {Letters of Sulpicius, p. 26),
" I have wrested my enemy's sword from his
hands, the bystander who furnishes him with a
fresh weapon can have no pretence to be con-
sidered as a neutral in the contest." All such
instruments or materials are therefore regarded
as contraband, or merces banno interdicta, and
they are liable to seizure and forfeiture if cap-
tured in course of conveyance to a belligerent.
Another class of articles is said to be ancipitis
usits, i.e. of variable application, being of snch
CONTEABAND— CONTRACT
399
a character that it cannot be exactly determined
whether they are intended for belligerent or for
ordinary commercial purposes. Amongst these
articles are coal, naval stores, timber, and tar.
The decision whether articles of this class are to
be deemed contraband will rest with the court
before which the goods are brought, when regarfi"
should be had to the destination of the ship,
the purposes for which the goods are intended,
the position and cliaracter of the war, and the
regulations and treaty obligations laid down or
accepted by the belligerent. Even, however,
if articles of this class are held to be contra-
band, they are not ordinarily subject to seizure,
but merely to the right of pre-emption, under
which their full value, with, in some cases, the
ordinary mercantile profit, is paid for the
articles if the belligerent desires to retain them.
This right is described by Sir Robert Phillimore
as "a fair compromise between the right of the
belligerent to seize, and the claim of the neutral
to export his native commodities, though imme-
diately subservient to the purposes of hostility"
{Commentaries upon International Law, vol. iii.
2nd edition, p. 451). Within these limitations as
to commodities, and subject to absolute prohibi-
tion of commerce with besieged and blockaded
places, "it cannot be too emphatically declared
that it is the unquestionable right of the neutral
to carry on a general trade with the belligerents"
(ihid. p. 387).
{h) The term " contraband " is also applied to
goods in respect of which the requirements of
the revenue laws of a country have not been
complied with, and which are liable to seizure
hereunder. Section 177 of the Customs Laws
Consolidation Act, 1886(39&40 Vict. c. 36),
provides that goods unshipped without payment
of duty, prohibited goods (whether imported or
shipped for exportation), goods illegally removed
from a warehouse, goods concealed on board a
ship or boat, and goods packed therewith for
the purpose of concealing them — are all liable
to forfeiture, and a similar provision is enacted
(§ 179) in respect of prohibited goods found on
board or attached to any vessel or boat found
on arriving within the United Kingdom, or
within three leagues thereof. The seizures may
be disposed of as the commissioners of customs
direct. The excise acts contain similar enact-
ments with respect to excisable commodities.
In 1911 the customs officers made 6630
seizures, amounting in the aggregate to 1 0 , 6 4 9 tb
of tobacco and cigars, and 143 gallons of spirits.
The produce of these seizures is, as a general rule,
sold, if a price over and above the duty can be
obtained, and the articles are legally saleable.
[Phillimore's Commentaries on International
Law. — Wheaton's Elements of International Law.
— Hall's International Law, 2nd ed., 1884, pp.
598-637. — As to offences against the revenue laws
see the annual reports of the commissioners of
customs and inland revenue.] T. H. e.
CONTRACT. The origin of contracts must
be co-eval \vith the first commencement of econo-
mic relations among mankind. The simplest
actions of daily life, even amongst the least civil-
ised communities, are really forms of contract.
Exchange and barter, the earliest and crudest
outcome of the law of supply and demand, is
essentially a contract. The man who can make
a rude plough finds himself, by the possession of
that faculty, independent of the necessity of en-
gaging directly in agricultural pursuits to obtain
a share of the fruits of the earth. This element-
ary example will suffice to demonstrate the
primary bearing of the doctrine of contracts on
economic questions. For even in this there is
traceable one of the great and fundamental
principles of contract in its relation to political
economy, namely, the power it bestows of ob-
taining at once a personal benefit, through
entering into an engagement ultimately to
discharge the original obligation. In more
advanced conditions of society, the principle
assumes more extended development ; land-
owners lease land to farmers possessing skill
and capacity requisite to till that land to ad-
vantage, capitalists advance money to merchants
to be employed in trade to produce profits ex-
ceeding the rate of interest demanded, but the
principle is still the same. It is obvious that
to induce a man to entrust liis property to
another, to part with his present enjoyment
and use of it for the sake of future advantage,
the certainty of that future advantage must be
secured to him, he must have a hold over the
person to whom he has entrusted it, he must,
to carry on his business and arrange fresh com-
binations, be able to reckon with confidence upon
the return to him of his capital, together with
the increment which is the result of its tempor-
ary alienation. It is the establisliment of this
confidence, the basis of any system of credit,
which is the aim and object of the law of con-
tracts. The methods by which the law seeks
to attain this security are various. For two
objects, apt to clash, have to be borne in mind.
On the one hand, that of ensuring performance
of, inspiring confidence in, the fulfilment of the
contract ; on the other, that of encouraging the
freedom of contract by attaching thereto such
safeguards that persons may readily bind them-
selves, knowing that the law will protect them,
and that precautionary measures exist which
will prevent undue advantage being taken of
ignorance, necessity, inadvertence, want of
proper advice, or lapse of time ; and that fraud,
if it exists, will invalidate any contract, how-
ever formal and solemn. To turn to concrete
examples. Among the first class, or what may
be termed the promisee's safeguards, may be
enumerated the rules by which money due or
liquidated demands under a contract can be
recovered by speedy and economical process,
such as that provided by Order XIV. of the
400
CONTRACT
rules of the Supreme Court, which practically
casts the onus of proving non-liability on the
defendant, and the procedure which amerces
damages, assumed to be commensurate with the
injury directly or reasonably referable to the
breach of the contract, or where such damages
afford no sufficient reparation, specific perform-
ance of the contract itself. The other class,
which may be termed the promisor's protection,
comprises enactments, such as the statute of
limitations, which requires that actions on con-
tracts should be brought within such period as
to render it probable that witnesses who can
speak to what really took place may be still
available ; the statute of Frauds, rendering
writing necessary for proof of contracts attaining
a certain degree of importance or extending over
a specified period ; the whole doctrine of the
limitation of the contractual powers of infants
and married women, the equitable rules which
will in fitting cases set aside or modify un-
conscionable bargains with reversioners or per-
sons whose immediate and pressing needs impair
their liberty of action, and finally the great
principle that fraud invalidates everything.
In certain exceptional cases the legislature
goes even further than this, and adopts a course
which must always be open to criticism and
discussion. It passes an act to benefit a par-
ticular class, such for instance as the Agricultural
Holdings Act of 1883, or the Ground Game Act
of 1880, and then provides that it shall not be
competent for any member of the class intended
to be benefited to contract himself out of the
act. How far this interference with freedom
of contract is justified must always be an open
question. It is never permissible save in the
interest of a class admittedly improvident or
prone to sacrifice future advantage for imme-
diate gratification, such for example as sailors.
But e"vien in such cases, members of the class
intended to be benefited must occasionally lose
good opportunities by reason of the fetters so
imposed on their contracting powers. Take
the case of a farmer willing to take a farm at a
lower rent if he could renounce the benefit of
the Ground Game Act, having no inclination to
avail himself of the sporting reservation it
ensures him, and possessing a well-founded con-
fidence that his landlord, from his own tastes
and interests, to say nothing of his regard for
an obligation assumed, would never permit
ground game to increase to the prejudice of the
tenant's occupation of the farm. It certainly
seems hard that the parties should not be per-
mitted to regulate their relations in accordance
with their own wishes and their mutual interests.
But the justification of such measures is to be
found, if at all, in the general interest of the
community and the welfare of the class specially
concerned, and for one case where the rule might
probably be relaxed with advantage, there would
be many where the deviation would produce
ultimate disadvantage to one party. Some
instances of legislative interference with freedom
of contract seem, however, to be entirely bene-
ficial, such for instance as the Truck Acts, and
the legislation respecting the employment of
women and children in mines and factories,
(see Children's Labour, and Factory Acts.)
An interference with contracts, frequently un
justifiable, is that of ex post facto legislation,
enactments which set aside or modify existing
contracts, not on the gi'ound of any inherent
disability or irregularity existing at the time
the contract was entered into, not on any sugges-
tion that the parties were not of competent and
freely consenting mind when they contracted,
or that the contract was in any way tainted
with fraud, but on the plea that since that date
circumstances have altered, that something has
supervened which renders it equitable or desir-
able that its terms should be reconsidered or
readjusted without the consent of at least one
of the parties thereto. Whether such circum-
stances exist or not in any particular case, or
whatever estimate may be made of the justice
or the policy of such a measure, appears alto-
gether outside the economic questions involved.
If good is done in any particular case, the benefit
is immeasiirably outweighed by the danger of
the precedent, by the general sense of insecurity
induced, and the shock to confidence in the
sanctity of contract occasioned thereby. In-
stances are not far to seek. Irish rents in recent
times, and commercial obligations in France
during the stress of the Franco-German war, have
been the subject of this sort oi ex post facto legisla-
tion, and however widely opinions may difler as
to the degree of justification afforded in each
case by the exigencies of the situation, the pre-
cedent cannot from an economic point of view
be regarded as otherwise than dangerous. Such
legislation has been likened to a convulsion of
nature which by destroying the subject matter
of a contract renders the fulfilment thereof im-
possible and takes away in ordinary cases any
right to damages for the breach ; and the simile
indicates the legal attitude towards exceptional
measures of this nature. A question of mixed
economics and law in relation to contract which
is at present taking definite and practical form
is how far the law will intervene to limit com-
binations which, having as their objects the
attainment of complete or partial monopolies
and the elimination of healthy competition, may
tend to enhance the price of articles of daily ne*
cessity, to the benefit of the few and the prejudice
of the many. Contracts made with a view to
such an end may be declared void as between
the parties both in this country and in America,
but community of interest secures adherence to .
the terms of such contracts and the remedy, if I
any, must be brought to bear from outside.
As stated by Lord Coleridge in the recent case
of the Mogul Steamship Company, Limited,
CONTRACT, LAW OF
401
t;. M'Gregor, Gow, and Co., 21, Q.B.D., 544,
in a judgment affirmed by the H. of L. (92)
Appeal Cases 25, the line which separates the
reasonable selfishness of traders from wrong and
malice is one difficult to draw in words. But
the law of conspiracy is very untrammelled and
general in its operation, embracing in its wides^
definition any combination of two or more per-
sons for the accomplishment of anything which
in the opinion of the court is detrimental to the
public welfare, and it will probably come to be
judicially settled before long how far salt unions,
flour and coal unions, and the whole develop-
ment of the ring system, fall within the scope
of the criminal law under this head.
The intervention of bankruptcy law to pre-
clude the full enforcement of contracts stands on
a different footing (see Bankruptcy Law). The
possibility of bankruptcy is always a remote
potential incident of every contract, from the
inception of which it must be taken to have
been in the contemplation of the parties and
accepted by them ; moreover, the obloquy and
disabilities involved by becoming bankrupt,
coupled with the necessary surrender of all
existing, and until discharge, all accruing,
property constitute a sufficient deterrent and
punishment to warrant an interference which
is after all more in tlie interest of the body
of creditors than of the bankrupt.
Confidence in the fulfilment of contracts
renders possible the replacement of a very large
proportion of the circulating medium of a
country by the employment of paper to re-
present the gold or silver which would otherv/ise
be required. Bank-notes are merely contracts
to pay, yet the firm belief in the validity of the
contract supports a circulation adequate for the
wants of the country, with the assistance only
of coin representing a comparatively small pro-
portion of the outstanding liability, and so
with bills and promissory notes ; though only
contracts, yet, backed by the credit of the
parties to them, they take, during their currency,
the place of coin.
So again, the entire fabric of legitimate co-
operation and combination, of partnerships, the
utilisation of capital and organisation of labour,
would be impossible were it not for the doctrine
of contracts and its practical availability. A
firm of contractors, themselves bound by con-
tract to unite their energies and capital, or
deriving that capital from others by means of
conti'act, undertake under contract important
works for a body of persons who again, as a
company, combine their capital under the
provisions of a contract of association, the
contractors make subcontracts with managers,
foremen, and workmen for their respective
services, with producers, carriers, shipowners,
j and manufacturers for the supply and carriage
I of the requisite materials and plant, other
con traces are entered into with landowners
VOL. I.
for the site to be occupied, and so by the
intervention of a series of contracts, an enter-
prise is carried through which would be
absolutely impossible without such machinery.
Employment is found directly or indirectly for
a large number of persons, and money is put
into circulation through the most remunerative
and beneficial channels.
As we have seen that the principle of contract
helped to supply the simplest wants of early
economic society, so it keeps pace and expands
with the increasing needs of advancing civilisa-
tion. By an inherent power of development,
without any moving cause other than men's
recognition of its necessity and appreciation of
its efficacy, it rises to every fresh occasion, and
almost insensibly permeates daily life to the
welfare and progress of society at large. ^
[Addison on Contracts. — Chitty on Contracts. —
Pollock's Law of Contracts. — Anson on Contracts.'\
J. R. p.
Contract, Law of. A contract is a legally
binding promise made by one or more persons
to another person or other persons, to do some
act, to forbear from some act, or to suffer
some act to be done, for the benefit of such
other person or persons. Such a promise,
whether legally binding or not, is called an
agreement, and an agreement becomes a contract
if the following requirements are complied with :
(1) the promise must be intended to create a
legal relation between the parties (e.g. a promise
to dine at a friend's house is not a contract) ;
(2) the parties must be capable of contracting
(e.g. the agi-eements of infants and lunatics are
mostly invalid, and a married woman having
no separate estate is incapable of contracting) ;
(3) the contents of the agreement must have
been submitted by the one side to the other
(otfer), and must have been assented to by the
latter in an unambiguous and unqualified
manner (acceptance) ; (4) the agreement must
not be entered into for an unlawful or immoral
object {e.g. an agreement not to exercise a certain
trade without any limit as to space is invalid,
as being in general restraint of trade, and there-
fore against public policy; an agreement to
commit an indictable offence is similarly void,
and there are numerous other instances) ; (5)
the contract must either be made by deed {i.e.
signed, sealed, and delivered by the promising
party or parties), or it must be supported by a
"valuable consideration."
A contract made by deed is called a contract
under seal or a specialty ; contracts not made
by deed are called simple contracts or parol
contracts. A valuable consideration may consist
in a benefit accruing to the promising party or
in a sacrifice made by the party to whom the
promise is made, in exchange for the promise.
1 Montesquieu's story of the Troglodytes forcibly illus-
trates the dissolution of society through breach of con-
tract.
2 D
402
CONTRACT, LAW OF— CONTRIBUTION
If, for instance, A by contract under seal pro-
mises to B to pay liim £500 on a given day by
way of gift, B will succeed in an action against
A if A fails to pay at such date. If, on the other
hand, the same promise be made by writing
without seal, 1> has no remedy in case of non-
performance. I f, however, A, by word of mouth,
promises B to pay him £500 in two days in
consideration of B lending him a book for two
hours, there will be an enforceable contract, as
the adequacy of the consideration is not inquired
into except in so far as it might be evidence
of fraud.
An agreement which satisfies the above-men-
tioned requirements is called a contract ; if,
on the other hand, any one of the requirements
is not complied with, the transaction remains
without any legal efiect, and the agreement is
called "void." Void agreements must be
distinguished from unenforceable and voidable
contracts.
Certain classes of contracts are not enforce-
able in the absence of written evidence as to
their contents, the following being the most
important : —
(1) Under § 4 of the Statute of Frauds
(29 Car. II. c. 3).
(a) Contracts by which an executor or
administrator assumes personal liability for
debts owing to the estate administered by him.
(b) Contracts of guarantee, (c) Contracts made
in consideration of marriage, (d) Contracts for
the sale or purchase of land or of any interest in
land, (e) Contracts not to be performed within
a year from the date on which they are made.
(2) Under § 1 7 of the same statute.
Contracts for the sale of goods at the price of
£10 or at any higher price, unless the goods
have been partly accepted and received by the
buyer, or have been partly paid for by the same.
(3^ Contracts arising on bills of exchange.
(4) Contracts of marine insurance, etc.
The requirement of writing in these cases
does not affect the validity of the contract ;
only so long as no written evidence exists the
contract cannot be proved in a court of law ;
but written evidence dated from a time sub-
sequent to the date of the contract, if otherwise
in order, is quite sufficient.
A " voidable " contract is one which may be
rescinded by one of the parties, unless such
party, after having become aware of the circum-
stances which make the continuance of the
contract depend on his option, by his conduct
or by express words shows that he intends to
abide by the agreement. Thus, for instance, a
contract induced by fraud or undue influence is
voidable at the option of the defrauded or intimi-
dated party.
The usual remedy for breach of contract is
an action for damages ; the party who suffers
loss in consequence of such breach is entitled to
receive compensation in money from the party
who failed to perform the contract. He is *' as
far as money can do it to be placed in the same
situation as if the contract had been performed."
The causal connection between the non-perform-
ance and the loss must, however, not be too
remote, and the loss must be of such a descrip-
tion as might reasonably have been contemplated
by the parties when entering into the contract.
Thus a person who sends some machinery for
repair through a carrier who fails to deliver it
in proper time cannot claim compensation for
the loss of trade arising through the delay in
the receipt of the repaired machinery. If,
however, a carrier undertakes to cany goods
which to his knowledge were meant to be sold
at a particular time, he is liable for the damage
done by loss of market arising from a delayed
delivery. In actions for non-payment of a debt
nothing more than the sum due could be
recovered formerly, unless there was an express
promise to pay interest ; it is now provided by
3 & 4 William IV. c. 42, §§ 28, 29 that in
the case of a debt payable by virtue of a written
instrument interest at the current rate may be
allowed by way of damages.
The practice of the Court of Chancery has
provided a remedy, in cases where money is no
adequate Compensation for a breach of contract
in the shape of an order for specific performance.
This remedy is, however, available only to a
very limited extent, the most conspicuous
instances being contracts for the sale of land,
and even in the case of a contract which,
according to the nature of its subject matter, .
might be specifically enforced, the court will not j
grant a decree unless certain requirements are
complied with, one of the requirements being
valuable consideration, which for the purpose of '
specific enforcement must exist in a contract
under seal as well as in a simple contract, e. s.
CONTRACT NOTE. The writing on these
documents is a short and formal announcement
that a stockbroker has bought or sold for his
principal a given amount of stock, bonds, or
shares at specified prices, to which is added
brokerage and a stamp, which Mr. Goschen
raised to 6d., on each contract note for more
than £100, but which, before 1888, used always
to be Id. Contracts do not pass between
members of the stock exchange. It is a rule
that every bargain between members should be
checked by 1 1 a. m. on the following day ; and
the committee will not listen to any dispute if
this be neglected. A. e.
CONTRACTORS. Persons who are parties
to a contract. The name is more specially
applied to persons who make it a regular
business to undertake large works (e.g. the
construction of railways, bridges, or buildings)
for sums fixed beforehand. e. s.
CONTRACTUS TRINUS. See Eck, Johann.
CONTRIBUTION, CONTRIBUTORY. Sec
Company.
CONVENTION OF ROYAL BURGHS— CONVENTIONAL TARIFF 403
CONVENTION OF ROYAL BURGHS OF
SCOTLAND. This municipal federation origin-
ated in the court or parliament of four burghs,
which consisted of representatives from Edin-
burgh, Stirling, Berwick, and Roxburgh. In
1368 Lanark and Linlithgow were substituted
for Berwick and Roxburgh. In the 13th aid
14th centuries this court, with the chamber-
lain of Scotland as presiding officer, exercised
a general supervision over the burghs of the
kingdom, legislating for them, and acting as
their high court of appeal. The transition
from the old parliament or court of four
burghs to the modem convention of royal
burghs seems to have taken place gradually
during the 15th century. Already, in 1405,
the process of transformation is j)erceptible.
In this year the court of four burghs enacted
that two or three burgesses from each of the
king's burghs, south of the Spey, should
assemble annually to treat and ordain con-
cerning all things that relate to the well-being,
liberties, and court of the king's burghs.
The name " convention " gradually superseded
"court" and "parliament" in the first half
of the 16th century.
The most important member of the league
was Edinburgh, which sent two commissioners
to the meetings of the convention, while the
other royal burghs usually sent only one.
Edinburgh was also generally selected as the
seat of the convention. But the place and
time of meeting varied. As a rule, the com-
missioners assembled annually. The presiding
officer, elected at each session, was called the
moderator. He was generally the commissioner
of the town where the meeting was held, or, if
there were two commissioners, the senior dele-
gate. A committee of representatives of various
burghs was often appointed to transact urgent
business while the convention was not sitting.
The chief function of the convention was
the supervision of trade, domestic and foreign.
It made regulations concerning markets, tolls,
fisheries, manufactures, customs -duties, ship-
ping, imports and exports, etc. It negotiated
commercial treaties with continental states and
cities. It exercised control over Scotch
merchants in France, Flanders, and other
countries of Europe. The chief foreign trade
of Scotland was carried on Avith the Nether-
lands, and was monopolised by the royal
burghs. This trade was regulated through
"the conservator of the Scotch privileges in
the Netherlands." He was elected by the
convention, though the king sometimes claimed
and exercised the right of appointment. The
conservator lived in the Scotch staple -town,
usually Campvere (the modern Vere in the
province of Zealand), where the royal burghs
enjoyed important privileges. He had general
charge of Scotch merchants and factors in the
Netlierlands, and was the judge of the con-
servatory court, which tried all civil and
criminal cases concerning Scotsmen. The
"lord" conservator was himself guided by
the instructions and orders of the convention.
At Campvere there was, moreover, a "con-
sergerie," where the Scotch merchants lodged
and took their meals. The master of the con-
sergerie was expected to enforce many minute re-
gulations, some of which were peculiar. In the
staple-town we also find a Scotch school, kirk,
and prison-house. The convention carefully
regulated everything relating to these various
institutions, including even the wearing apparel
of merchants and the price of their meals.
Besides the supervision of commerce, this
powerful organisation exercised important func-
tions in connection with national taxation.
It apportioned public taxes among the burghs.
It also sometimes made loans and grants of
money to the king.
A third important function of the convention
was the oversight of the internal administration
of royal burghs. It took cognisance of weights
and measures ; altered the "setts" or written
constitutions of towns ; decided controversies
between burghs, or between burghs and their
magistrates ; and regulated the election of
municipal officers, the qualifications of burgess-
ship, the finances, etc., of towns. It also
often appropriated money for the repair of
harbours, and for the general improvement of
particular burghs.
The federation is still in existence, but its
most important functions have been absorbed
by parliament. Its meetings are held annually
at Edinburgh, which is represented by two
commissioners and two assessors, while the
other burghs send one commissioner and one
assessor. The larger towns have cause for
complaint owing to the inequality of repre-
sentation. The convention now merely makes
suggestions and recommendations concerning
commerce and municipal affairs, for the purpose
of influencing public opinion and parliamentary
action. It used to exert great influence upon
national legislation.
[This account is based upon the Acts of the
Parliament of Scotland (12 vols., 1814-1875),
and especially upon the Records of the Convention
of Royal Burghs, edited by J. D. Marwick (6
vols., Edinburgh, 1866-90). These Records form
a rich, unworked mine of information for historians
and economists. There is no good history of the
convention. — John Mackay 's Convention of the
Royal Burghs of Scotland to 1707 (Edinburgh,
1884) is a very brief and fragmentary account.
The subject is worthy of more attention than it
has thus far received.] c. or.
CONVENTIONAL TARIFF. This term is
applicable to regulations, of a more or lesa
arbitrary or empirical kind, giving a fixed
value of conversion from one currency to
another, in which the exact intrinsic value or
404 CONVENTIONAL VALUE— CONVERSION OF NATIONAL DEBT
unit par of excliange is disregarded. Thus, the
English sovereign in Portugal has a legal con-
ventional tariff value of 53^ pence per milreis
of her own gold coinage, although the pure gold
value of the latter is only 53*284 pence. Then
again, in international postal conventions
between England and a gi-eat group of other
countries, similar fractional differences are
allowed to be, so to speak, glossed over. For
example, ten centimes and one penny are to an
enormous extent taken as identical. But one
penny, as the two hundred and fortieth part
of a gold sovereign, has about '00417 of its
value, whilst ten centimes have only about
•00396. This is tantamount to depreciating
English currency to the extent of more than 5
per cent of its real value. In the practical
result, the British public has been unduly
generous and quixotically lavish in letting
itself be mulcted in this way by conventional
tariffs. The extent of this may best be under-
stood if attention be given to the fact that
hundreds of millions sterling, by way of loans
to foreigners, have been advanced, in which a
conventional tariff has been used, either of
25, instead of 25-2215, francs, to the sovereign,
or of 48, instead of 49-316, pence to the
dollar. F. H.
CONVENTIONAL VALX7E. A term some-
times used as equivalent to Official or De-
clared Value {q.v.), for the Board of Trade and
customs returns. The values of goods imported
and exported were, down to 1870, computed at
prices ascertained in 1694, as a conventional
method of bringing them all together into
money totals. Thus, e.g., "eggs" were on
importation calculated at a uniform value of
9d. a great hundred, though in the mean-
time the prices had risen to 6s. ; and cottons on
exportation at Is. 6d. per yard, though they
had fallen to 4^d. French values are re-adjusted
every year, and those so obtained are conven-
tionally used in all publications during the
progress of the year, but corrected for the
annual records. S. Bo.
CONVERSION OF BRITISH NATIONAL
DEBT. The form in which the British
National Debt has been held has frequently
been modified. The improved condition of the
public credit has from time to time enabled the
government to make arrangements for the pay-
ment of a lower rate of interest, an object which
is accomplished either by the issue to the
holders of the stock to be converted of another
stock bearing a different rate of interest, or by
the repayment of the capital value of the stock
out of moneys borrowed for the purpose. In
the one case the stockholder remains unchanged,
although the nominal amount of his holding,
and the interest paid upon it may be varied.
In the other, the place of the original stock-
holder is taken by one who is ready to accept
less favourable terms for himself,
Operations of this character have not been
infrequent. The first conversion of the British
National Debt was carried into effect in 1711,
when a mass of floating obligations was con-
vertedinto £9,177,968 of South Sea Company's
stock bearing 6 per cent interest. In 1760,
Mr. Pelham converted £54,413,433, 4 per cent
stock into the same amount of new stock
eventually to bear 3 per cent interest only. In
1817 the Irish debt, of £103,033,750, was con-
verted into the debt of the United Kingdom.
Inl822,Mr.Vansittartconverted£149,627,867,
5 per cent stock into £157,109,217, 4 per
cent stock. In 1824, Mr. Robinson converted
£70,098,935, 4 per cent stock into 3^ per
cent stock of the same amount. In 1830,
Mr. Goulburn converted £150,790,176, 4 per
cent stock partly into 5 per cent stock at the
price of 70, but almost wholly into 3-^ per cent
stock at par. In 1834, Lord Althorp convert-
ed £6,489,190, 4 per cent stock into an equal
amount of 3| per cents. In 1844, Mr. Goul-
burn succeeded in converting £248,757,311,
3^ per cent stock into a new stock to carry 3|
per cent for ten years and 3 per cent for twenty
years. In 1853, Mr. Gladstone arranged for the
conversion of £3, 063, 906, 3 per cent stocks. In
1883 a sum of £70,241,908, 3 per cents was
converted into terminable annuities, and
in 1884, Mr. Childers converted £23,362,596,
3 per cent stocks into 2| per cents at 102, and
2^ per cents at 108.
For some time prior to 1888, the price of the
leading marketable securities, including British
government stocks not redeemable at any early
period, had made it evident that the state of
the public credit rendered it unnecessary that
so much as 3 per cent interest on the funded
debt should be paid. On the 9 th March of
that year Mr. Goschen submitted a scheme for
the conversion of the three per cent stocks then
existing — consols, reduced threes, and new
threes — into a single stock to bear interest,
payable quarterly, at the rate of 3 per cent for
the year ending the 5th April 1889, 2| per cent
for the following fourteen years ending the 5th
April 1903, and 2| per cent for the next suc-
ceeding twenty years ending the 5th April 1923,
and thenceforward until it should be redeemed.
The new stock was to be called "Two-and-
three - quarters per cent consolidated stock "
until the 5th April 1903, and "Two-and-a-half
per cent consolidated stock " thereafter. An
equivalent amount of the new stock was offered
in exchange for the stock to be converted, and
any increase in the nominal amount of the debt
was thus avoided, but an important difference
in the position of the three old stocks as
respects redemption rendered a different modus
operandi and some variation of terms essential.
The new 3 per cent stocks had been redeemable
at any time since the 5th January 1873, and
Mr. Goschen proposed to assume consent to the
CONVERSION OF BRITISH NATIONAL DEBT
406
conversion unless the holders formally dis-
eented, in which case they were to be paid off
at par in one sum, or in such proportions and
in such order and manner as the treasury
might direct. The amount of stock to
which this arrangement was applicable was
£166,399,043.
The position of the holders of consols and
reduced threes was a better one, for they
possessed a right to twelve months' notice before
their stock could be redeemed. In their case
it was considered that assent to conversion
could not properly be assumed in the absence
of a formal acceptance of the altered terras, and
in order therefore to encourage holders to give
such assent and to forego their privilege of
notice, a bonus of 5s. per cent was to be given
to those who agreed to the conversion within
certain specified periods. The amount of the
stocks to which this arrangement applied was
in the aggi-egate £391,593,466, of which
£322,681,033 was in consols, and £68,912,433
in reduced threes. The former amount was
subsequently increased by £34,625,778, created
in lieu of the remaining sums to be paid in
respect of a terminable annuity into which
certain stocks belonging to suitors of the
supreme court had been converted.
In order to compensate stockbrokers, bankers,
solicitors, and other recognised agents for tlie
trouble to which the offer made to holders of
consols and reduced threes would put them,
the treasury were to be empowered to pay a
commission of Is. 6d. per cent on the stock
converted.
The proposals made by Mr. Goschen were
favourably received both in parliament and in
financial circles, and a bill embodying them
received the royal assent on the 27th March
1888. It speedily became evident that the
scheme would be successful. The simplicity
of the terms proposed had undoubtedly much
to do with the success of the operation, to-
gether with an impression current among
business men that such a conversion was
certain to be carried through. By the 29th
March, the holders of new threes who had ex-
pressed dissent represented not more than some
£400,000 out of £166,000,000, whilst assents
on the part of the holders of consols and re-
duced threes to the extent of £297,406,173,
or nearly 76 per cent of the whole, were re-
ceived by the 26 th April, an additional
£70,861,170, or 18 per cent, being converted
between that date and the 1st June. On the
5th November 1888, new stock to the extent
of £549,094,011 had been accepted and
£1,199,102 old stock had been paid off", leav-
ing a balance of £42,325,173 still to be dealt
with.
The operations undertaken for the conversion
and failing this the redemption, of this remanet
may be thus summarised : I
Stock redeemed by the action of the
ordinary Sinking Funds £1,356,461
Paid off under discount 6,128,006
Stock acquired by National Debt
Commissioners and converted 8,164,312
Stock temporarily converted into a 3
per cent Book Debt 6,376,143
Stock automatically converted 8,426,141
Paid away or claimed in cash 11,874,110
£42,325,173
The final results of the whole series of opera-
tions were as follows : —
Stock dealt with.
1 Per
Amount. | ^ent.
Converted into new stock ...
Paid off in money
£565,684,4651 95 71
19,354,253| 3-3
5,785,689 I'O
£590,824,407100-0
Converted into a temporary
"Book Debt"
Net amountof stock dealtwith
The cost of the operations was as follows : —
Bonus to redemptioners £958,528
Commission to agents 234,073
Remuneration to Banks of Eng-
land and Ireland 116,054
Dividend paid in advance 1,715,815
£3,024,470
T\\e saving in interest on the National Debt
exceeded a million in 1889-90 ; for the following
thirteen years it was about £1,400, 000 per ann. ,
an amount doubled after 1903-4 when consols
became a 2^ per cent Stock redeemable 1923.
[Hansard's Debates, vol. cccxxiii. pp. 709 and
1813 ; vol. cccxxiv. p. 118.— The Acts 51 Vict,
c. 2, 51 & 52 Vict. c. 15, & 52 Vict. c. i.—Parlio-
mentary Papers, Nos. c. 5584, 283 of 1889 and
153 of 1890. — Also, for a detailed account of tlu)
operations. Conversion and Redemption, by E. W.
Hamilton, London, 1889.] T, H. e.
CONVERSION, COLONIAL AND FOR-
EIGN STOCKS. In its financial aspect "con-
version " is a term generally applied to con-
solidations and simplifications of securities or
to reconstructions of a national currency, like
that carried out by Germany in 1873. It is
intended to confine these remarks to the most
important conversions of colonial and foreign
stocks. (For the conversion of the British
National Debt see separate article.)
Colonial Stocks.
Canada. — In 1860 Canada effected an im-
portant conversion of her 6, 5, and 4^ per cent
debentures into 5 per cent consols or bonds,
redeemable in 1885, when the holders were
offered 4 per cent inscribed stock, and most of
them accepted the offer.
Cape of Good Hope. — This colony has effected
various conversions of debt, that of 1872 con
406
CONVERSION, COLONIAL AND FOREIGN STOCKS
verting the securities of the Cape Railway into
government 4^ per cent consolidated debentures
and that of 1886, offering the holders of the
entire debt bearing 6, 5, 42", and 4 per cent,
the option of converting into 4 per cent inscribed
stock. This offer applied to £13,343,100 in
bonds and was largely carried into effect.
India. — In 1874 there was a partial conver-
sion of the old 10\ per cent stock of 1833. In
1880 India 5 per cent stock was converted into
4 per cent stock. In 1887 India 4 per cent
stock was offered the option of converting into
3^ per cent stock, when £48,215,673 accepted
the terms offered. Since then there have been
some conversions into 3 per cent stock.
New Zealand. — This colony effected import-
ant conversions of debt, in 1868, when Ncav
Zealand 5 per cent consols were issued, and in
1885 and 1886,when loans of about£14,000,000
were allowed to convert into 4 per cent inscribed
stock, the holders mostly availing themselves of
the option.
Jamaica, Mauritius, and Natal have likewise
effected conversions of debt.
Foreign Stocks.
In 1869 Austria compulsorily converted all
her issues into internal 5 per cent rentes, where-
upon the Council of Foreign Bondholders issued
"Anglo-Austrian bondholders' certificates" to
cover the loss entailed. These were redeemed
at £5 each in 1871. In 1888 there was a
partial conversion into 4 per cent gold rente,
which will probably be carried further.
Egypt has also effected many consolidations
of this nature, but the unification carried out
in 1877 was by far the most important of them.
All the then existing loans of Egypt, many of
them carrying high rates of interest and sinking
fund, were converted into 38^ per cent 5 per
cent preference stock, and 61i per cent unified
stock, which was to bear up to 7 per cent
interest. But in reality it has borne 4 per cent
interest. At the same time the Khedive's
private loans were converted into Daira Sanieh
debt. These conversions were the result of Mr.
Goschen's mission in 1876, which proved the
financial salvation of Egypt.
French debt conversions have been numerous,
one of the latest being in 1883 of the 5 per cent
national loans into new 4^ per cent rente to the
amount of £271,591,430" This stock may be
again converted from 1893. In 1878 new 3
per cents were issued in conversion of some
railway stocks ; in 1883 this stock was added
to by conversion of the savings banks' deposits.
Altogether about £75,000,000 was so dealt
with.
Mexico has made many conversions, with and
without the consent of her creditors. The last,
in 1886, whereby the entire foreign debts were
exchanged for consolidated debt of 1886, bear-
ing 1 per cent rising to 3 per cent interest, was
the result of protracted negotiations following
on the practical repudiation of 1866.
Peru, to go no farther back, effected partial
conversions in 1852, 1862, 1865, and 1872,
and it is evident, that before Peru ceases to be
classed amongst the list of defaulters, a further
consolidation and reduction of debt will have to
be carried into effect.
Russia has carried out a number of conver
sions, partly of internal debt. But her latest
conversion, that of 1889, is to exchange the 5
per cent railway loans of 1870, 1872, 1873, and
1884 into £49,120,783 of 4 per cent bonds.
Spain effected her first conversion of foreign
debt in 1834, and from that time up to the
consolidation and conversion of 1881-82 her
arrangements with her creditors were numerous.
By the last arrangement all her outstanding
loans were exchanged for 4 per cent external
and internal stock, with a large reduction in the
nominal capital of the debt.
Turkey in 1865 converted her many internal
debts into a general debt bearing 5 per cent
interest. In 1882 all the loans upon which
Turkey w^as in default were converted into four
series of 1 per cent bonds amounting in all to
£91,842,000.
The Uniljed States in 1871 and 1873 con-
verted 6 per cents into a 5 per cent funded
loan for $500,000,000. In 1876 a further
$300,000,000 in 4^ per cents were issued for
conversion purposes ; and in 1877-78 another
1739,000,000 were issued in exchange for 6
and 5 per cent bonds. In 1881 the 5 per
cents of 1871-73 were renewed at 3^ per cent,
and in 1882 they were converted into 3 per
cents, which have since been entirely redeemed.
There is hardly a foreign country of any
standing which has not carried out similar
operations, the main object in all being to pay
lower rates of interest upon their obligations.
It is not too much to say that if all the govern-
ment debts of the civilised world carried interest
now at the rates originally contracted for, their
burdens in interest would quite double what
they now are. It is evident too, that many
further conversions to lower rates of interest
will be effected in the near future.
CONVERSION OF ARABLE LAND INTO
PASTURE IN ENGLAND.— Historically, two
epochs stand out in which tillage has been on
a large scale converted to pasture in England :
(1) 1400-1580 ; (2) 1878 to present time.
(1) So long as self-sufiicing farming was prac-
tised or feudalism prevailed, little or no attention
was paid to the nature of the soil or climate.
Whatever corn was requii-ed for the support of
isolated villages, organised as separate com-
munities complete in themselves, was necessarily
grown upon the spot, and land was valued less
for the rents it produced than for the men it
supported. Divisions into arable and pasture
were therefore dictated by social exigencies
CONVERSION— CONVERTIBILITY OF BANK NOTES
407
instead of natural advantages. At the end of
the 14th century farming for profit was intro-
duced, and gradually tillage was superseded as
the staple agricultural industry ; pasture became
the rule, and wool the source of the farmer's
wealth. This change was, in the first instance,
due to social causes. The Black Death {q.v.\
depopulated rural districts. Landlords were de-
prived of their quit-rents, and holdings thrown
upon their hands. There was plenty of land, but
few to work it ; little money was forthcoming
to pay for labour even when it was available.
In this crisis landlords adopted one of three
courses : (a) they offered stock and land leases
(Rogers, Agriculture and Prices, i. p. 24) ; {h)
they exacted the labour services, which had now
become exceptionally valuable ; (c) they laid
down their land to pasture, and enclosed vast
tracts as sheep-runs. From these courses
followed important results. From (a) sprang
the class of tenant farmers ; from Qj) the
Peasants' Revolt of 1381 and the effort to
destroy the manorial muniment rooms (Denton,
Fifteenth Century) ; from (c) the acceleration
in the break-up of the old manorial and common-
farm system, as a more profitable method was
discovered of employing land. If this last
course was adopted upon lands depopulated by
the Black Death, no social grievance was caused.
If the change simply meant the conversion of
common farms into enclosures on which corn and
cattle could be conveniently raised, it consti-
tuted an advance in agricultural science, and
displaced little or no labour. But, as a rule,
the change meant that landlords withdrew tlieir
demesnes from the common farms, ceased to
employ labour, enclosed an undue share of the
wastes, deprived copyholders and tenants of the
means of cultivating their own holdings, and
threw the new enclosures into vast sheep-walks.
Thus the change caused a large amount of
agrarian distress and social discontent [Libelle of
English Polycye ; Denton, Fifteenth Century ;
More's Utopia, p. 41 (English Reprints, 1869) ;
Dialogue betioeen Cardinal Pole and Thomas
LupsetjlEi. E. T. S. ; Supplication of Poor Covimons,
E. E. T. S. ; F. W. Russell, Rett's Rebellion, etc.]
When once the tendency began, it was accelerated
by the dissolution of the monasteries and the
high profits of the rising wool trade, and con-
tinued to develop in spite of the prohibitions of
the legislature {e.g. 6 Hen. VIII. c. 5 ; 7 Hen.
VIIL c. 1 ; 25 Hen. VIIL c. 13 ; 27 Hen. VIII.
c. 22). England in fact became a gi-ass-grow-
ing, wool-producing, pasture country until the
pressure of population at the close of the 18th
century reversed the agricultural policy.
(2) War prices of corn (1797-1815) en-
couraged farmers to plough up land for corn.
But the preponderance of pasture over arable
land continued after the change had been long
in progress. Of this fact two inquiries give
sufficient proof. Mr. Comber (Inquiry into
the State of National Subsistence, 1808) calcu*
lates the arable land and gai-dens of England
and Wales at 11,588,000 acres, the lands de-
pastured by cattle at 17,479,000 acres, and the
commons and cultivated wastes at 6,473,000
acres. Mr. Couling (Select Committee on
Emigration, 1827) calculated in that year the
arable land and gardens of England and Wales
at 11,143,370 acres, the meadows, pastures,
and marshes at 17,605,630 ; the unculti-
vated improvable wastes at 3,984,000 acres.
Temporarily checked from 1815 to 1850, the
tide set subsequently in the direction of the
conversion of pasture into arable land. In
1874 there were 13,900,000 acres of land in
England and Wales under corn crops, green
crops, or rotation grasses, as against 12,071,691
acres under permanent pasture. In 1875 there
were 13,980,000 acres of land under corn crops,
etc., against 12,202,596 acres of pasture.
Thus, as compared with 1808 or 1827, the
arable land exceeded the pasture by one and
three quarter million acres, instead of the
pasture exceeding the arable land and gardens
by six and a half million acres. The pre
ponderance of arable land over pasture ceased
to increase after 1878. In 1879 and 1880 the
area of arable land was 13,480,500 acres and
13,210,600 acres, and the area of pasture land
was 13,007,400 and 13,267,600 acres. Thus,
by 1880, the tide had commenced to turn. In
1888 and 1889, the area of pasture land ex-
ceeded the arable land. In 1888 the arable
land was 12,715,800 acres, the permanent
pasture, 14,554,500. In 1912 the arable land
was 14,660,300 acres, the permanent pasture,
17,335,700 acres. e. e. p.
CONVERTIBILITY OF BANK NOTES.
The convertibility of bank notes into specie on
demand is an essential condition of a sound cur-
rency. It has been held, and it would appear
difficult to controvert the statement, that im-
mediate convertibility on demand is a complete
safeguard against over-issue, for if a redundant
note were in circulation the provision that it
would be immediately paid on demand would
appear sufficient to ensure that such a note,
when redundant, should immediately be with-
drawn. But, according to the currency prin-
ciple supported by Sir R. Peel (see Currency
Doctrine), the question of convertibility might
depend on other considerations. "The real
question to be solved is, how to regulate the
quantity of the paper circulation, so as to keep
its value identical with what the value of the
metallic currency should be " (speech of Sir R.
Peel, House of Commons, May 20, 1844).
"Convertibility alone will not ensure this.
Convertibility provides, indeed, the means ot
taking out of circulation a quantity of paper
already in excess ; but it imposes a very
imperfect check on putting too much paper
into circulation." Sir R. Peel did not attempt
408
CONVEYANCE— COOPER
to reconcile the latter half of this sentence
with the former, for it is difficult to under-
stand how paper substituted for money can
remain in excess of the wants of the country
when the means of taking this excess out of
circulation have been provided. Real converti-
bi]ity, that is to say the means of obtaining
specie for notes whenever required, appears an
ample safeguard against over -issue of notes.
Bank notes, however, play a very different part
in the financial system of the country from what
they did at the commencement of this century
(see Bank Note ; Currency Doctrine.)
[Tooke and Newmarch's History of Prices is a
perfect mine of information on the subject. —
Fullerton, On the Regulation of Currencies. —
James Wilson, On Capital, Currency, and Bank-
ing, and the writings of Huskisson, Ricardo, Sir
W. Clay, Colonel Torrens, Walker on Money."]
CONVEYANCE. (1) The transfer of the
ownership of property. (2) The instrument by
which the transfer is effected. A conveyance,
to be effectual, must be embodied in a deed
(which is a document signed, sealed, and de-
livered by the parties in the presence of a wit-
ness). The conveyance of property need not
necessarily have the effect of transferring the
beneficial rights of ownership ; in the case of a
mortgage, for instance, the legal estate — i.e.
the formal right of ownership — is vested in the
mortgagee, but the mortgagor, as a general rule,
remains in possession and in the full enjoyment
of an owner's material right — excepting, how-
ever, the right of alienation. The methods of
conveyancing have been considerably simplified
within the last two generations, and even within
the last decade. A modern conveyance begins
with the date and the names of the parties ;
then follow the recitals, which in the first place
explain the title, and in the second place state
the nature of the transaction which has caused
the conveyance to be effected (each recital be-
ginning with the word "whereas ") ; these being
finished, the so-called " Testatum " (" Now this
indenture witnesseth ") introduces the effective
part of the conveyance, beginning with the
statement of the consideration and the acknow-
ledgment of the same, then proceeding with the
"operative words" {e.g. "the vendor conveys,"
etc.), and afterwards describing the " parcel " —
i.e. the property which is the object of the
conveyance; by the "habendum" the nature
of the estate which is conveyed is explained
(whether in fee simple, for life, upon trust, etc. ) ;
and finally the " covenants " contain the mutual
promises concerning the property or the adjoin-
ing property. Many of the alienating owner's
covenants have been rendered unnecessary by
the Conveyancing Act of 1881, the addition of
certain expressions to the operative words im-
plying a number of covenants which formerly
had to be set out at great length. It is un-
necessary to mention that the description of a
conveyance as given here is liable to a great
many variations according to the circumstances
of the case. A conveyance on sale is liable to
a stamp duty of 5s. for every £50. E.s.
COOLIE SYSTEM. By this system a mi-
gration of labourers from India, China, and the
South Pacific, to other tropical countries under
European government, is placed under state
regulation. The movement began (1834) when
the freed negroes largely declined plantation
work. The management being at first in
private hands, unpleasant rumours called for
government intervention, and now the egress
from India is strictly controlled (acts of 1864
andl869), the termsof engagement are regulated,
and the colonial governments held responsible
for their execution. Commissions of inquiry
were issued for Demerara (1870) and Mauritius
(1875). The French government on their part
undertake inspection in their colonies. The
movement from China is regulated by a conven-
tion (1866) between the governments of China,
Great Britain, and France.
The chief colonies employing coolie labour
are Demerara (one-third of population), Trinidad
(two thousand a year), Mauritius (five-sevenths
of population), Natal (one-fifteenth), Queensland
(chiefly from the Pacific Islands), and the
Straits. Outside the British empire, Cuba,
Peru, Tahiti, and the French sugar islands.
The system is interesting — (1) as showing
the beginnings of a movement from the two
great centres of population in Asia, the dimen-
sions of which cannot be foreseen ; and (2) as
an instance of non-economic considerations in-
ducing state interference with private enter-
prise, for the protection of labour against the
individual's ignorance of the value of his labour
and his acceptance of a standard of living de-
termined by the offers of competing capitalists.
[Comhill Magazine, 1867.— Jenkins, The Coolie,
London, 1871, an adverse report. — Histories of
the colonies above mentioned.] a. o.
COOPER, Thomas (1759-1840), was born in
London and admitted to the bar, became a
Radical, was involved in political troubles, and
finally followed his friend Priestley to the United
States, where again he took an active part in
political affairs. In 1 820 he became president of
Columbia College in Columbia, South Carolina,
and held that place till 1834.
In addition to pamphlets, he wrote Lectures on
the Elements of Political Econoviy, Columbia,
1826, and a Manual of Political Economy
(Washington, 1834), both good text -books in
their day, expounding the doctrines of Adam
Smith and Ricardo. F. W. T.
COOPER, Thomas (1805-1892) imprisoned
in early life as a chartist (see Chartism), was
among the last survivors, as he had been one
of the most sincere of the leaders in that
movement.
CO-OPERATION
409
CO-OPERATION
Co-operative Associations, p. 409 ; Co-operative Farming,
p. 413 ; Co-operative Workshops, p. 415 ; Co-operation,
Partial (Oldham Cotton Spinning Companies), p. 417 ;
Co-operation, Social Aspects of, p. 418.
Co-operative Associations. The term
co-operation has been employed by economisii
in two senses, (a) as indicating certain broadly
marked phenomena connected with the auto-
matic development of human communities, of
which what is most widely known as division
of labour is an instance ; and (b) as indicating
the deliberate association of individuals to form
trading bodies on certain specific principles for
their common advantage. The latter use of
the term is the more common of the two, outside
text books on economics.
(a) The simplest conceivable case of co-
operation is when two men combine to move
a weight too heavy for either to deal with
singly. In this case two similar forces are
integrated. Co-operation of this kind is only
r of limited application, I'or the number of men
whose power can be brought to bear on even a
large object at suitable points is comparatively
small, unless some form of machinery is used.
But the labour of men may also be combined
by their performing different tasks simultane-
ously, in order to produce a joint result,
and as soon as this is recognised the growth
and organisation of the community become
capable of much more rapid progress than
before. A maker of bows can do his work
without assistance, but his labour will be more
efficient if he can send out some one to collect
suitable pieces of wood for him. A skilful
smith could, at a pinch, make a simple bit of
ironwork by his own unaided exertions, but his
trouble is enormously lightened if he has an
assistant to blow his bellows. The case of the
smith is typical of all operations which requu-e
two or more series of acts to be performed more
or less simultaneously — in this case, blowing to
keep the fire hot, and hammering. If the
piece of ironwoi-k to be executed is at all large,
an assistant becomes indispensable. The thing
could not be done at all without him. Suppos-
ing he gets a third man to sharpen or polish
such articles as he and his companion have
been making, the efficiency of the whole group
is much increased. The constitution of this
group of artificers illustrates the principle of
division of labour, as Adam Smith called it.
Modern economists have adopted the more
accurate expression division of employment, but
Smith's description of the principle as illus-
trated in pin-making is still the classical de-
scription in the English language (see Wealth of
Nations, bk. i. ch. i.), though he left it to his
successors, e.g. Babbage, to point out some of
the most important advantages of the division
of labour.
What is called civilised society has only
become possible because this principle of division
of employment has been carried out to the full
extent admitted of by the progress of scientific
knowledge. For an analysis of the reasons why
it has so greatly increased the efficiency of
labour, reference may be made to Mill, bk. i.
ch. viii. ; Sidgwick, bk. i. ch. iv. ; Marshall's
Econoviics of Industry, bk. i. ch. vii. viii.
(see Division of Labour). Division of em-
ployment implies, however, specialisation of
employment, a result which is not without
disadvantages. When there exist large bodies
of men who can only perform some special kind
of skilled labour, portions of these bodies are
from time to time in danger of becoming
redundant, and consequently of losing their
means of subsistence. This evil result may
be produced by climatic influences, by a mis-
calculation as to the requkements of the com-
munity, or in modern times of the communities
supplied, by changes of fashion, or by new inven-
tions. The latter cause is much less injurious
to the men than it used to be, as the process of
improvement, though constant, is only gradual.
The violent disturbance of the labour market
which followed the first introduction of steam
machinery and of the factory system is not
likely to occur again. The other three causes
are still active and produce serious effects. It
is to be observed that specialisation of emjjloy-
ment is, from the nature of the work to be done,
much less extensively carried out in agriculture
than in manufacturing.
The mode in which the co-operation of indi-
viduals in modern society occurs presents other
aspects besides division or specialisation of
employment. It is marked, as is well known,
by the association of larger and larger bodies of
men acting under a single firm or company.
Provided the management is good a large busi-
ness can be conducted more economically than
a small one, — that is, the labour of those con-
cerned is more efficient in the former than in
the latter case. Of late years this tendency
has taken the form of the amalgamation under
one management of several works engaged
in producing the same article. Another very
important feature of the modern conditions of
industrial life is the high degree of dependence
of each industry for its prosperity on the pros-
perity of other industries. Any influence tend-
ing to increase the activity of one trade tends
to make several other trades more active, and
generally the efficiency of labour in all trades
is increased to some extent. Conversely depres-
sion in one trade produces depression in others.
A high degree of economic efficiency arising
from a high degree of industrial organisation
necessarily carries with it a liability to frequent
derangement of that organisation, the parts
forming the industrial organism becoming mora
mutually dependent in proportion as differenti-
ation is carried further.
410
CO-OPERATIVE ASSOCIATIONS
(b) Co-operation in the sense of an associa-
tion of individuals for certain specific business
purposes is of two kinds : associations of con-
sumers, and associations of producers.
Associations of consumers arose from the
desire of individuals in the possession of small
incomes to obtain the commodities they require
for daily use at wholesale prices. In 1844
twenty-eight workmen of Rochdale subscribed
a fund to be used in the purchase of flour,
sugar, and other articles, which were bought
retail by the subscribers at the ordinary prices
of the district, the excess realised being periodic-
ally divided among the members after all costs
had been met. The experiment was thoroughly
successful and has been widely imitated. Shops
worked on this principle are now well known as
co-operative stores. Those carried on by work-
men, which are now very numerous, have in
some cases adhered to the lines on which they
were started, which included the division of
part of the profits among the persons employed
in the store, and the setting aside of another
part for educational purposes, but in some
cases these latter practices have been dropped,
the whole surplus being divided among the
members of the store. The encouragement to
thrift has been very great. The profits being
at the disposal of the members only at fixed
intervals, and in appreciably large amounts, are
less likely to be dissipated. The stores also
afford direct facilities for investment. As a
working man co-operator said, "We may al-
most eat and drink ourselves into a house."
The enormous institutions started in London by
members of the middle classes have been highly
successful, but are not co-operative in the special
sense in which the word is used by those to
whom "co-operation" is a species of religion.
These great stores sell their goods at the lowest
price they can, which is, of course, an excellent
thing, and just what is wanted by the classes for
whose benefit these stores are intended, but the
persons employed in them have no share in the
profits. The consumers, as such, have no share
in the profits. It is this feature in their or-
ganisation which leads " co-operators " in the
more special sense of the term, to deny that these
stores are truly co-operative. Useful as they are
they are less interesting to the economist than
the real co-operative associations, from the
growth of which great and salutary changes in
the structure of society are looked for by those
who are best acquainted with the subject.
Many of them have become merely large
shops differing hardly at all from big com-
mercial concerns.
Co - operative Societies. — The associations
which are conducted in the United Kingdom,
either theoretically or in fact, oii true co-opera-
tive principles, are of two kinds, distributive
and manufacturing. The origin of distri-
butive societies has already been referred to,
and it is not necessary to go at length into the
history of the movement which, from such
small beginnings, has achieved the remarkable
results now apparent. The manufacturing
and industrial side of the movement has
not yet attained its proper development in
the United Kingdom. Subjoined are tables
which will furnish a general idea of the
present magnitude of this movement, from
which so much is hoped by thoughtful students
of sociology. The figures of which these tables
are a condensation, will be found in full in the
Report of the Central Co-operative Board to
the Plymouth Congress, 1910.
The following is a statement of the number
of co-operative societies existing in the United
Kingdom at the end of 1909, and of certain
particulars regarding their business ; arranged
(A) with reference to geographical divisions ;
(B) according to the special functions they
perform.
Sections.
1 No. of
Socie-
ties.
No. of
Mem-
bers.
Share
Capital.
Irish ......
23
i 223
145
475
294
223
81
97
9,335
311,437
304,589
l,0fff,186
405,129
370,381
98,711
78,525
£52,111
3,344,188
4,687,461
16,388,278
5,245,820
2,742,394
813,707
862,005
Midland. .» .
Northern . .
North Western
Sco'etish . .
Southern . .
South Western
•
Total ....
1561
2,585,293
34,135,964
Sections.
Invest-
ments.
Received
for goods
sold '09.
Net profit
in '09.
Irish
£27,601
1,823,913
2,915,667
11,895,699
5,636,759
1,270,307
414,765
472,251
£280,942
7,529,806
10,769,530
54,925,533
22,714,409
7,978,530
1,769,508
2,884,006
£20,716
883,620
1,872,510
5,134,424
2,852,785
619,297
220,415
407,356
Midland . .
Northern . .
North Western
Scottish . .
Southern . .
South Western
Western . .
Total ....
24,456,962
108,852,264
12,011,123
1
Sections.
No. of
Socie-
ties.
No. of
Mem-
bers.
Share
Capital.
Distributive . . .
Productive ....
Supply
Special
English Wholesale
Distributive . .
Productive . . .
Scottish Wholesale
Distributive . .
Productive . . .
1430
119
4
6
1
1
2,469,039
31,806
81,755
1,254
1,163
276
£
30,804,246
858,039
378,792
26,644
1,657,305
410,938
Total ....
1561
2,585,293
34,135,964
CO-OPEEATIVE ASSOCIATIONS
411
Sections.
Invest-
ments
Received
for goods
sold '09
Net profit
iu'09
Distributive . . .
Productive . . .
Supply ....
Special ....
English Wholesale
Distributive . .
Productive . .
Scottish Wholesale
Distributive . .
Productive . .
£
20,405,988
452,448
148,733
290,644
1,487,094
1,672,055
£
70,315,078
3,142,047
2,104,618
157,447
19,469,782
6,206,156
5,090,421
2,366,715
£
10,847,945
184,159
52,006.
4,257
429,208
201,310
232,493
59,745
Total ....
24,456,962
108,852,264
12,011,123
Statement showing the above items at the end of
the undermentioned years.
Yrs.
Socie-
ties.
Mem-
bers.
Share
Capital.
Trade.
Prolits.
1861
1871
1881
1890
1909
746
1230
1554
1561
48,184
262,188
642,783
1,117,085
2,585,293
£
333,290
2,305,951
6,937,284
12,2(51,952
34,135,964
£
1,512,117
9,437,471
24,926,005
43,215,710
108,852,264
£
670,721
1,970,576
4,170, OlitS
12,011,123
It will be at once seen from a glance at the
totals given in these tables that, taken as a
whole, the societies to which they refer are in a
highly satisfactory condition. The net profit
of £12,011,123 shown at the end of 1909 is
very large relatively to the share capital, and
the investments amounted at that time to
over £24,456,000. The value of stock, land,
buildings, etc. was, we may observe, over
£28,286,948. ■
The strength of the movement lies, in the
northern and north-western districts of England
and in Scotland. Manchester is, indeed, the
headquarters of co-operation, for it is there that
the English Wholesale Society, whicli is com-
monly called "The Wholesale," has its chief
office ; but the great societies of Rochdale,
Leeds, Halifax, Huddersfield, Burnley, Accring-
ton, Bolton, and Bradford each contribute a
very large quota to the total business done. In
the midland, southern, and western districts
co-operation is very imperfectly developed, but
great, and to a large extent successful, efforts
are being made to improve matters in this respect,
especially in London.
One fact which should be noted was the small
volume of co-operative production twenty years
ago — meaning by co-operative production, in
the full sense, a system in which the wage-
earners, as such, share in the profits. This
feature was a source of keen regret and dis-
appointment to zealous co-operators. The
report of the Committee on Production to the
Ipswich Congress, 1889, was in many respects
hopeful, and some progress has been made
since then, but the obstacles to success in this
department of co-operation are, and always
have been, much greater than in the distributive
department. The difficulty which impressed
the Ipswich Committee most was to get pro
ductive societies to abstain from competing
with each other, as will be seen from the
following extracts from their report : "As we
have before stated in our reports, we have to
admit that in the multiplication of these very
small societies, each struggling for a separate life,
there is the possibility of great difficulty in the
future. We have to regret that our attempts
to bring these societies into federation with each
other have entirely failed, owing in a great
measure to petty jealousies which seem insepar-
able from such associations. In the view of
this committee it is a matter for serious con-
sideration how far the formation of these small
and isolated societies should be encouraged,
unless there is some guarantee that they will
act in co-operation with each other." And in
concluding the report, the committee observe,
"that there still exists among co-operative
societies and their members a deplorable amount
of disloyalty towards the efforts of those societies
which are honestly striving to work out this
difficult problem of co-operative production."
These severe expressions are quoted partly in
order to explain the comparative I'ailure of pro-
ductive co-operation at first, and partly to
show that the leaders of the co - operative
movement were men who looked facts in the
face, and did not seek to disguise them under a
cloud of words. This is an attitude of mind
^\hich is favourable to the ultimate success of
the movement. It might almost be said that
it is a guarantee of it, for the principle of pro-
ductive co-operation is a sound one, though its
practice requires tiie prevalence of a higher level
of education, both moral and mental, than at
present exists in the majority of co-operators.
That a greater approximation towards the prin-
ciple is possible may perliaps be inferred from
the fact that, besides the W^holesale's boot
and shoe works at Leicester, there are four
corn-milling societies, each of which soid over
£100,000 of goods in 1909, wliile one of these,
the Halifax Flour Mills, sold over £446,000
worth, and had £228,400 of investments at
the end of 1909. Flour mills are still, as they
were twenty years ago, the most successful
branch of the movement ; their sales in 1909
were £1,106,000, out of a total of £2,287,000.
In Scotland bakeries do the largest business.
Co-operative farming has so far answered less
well in the United Kingdom (see Co-operative
Farming), though something in this direction
has been done in Scotland, and butter-making
on the co-operative plan has been commenced
in Ireland through the exertions of Canon Bagot
and the Hon. H. C. Plunkett. As will be seen
below, co-operative farming is far from being a
failure on the continent.
It has already been said that co-operative
manufacturing encounters much greater diifi-
412
CO-OPERATIVE ASSOCIATIONS
eulties than co-operative distribution. The
nature of the difficulties has been described as
they present themselves practically to the able
and energetic men who are trying year by year
to overcome them. They can only be got rid
of by degrees, for they are the result of tlje low
state of general education. Professor Marshall
has pointed out in The Econcytnics of Industry,
and also in his address to the Ipswich Congress
(1889), that higher mental qualities are needed
for carrying on a large manufacturing concern
than in conducting a successful shop. At
present workmen have not realised that good
management must be paid for and is worth
paying for (compare Walker, The Wages Ques-
tion, ch. XV., Co-operation : getting rid of the
entrepreneur). Their attitude in regard to this
subject is shown by the remark attributed to
one who is now a Cabinet Minister, that "he
had never seen a man who was worth more than
£5 0 0 a year. " It is not suggested that managers
of co-operative societies ought to be paid at this
or any other specific rate in all cases, but until
workmen generally realise that there are men
whose worth for special purposes is, in the
present state of society, £500, and even more
than £5000 per annum, they will never under-
stand why co-operative manufacturing fails to
succeed in competing with its capitalist rivals.
Still the obvious success of the Halifax Flour
Mills is evidence that in one branch of trade,
at any rate, co-operators can adapt themselves
to the industrial requirements of the time if
they take the proper means.
The plain fact is that co-operative manufac-
turing is still in the experimental stage. Pro-
gress has been made since 1889 when, at the
annual Co-operative Congress, held at Ipswich
in that year, there was an interesting dis-
cussion on the question whether small produc-
tive societies should be encouraged to continue
to work independently of the Wholesale, or
whether the Wholesale should undertake the
work itself. The discussion ostensibly related
to the best means of establishing Profit- sharing
{q.v.) in production, and the chief charge brought
against the Wholesale was that it did not share
profits with its workers, that, like some of the
original societies, it had degenerated into " joint-
stockism." The latter principle did not seem
to be wholly approved even by the advocates of
production by the Wholesale Society, but Mr.
Benjamin Jones, of the Wholesale, in the course
of a paper read to the congress, pointed out that
at Oldham, where many mills are owned by
workmen, " joint- stockism " had led to the same
results as " profit-sharing" was intended to lead
to by making workmen well off. The whole dis-
cussion, which ended in the approval by the
congress of production carried on by societies in-
dependent of the Wholesale, but " federalised, "
was a very business-like one. There are, of
course, numerous differences of opinion on minor
technical points in relation to distributive co-
operation, the most important of which is the
question how far credit should be allowed to
members of stores. The balance of opinion is,
it need hardly be said, against the giving of
credit.
Co - operation abroad can only be briefly
touched on here. A good deal of valuable in-
formation on the subject will be found in a
paper by Mr. Vaughan Nash on ' ' Co-operation
in relation to International Commerce," read
before the Ipswich Congress. Mr. Nash had a
special object in writing this paper, namely, to
urge on co-operators in different countries the
advantage that would result from their working
together more than at present, but it furnished
a useful rdsumA of the position of co-operation
in foreign countries in 1888. During the last
twenty years a considerable change has taken
place in the attitude of the continental socialist
co-operators. For many years they despised
co-operation among consumers, as being a
"bourgeois institution" and a support to
*' capitalism." They have discovered that, even
from their point of view, co-operation among
consumers has merits. This was perceived first
in Belgium and later in other places. At the
International Co-operative Alliance, which held
its meeting in Hamburg in 1910, a body of
socialists who had been attending the Socialist
Congress at Copenhagen were present in order
to cement an alliance between Socialism and
Co-operation, on equal terms. The free develop-
ment of co-operation is now recognised as a
good thing by the socialist leaders of the
Continental Countries. In two important,
respects these countries are still in a decidedly
more advanced condition than the united King-
dom, namely, in regard to agriculture and
banking. In France, Austria, Germany, Den-
mark, Italy, Switzerland, and Sweden, there
exist powerful organisations of peasant pro-
prietors for the joint purchase or hire of farming
implements and other requirements, for acquiring
and working dairies, for the joint sale of pro-
duce and for obtaining credit. Long ago
Denmark possessed a most highly organised
system of agricultural co-operation, and it is
owing to this that the export of Danish butter
has so much increased of late. Co-operative
dairies seem to succeed in most countries, includ-
ing the United States, where ' ' creameries " are
an important feature. There can be little doubt
that the system of popular banks with which
the name of Schulze-Delitsch is associated has
been of great service to agricultural co-operation
in Germany, and a modification of the same plan
devised by Signer Luzzati was many years ago
introduced into Italy {v. Banks, Popular).
These loan societies are closely connected with
the farming societies, being in fact chiefly com-
posed of the same individuals. They coiuraet
loans on the guarantee of all the members and
CO-OPERATIVE FARMING
413
make advances to members at a slightly higher
rate than that at which they borrow, but still
much below the terras at which the individual
members could raise money themselves. As
regards the joint sale of agricultural produce
the system is less developed than in other
respects, and, generally, distributive co-operation
is too much neglected on the continen^t, except
in Switzerland and Holland, and to some
extent in Belgium. As is well known, there
are co-operative workshops in France of old
standing, the most famous being those with
which the names of Godin at Guise and Leclairo
at Paris are associated (v. CiT]5 OirvmfeRE ;
Familist^he). These two experiments in
profit-sharing have realised a remarkable degree
of success. It had always been feared, even
by friends of co-operation, that such institutions
were dependent on the lives of the individuals
who started them, but so far these unfavourable
anticipations have been agreeably disappointed.
For a description of the very successful work
carried out by the late M. Godin see tlie trans-
lation of the pamphlet Twenty-eight Years of
Co-partnership at Guise, published by the
Labour Co-partnership Association, 6 Blooms-
bury Square, London, W.C, The Right Hon.
T. Burt, in the preface, bespeaks "the careful
attention of co-operators, of trade unionists,
of liberal-minded employers " to this interesting
history.
"Russia," says Mr. Nash, "is by far the
most co-operative country in Europe, but its
vDlage communities, or mirs, are beginning to
show sigTis of dissolution, and its artels, being
nomadic and shifting, have but little bearing
on the question of international co-operation."
The Artel (g-.u) is a species of workmen's society
which is found in all branches of industry in
Russia, the members of which jointly execute
pieces of work, especially buildings, railways,
and bridges.
As regards the United States, we have already
mentioned the existence of creameries as the
most important feature from a co-operative point
of view, but there are also some co-operative
workshops. There were also many co-operative
stores before the Civil War, but their progi-ess
since then has been very slow. In the British
colonies there is very little co-operation of any
kind. w. H.
Co-operative Farming. The application
of co-operation to agriculture was one of the
earliest aims of the founders of co-operation,
and formed a part of almost all the plans of
Robert Owen and his followers. The best
known experiment in the pioneer period was
that of Rathlahine (sometimes called Rala-
hine), in County Clare, Ireland, in 1831-33.
Mr. E. T. Craig, a disciple of Robert Owen,
was invited by Mr. J. Scott Vandeleur, an
Irish landlord, to form a society based on
the co-partnership of landlord and tenant.
The farm was 618 acres in extent, half of
it under tillage. The labourers at the outset
numbered twenty -eight men, twelve women,
and fifty -two children. Subsequent admis-
sions to membership were by ballot. Mr.
Vandeleur, the landlord, was president and re •
served to himself a power of veto, as well as
the right to discharge labourers during the first
year. He also stipulated for the exclusion of
intoxicants. The labourers elected a committee
who met nightly to arrange the farm work.
At the year's end the landlord received his rent
of £900 in kind, taking the risks of variations
in value. The rest of the produce, which was
not consumed by the members and charged to
them, was sold for common account. The
first profits were appropriated to enhancing
wages twenty and twenty-five per cent. The
surplus beyond was devoted to a fund to pay
out the landlord. The experiment was success-
ful commercially. It also restored peace on
the estate and established harmony in the
relations of the landlord and his people. But
it was brought to a sudden end in 1833 by
the flight of Mr. Vandeleur, who had ruined
himself by gambling (see Co-operative Agri-
culture by Wm. Pare, Longmans, 1870 ; and
History of Ealaliine, by E. T. Craig ; Triibner
and Co., 1882). About the same time, 1829,
Mr. "Wm. Gurdon leased a farm at Assington,
Suffolk, to a body of his labourers who formed
themselves into a voluntary co-operative society,
based on a plan of dividing equally the produce
of the farm. He lent them capital without
interest. The experiment was very successful,
the labourers repaying the loan capital and
making large profits for themselves. This
success led to the leasing of a second farm to
labourers in 1853, to be worked on the same
lines. This also was very successful, yielding
a profit to the labourers of £3674 up to 1879.
In 1883 the association had to ask for help
from outside sympathisers, in consequence of
continued agricultural depression. The land
being stiff clay, almost all under tillage, is
suitable for little else but wheat-growing, and
the co-operative labourers were unable to make
a profit on wheat-growing after 1879. In 1884
a co-operative society was formed to continue
the farm, the labourers' capital being augmented
by subscriptions of co-operative societies and
friends. This society, the Assington Agri-
cultural Association, at present shows an
annual loss of about £1 per acre. The No. 1
farm established in 1829 is still being worked
by the labourers' society, but no accounts are
published.
In 1829 Lord Wallscourt commenced an
Irish experiment, and reported in 1846 that,
after seventeen years' trial, the venture had
-answered beyond his hopes ; he had been able
to travel abroad a year at a time, and on his
return always found the farm had prospered.
414
CO-OPERATIVE FARMING
He divided profits with his labourers, reckoning
every £5 of their wages as being equal to £100
of his own capital. (See Professor F. W.
Newman's Lectures ov, Political Economy, p.
338, Chapman, 1851.)
After the pioneer periods of Robert Owen
and the Christian socialists, the co-operative
movement, advancing on the line of least
resistance, left farming experiments — as it left
productive efforts — almost neglected, and at-
tended almost exclusively to the development
of the simple stores system. But from time to
time, during the thirty years which followed
the establishment of the Rochdale Pioneers
Society in 1844, co-operative farming experi-
ments were made by advanced co-operators.
Mr. Walter Morrison, M.P., established a
co-operative farm in the Midlands, giving the
labourers a share in the profits and management.
The experiment was partially successful, paying
five per cent interest, but in other respects was
not considered suflSciently hopeful to render it
worth while to persevere. Lord George Manners
adopted profit-sharing Math his labourers upon
a farm at Cheveley, Newmarket. He told the
writer of this article that the experiment was
so successful as to yield him ten per cent on
his capital, and permit of £3 per worker being
paid as dividend on labour. To stimulate
thrift Lord G. Manners adopted the plan of
paying the labourers' dividends into the post
office savings bank, and "handing the pass-
books to their wives " — a device which he said
answered perfectly. It was his intention to
form a more complete co-operative society to
work the farm, but his death brought this
interesting and successful effort to a close.
More recently Mr. Bolton King established two
co-operative farms at his residence near
Leamington. The rules were very generous to
the labourers, leaving them with full powers
over both the land and the landlord's capital
without the checks which in other cases have
naturally been provided. The result was not
successful. Equally unsuccessful was an at-
tempt by Mr. William Lawson at Aspatria
near Carlisle, described by him in a work
called Five Years of Gentleman Farming, edited
by G. J. Holyoake. Mr. William Lawson, a
brother of Sir Wilfrid Lawson, gave time and
money freely to his effort, but he adopted
methods of farming which were condemned as
impracticable by the Royal Agricultural Society's
Commissioners on steam ploughing, and the
failure can scarcely therefore be imputed to the
co-operative arrangements (vide Jourtial of the
Hoyal Agricultural Society of England).
Recently the opinion in favour of co-opera-
tive farming has received a great impetus,
and many co-operative societies have taken
farms to work as part of their enterprise.
The report of the Central Co-operative Board
for 1910 gives a list of ninety-one known co
operative farms of which the following is
summary : —
•ssot:
^OOSrH 0«-H to
:
•*
■^UOJ<I
£
1113
1225
436
2574
808
S
s
£
4862
2999
1652
1544
506
305
165
of
•pauMO
uo :jseja:jni
£
2054
1872
1716
770
1063
448
22
^
i
•pa^saAui
£
52,735
73,055
52,542
20,375
30,090
20,148
750
1
<
rt< <M OO 00 O -* O
rH >0 iC Tf ±- O O
O t-j OO .O CO i-H C^
f
i-
o
t-rH«OrH-*(M •
i
CO
Number
of Co-
operative
Farms.
^««^r-c,^
M
s
"^3
ja S o
PI
Midland . .
Northern . .
North-western
Scotland . .
Southern . .
South-West ,
West . . .
J
•go
1"
m
I
The two last on the list are farms worked
by separate farming societies, all the others are
farms attached to stores. The large amount of
capital invested is due to the freeholds having
been frequently bought by co-operative societies
as investments for their surplus capital. The
totals show that over ten thousand acres are
now farmed co-operatively and over a quarter
of a million of capital is invested in the farms.
The results vary very greatly, the losses on
balance nearly equalling the piofits.
Simultaneously with this development of
farming enterprise inside the co-operative move-
ment, a considerable number of profit-sharing
and co-operative experiments have been set
on foot by landowners and farmers, like Earl
Spencer, Mr. Boyd Kinnear, and Lord Wantage.
The latter was stated to have taken 20,000 acres
of land into his own hands and adopted a plan of
working it upon a system of association with
the labourers which paid him good interest and
yielded them about £2 each of dividend on
labour. The results were described in glowing
terms by the Daily News commissioner, whose
letters have been published in book form (see
Life in our Villages, Cassell and Co . , 1 8 9 1 ). In
part iv. of volume ii. 3rd series of the Journal
of the Royal Agricultural Society (31st December
1891) Mr. Albert Grey reported a most success-
ful effort at co-operative farming carried out by
him in Northumberland, on the large scale
CO-OPERATIVE WORKSHOPS
415
of 3765 acres, of which 1290 are permanent
pasture and 2475 arable. In 1886 he com-
menced on the Home Farm at Hawick, and in
the next four years was able to pay the labourers
three annual bonuses of 6d. in the £ on their
wages. The same year he applied the profit-
sharing plan to the East Learmonth farm of
821 acres, of which all is arable but 122 acres.
In the case of this farm the outgoing tenant
had refused to continue his tenancy unless he
were allowed a reduction of 20 per cent in his
rent. Mr. Grey had been able to earn the old
rent under the profit-sharing arrangement and
also interest on capital. In addition he had
paid the labourers three annual bonuses, viz.
one of Is. in the £, one of Is l|d., and one of
Is. 3d. Mr. Grey adopted the formula for
division of profits carried out by M. Godin of
Guise in his celebrated co-operative workshops
(see CiTt OuvRifeRE). Interest on capital
ranks as equivalent to wages of labour for a
pro rata division of profits (see Co-operative
Traveller Abroad, Labour Association, London,
1888). On the additional area of land which
Mr. Grey placed under the profit - sharing
system in 1888, he was sanguine of making a
profit, and his whole paper was filled with in-
teresting details of economies effected and
improvements obtained by the reconciliation of
interests of employer, managers, and labourers.
]\Ir. Albert Grey subsecpiently became Earl
Grey, taking an active part in public life as
Governor General of Canada and in other
capacities which absorbed his time and attention.
In view of the recent revival in agricultural
prosperity it seems evident that the time is
ripe for the application of co-operation to farm-
ing, and it only requires the evidence of a few
successes on a considerable scale to bring about
a great extension of the movement. e. o. g.
It has been proposed (1911) by the Board
of Agriculture, to spend £20,000 through the
County Councils on behalf of Agricultural
Co-operation.
Co-operative Workshops. In the article
on Co-operative Associations the general
fact is stated that productive co-operation has
developed much more slowly than distributive
co-operation. Forty yeai's ago the failures of
co-operative workshops were so numerous that
many writers held that co-operation had been
proved to be inaj^plicable to manufacturing.
Professor Beesly, in a pamphlet on The Social
Future of the Working Class (Reeves and
Turner), 1868, stated : "I believe there is not
in England at the present moment a single
co-operative society in which workmen divide
the profits irrespective of their being share-
holders," and he concluded that "we must look
for improvement not to this or that new-fangled
industrial system, but to the creation of a.
moral and religious influence which may bend
all in obedience to duty. When we have
created such an influence we shall find that it
will act more certainly and eflectually on a
small body of capitalists than it would on a
loose multitudinous mob of co-operative share-
holders." So far as this was a statement of
facts it was too sweeping. Mr. J. S. Mill,
Professor Fawcett, and other economists could
see even then some favourable features in the
struggling experimental attempts at workshop
co-operation. Upon these and upon confidence
in general principles they based very hopeful
forecasts of the future, and the latest facts and
figures seem to justify their views.
Comparing the returns issued by the Co-
operative Union for 1909 with those issued for
1889, the following figures show that progress
is becoming more rapid as the feeling grows
that the initial diflaculties have been over-
1889.
1909.
Number of Co-operative
Workshops .
106
121
Number of Members
25,728
31,806
Share Capital
£714,189
£858,039
Loan Capital .
£274,784
£3,877,654
Reserve Funds
£28,46',)
£151,291
Total Funds .
£1,017,442
£2,886,984
Sales ....
£2,308,028
£11,714,918
Profits ....
£118,355
£445,214
Losses ....
£5,581
£6,218
Net Gain
£112,774
£438,996
if a coniimrison is made between the latest figures
for 1909 and those for 1889, it will be found
that the percentages of increase in 20 years
have been as follows — in number of workshops,
14*15 percent; in members, 23-62 per cent;
in share capital, 24*34 per cent ; in business,
407*57 per cent; and in profits, 276*16 per
cent. These figures show that whilst there
has been an increase of new societies (possessing
of course fewer members than the older ones),
the established societies have increased their
capital, and have even more rapidly gained in
trade and in the power to make profits. If a
further comparison is made of the growth of the
co-operative workshops as compared with the
growth of the co-operative movement generally,
it will be seen that the productive side of co-
operation is now distinctly vigorous and is
probably absorbing the most energetic and cap-
able co-operators. The following were the per-
centages of increase of the co-operative movement
in 1890 over 1888 — in number of societies,
3*48 per cent; in members, 12*55 per cent ;
in share capital, 17*97 per cent ; in business,
17*59 per cent; and in profits, 22*13 per
cent.
Two kinds of workshops are included in the
figures quoted above from the annual returns
of the Co-operative Union, viz. workshops which
divide their profits only between capital and
custom, and workshops which admit labour also
into partnership. Repeated resolutions have
416
CO-OPERATIVE WORKSHOPS
been passed by large majorities of delegates at
annual co-operative congresses affirming that
the true principle of co-operation in production
requires the co-partnership of labour. But the
Central Co-operative Board, which is the execu-
tive of the movement, is reluctant to exclude
from recognition the large workshops which
belong to the Co-operative Wholesale Society,
and those corn mills belonging to stores which
violate the principle laid down by congress.
The burning question of the movement has
been whether the inclusion of the worker to
share in profits and mabagement is essential or
not. As the promoters of industrial co-operation
are generally agreed that nothing short of the
partnership of labour with capital will finally
reconcile the two interests and end conflict,
public interest naturally centres most around
the workshops in which co-partnership exists.
According to the annual reports and other pub-
lications of the Labour Co-partnership Associa-
tion (of 6 Bloomsbury Square, London) the
co-operative workshops which recognise the
principle of profit-sharing with labour now
number one hundred and twelve, and are
therefore in a majority. Eight or nine of them
have beeii in existence over forty years. They
are established in almost all parts of the kingdom
and in about forty different trades. The number
of workers employed is between four thousand
and five thousand. The Labour Co-partnership
Association, which devotes itself especially to
the establishment and welfare of these profit-
sharing societies, holds exhibitions of their pro-
ductions, and the goods shown are said to be
very excellent and tasteful. The practicability of
successful manufacturing on co-partnership lines
may therefore be considered to be established.
The absence of strikes seems to be satisfac-
torily assured. Where strikes have been made
public in connection with " co-operative " work-
shops they have been in factories which exclude
the workers from participation. Only one small
conflict is known to have occurred at a profit-
sharing workshop, and that was promptly
settled.
The amelioration of the social position of the
workers cannot be wholly stated in figures.
The addition to the wages in the shape of
"bonus" or "dividend on labour" varies very
greatly, but appears to average ll|d. in the £,
or rather under 5 per cent on wages. But
only a portion of the effect of profit-sharing can
be seen in this item. It is stated by Mr. Joseph
Greenwood, the late manager of the Hebden
Bridge Fustian Manufacturing Society in York-
shire, that whilst profit-sharing with them added
only 9d. in the £ to wages, the average -income
of their workers (men, women, and children)
had been increased in twenty years from about
12s. 6d. per week up to over l7s. per week, the
chief increase being due to regularity of employ-
ment and saving of lost time. Fustian cutting
was originally a sweated industry, but the
society at Hebden Bridge now employs 296
workers, all of whom are shareholders. They
own £9132 of the capital stock, which amounts
in all to £29,615. That the condition of
these workers must have been greatly im-
proved beyond the amount of "bonus" dis-
tributed is evident from the fact that the latter
has only totalled about one-third of the sums
invested by the workers in their society. The
Labour Co-partnership Association, moreover,
adds that the societies which have been formed
in recent years since it has been at work have
almost all been induced to adopt rules which
make provision for many excellent common
funds. Thus the Leicester Co-operative Boot
and Shoe Manufacturing Society when dividing
£240 of surplus profits (realized during a
quarter-year) apportioned the sum thus : to
reserve £40 ; to the workers (lO^d. in the £ on
wages), £80 ; to the committee (who are nearly
all workers in the factory), £24 ; to the educa-
tional fund, £10 ; to the provident fund, £20 ;
to the special service fund for rewarding inven-
tions and economies, £6 ; to capital (in addi
tion to 6 per cent), £20 ; to customers (2|d.
in the £ on^ purchases)^ £40. In this case the
lO^d. " dividend on wages " fonned but a third
portion of the whole benefits.
The increase in the productiveness of labour
under co-partnership rules seems very clear.
The Agricultural and Horticultural Association
commenced some years ago to manufacture
oilcake for cattle, putting down machinery
calculated to produce 35 tons per week and
subsequently adding other machinery calculated
to produce 60 tons per week. At first the new
employes, unfamiliar with the profit-sharing
system of the Association, only produced 21 to
26 tons off the first machinery and about 48
tons off the second. But, under the stimulus
of "bonus " the first set of machinery now pro-
duces 57 tons per week and the second set
produces about 76 tons per week. The differ-
ence in output converted a loss into a profit for
the Association, whilst the average remunera-
tion of the workers (men and youths) went up
from £1:0:7 per week to £1 : 6 : 8.
The result upon the position of capital in
these workshops has been to substitute a safe
and steady reasonable dividend for a higher
but fluctuating one. As the societies attain
success they decrease the dividends on capital
instead of increasing them. Several leading
workshops have recently done so, including the
Hebden Bridge Fustian, Leicester Hosiery,
Manchester Printing, Edinburgh Printing, and
Paisley Shawl Manufacturing. The majorit;y
of shareholders, being customers and workers,
attach most importance to the dividends on
custom and on wages, and decrease the dividend
or interest on capital to increase these. But
this does not appear to check the inflow of in
CO-OPERATION, PARTIAL
417
vestments, as the dividend or interest on capital
is a first charge on the whole profits. These
being swelled by the stimulus given to custom
and zeal of the workers, the dividend on capital
assumes almost the sate position of a first mort-
gage, and 5 per cent is found amply suffici6at
to attract funds. E. o. G.
Co-operation, Partial (Oldham Cotton-
Spinning Companies). The term "partial
co-operation " is ap[)lied by Prof. Marshall
{Principles of Economics, vol. i. p. 364, 2nd
edition) to such partial applications of the
co-operative principle to production as (a)
profit- or profit-and-loss sharing (see Profit-
Sharing), {h) the Leicester boot works and
other similar productive establishments owned
by the main body of co-operative stores
through their agents the wholesale (see Co-
operation and Co-operative Workshops),
and (c) certain joint -stock cotton -spinning
companies in Oldham and its neighbourhood.
These last are owned by combinations of small
capitalists, among whom are many workpeo]jle
with a special knowledge of the cotton industry,
though few of the companies' employes can
describe themselves as "their own masters."
It is customary, but incorrect, to call these
concerns "co-operative mills," and to say that
many of them are owned by the working classes.
It is, however, true that the foundation of a
number of the Oldham " Limiteds " was due
to an attempt by working men to a]tply the
co-operative principle to production. The early
history of the Sun Mill Company is typical of
the whole movement in its initial stages, and
throws much light on the difficulties attending
even a partial application of such a principle
to a highly organised industry.
The "Oldham Building and Manufacturing
Society," the first of its kind registered under
the Joint- Stock Companies Act, was founded in
1858 : capital £1000 in £5 shares. The pro-
moters were members of the Oldham Industrial
Co-operative Society. Calls on shares were to
be 3d, weekly, and the directors were paid 6d. a
week for their services. Several months elapsed
before all the shares were taken up, and a
longer delay occurred before the society's
business, weaving, could begin. At the end of
the first quarter's working, a dividend of 7|-
per cent was paid, but afterwards the looms
were run at a loss. The difficulty of disposing
of the manufactured goods, disputes among the
directors, and between the shareholders and
non- shareholders employed by the company,
and above all the unsuitability of the climate for
weaving led to this result. It became necessary
to make a radical change in the scheme, and
accordingly the promoters decided to increase
the capital to £14,870, and build premises for
cotton - carding and spinning. The engines
were " christened " in 1863, and under the new
name of the "Sun Mill Company," business
VOL. I.
was carried on through the period of the Cotton
Famine (see Cotton Famine) eventually with
considerable profit. But, in 1867, Mr.
Gladstone, visiting Oldham, was officially
informed that out of more than a thousand
shareholders, only four were also the company's
employes, and that it was difficult to persuade
workpeople to buy shares. In 1868, in order
to ensure loyalty to the company's interests on
the part of its principal servants, their salaries
were reduced, and instead a bonus — a percentage,
— was given on all profits over 10 per cent on the
capital. The directors at one time desired to
extend this system of profit-sharing to the
operatives, but were strenuously opposed by
the principal servants, and eventually, as the
bonus was found not to have the desired ellect,
the directors went back to the old arrangement
of fixed salaries. Since then the history of
the concern, which in its early years had shown
"much experimental enterprise but a w^ant of
judgment as to consequences," chiefly deals
with the struggles of a young business to extend
its connection. During the twenty years
1858-1877 £8 : 10s. was paid in dividends on
the £5 share.
[^The Sun Mill Company, Limited ; its com-
mercial and social history, by William Marcroft,
Oldham, 1877. The same writer, in a pamphlet
entitled A Co-operative Village, and published
at Oldham in 1878, propounds a scheme of
partial co-operation by which a small settle-
ment could attain a kind of "industrial
independence."]
It was hoped that the Limited Liability Act
(see Limited Liability Acts) would encourage
the labouring classes to invest their savings in
manufacturing ventures ; in Oldham and its
neighbourhood the example set by the promoters
of the Sun Mill Company was in several cases
followed by working men. But the movement
soon passed out of their hands, and losing its
co-operative aspect, degenerated into a system
of company promoting by outside speculators.
Owing to the presence of great machinery works
in the town a factory could be built there and
fitted up with the newest machinery at the
smallest possible cost. As a rule the buildings
were mere "shells," so arranged as to hold mules
with a very large number of spindles. During
the fifteen years after the passing of the above-
mentioned act the total number of spindles in
Oldham, then as now the headquarters of
cotton-spinning, was nearly doubled. In 1886,
according to the official list, seventy-seven mills
(average age nine years) contained 5,166,922
spindles, whose balance-sheet value was over
five million pounds ; at present there are more
than a hundred, whose shares are quoted in the
official list. The majority have at one time or
other paid very large dividends.
Of late the Oldham "Limiteds" (see Mr.
Albert Simpson's "statement respecting the
2 B
418
CO-OPERATION, SOCIAL ASPECTS OF
Cotton Mills of Oldham, and the working of
the Limited Liability Act in connection with
them," handed in to the Labour Commission,
group C, 10th July 1891) have been charged
with omitting to write off enough per annum
for depreciation, so that their large dividends
are, in part at least, paid out of capital. In
many cases there is evidence to warrant such
a criticism ; out of a hundred and ten concerns
the shares of sixty -seven, many of which
pay large dividends, are at a discount. The
appointment of government auditors under the
Limited Liability Act has been suggested as a
remedy.
Again, it is certain that " divi-hunting " has
forced many of them into rash speculation, and
led to a serious loss of financial vitality.
During 1890, to defeat attempts to "corner"
cotton at Liverpool, many of their "buyers"
bought cotton "to arrive" throughout the year ;
and, as a consequence of the sharp fall in 1891,
the legitimate profits of cotton-spinning were
swallowed up by the losses due to cotton
speculation. Workpeople are not disposed to
risk their savings in this manner, and though,
in the case of the older and more stable concerns,
conducting their business on sound principles,
and setting aside a yearly sum to pay for
renewal of machinery, etc., a small percentage
of the shareholders are retired workmen, and a
few even employes of the company in which
they hold shares, generally speaking, the
Oldham "Liraiteds" are not even "partially
co-operative." E. b. o.
Social Aspects of Co-operation. The
statistical information conveyed in the ofl&cial
reports of the Kegistrar of Friendly Societies
and of the United Board of the Co-operative
Union, whilst it furnishes very complete parti-
culars as to the financial side of the co-operative
movement, affords no sufficient criterion as to
the social side. That provision is made for
the social and educational development of co-
operators may, however, be gleaned from those
sources. Thus in the year 1909 the sum of
£91,070 is stated to have been applied by co-
operative societies to educational purposes,
whilst the sum of £10,580 : 8 : 11 was voted
to the maintenance of the Co-operative Union,
whose work is entirely of an educational char-
acteiL The money spent upon education goes
sometimes to lectures and classes, but more
often to keep up reading-rooms and libraries,
which in the northern counties are usually to be
found in connection with the stores. Social
gatherings and entertainments also come in for
a share of the educational grants. In addition
to supporting university extension lectures in
several centres, co-operators have founded two
scholarships at Oxford, the Hughes and the
ISTeale, to commemorate the services rendered
to the movement by Mr. Thomas Hughes and
Mr. E. Vansittart Neala Tlie development of
the social side of the co-operative movement is
promoted by an effective system of district and
sectional organisation. Delegates are periodic-
ally brought together by this means to discuss
the welfare of their movement, and much pro-
pagandist work is done. Once a year the Co-
operative Congress is held, at which co-operators
meet from all parts of the United Kingdom.
"The annual congress is composed of delegates
from societies in union, each society being
entitled to send one delegate for each annual
subscription of 1 000 d. or fractional part thereof.
Business of the congi-ess : There is first the
inaugural address, then the report of the Central
Co-operative Board, the election of scrutineers,
of the voting for the new central board, and the
discussion of papers and proposals bearing on
co-operation " (Acland and Jones, Working Men
Co-operators, p. 111). Co-operators recognise
that their business system depends largely upon
the progress of mutual improvement amongst
their members, and they are constantly urging
that more attention should be paid to the
special training of co-operatoiis. "We regret
to find that educational grants do not keep
pace with the general growth of the societies.
Our opinion is that it will pay every society to
devote at l&st 2^ per cent of its net profits
to education, and that though societies may
and do succeed without this, yet it is because
the older generation still lives and guides them,
but when the day arrives that they no longer
take part in their management, the societies
will run a great risk of suffering thereby " {Co-
operative Wholesale Societies' Almanac, 1883,
quoted in Working Men Co-operators). It is,
however, by the daily routine of co-operative
transactions that the social life of the movement
is chiefly fostered. To regard the mechanism
of the movement as simply an adaptation of
"shopping" is to completely misapprehend its
character. Equally erroneous is the superficial
estimate of the store system as a form of
"joint-stockism." The store, it is true, con-
tains the stock-in-trade of the shop, but its
social significance lies in its being the centre of
a consumer's league, the organised expression
of a social standard of requirements. As a
domestic dep&t or repository, the store has
played an important part in the growth of
neighbourly feeling. By affording opportunities
for social thrift as well as consumption, it enters
into the everyday economy of families connected
with it, in many instances supplying the house
itself, as well as the furniture, clothing, and
food requirements of the inmates. The Women's
Guild recognises the influence of women in the
co-operative movement, for though only estab-
lished a few years, it has done much to educate
them in the responsibilities of organised pur-
chasing.
The constitution of the co-operative society
is, after all, the best guarantee of its social
CO-OPERATION, SOCIAL ASPECTS OF
419
character. If that constitution were of a merely
joint-stock character, as is so commonly alleged
by critics of co-operation, we should expect to
find people going into the movement for the
acquisition of shares, and using their position
to enhance the value of, and increase the return
upon, their holdings. This, however, does not
happen. The shares in a store yield a stereo-
typed return of 5 per cent, sometimes less, and
there is never a market, in the recognised sense of
the term, for co-operative shares. When shares
change hands they do so usually at par. The
share list is never closed to new comers. ' ' This
open democracy of a million souls," to quote
Miss Potter (Mrs. Sydney Webb) in The Co-
operative Movement in Great Britain, is open
to all comers. The holder of the maximum
allowed by law (£200) has just as much power
as, and no more than the shareholder witli two
or three pounds. Thus Ave lind none of the
characteristics usually associated Avith the joint-
stock system in co-operation. Instead of a
trading concern in which the lion's share in
the direction of the revenue goes to the large
stockholder, the power is equally apportioned
to all the members, and the dividend is pro-
portioned to the use made of the store (dividend
on Purchases.)
Just as individuals have formed societies for
distribution and saving on a mutual basis, so
the societies themselves have united in order to
perfect and consolidate the co-operative system.
The English Co-operative Wholesale Society,
enrolled in 1863, has grown into an organisation
of enormous power ; the notable point in this
connection, which is dealt with very fully in
Miss Potter's book, being the social influence
which this great federal institution, in common
with its sister society in Scotland, has exerted.
These federal institutions, while allowing free
play to local activity, keep up a constant
healthy circulation of ideas and commodities
between the societies federated. Villagers and
townsmen gather at the delegate meetings to
transact the aftairs of "the Wholesale." The
best experience and information of the central
institution is placed at the service of the most
insignificant society. Just as the trade union
and the friendly society have passed through the
stages of scattered and isolated local effort into
national associations, so has co-operation ; and
to the federal development of the movement
may be ascribed much of the steady and uniform
rise in the standard of requirements noticeable
in the co-operative movement (see Miss Potter's
book). Nowhere can this be more clearly per-
ceived than in those districts where the stores
have remained outside the federal body. The
county of Forfar, for instance, has held aloof
almost entirely from the Scottish Wholesale
Society, and inquiries made throughout the dis-
trict show that co-operation has stood still in
consequence during the past thirty years, each
society in its own rut, whilst the standard of de-
mand is lower than within the federation. The
federal principle has been largely applied to the
business of corn-milling, the price of bread in
districts where co-operation is strong being fre-
quently set by the joint agency of the mill and
the store. It happens also, frequently, that
instead of the store taking the current prices
of the neighbourhood for its goods, it has come
to set them for the district. Productive de-
partments have been established on a large
scale in connection with the two wholesale
societies, and production is now carried on in
many directions for use direct and not for profit,
none of the commodities of the wholesales being
sold outside the circle of the stores.
The Co-operative Wholesale Society Ltd.
gives its name to the Bank of the Association.
The Head Office is in ]\lanchester. It was
established in 1873. The Bank had in 1910
a paid-up capital of £1,709,657, Loan Capital
£3,091,174, deposits, etc, £1,650,532 and
1160 Shareholders.
It is frecj^uently stated in detraction of the
co-operative movement that so far from being
a social organisation it is mainly composed of
self-seeking persons, devoid of public spirit,
and intent upon personal acquisition. The
advocates of co-operation do not, however, claim
that their system is regenerative, though they
maintain, as it would seem with reason, that
the advantage of the individual can only be
secured by the welfare of those associated with
him. Seeing that the co-operative body now
numbers two and a half millions of associates,
it would appear that a considerable number of
those enrolled must contribute their quota of
public work. Otherwise instead of continually
increasing prosperity we should find corrupt
and self-centred societies partaking of the pro-
pensities of members whose only thought was
for themselves. But little inquiry is necessary to
show that in this movement a large and increas-
ing body of enthusiastic and efficient persons are
continually devoting themselves to the fui'ther-
ance of its principles. In no other movement is
there so much hard and thankless voluntary Avork
done for the love of the thing as in co-operation.
Profit-sharing industrial partnership has
recently developed greatly in the form of
Co-partnership (see Appendix). This is
largely due to the late Sir George Livesey of
the South Metropolitan Gas Comj)any. The
basis of the system is a bonus on salaries and
wages, and the objects are to give all officers
and workmen an inducement beyond their
salaries and wages to take an interest in their
work and the welfare of the company which
employs them besides the opportunity of be-
coming shareholders in that company, and thus,
by becoming OAvners of property, to improve
permanently their position in life. The co-
partnership bonus is calculated annually on the
420
COPARCENERS— COPLESTON
salary or wages for twelve months. The offer
to be made to every oflBcial and workman of the
company in regular employment, the condition
of acceptance being the willingness to sign an
agreement, which agreement binds the company
to provide work for twelve months. The prin-
ciple is already adopted by twenty-six gas com-
panies of the United Kingdom, with capitals of
nearly forty- five millions, and many other firms.
[Acland and Jones, Working Men Co-operators.
— Beatrice Potter, The Co-operative Movement in
Great Britain, — Annual Report of the Co-opera-
tive Union. — Annual Report of the Registrar of
Friendly Societies. — Sedley Taylor, Profit Sharing.
— Co-partnership, pub. by Co-partnership Pub-
lishers Ltd., 6 Bloomsbury Sq., London.] v. N.
COPARCENERS. Persons to whom lands
of inheritance descend jointly. For instance
at common law, when an ancestor dies seised of
land in fee simple or in fee tail, and his next
heirs are two or more females, they will take
an equal interest in the land. Under the custom
of Gavelkind {q.v.), which prevails in Kent,
lands descend to all the males in equal degree.
Coparceners take a distinct share in the land
and can compel partition.
[Stephen's Commentaries, bk. ii. pt. 1.]
J. B. C. M.
The real property of a person dying intestate
generally goes to one heir ; but in some cases
several persons are coheirs, and are then said
to take as coparceners. This occurs (1) at
common law when the persons entitled by
descent are females (the rule of primogeniture
applying to males only) ; (2) in the case of
lands held under the custom of gavelkind, the
males of the same degree of relationship (in so
far as they are otherwise entitled) take as copar-
ceners. There is no right of survivorship
between coparceners — a circumstance which dis-
tinguishes the tenancy of coparceners from joint-
tenancy (cp. Joint- Ovmership). E. s.
COPERNICUS, NicoLAUs(1473-1643). This
great man has a place in the history of political
economy in virtue of his tract Monetae Cudendoe
Ratio, wiitten in 1526 by desire of Sigismund I.,
king of Poland, as a re-statement of the prin-
ciples previously explained by the author at the
Prussian Landtag of 1522 as those on which the
reform of the currency should be based. The
conditions on which he insists are — strict in-
tegrity in the weight and quality of the coin,
the charge of a seigniorage just sufficient to defray
the cost of mintage, and a unity of the monetary
system throughout the entire state. There is,
with much that is sound, some admixture of
error in the tract. It was first published by
Benkowski in 1861 and afterwards, in conjunc-
tion with the treatise of Oresme, in 1864 by
Wolowski (Roscher, Oesch. der Nai. Oek. in
Deutschland, p. 111). J. K. i.
COPLESTON, Edward (1776-1849), born
at Offwell in Devonshire, educated at Oxford,
he became provost of Oriel, 1814. He waa
the champion of Oxford University against
the attacks made against it in the early
numbers of the Edinburgh Review ; and it
was as "one of his constituents," that he
wrote his chief economical treatise, his two
" Letters to the Right Hon. Robert Peel, M.P.
for University of Oxford, on the pernicious
eff'ects of a variable Standard of Value, especi-
ally as it regards the condition of the Lower
Orders and the Poor Laws" (1819). He be-
came Dean of Chester in 1826, and succeeded
Sumner as Dean of St. Paul's and Bishop of
Llandaff in 1827. He was an occasional writer
for the Quarterly Review (see list of his works
in Memoir, pp. 346-7). Though chiefly known
as a theologian and ecclesiastic, he took part in
the economical and political controversies of his
day ; his Oxford Prize Essay (1796) on "Agri-
culture" shows that his attention was early
directed to the topics afterwards treated in his
" Letters to Sir Robert Peel."
In the first of these Letters (which bears the
motto " laissez-nous faire ") he states the doc-
trine of currency which (he says), though "only
a question of simple arithmetic," yet affects
"all the most valuable interests of life." He
gives illustrations, from English history, of what
has happily been called by some later writei-s
the "secular" depreciation of the currency (or
its depreciation over a long period of time), and
points out how very gradually and unequally
prices adapt themselves to the change. As in
retail dealings and in transactions between
non-commercial people competition acts much
less promptly and effectively than in dealings
between merchants, so its efficacy is very
imperfect in case of the agricultural labourers,
as distinguished from the mechanics of the
cities ; they are quite unable to make their
wages keep pace with any depreciation of money
or rise in the price of food. "At no period of
our history till the present was the condition of
the labourer so bad as in the time of Elizabeth. "
Rather than raise the labourer's wages, the
farmer will let him "come on the poor rates."
Now the causes of depreciation may be the
natural progress of trade and the discovery of
mines ; the distress is in that case unavoidable,
and every civilised nation will at one time or
other pass through the experience. But th*
depreciation may be due to artificial and pre-
ventible causes ; and this is our own case, in
1819. We have ourselves to blame ; and we
ought to apply the cure. We should restore
our ciurency to its old basis, and put an end to
the suspension of cash payments. Copleston
throughout follows the leading of Ricardo,
Huskisson, and Canning against Bosanquet,
Vansittart, and the opponents of the bullion
committee.
In the second Letter he discusses what
steps should be taken to secure that the
COPPER MONEY
421
return to a more normal currency and low
prices shall be as far as possible equable in its
effects on all classes. The new corn law was
meant to give to the agriculturists the supposed
advantages secured to commercial men by-
restriction ; but it would \)9 better, he thinKs,
to dispense with both of them and return to
our normal condition. Then he goes at some
length into the question of the relief of the
poor, discussing what government can and can-
not do in this matter, what our own govern-
ment had done, and, finally, what it ought to
do. He considers that Malthus (whom he
otherwise warmly praises) has not done full
justice to the English Poor Law. Till lately,
according to Copleston, this law was so well ad-
ministered as to preserve life without encourag-
ing the propagation of it. An historical review
of the legislation in regard to the poor in England
is made to support his view that depreciation of
the cun-ency has been a potent cause of distress
to the poor, and unfair gain to their employers.
His own recommendations are stricter than his
criticisms of Malthus might have led his reader
to expect. " Legal relief is necessarily of itself
encroaching and unsatiable." He appeals to
employers to raise wages without waiting till
they are compelled ; but (he believes) in any
case the march of events will so lessen poverty
that it will not be true of England as of India
and China that its only source of wealth is its
"redundant supply of human labour."
Copleston's article in the Quarterly Revicia
(for April 1822), on the state of tlie currency,
would lead him to be classed among the ultra-
buUionists, who attributed more influence to
the suspension of cash payments than the facts
would justify. It is criticised by Tooke in his
TJioughts and Details on High and Low Prices,
(part i. pp. 19, 43, seq., 1823) ; and Ricardo
includes him among the adversaries who ' ' put
sentiments in my mouth that I never uttered "
(letter to Malthus, 16th Dec. 1822). But,
like many other of the minor economists, he
did service by drawing attention to particular
points that had been comparatively neglected
by the more prominent writers.
[W. J, Copleston, Memoir of E. Copleston,
Bishop of Llandaff, vnth Selections from his
Diary and Correspondence (London 1851). — See
also Mozley, Reminiscences of Oriel College, 1883.]
J. B.
COPPER MONEY (England). This metal
was first used for coinage in England in the
reign of James I., when, under the authority
of a patent granted by the king. Lord Har-
rington of Exton caused copper Farthings to be
struck and put into circulation. These pieces,
known as "Harrington tokens," weighed only
six grains.
Copper Halfpence were first issued in the
reign of Charles II., and
Copper Pence in that of George III. (1797).
Copper Twopences were issued at the same
time as the first coinage of pence, but they were
found to be inconveniently large and heavy
(2 oz.), and their coinage was not continued.
Copper Half -far things for circulation in Eng-
land were first coined in the year 1843. The
last issue of coins of this denomination bears
the date 1856.
The following is a list of the denominations
of copper coins issued for circulation in England
since the reign of James I. : —
James I.
Charles I.
Cromwell.
Charles II.
William & Mary.
William III.
Anne.
George I.
George II.
George III.
Farthing.
Farthing.
Farthing.
Halfpenny, Farthing.
Halfpenny, Faithing.
Halfpenny, Farthing.
P'arthing.
Halfpenny (125 grs.), Farthing (62-5
grs.)
Halfpenny (152 grs.), Farthing, (76grs.)
(1770)— Halfpenny (152 grs.), P\arthiiig
(76 grs.)
(1797)— Twopence (S75 grs.), Penny
(437-5 grs.)
(1799>— Halfpenny (194*5 grs.), Farth-
ing (972 grs.)
(1806)— Penny (291-7 grs.), Halfpenny
(145-8 grs.). Farthing (72*9 grs.)
George IV. Penny (291-7 grs.). Halfpenny (145-8
grs.), Farthing (72-9 grs.)
William IV. Penny (291-7 grs.). Halfpenny (145-8
grs.), Farthing (72-9 grs.)
Victoria. Penny (291-7 grs.), Halfpenny (145-8
grs.), Fartliing (72-9 grs.), Half-
farthing (2(5-5 grs.)
In 1860 copper was superseded by bronze for
the manufacture of pence, halfpence, and
larthings ; the old copper pieces being demone-
tised by royal proclamation of the 13th May
1869. They were, however, exchanged at the
Mint for their full nominal value until the
year 1873.
The weights of the bronze coins are as
follows : —
Penny, 145-83 grs.
Halfpenny, 87-5 grs.
Farthing, 43-75 grs.
Farthings made of tin were struck in the
reigns of Charles II., James II., and William
& Mary ; halfpence also were made of that
metal in the tAvo last-named reigns. F. E. A.
COPPER MONEY (Sweden). {Copper
plates or blocks itscd as money in Sweden. ) From
1644 to 1776 there was in Sweden a cumber-
some form of copper currency. It consisted of
thick square plates (pUtar) of pure copper of
various dimensions and weights, the largest
weighing as much as 17 kilogrammes (or 37^
lbs. av.) The nominal value in silver dalers,
with the year of its issue, etc., was stamped in
the corners and in the centre of each plate. The
reason which led to the adoption of this form
of currency was a desire to benefit the native
copper mines, a feeling analogous to that
which at the present date (1891) has greatly
promoted the coinage of silver money in the
United States.
422
COPYHOLD— COPYRIGHT
By the law of 1644 one skeppund of copper
(170 kilogrammes or 374| lbs. av.)was coined
into a number of platar equal in total nominal
value to 69 silver dalers. In the hope, however,
of adding to the wealth of the nation, laws were
passed in 1674 and 1715 which directed that
the stamps on the blocks should be altered so
as to cause them to pass at a higher nominal
value than before, the number of silver dalers
represented by a skeppund of copper being
increased in 1674 to 100, and in 1716 to 180.
The latter rate was maintained until 1776,
when, by a new coinage law, the pldtar were
demonetised, and ceased to form any part of
the Swedish currency.
After 1715 one plat was reckoned as equal
to two silver dalers, or f of a Rixdaler. This
would be equivalent to 2f crowns of the present
gold standard, which are equal in sterling to
2s. ll^d. The weight of one plat at the
valuation of 1715-1776 would therefore be (170
kilogrammes-T-90) 1*88 kilogrammes or 4 lbs.
2 oz. av., while the nominal value of the
largest plate, weighing 17 kilogrammes (37^
lbs. av.), would be eighteen sUver dalers, equal
to twenty-four of the present gold crowns,
which amount in sterling to £1 : 6 : 5.
For a long time these blocks of copper formed
the chief medium of exchange in Sweden
(so far as metal was concerned), and as they
were very unwieldy, merchants were often
obliged to obtain a wheelbarrow when they
had to pay or receive any large sum of money.
The inconvenience of employing this form of
money appears to have led to its disuse.
In Italy, Mommsen (^Hist. of Rome, vol. i.
p. 458, ed. 1864) says, ''there seems from the
first to have been a fixed ratio for the relative
value of copper and silver (250 "1)." P. E. A.
COPYHOLD. Land forming part of a manor
and subject to certain burdens in favour of the
lord. Among these the fine payable on aliena-
tion and the " heriot " are the most prominent.
The right of heriot entitles the lord to take the
best beast, and in some cases the most valuable
chattel on the holding, when the tenant dies.
The tenants' rights are derived from "the
custom of the manor," the lord being still
looked upon as the feudal possessor of the land,
hence he is entitled to all mines and minerals
under the land, and to all timber growing upon
it. The transfer of copyhold lands is still
effected in the mediaeval forms. The new
tenant is admitted in the lord's court — the
court baron — and his admittance entered on
the court roll, the copy of which is evidence of
his title — hence the expression "copyhold."
A series of copyhold enfranchisement acts were
passed between 1841 and 1894. The last (1894)
repealed former acts and consolidated and im-
proved the law. It deals with both voluntary
and compulsory enfranchisement with the con-
sent of the Board of Agriculture. Either lord
•'or tenant may compel enfranchisement on con^
dition of bearing the expenses. Every facility is
now given to enable both lord and tenant to put
an end to their obsolete relation, and copyholds
will, no doubt, soon disappear altogether, e. s.
COPYRIGHT. Copyright may be defined
as the sole and exclusive privilege of multiply-
ing copies of an original work of art or literary
composition. Under the Tudors monopolies for
printing special classes of books were often
granted by the crown, but it was not until 8
Anne c. 19 that a law was passed conferring
copyright after publication. Copyright is now
governed by 5 & 6 Vict. c. 45 and subsequent
amending acts, the last of which (1911) extends
to the British Dominions. It brings all copy-
right under statutory law. It simplifies the law
and makes it more favourable to the author.
(1) Literary Copyright. Original books, includ-
ing pamphlets, lectures, sheets of music, reproduc-
tions of music by mechanical methods, musical
"records," maps, charts, plans, translations, etc.,
are protected for the author's life and for fifty
years after ; except that if, after the author's death,
a work is unfairly withheld or the price unduly
raised, a special license may be granted for its
publication or performance on reasonable terms.
Libellous and, immoral publications are not pro-
tected by copyright. Newspapers under some
circumstances may be within the acts. The first
publication of the work must be within the United
Kingdom or such part of the British Empire to
which the law applies. Aliens resident in such
parts of the Empire enjoy the same protection.
(2) Dramatic Copyright. Plays and musical
compositions are protected for the same period as
books, but the time runs from the publication
or representation, whichever happens first. To
dramatise a copyright book is an infringement.
(3) Works of Art. By the act of 1911 works
of art were included for the first time in the same
arrangement as literary works.
(4) Designs. Original designs used in manu-
facture for fabrics, etc., may be registered and
protected under the Patents and Designs Act 1907,
and the Trade-Marks Act, 1905.
(5) Copyright in Foreign Countries. See
Colles and Hardy, Playright and Copyright in
all Countries, London, 190G ; Copinger, Law of
Copyright in Works of Literature and Art, ed.
J. M. Easton, 1904. In the United States the
act of 1909 protects literary, artistic, and musical
productions, for twenty-eight years, with a renewal
for a further period of twenty-eight years to the
author or his heirs. Aliens can enjoy this protection
if resident in the United States when the work is
first published, or if the foreign states to which they
belong grant certain copyright protection to subjects
of the States. The " manufacture " clause (act of
1891) requires, with a view to protecting native
typographers, that a book published in the United
States should be printed there. The law of 1909
left this unaltered except in the case of books
originally published in a foreign language.
(6) International Copyright. By an act of
1844 authors of foreign nationality could be pro-
tected by British copyright provided (1) they
COQUELIN— CORN LAWS
423
complied with certain formalities, such as the
registration of their works in England within a
year of the date of publication abroad, and (2) that
reciprocal protection is given to British authors in
the countries of which they are subjects. It did
not, however, confer on any foreign author rig^ats
greater than those he enjoyed in his own country.
The system was improved by the International
Copyright Act, 1886, and by the "Bern Conven-
tion," 1887, entered into by the British Empire,
Belgium, France, Germany, Italy, Spain, Switzer-
land, Norway, Japan and others. British authors
are protected abroad by the arrangement under
which each country enters into the Convention.
Austria- Hungary arranged a separate convention
with England in 1893. The International Con-
vention at Berlin, 1908, made recommendations
simplifying the law still further.
(7) Basis of Copyright. — Blackstone (2 Com.
p. 405), and other writers (Copinger on Copyright)
adopting Locke's view of occupancy, incline to
base the right of an author to the exclusive use
of works composed by him on occupancy founded
on personal labour. But it is difficult to see how,
without great straining of language, a title which
the Romans applied to material things can be made
to embrace the right of an author to his ideas em-
bodied in outward form. Judicial decisions incline
to the economic view that a manuscript having
value was a form of wealth, and should be pro-
tected like other property, Millar v. Taylor (4 Burr,
2362), Donaldson v. Becket (4 Burr, 2408), Jetfries
V. Boosy (4 H. L. C. 867). Spencer [Social Statics,
c. xi. § 1) holds that "a man may claim the ex-
clusive use of his original ideas without overstep-
ping the boundaries of equal freedom, it follows
that he has a right to claim them, or in other
words, such ideas are his property."
See Report of Royal Commission on Copyright
Laws and Minutes of Evidence, 1878. — See also
Scrutton, The Law of Copyright, 1896. — Shortt,
The Laio relating to works of Literature and Art,
1884. — MacGillivray, A Treatise on the Law of
Copyright, 1902. — Winslow, The Law of Artistic
Copyright, 1889. — Cohen, Law of Copyright,1896.
— Edmunds, Copyright in Designs, 1908. — Knox
and Hind, Copyright in Designs, 1899. — Briggs,
Law of Liter national Copyright, 1906.
COQUELIN, Charles (1805-1852), born at
Dunkirk, died at Paris. Beginning life in
business (1839-44), he published a Trait6 de la
filature du lin (Paris, 1845). Soon after,
having joined the free traders in their campaign
in favour of customs reforms, he wrote in the
Hevue des deux mondes, also in the Journal des
economistes, to which he contributed many
articles, much noticed and justly valued at the
time, on banks, commercial companies, railways,
canals, conversion of the rente, the corn laws,
the circulating medium, liberty in commercial
matters, etc. He superintended up to his death
the publication of the Dictionnaire de Veconomie
politique of Guillaumin (1852-53). His principal
work, Du cridit et des banques (Paris, 1848, 1st
ed. ; 1859, 2nd ed.), still remains, though some
of the details are out of date, one of the ablest
arguments in favour of freedom for institutions
of credit and circulation. a. c. f.
CORBET, Thomas ; wrote—
An Inquiry into the Causes and Modes of the
Wealth of Individuals, or the Principles of Trade
and Speculation Explained (London, 1841 ) sm. 8vo.
The author, claiming for himself only that
degree of originality which Newton evinced when
he explained the most ordinary transactions, such
as plumbing and weighing, assigns as the " dis-
tinguishing principle of trade " though " not
noticed by Adam Smith " — to buy and sell always
at the market price. " Many other principles,"
as the author says, "will be found to be as novel."
F. Y. E.
CORBETTA, Eugenio, author of Conferenze
popolari di economia pubblica e sociale, Milano,
1872, Dumolard. m. p.
CORN LAWS. A corn law is an expedient
adopted by the legislature, with the object of
securing a higher price for the cultivator, and
a higher rent for the landowner. It takes
two forms. One, and the most familiar, is a
tax or prohibition on importation. The other
is a bounty on exportation. The first corn law
of the former kind in the English statute book
is one enacted 3 & 4 Edward IV. The only law
of the latter kind is the famous Bounty Act
of William and Mary, enacted in 1689 (1 W.
and M., s. 1, c. 12). The act was extended
to Scotland by 5 Anne c. 8, and Avas slightly
modified by 13 Geo. III. c. 43.
Acts of the sovereign, probably by the advice
of the council, prohibiting the export of corn,
with the view of distressing the king's enemies
or of preventing scarcity at home, are of early
and frequent occurrence in English history.
But they are temporary, the expedients of
military policy, or of a feeling that it was the
first duty of a sovereign to assist in procuring
plenty at home, and were not intended to pro-
mote the interest of either cultivators or land-
lords. These restraints were constantly en-
forced by severe and even savage penalties.
The preamble of the petition on which the
act of Edward IV. is founded (Rolls of Parlia-
ment, V. p. 504), asserts that "husbandmen
and occupiers in husbandry are sore hurt by the
bringing of corn out of other lands and partes
when corns of the growing of the said realm
have been of easy price." Imports of wheat,
rye, and barley are prohibited, unless the
prices of these three kinds of gi-ain are at 6s.
8d., 4s., and 3s. respectively the quarter. The
corn thus imported is to be forfeited, half to go
to the king, half to the informer. Prize of
war, however, apparently (for the language of
the petition is not very clear), is exempt from
these provisions.
The year in which this act was passed was
one of very low prices, for wheat was only
3s. lO^d., rye 2s. lOd., barley 2s. 4^d. the
quarter. During the period before 1542, when
prices began to rise permanently, Le. for eighty
I
424
CORN LAWS
years (1462-1542), prices for twenty-three years
only were above the rates, sometimes only
slightly, so that one could hardly say that the
act was very effectual in promoting its avowed
object. Besides, for a very long time, acts of
parliament were very imperfectly obeyed, per-
haps hardly known to exist ; and governments,
even in the most despotic times, were very
much alarmed at any discontent which might
arise in case the price of food was artificially
heightened. There are numerous statutes pro-
hibiting the exportation of corn in times of real
or apprehended scarcity.
Imported corn, like every other foreign
commodity, was made liable to the charges
which were imposed by Cecil {see Book of
Rates) — the constant subject of quarrel be-
tween the early Stuarts and their parliaments.
Here, however, the maximum price at which
imported wheat was freed from customs duty
was 48s. a quarter. The average price of wheat
during the 17th century was 41s. and nearly
the whole century was a period of exceeding
suffering to the poorer or labouring classes.
The real commencement of the system of
imposing a scale of charges on imported corn,
with a view to heightening prices and there-
after rents, was the sliding scale of 22 Charles
II. c. 13. Under this law a duty of 16s.
a quarter was imposed on wheat as long as it
was at and below 53s. 4d. and of 8s. when the
price was between 53s. 4d. and 80s. Other
kinds of grain were similarly treated, for 16s.
was to be exacted when rye was below 40s.
barley and malt when below 32s. and peas and
beans below 40s. Oats, when at 1 6s. and under,
were to pay 5s. 4d. There was as yet no
malt, but only a beer duty. Now during the
17th century, the average price of wheat was
41s., of barley 21s. ll|d., of malt 23s. 7|d.,
of peas 23s. 2|d., of beans 23s. l^d., and of
oats 14s. 7|d. I have not found the price of
rye in sufficient frequency to justify an average.
But the above figures prove that the intention
of the act was to put a prohibition on the
importation of food. It is true that when
scarcities came, as in the seven years' dearth at
the end of the 17th century, in 1709-10, in
1756, and on some other occasions, the act
was suspended for a period, and, as Adam Smith
says, " the necessity for these temporary statutes
sufficiently demonstrates the impropriety of this
general one." The act remained in existence
as the ordinary corn law for more than a
century, for it was changed only by 13 Geo.
III. c. 43.
The sliding scale act of Charles II. was, as
far as the realisation of its objects are con-
cerned, a total failure. The price of wheat was
generally low to the end of the century, for
during the forty years 1663-1702 inclusive the
average is 38s. lOd., this period including the
so-called seven dear years 1692-1698 inclusive.
Besides, the act was suspended as soon as it
really came into operation. With rare ex-
ceptions too the harvests were exceedingly
abundant well into the third quarter of the
18th century, average prices being constantly
less than half the average rate of the 17th
century. For this result there were two
dominant causes. The first was the extra-
ordinary geniality of the seasons. The second
was the gradual adoption of the new agriculture,
the substitution to a great extent of the four-
course for the three-course system of cultivation,
the spread of turnip and artificial grass culture,
and the great increase as a consequence of live
stock. The development of English industry
and manufactures was remarkable, and was due
in great measure to the plenty which prevailed.
We shall see presently what bounties did.
When prices occasionally rose to what, till
recent years, we should call moderate rates, say
50s. a quarter, there were great discontents
and occasionally serious bread riots. The act
of Charles does not appear to have been blamed
for these disagreeable experiences, for the
calamity was generally assigned to the acts oi
the com dealers, who were branded with the
names of forestallers and regraters, and looked
on generally as pubKc enemies. {See Fore-
stallers AND Regraters.) The government
were exceedingly alarmed at these symptoms,
and did their best to keep the ports open
for foreign food. At last by 13 Geo. III.
foreign corn could be imported at nominal
duties when wheat was over 48s., rye, beans,
and peas 32s., barley, here, and bigg 24s., and
oats 16s., the rate on wheat being 6d. a
quarter, on rye, etc. 3d., on barley, etc. and
oats 2d., and the whole duty might be drawn
back, if re-exported in six months. In 1791
the corn laws were consolidated but not materi-
ally changed. During the great continental
wars prices were all that the farmers and land-
owners could desire.
But in 1813, after the retreat from Moscow,
the domination of Napoleon came to an end,
and with it his anti-commercial decrees. Large
quantities of foreign corn came into England
and prices fell. In 1815, therefore, another
act was passed (55 Geo. III. c. 26). Under
this act no foreign corn could be taken out of
bond unless when the following prices were
reached — ^wheat 80s., rye, peas, and beans 53s.,
barley, here, and bigg 40s., and oats 26s.,
some favour being shown to the produce of
Canada. It was supposed that this enactment
would raise prices, but they continued provok-
ingly low, and in consequence there occurred
what was called agricultural distress. By 3
Geo. IV. c. 60, a new scale of maxima was
adopted of 70s., 46s,, 35s., and 25s. Certain
modifications were made between this date and
1846, when the corn laws were abolished, the
measure to take final effect in 1849. Only b
CORN LAWS
426
shilling duty was left, which was abolished
twenty years later by Mr. Lowe.
The bounty on exported corn, as is stated
above, was granted in 1689. The corn law of
Charles IL had been a failure. It did no good
in cheap years, it was dangerous in dear times,
and had to be suspended. The bounty was
far more plausible, and, at first sight, far more
defensible. It stimulated corn growing, and
to stimulate corn growing was to provide more
abundant, j)erhaps cheaper food. The bounty
too seemed 3o small, especiall.F when compared
with the duties on imports under the act of
Charles. EngHsh agriculture was in a deplor-
able condition in 1689. It was affirmed by the
closest and most intelligent observer of the
time, Gregory King, that the average rate of
corn production in England was, one kind with
the other, not above fourteen bushels to the
acre, and the bounty would mend this serious
deficiency of enterprise. State-aided industry
was a superstition of the time ; the grant of
the bounty by parliament seems to have
excited — and I jiave read much that was written
at the time -neither criticism nor opposition.
The bounty was not to be given when the
price of wheat reached 48s., of rye 32s., of
barley and malt 24s. a quarter. When the
prices were below this amount, the payments
on exportation were 5s. on wheat, 3s. 6d. on
rye, 2s 6d. on barley and malt. After the
Scottish union oats were included and here, and
2s. 6d. was to be paid on these, 15s. on oat-
meal. By 13 Geo. III. c. 43 the maximum
price of wheat was made 44s. and 5s., rye 28s.
and 3s., barley, malt, and here 22s. and 2s. 6d.,
oats 2s., oatmeal 2s. 6d. But after 1773 it
was rarely that prices were low enough to
admit a bounty, and very soon the bounty was
practically suspended. The form, however,
survived during the continental war.
The sliding scale of import duties had no
effect on agriculture, and till the last thirty
years of its existence only a fitful effect on
prices. It did not encourage cultivation, because
the best hopes of farmer and landlord seemed
to lie in scarcity. Its effect was that it
destroyed or weakened the foreign market, by
rendering it uncertain, and that it prevented
the exchange of British manufactures against
foreign grain. It deluded the farmer by the
excessive range of variation in prices which it
caused, and it was a serious injury, for the
same reason, to the mass of the people. Hence
there were people who denounced the sliding
scale, but thinking that British agriculture
could not prosper without some assistance,
advocated a fixed duty. This was the policy
of the Whigs. The advocates of free trade
answered that a fixed duty was a fixed wrong,
and this criticism was accepted and endorsed
by parliament.
But the operation of the bounty was very
different. It cannot be doubted — the writei
has, for the first time, collected the evidence — ■
that the bounty stimulated corn-growing, en-
closures, and to a very limited extent arable
agriculture. But this advantage, such as it
was, was countervailed by mischievous conse-
quences. In the first place, it discouraged the
spread of the new agriculture, i.e. in general
terms, the substitution of the four-course for
the three-course system, and the abandonment
of bare fallows for turnip and artificial grass
culture, and with this the increase and improve-
ment of cattle and sheep raising. The legisla-
ture encouraged only one branch of agriculture,
corn raising, and by implication discouraged
the other branches. In the next place, men
gambled for the bounty. It was reckoned that
in average cheap years, only a thirty-third of
the crop won the bounty, but it obviously
affected the whole crop which was raised. In
just the same way, in modern times, the beet-
root crop, favoured by continental governments,
is the most unsatisfactory and disappointing
industry on the continent.
In the next place, for a long time, as no rule
as to quality was established, the bounty was
favourable on corn which was below the aver-
age quality. The contrast between minimum
and maximum prices of grain on the London
Corn Exchange is extraordinary, constantly
being thirty to forty per cent, for so gi-eat an
interest was created by the bounty that it has
been possible to collect, from the days of the
great famine of 1709-10, accurate accounts of
weekly London prices from the newspapers. At
last the legislature required the city of London
to furnish a return of prices and quantities, and
established a system of averages. But the
most important action which parliament took
was in 1770, when returns of corn prices were
required from every county weekly, which
were published in the London Gazette. These
returns disclose the fact that, though by this
time the effect of the bounty was much dimin-
ished, the price of corn in the inland counties,
i.e. those who had no access or no easy access
to the ports, was fully 5s. a quarter higher than
it was in the maritime counties or from fifteen
to twenty per cent dearer. The whole country
paid the tax, and some parts of it had to pay
all the more for food. The officials too, who
made the returns, were constantly charged with
stating that prices were far lower than experi-
ence justified.
There was considerable difference of opinion
about the operation of the bounty. Arthur
Young, who had only the interests of progress-
ive agriculture at heart, believed that it and
the sliding scale were important stimulants to
agriculture. Smith, as might be expected,
though he was not possessed of the facts which
prices disclose, denied that the effect was any-
thing but mischievous. Tooke, perhaps the
426
CORN RENTS
last considerable economist who handled the
question, declares that in the absence of accur-
ate information on the effects of it, he is unable
to determine whether the good was greater than
the evil. On this, the evidence of facts,. of
which a summary has been given, is conclusive.
J. T. R.
CORN RENTS. During the latter half of
the 16th century rents were very slow to im-
prove. In Stafford's famous pamphlet, at one
time ascribed to Shakespeare, the complaints
of the landlord are loud. Prices had trebled
and rents were stationary. The explanation
is, that everything needed for agriculture,
except labour, had increased near threefold in
price, and the margin from which rent could
be paid was therefore not increased. The
Oxford and Cambridge colleges, the schools
of Winchester and Eton, were greatly im-
poverished, and apparently found it difficult to
live. Their tenants too were all on customary
rents.
In this crisis parliament, at the instance of
Burleigh or Sir Thomas Smith, for the credit is
divided, came to the rescue by the act of 1576,
18 Eliz. c. 6, under which the colleges and
the two schools were empowered in the grant
of fresh leases to reserve one-third of the old
rent in produce or in money at the maximum
prices of wheat and malt, in the markets of
Oxford, Cambridge, Winchester, and Windsor.
I have found that the produce rent, at
fictitious prices, had been for some time
customary at King's College, Cambridge, before
the act was passed ; and the hint probably
came to Burleigh or Smith from this practice.
Thus the college demanded that the lessee
should supply so many quarters of wheat and
malt at 6s. 8d. and 4s. though the market price
might be treble these amounts, and sheep at 2s.
when the lowest price was 6s. 8d. The Cam-
bridge colleges clung to this system despite
the act till the end of the century. The
reason, I believe, was that domestic grinding
and baking were customary at Cambridge,
while at Oxford purchases were made from
the common baker or brewer. The local
custom was dropped at last, it appears, because
these covenants did not secure high quality.
The act did not prejudice existing leases.
Hence it is some time before the returns of
corn prices appear. The earliest which I have
found in Oxford is in 1582. The practice of
Eton long continued to be that of King's
College, and Winchester appears to have
adopted the change slowly, for the accounts of
this school have, it seems, been lost up to the
time of the Long Parliament. The rent days
at Oxford on which the market returns are
given are rarely more than two. New College
alone having occasionally a third. At King's
College they were thirteen, but one seldom finds
the whole. At St. John's they are six, and
these are always found. At Winchester there
were also six, at Eton seven, though at last
Eton only has two. Winchester has oc-
casionally oat rents.
These com prices are of the greatest value in
the history of agricultural prices, which indeed
could not, since the Reformation, have easily
been constructed without them. In the early
part of the 18th century Fleetwood, after-
wards bishop of St. Asaph, and previously
fellow of Eton, extracted the Eton prices, and
published them in his Chronicon Preciosum.
This gave the hint to parliament, which,
during the 18th and 19th centuries, occasionally
called on the Eton authorities to return their
corn prices. These were published in parlia-
mentary papers. The writer of this article
was the first to collect the Oxford, Cambridge,
and Winchester prices, as well as those of Eton,
from the original records. It is probable that
no other country could supply such a series, but
from casual and broken notices of French com
prices, it is plain that generally they are not
very different in amount, money and measures
being duly interpreted, from those which pre-
vailed in Southern England. j. t. r.
CORN RETURNS. By the Corn Returns
Act 1882 (^5 & 46 Vict. c. 37) which consoli-
dated and amended the 5 & 6 Vict, c. 14 and
the 27 & 28 Vict. c. 87, the buyers of corn in
certain towns named by order in council, are
required to make to the inspectors of corn re-
turns, weekly returns of the amount of each sort
of British corn bought by them, and the weight
and the price thereof. Such returns are to be
made in not less than 150 and in not more than
200 towns. The inspectors are to forward to the
Board of Trade weekly summaries of these re-
turns, and from these summaries the Board of
Trade computes the weekly, quarterly, and yearly
average prices of each sort of corn. These aver-
ages are computed by dividing the total prices
by the total quantities. On these averages de-
pends the yearly amount payable to owners of
tithe rent charges (see Tithe). j. e. c. m.
CORNAGE. A monetary payment called
cornage was a frequent incident of the tenure
of land in the counties of Cumberland, Durham,
Northumberland, and Westmoreland. Little-
ton explains cornage tenure to be the tenure of
land by the service of blowing a horn to give
notice of the incursions of the Scotch ; and this
explanation has been often repeated, but is
certainly incorrect. The true explanation is
that in lands held by cornage tenure the tenant
paid to the lord a small sum of money for every
homed beast in his possession, or a fixed sum
as a composition. The payment was an incident
of both free and unfree tenures, and in the
latter case was paid by all the tenants together.
In the manor of Easington in Durham it was
fixed at 30s. a year from a very early period,
and in most cases the amount paid bears na
CORNER —CORPORATION
427
relation to the actual number of cattle on the
land. But a charter of Henry I., in granting
the cornage of Borton to the monks of Durham,
estimates its amount as twopence from each
animal. For similar payments in other covn-
tries than England see Ducange, Glossarium,
s.v. In England cornage seems to be confined
to the four counties named, where it is also
known as "horngeld" or "hornbield." It
perhaps points to an early payment of rent in
cattle. Servile tenants owing cornage were
often also bound to provide the lord with a
milch-cow or its value.
[Littleton's Tenures 1481. The Boldon Book,
edited for the Surtees Society by the Rev. William
Greenvvell (see esp. "Glossary," 5.1;.)] c. G. c.
CORNER ON Stock Exchange. A specu-
lator is said to have got into a corner when he
cannot deliver the securities or other articles
which he has sold for delivery at a given date
(y. Backwardation and Bear). a. e.
The word is an Americanism now acclimat-
ised here, signifying a condition of a market in
which speculators of one class are placed at the
mercy of their opponents. It is a term even
more extensively used in the produce markets,
in the corn trade, and so forth, than upon the
stock exchange. As a rule, the speculators
** cornered " are those who have sold what they
did not possess in the expectation of being able
to buy upon lower terms. In many cases such
sales have extended to a larger amount than
there are goods of the class, or securities, upon
the market or in existence, and if the buyers
are strong enough to demand a delivery of what
has been sold it is evident that the sellers
must at last apply to those to whom they have
sold to let them off tlieir bargains. The
result is that the buyers may then demand
their own terms to cancel the transaction. In
America, where gambling in produce is carried
to enormous lengths, these "corners" are
frequent. A "corner" may be said to differ
from a "rig" in that the latter more often is
applied to a transaction such as the recent
French operation in copper. In that case an
effort was made to secure the entire production
of the world, amounting to upwards of 200,000
tons annually, and to sell it only at an advance
of about 100 per cent, all consumers of copper
being compelled to purchase from the syndicate.
The result proved disastrous. The French
Society des Mitaux * ' rigged " the market for
upwards of a year, but it may also be said that
they "cornered" those who had speculatively
sold copper for forward delivery in October
1887, the price advancing from under £40 per
ton early in that month up to nearly £90 in
January 1888 {see Cartel ; Combination).
CORNIANI, Giambattista (1742-1813)
born at Orgi Nuovi, in the province of Brescia,
wrote mjlessione sulle Monete, in 1796 (pub-
lished in Verona for the first time, and repub-
lished in 1804 by Custodi) on the genera\
effects depending on the quantity of coin which
circulates in a country, and two other essays,
entitled Discorsi due delta Legislazione relativa-
mente all' AgricoUura, read in 1777 before the
academy of Brescia on rural legislation, and
also published by Custodi, whose personal
friend he was. Corniani, although an indif-
ferent economist, was a distinguished man of
letters. m. p.
CORPORATION, Municipal. A body of
persons incorporated for the purpose of promot-
ing the good government of a town.
By the Municipal Corporation Act 1835 (5 &
6 Will. IV. c. 76) the greater number of muni-
cipal corporations were reformed and their con-
stitution placed upon a uniform basis. That
act and subsequent acts have been consolidated
by the Municipal Corporations Act 1882 (45
& 46 Vict. c. 50).
The government of a municipal corporation
is entrusted to a mayor and a certain number of
aldermen and councillors who constitute the
"council." The council is elected by the bur-
gesses ; the aldermen and mayor by the council.
The qualification of a burgess consists in (1) being
of full age ; (2) having occupied a building in
the borough for twelve months ; (3) being rated
to relief of the poor and having paid his rate :
(4) not having received parochial relief; and (5)
residing witliin seven miles of the borough.
The rents, profits, and interest of all corpor-
ate property is paid into a borough fund, and
out of such fund the expenditure is defrayed.
Any deficiency is made up by a borough rate.
The consent of the Treasury is required to
enable a corporation to acquire or dispose of
land, but it may, subject to certam restrictions,
make leases not exceeding thirty-one years.
The chief powers enjoyed by municipal cor-
porations are : the administration of all town
property ; paving, lighting, and the cleansing
and maintenance of thoroughfares ; the making
of sewers ; the establishment of public buildings ;
appointment and supervision of the police ; the
administration of special trusts ; and the super-
intendence of education where there is no school-
board.
Special powers are enjoyed for the purpose of
removing unhealthy areas and erecting work-
men's dwellings.
By the Local Government Act 1888 boroughs
are divided into four classes : (1) those under
10,000 inhabitants ; (2) those over 10,000 but
without quarter-sessions ; (3) those over 10,000
but with quarter-sessions ; and (4) sixty-one
named boroughs each with a population of
50,000, on the 1st June 1888.
The first three classes form part of the
county in which they are situate. Class 1 is
practically incorporated with the county. In
class 2 the right of the borough justices to
grant licences is withdrawn. In class 3 the
428
CORPORATION— CORPORATIONS OF ARTS AND TRADES
boroughs are permitted to continue to manage
minor business. Class 4 is invested with all
the powers of a county council. A county
borough is entitled to share in the local taxation
account ; the amount depending on an adjust-
ment to be made between the county and* the
borough ; and all boroughs are to receive from
the county council grants in aid of the salaries
of certain officers, and of county lunatics.
Any deficiency of income is met by borough or
police rates. As a sanitary authority a borough
may also levy general district rates and private
improvement rates. Money may be borrowed
with the assent of the local government board.
[C. Gross, The Gild Merchant, Oxford, 1890.
— J. S. Vine, English Municipal Institutions,
London, 1879. — 0. N. Bazalgette and G. Hum-
phreys, Local and Municipal Government, Lon-
don, 1888. — J. M. Lely, Municipal Corporations,
London, 1882.] j.e. c. M.
CORPORATION, Aggregate. An associa-
tion of persons which the law regards as capable
of possessing rights, and of being subject to
duties. The existence of a corporation depends
in English law on one of five things, viz. ^1^
common law, (2) prescription, (3) statute, (4)
charter, or (5) implication (see Grant On Cor-
porations) ; but practically all corporations may
be traced to charters granted by the crown or
to acts of parliament. The early corporations
were generally ecclesiastical or municipal bodies,
though some were formed for charitable or
educational purposes. Trading corporations
are more modern. At first they were, and
sometimes are, incorporated by charter (see
Charter) or by special act of parliament, but
in 1844 persons were allowed to form a com-
pany by means of a certificate of incorporation.
Each member of a company so incorporated was
liable for the debts of the company, but in
1855 an act (18 & 19 Vict. c. 133) was passed
which authorised the formation of companies
in which the liability of each member is limited
to the amount of shares held by him. This
principle has been developed by subsequent
legislation, and the "company" is to a large
extent taking the place of the "partnership."
Apart from the limitation of liability, a com-
pany possesses a great practical advantage over
the partnership, inasmuch as the death of a
partner usually dissolves the partnership, where-
as the death of a member of a company does
not afi'ect its existence. A further important
distinction between these two modes of conduct-
ing business is that one partner can as a rule
withdraw his capital, whereas a shareholder
cannot do so unless the company is wound up.
J. E. c. M.
CORPORATION, Sole, is a name under
which each successive holder of any public office
is described in his capacity of owner of any pro-
perty attached to such office (e.g, the rector of
a parish as owner of the glebe). e. s.
CORPORATIONS OF ARTS AND TRADED
England, p. 428 : France, p. 430 ; Germany, p. 431.
The constitution of manufacturing industi'y
in the Middle Ages was everywhere in Europe
characterised by the system of Guilds, or
corporations of arts and trades. These diff"ered
more or less in the different countries. In
England, where the state was consolidated
and a strong central power established at an
earlier period than in France or Germany,
trade was earlier and more completely controlled
by the government, and the state regulations
relating to it more energetically and systematic-
ally carried into effect. The guilds were not
as widely diffused in England, nor had they as
great a degree of autonomy, as elsewhere. But
in their aims and operations, wherever they
existed, there was a remarkable general similar-
ity, so that a statement of these for England
will apply in a great degree to the other coun-
tries which have been named. The same re-
mark may be made respecting the history of
these institutions. A survey of their rise,
progress, and decline in England, France, and
Germany respectively, will show that in their
development and downfall identical social
causes were everywhere in operation.
England. — Already, in the Anglo-Saxon
times, religious and social guilds had existed
for the performance of pious offices and for
mutual help and solace, and frith-guilds for
joint action in personal defence and for preser-
vation of the peace. The latter rose naturally
in a society where the state was not strong
enough to provide adequately for the legal
protection of its members. But the merchant
guilds, which are found in the Norman period
in many English towns, though they may have
been suggested by these earlier associations,
had quite different aims. The merchant guild
(or "hanse" as it was sometimes called) was a
society "formed primarily for the purpose of
obtaining and maintaining the privilege of
carrying on trade " in a town. This privilege
implied the restriction of that trade to the
guild brethren, who had also defined rights of
traffic with other towns. Any one, not a
member of the guild, trading in the town, was
subject to fines. An entrance fee had to be
paid on admission to the guild, and probably
annual dues to the common fund, -which were
spent in festivities or religious offerings, or in
relieving the poorer brethren. Rules for the
conduct of buying and selling in the town, and
for the enforcement of commercial morality,
were framed by the guild, and binding on its
members. Admission to the merchant guilds
seems to have been open only to those inhabit-
ants of the town who were full burgesses by
virtue of holding land within the town bound-
aries. Each guild had for its head a president
caUed an alderman, with two or more assistant?
II
CORPORATIONS OF ARTS AND TRADES— ENGLAND
42S
known as wardens ; and there was a council of
twelve or twenty-four.
The earliest distinct mention of a merchant
guild is in the year 1093, but they may have
existed before the Conquest. The charters
granted by Henry II. to a number of the
leading English towns recognise the existence
in them of guilds merchant. The craft guilds
appear somewhat later ; they are found in
some places early in the 12th century, and in
the 13th we hear of them in most of the
industrial towns. Their origin has been vari-
ously explained. Some have regarded them as
the descendants of the collegia of the Roman
artisans. But the latter organisations, at least
under the later empire, were not free associa-
tions, but were imposed by the government on
the working classes ; and it is not likely that
they had a continuous existence from the 5 th
to the 12th century. Others suppose the craft
guilds to have arisen out of organisations, under
seigniorial regulations, of artisan serfs on the
lands of monasteries and great nobles. But
this is a mere hypothesis, so far as England is
concerned, and for France and Germany it has
been made probable only in some special cases.
Brentano, again, has put forward the view that
the craft guilds were formed in consequence of
the expulsion of the petty artisans from the
merchant guilds, the craftsmen combining for
mutual protection against the old burgliers.
An obstinate struggle does seem to have taken
place in Germany and the Netherlands between
a burgher oligarchy which had got possession
of the municipal government and the members
of the craft guilds ; but there is no evidence
of any such contest in England. These guilds
seem to have everywhere arisen spontaneously
out of the social conditions of the Middle Ages,
and to have been at first simply private associa-
tions for the general advancement of the in-
terests of the artisans, as the merchant guilds
had been for promoting those of the traders.
The earliest English craft guilds that came
into notice were those of weavers and fullers
of woollen cloth. "We hear of them in 1130 as
making an annual payment to the king for the
royal licence, without which they were treated
as ''adulterine" and fined. The royal charter
forbade any one in the town to which it related
to follow a craft unless he was a member of the
corresponding guild, and conferred on the guild
the right of exercising a certain supervision over
its members. Of the powers thus bestowed the
municipal authorities were often jealous, and
we find those of London offering King John a
money payment on condition of his abolishing
the weavers' guild. The exclusive right to
engage in trade which had belonged to the
(merchant guilds brought these last into collision
with the craftsmen, who sometimes sold the
wares they produced dii'ectly to their customers ;
and the craftsmen ultimately gained the rights
of burgesses, though we cannot trace the history
of the change. The monopoly of the burgesses
was probably lost before the end of the 13th
century ; in any case the statute of 1335,
establishing the freedom of buying and selling,
must have abolished it. This amounted practi-
cally to a dissolution of the merchant guilds,
which survived only as social and religious clubs,
or as a machinery for the discharge of certain
functions of the municipal government, especi-
ally for admission of apprentices to the freedom
of the city. The bye-laws of the several craft-
guilds made it a requisite for admission to a
trade to have served an apprenticeship of a
certain duration, the term being usually seven
years. They also prescribed the proper treat-
ment of apprentices by the master, and some-
times limited the number which a master was
allowed to have. They fixed the conditions
which must be satisfied before setting up as a
master, and regulated the processes of mann-
factm-e with a view to the production of good
and solid work. They exercised a general sur-
veillance over the moral conduct of their mem-
bers. Violations of the rules were punished by
fines, and, in case of repeated oifences, by expul-
sion from the trade. The guilds further per-
formed in some degree the functions of friendly
societies, and practised common festivities and
religious observances.
These bodies have sometimes been represented
as issuing the regulations and exercising the
jurisdiction we have described quite independ-
ently of the city authorities, whilst others
consider them to have been no more than the
mechanism through which the municipality
superintended manufacture, the officers of the
guilds merely bringing offenders before the
municipal courts. The truth seems to lie
between these two views. The town magis-
trates could issue regulations binding on the
crafts ; but the guild rules were in fact gener-
ally drawn up by the craftsmen themselves
and submitted to the magistrates, who usually
sanctioned them as of course and, though some-
times taking causes into their own hands,
commonly left the supervision of the manufac-
ture and the decision of minor questions to the
masters, bailiffs, or overseers of the trades.
The extent of the jurisdiction of the guilds was
probably different in different places. The
kings, from Edward I. onward, favoured the
craft guilds as a useful counterpoise to the urban
magnates, and as a serviceable auxiliary for police
purposes. And the municipal authorities them-
selves became friendly to them as subserving the
latter object. Indeed before the end of the
reign of Edward III., citizenship was bound up
with the membership of one of the guilds, and
it was natural that the jealousy between them
and the town governments should disappear.
In the time of Edward III. there were aa
many as forty distinct companies or crafts in
430
CORPORATIONS OF ARTS AND TRADES— FRANCE
London, and at the end of the century not
fewer than sixty ; in towns of the second rank
their number increased more slowly. In the
first half of the 14th century the guild system
was at its maximum of efficiency. It continued
to extend itself to new centres for two hundred
years afterwards. But under the Tudors the
direct control and superintendence of industry
was more and more taken into the hands of the
central government, and the regulations of
crafts and trades were incorporated into the
public law of the realm. The act 5 Eliz.
c. 4 (1562), commonly called the Statute of
Apprentices, adopting what had been the ordin-
ary bye-law of the corporations, required a
seven years' apprenticeship in all trades carried
on in market towns. It provided that when
there were, in certain specified trades, three
apprentices in a workshop, at least one journey-
man should be employed, and for every addi-
tional apprentice another journeyman. It also
contained enactments respecting the hours of
labour and the annual fixing of the rate of
wages by the justices of the peace. This statute
was held not to apply to trades established at
a la-ter period, or to places which only obtained
corporate privileges after 1562 ; and thus some
of the most important manufactures of Eng-
land were never subject to it. In Scotland no
such law existed, and Adam Smith says that
" he knew of no country in Europe in which
corporation rules were so little oppressive."
The increasing application of great capitals
to industry, and the substitution of the factory
for the workshop, tended to make the old trade
rules obsolete ; and the guild spirit became at
the same time more narrow and selfish. In the
18 th century any statutes which gave coercive
power to the guilds, though not formally re-
pealed, were in a great degree allowed to fall
into desuetude, and the importance of these
institutions practically disappeared. They
were discredited in principle by the polemic
directed against them in the Wealth of Nations.
Adam Smith condemned "the exclusive privi-
leges of corporations, statutes of apprentice-
ship, and all those which restrain in particular
employments the competition to a smaller
number than would otherwise go into them,"
as "encroachments on natural liberty," as
raising the market prices of the wares produced
above their natural price, and as obstructing
the free circulation of labour fi'om one employ-
ment to another. Smith held that a long, or
indeed any fixed, term of apprenticeship was
altogether unnecessary ; but he certainly ex-
aggerates the facility with which handicrafts
can be thoroughly learned. He also thought it
a mere pretence that corporations are required
for the better government of trade. After
several partial enactments of a liberal tendency,
the apprentices' act of Elizabeth was repealed
in 1814 (54 Geo. III. c. 96), and the trade
privileges of the guilds formally abolishfcd in
1835 (5 & 6 Will. IV. c. 76). Partly as
a result of the legal destruction of the old
system, a new legislation has been introduced
for the protection of the working classes by
provisions for the healthy conduct of manu-
facturing production, and the limitation and
regulation of the labour of women and children.
France. — In France the name jurande was
given to the office of those who were appointed
to watch over the execution of the trade
regulations and the conservation of the interests
of the several crafts. These Juris corresponded
pretty nearly to the English wardens. Those
only who were admitted as mattres could carry
on a manufacture on their own account. The
production of a chef-d'oeuvre (masterpiece) was
commonly required for admission to the
maUrise, and it was the business of the jur^ to
pass judgment on its execution. The journey-
men (compagnons) had been apprentices to the
trade, and expected in time to be themselves
mattres. The relations of the three classes
were substantially the same as in England.
Powerful corporations existed from early times
in Paris. The Parisian marchands de I'eau
(nautcB Pari^iMci) dominated the commerce of
Paris. The provost of this body was the head
of the municipal magistracy. The corporations
of goldsmiths and of money-changers were also
very ancient. The documents relating to the
trade corporations of the metropolis begin to be
numerous in the time of Philip Augustus. The
trade statutes and customs of the city of Paris
in the 13 th century are preserved in the collec-
tion made by £tienne Boyleau (seeBoiLEAU, E.),
appointed provost of the city by Louis IX. about
1260. The kings, who at first were hostile to
the claims of the corporations, from the begin-
ning of the 15th century favoured them, both
as useful instruments of police and as a source
of fiscal aids. But they also sought, though
often with but little success, to temper their
exclusiveness, repress their exactions, and
adapt their regulations from time to time to
the development of new branches of industry
and new methods of production, whilst on the
other hand they insisted on their royal right of
issuing letters of maitrise, and of supervising
the guilds. Louis XI. in 1467 armed the
trades, forming them into banners and com-
panies, bound by an oath of fidelity to the
crown. An edict of Henry III. (1581) gave to
the institution of corporations the extent of
a national system, and placed all the trades of
the kingdom under a general law. The edict
at the same time corrected prevalent abuses.
It mentions in particular the heavy expenses to
which artisans were subjected in order to
obtain the maUrise, the masterpiece which they
had to produce sometimes absorbing the work
of more than a year, and candidates being
expected to regale the jur6s with banquets and
CORPORATIONS OF ARTS AND TRADES— GERMANY
431
conciliate them by gifts. The crown, by this
act, may be said to have taken possession of
the police of mannfacturmg industry through-
out the realm. But, owing to the opposition
of the guilds and of the civic authorities, Vhe
provisions of the edict were very imperfectly
carried into effect, and a law of Henry IV.
(1597) was not much more successful.
In the last states-general (1614) the tiers etat
brought forward a strong protest against the
prevailing evils, and prayed for the suppression
of all guilds created since 1576, and the open-
ing of crafts to all persons without exception,
subject only to visitation by state inspectors.
But the government did not respond to this
appeal. The industrial policy of Colbert recog-
nised the guilds, but only as organs of the state,
subject to its control and direction ; he revised
the statutes of the existing bodies, and founded
many new ones, and regulated their whole pro-
ceedings (1673-74). But though eminently
successful in his own hands, his general system,
as carried out by his unintelligent and feeble
successors, tended rather to impede than to
promote industry. While the guilds were not
duly controlled, they were subjected to exorbit-
ant charges, and were thus forced to impose
extravagant dues on then- members, and to
insist more strongly on their monopoly. There
were endless prosecutions of indi\ddual artisans,
and conflicts as to the limits of the several
industrial professions, as well as struggles for
precedence between them, and these tended to
bring the whole system into disrepute. The
body of laws relating to them, however, remained
essentially unaltered till 1776, when Turgot
proposed to Louis XVI. the entire abolition
(except in a few trades for special reasons) of
the jurandes and niattrises, and the establish-
ment of absolute liberty of manufacture. In
an elaborate report which, according to his
custom, he prefixed to the ordinance, he main-
tained that * ' the right to work is the sacred
and inalienable property of the poor man," and
that "all sound principles were violated by the
accepted doctrine that it was a royal right,
which the prince might sell and the subjects
must buy." The ordinance was carried against
the will of the parliament in a lit de justice,
but its execution was strongly opposed by in-
terested parties, and, after the fall of the
minister, the old system was introduced again,
though with some liberal reforms. This state
of things lasted until the constituent assembly
in 1791 abolished the corporations and pro-
claimed the complete liberty of industry. With
some fluctuations this policy has, on the whole,
been maintained up to the present time.
Germany. — The German Ziinfte were in their
aims and constitution essentially similar to the
English guilds and the French corporations.
The Emperor Henry I. had required all artisans
to settle in towns, and the handicrafts were
long held to be the special right of urban com-
munities. The Ziinfte are first found in the
12th century in particular cities and to^vns.
They gradually gained influence in the civic ad-
ministration, and on the other hand strengthened
the cities against the nobility. At first purely
private associations, they came to be recognised
as organs of the state, and exercised certain
magisterial functions. In the 13th and 14th
centuries they extended to many additional
cities, and in the 15th century there was a com-
plete guild organisation of the trades through-
out Germany. The rules of the system were
rigorously carried out. What was known as the
Ziinftzwang was strictly enforced, that is, the
requirement that every artisan should belong to
one of the corporations. The boundaries of trades
were precisely fixed, so that a member of one
could not do work which properly belonged to
another, however cognate the occupations might
be. The Ziinfte in different places were bound
together and kept in touch with each other
through the institution of the Wanderjahr.
In the 17th century the decline of these
corporations began. The growth of the arts,
the rise of new crafts outside the Ziinfte, and
the extension of manufacture on the great scale
made it impossible to maintain the old restric-
tions on processes of production ; and the open-
ing of distant markets and the development of
speculative production required a new trade
rigime. At the same time the central govern-
ments, in the spirit of the mercantile system,
assumed more and more the direct control of the
whole field of national industry. As the Ziinfte
increasingly failed to serve real public ends,
they were more and more governed by a spirit
of selfish exclusiveness, and were worked in the
interest of a few privileged families. For those
who were not sons of masters it became almost
impossible to obtain admission except by mar-
riage with the daughter or widow of a master.
The reception of apprentices was made difficult
by the imposition of conditions and charges, the
qualifications required of journeymen (Gesellen)
were enhanced by lengthening of the wander-
period and the time of probation. The educa-
tion of apprentices was neglected, and there
was little care for the condition and treatment of
the journeymen. But the ZUvfte still retained
their powers, and it was only late in the 18th
century that they were seriously attacked.
They had then to ^sustain the same assaults of
economic theory which were directed against
the English guilds and the French corporations.
Schlettwein, a German follower of the Physio-
crats {q.v.), denounced the whole system and
demanded freedom of industry. But the legisla-
tive overthrow of these institutions belongs to
the 19th century, and was not completed in all
the states before the middle of its sixth decade.
The Stein-Hardenberg legislation of 1808-10
and the law of 1811 established the liberty of
432
coRTi— corv:6e
Tianiifaoture in Prussia, which had been previ-
ously introduced in the provinces \thich formed
pai t of the confederation of the Rhine. The
principle of freedom was embodied in the general
ordinance (Gewerbeordnung) of 1845, but the
revolutionary period which followed prevented
the fair trial of this ordinance, and the com-
plaints against it led to a modification of its
provisions and a partial return to the old order
of things in the ordinances of 1849. In 1861
and 1865 changes were again made in a liberal
direction, but the law of 1849 remained sub-
stantially in force in Prussia. In most of the
other states, between 1860 and 1864, the prin-
ciple of industrial liberty was introduced. All
these local laws were in 1869 merged in the
uniform code of the North German Confedera-
tion, which has since become that of the empire.
By this code the exclusive rights of Zilnfte or
mercantile corporations, the distinction between
city and country with respect to manufacture,
the necessity of a proof of capacity before enter-
ing any craft or trade, the limitation of each
artisan to one branch of production, and all
restrictions as to modes of production, have been
abolished, and it is left open to every subject of
the empire to carry on any industrial profession,
and to take apprentices and employ journeymen
in such numbers as he may find expedient,
subject only to sanitary and other police regula-
tions and to such fiscal obligations as may be
imposed by the laws.
Adam Smith and other economists have
dwelt too exclusively on the evils and abuses of
these institutions, and have left out of account
the social necessities out of which they arose,
and the not inconsiderable advantages which
they possessed. There has of late been a feeling
in France and Germany that with the abolition
of the restrictions enforced by the corporations,
there was a real loss of moral and social, as
well as of some economic, benefits. In Prussia
several efforts have been made to restore them
on a free basis ; and it is understood that further
steps of the same kind are now likely to be
taken by the German governments, whose object
is thus to establish a sort of police of the in-
dustrial world and solve a part of the great pro-
blem of the organisation of labour. It seems,
however, extremely questionable whether these
institutions could be usefully revived ; and the
good ends which some have hoped to attain
through their instrumentality must probably
be effected by other means better adapted to
existing conditions.
[The best book on guilds merchant is Gross's
Oild Merchant, 1890. — On English guilds, the
student should first read Breutano's Essay on the
History and Development of Gilds, prefixed 4o
Toulmin Smith's English Gilds, 1870. With it
may usefully be compared Ochenkowski's Englands
wirthschaftliche Entwickelung im Ausgange des
Mittelaltera, 1879, and Cunningham, Growth of
English Industry and Commerce. — In Ashley's
English Economic History and Theory, vol. i.
1888, will be found a clear accouut of the origin
and early history of the guilds, founded on a study
of the sources. Seligman's Two Chapters on the
MedicevaZ Guilds of England (Amer. Econ. Assoc,
vol. ii. ) may also be recommended. For the French
and German guilds, see the article "Gewerbe" by
Schonberg in his Handhuch der politischen Oeko-
r^07?^^g, 3rd ed. 1890. Art. " Maitrise," Encydopidie
of Diderot and D'Alembert. — The early Parisian
trade rules may be seen in ]^tienne Boyleau'a
Mglements des Arts et MStiers, published for the
first time by Depping, 1837.] J. K. i.
CORTI, Adolfo. Author of Elementi della
sdenza del Commercio, Pa via, 1829. m. p.
CORVAIA, Baron, a socialist, caused a book
to be written by Michele Parma, proposing the
foundation of a national bank intended to
redeem the lower classes from the oppression of
capitalists. This bank was to be connected
with a savings bank, and was designed to
eliminate usury. The treatise. La Ban^ocrazia,
0 il gran lihro sociale, novella sistema finanziario
was published at Milan in 1840, and was trans-
lated into^ German. m. p.
CORVEE. In the strict sense of ihe term,
Corvie is used to signify a tax levied by the
state on the labouring classes, and paid by them
in a certain number of days of labour, either
wholly unremunerated or remunerated at a rate
less than the ordinary rate of wages. In par-
ticular such a system of taxation has very
generally been applied in many countries to the
construction and maintenance of roads and
bridges, each locality being compelled to defray
the cost of such works by contributions of
laboiu" from its inhabitants. In England the
common law threw upon the occupiers of land
in each parish the duty of keeping the roads in
repair. It is not easy to say exactly how this
duty was originally carried out, but it may
fairly be presumed that the statute 2 & 3
Philip and Mary, c. 8, which is the first of the
many highway acts, did little more than de-
clare the system in use. Under this act each
parish is to appoint surveyors of highways to
oversee the repair of the roads in that district.
Labour required for this purpose is to be dis-
tributed by the inhabitants in the following
proportions. Every occupier of land is to send
for every ploughland occupied by him a cart
with horses and two able men with them, and
every householder, cottager, or labourer, unless
he be a yearly hired servant, is to work himself
or by a substitute on such days as the surveyors
shall appoint for the repairing of the roads.
These days under the act of Philip and Mary
were to be four in number, but the act 5 Eliz.
c. 13 extended the number to six, which were
all to be before Midsummer day. Fines for
non-attendance on the days fixed were to form
a fund for the repair of the roads. The first
step towards the abolition of this form of taxa-
COh'^QLOl'GORVETTO
433
tion was taken by the act 15 Charles 11, c. 1,
the first of the turnpike acts, which applies
the system of tolls to the counties of Hertford,
Cambridge, and Huntingdon, through which ran
the great road to York and the north. Sta^te
labour, as corv6e was called in England, had
already been found inadequate to keep in proper
repair many of the great ways of communication,
and the bad state of the chief roads was a
frequent subject of complaints and petitions to
parliament about this time. The system of
turnpikes was accordingly extended by degrees
to the whole of England, and in many cases its
introduction gave rise to great discontent and
serious local riots in spite of the fact that the
inhabitants were thus set free from statute
labour. However, many of the roads in the
country, including almost all purely local ones,
were not turnpike roads, but remained subject
to the provisions of the various highway acts
which were enacted from time to time. But
even for the repair of these statute labour was
beginning to be found insufficient. The act 3
& 4 William and Mary, c. 12 gives to the
justices of the peace power to levy a rate in
cases where the six days of forced labour should
be found to be insufficient, and after various
changes had been introduced by subsequent
acts, statute labour was finally abolished by
the act 5 and 6 William lY. c. 50, which
substituted for it the system of highway boards
and rates now in existence.
It would not appear that in England this
limited application of corvee was ever unpopular.
In France, however, where the corv6c originally
existed only in certain disti-icts, its extension
to the whole of the country, effected by M. Orry,
controller-general of finance in 1737, gave rise
to much discontent. The burden on the peasant
was heavier, and the peasant was less able to bear
it, than in England. In 1758 M. de BouUogne,
then controller-general, estimates the annual
value of the labour so contributed at 1,200,000
livres, probably a modest estimate. Certainly
the burden on the peasant was much heavier.
Necker estimates the cost to the peasants of the
services rendered in Berry alone at 624,000
livres. These consisted not only of the labour
of the peasant himself ; beyond this he was
compelled to bring with him any beasts of
draught or burden, and any vehicle, that he
possessed. Nor was it only for the repair of
the roads that corvie was imposed upon him.
In De Tocqueville's Ancien Mgiinie, p. 444,
will be found an account of the various public
services carried out by means of corvee, and
Turgot's Lettre au Controleur Gdndral sur
I'abolition de la corvee pour les transports mili-
taires gives a vivid picture of the wastefulness
and inconvenience involved in that particular
application of forced labour.
A good account of the inadequacy of corvie
as applied to the construction and maintenance
VOL. I.
of the roads is given in Diderot's IhicydopMie,
but the most effectual indictment of this tax ia
to be found in Turgot's M^moire au roi sur un
projet d'^dit tendant a supprimer la corv4e, with
the accompanying criticisms of M. de Miromes-
nil and Turgot's often rather contemptuous
replies (see vol. ii. p. 237 of Turgot's collected
works). This, with the curious Frocks verbal du
lit de justice tenu d Versailles le 12 Mars 1776,
will give a good idea of the arguments used
both by Turgot and his opponents on this
question.
The abolition of corvie by this edict was,
however, only temporary. Turgot's successor
Calonne at once restored it, and though again
abolished in the early days of the Revolution,
the reactionary policy of the Directoiro once
more reinstated it under the name of Prestation
by the decree of 4 Thermidor, an x. At the
present day the repair of the communal roads
of France is carried out under this system.
By the laws of the 28th July 1824 and the 21st
May 1836 the municipal councils may call upon
every male citizen between certain ages to give
three days' labour yearly for this pur]^)ose, and
may exact the same time from every beast of
draught or burden and vehicle within the com-
mune. A money payment in lieu of labour
may be made at discretion.
For an account of the use of corvee in Egypt,
see the Times, 14th September 1888. The
construction of the Suez Canal during its early
stages was carried out under a system of forced
labour on a very large scale. In most countries,
however, taxes of the nature of corv4e are now
disused, unless the Conscription {q.v.) is re-
garded as an exception to this rule.
In mediaeval societies payments in labour to in-
dividuals, especiallyin lieu of rent, were common,
and in France were termed corv6es personnelles.
The nature of these and their economic bearings
will, however, be most fitly treated of under
Manor and Feudalism {q.v.)
[CEuvres de Turgot, nouvelle Edition, par MM,
Eugene Daire et Hippolyte Dussard, precedee par
une notice sur la vie et les ouvrages de Turgot, par
M. Eugene Daire, 1844. — M. Necker, De Vad.-
ministration des Finances de la France, 1784. —
Collection de comptes rendus Pieces authentiques
etats et tableaux depuis 1758 jusqioen 1787 con-
cernant les Finances de France, 1788. — Diderot
et D'Alembert, Encyclopedic, 1772. — De Tocque-
ville, Vancien Regime et la Revolution, 1857. —
De Tocqueville, Histoire Philosophique du regne
de Louis XV., 1847. — Larou.sse, Dictionnaire
Universel, 1866. — Penny Cyclopoedia, articles
"Turnpike" and "Highway," 1833. — Stephen's
New Commentaries on the Laws of England,
1886. — Comyns' Digest of the Laws of England,
1822.] c, G. c.
CORYETTO, Louis-Emmanuel, Comte de
CoRVETTO (1766-1821), born and died at Genoa,
early distinguished himself in law and politics
in his native city, and was made a director of
2 F
434
COSHERY— OTJ5T.T5. BOOK
the Bank of St. George there in 1802. Bona-
parte created him councillor of state in 1805,
and transferred him to Paris, where he helped
to draft the Oode de Commerce and the Code
Penal. In 1811 he became inspector-general
of state prisons, was retained in the ^state
councU by Louis XVIII., made president of the
section of finance, and (27th Sept. 1815 to
7th Dec. 1818) minister of finance. The
economic interest of his career centres in this
last office. Upon Corvette devolved the problem
of freeing the teri'itory by meeting the war in-
demnity of 700 million francs (£28,000,000),
in addition to claims of 1400 million francs
(£56,000,000), for requisitions made during
the war. Though the latter claims were cut
down to 240 millions (£9,600,000), Corvetto
was obliged to issue large amounts of stock,
and to seek the aid of Messrs. Hope and
Baring ; but the circumstances under which
the loans were floated, and the action of the
government in inflating the price of the stock
by large purchases, led "Wellington to describe
the Paris money-market as the scene of such
speculation as had not been equalled since the
days of Law. Corvetto justified his action on
the ground that it was patriotic to pay the state
debts as cheaply as possible and to maintain its
credit. His conduct has been severely criticised
by M. Leon Say, who argues that the interven-
tion of the government in such speculations
can have but a momentary efiect upon prices,
apart from other and pernicious consequences.
The intentions of Corvetto were good : his
example was dangerous.
[L. Say : Les interventions du Trisor d la Bourse
depuis cent ans. (Annales de Tj^cole libre des
Sciences politiques 1^^^ ann6e 1886, pp. 12-24). —
Baron G. de Nervo : Le comte Corvetto, Paris,
1869.] H. H.
COSHERY. In the Middle Ages social and
political relations in Ireland were regulated by
the clan system. There was no private pro-
perty in land : the clansmen being co- pro-
prietors with the chief. But although the
chief was not lord of the land, he had large
customary rights over the property of his
dependents. One of the most important of
these was coshery, an old custom which allowed
him to take the houses and provisions of his
clansmen for the use of himself and his followers.
The English invaders of Ireland based upon
this right the practice of coigns and livery,
by which they extorted from the Irish free
quarters and provisions for their soldiers. After
the Cromwellian settlement many of the dis-
possessed chiefs lived for years at the expense
of their former dependents, and various statutes
were passed to prohibit this custom of coshery.
E. L.
COST (Comparative and Relative). The
doctrine of comparative cost is the basis of the
theory of international trade. It is held that
the labour and capital of a country naturally
flow into those departments of production in
which it has the greatest comparative advan-
tage, or in which the comparative cost is least.
Thus, at the time of the gold discoveries in
Australia, although the absolute real cost
(reckoned in days' labour) of producing various
articles, was less than in other countries, their
cost, compared with gold, was greater, and con-
sequently they were imported in exchange for
the gold. The theory rests on the assumption
that labour and capital only move with diffi-
culty from one country to another.
[Cairnes's Principles of Political Economy,
newly Expounded. — Professor Bastable's Theory
of Foreign Trade. — Coumot's TMorie des
Michesses.]
Relative cost is a term used in the theory of
value. The normal value of freely produced
commodities is said to depend upon the relative
cost of production, that is, relatively to that
of other things, value always expressing a rela-
tion of one commodity to others (see Cost of
Production). j. s. n.
COST, IN THE Sense of Price. Cost is
sometimes used to signify price, meaning by
this money value at the moment. J. S. Mill
says (Principles of Pol. Econ. bk. iii. ch. iii.
§ I.), "Adam Smith and Ricardo have called
that value of a thing which is proportional to
its cost of production its natural value (or its
natural price). They meant by this the point
about which the value oscUlates, and to which
it always tends to return — the centre value to-
wards which, as Adam Smith expresses it, the
market value of a thing is constantly gravitating ;
and any deviation from which is but a tempor-
ary irregularity, which, the moment it exists,
sets forces in motion tending to correct it."
The cost of a thing is thus taken to be indi-
cated by its price, in the sense in which a
purchaser uses the word as equivalent to the
maker's price at the time. ' ' In common speech, "
as Prof. F. A. Walker says, "the word price brings
up the idea of money value. " The " cost " may
diflPer greatly from the "price" which a thing
may ultimately fetch, as it may from its "value,"
but when used in the sense indicated above, the
expression refers to the price at the moment.
The essential distinctions (1) between normal
and market value ; (2) cost, in the sense of
real cost, and expenses are treated elsewhere.
See Value ; Cost, Comparative and Rela-
tive ; Cost of Production.
COST BOOK. The book which contains
the names of the shareholders and the number
of shares held by each, and particulars of all
transactions in a partnership formed for work-
ing a mine. Mining regulations differ in vari-
ous parts of the United Kingdom. In Devon
and Cornwall a licence is first obtained to try
for ores ; and if the metal is found, a lease is then
granted for a number of years. The mine is
/
COST OF COLLECTION OF TAXES
435
managed by an agent who is appointed by and
works under the direction of the shareholders.
A shareholder cannot bind the other share-
holders by any contract except for necessaries
required for the due working of the mine accord-
ing to the usual custom of the district. The
agent has no power to make the shareholders
liable for money lent or upon bills of exchange.
[M'Swinney, On Mines, 1884.] J. E. c. M.
COST OF COLLECTION OF TAXES. One
of the maxims or principles of taxation enunci-
ated by Adam Smith, and Avhich, as Mill ob-
serves, "may be said to have become classical,"
is that " every tax ought to be so contrived as
both to take out and to keep out of the pockets
of the people as little as possible over and above
what it brings to the public treasury of the
state " ( Wealth of Nations, bk. v. ch. ii. pt.
ii.) Smith cites four ways in which a tax may
offend against this principle. The cost of collec-
tion may be excessive ; the regulations and
procedure which a tax necessitates may be such
as to obstruct, and even to divert, industry ; it
may, by holding out inducements to evasion,
require the levy of penalties and forfeitures ; and,
finally, it may cause annoyance and vexation to
the taxpayer from which he would gladly pay
to be free. Fawcett adds a fifth ground of
complaint, viz. that the price to the consumer
of a taxed commodity may be unduly enhanced.
The scheme of taxation existing in the United
Kingdom has not hitherto been generally open
to objection on any of the grounds mentioned
by Smith. Its revenue has been collected at a
low cost, amounting to little more than 2^ per
cent of the amount collected.
Dowell {History of Taxation and Taxes, 2nd
ed., vol. ii. p. 529) describes the causes which
brought about this result. ' ' The reform of the
tariff, diminished smuggling, and the consequent
reduction in the customs establishment and
abolition of the preventive coast guard ; an
equalised spirit duty throughout the kingdom
and diminished illicit distillation ; the con-
solidation of the numerous revenue boards and
establishments ; the abolition of the taxes on
manufactures ; increased facilities of communi-
cation by railroad, letter post, and telegraph ;
the abolition of the pernicious system of
appointments to offices through parliamentary
influence ; and improved education, . . . re-
duced the percentage by half in the sixty years."
The system of taxation of the United
Kingdom has been greatly altered by the
Finance Act of 1910, the following taxes hav-
ing been introduced or increased ; — the duties
on increment value and site value of land, on
undeveloped land, mineral rights duty, provi-
sions as to total and site value of land, pro-
visions for periodical valuation of undeveloped
land, duty on site value, duties on excise liquor
licenses, valuation of licensed premises, further
rates of estate duty and settlement estate duty,
with power to transfer land in satisfaction of
estate duty, settlement estate duty, or succes-
sion duty, super-tax on incomes over £5000.
Special provisions as to assessment of super-tax,
increase in some instances of the stamp duty
on leases and on marketable securities, and
additional customs and excise duties on spirits.
The Budget of 1914 proposes several alterations
in the income tax, and the imposing the super-
tax on incomes over £3000. These alterations
have caused an increase in the cost of collecting
the Inland Revenue. In reading the figures in
the table given below (p. 436) we must bear in
mind that in 1909-10 the excise formerly in-
cluded with the inland revenue was transferred
to the customs.
The effect, on the cost of collection, of the
limitation of the indirect taxes to a small num-
ber of commodities, aided doubtless by greatly
reformed administration, is very marked. In
1775, when "heavy duties were already imposed
upon many of the mast important articles of
consumption," and "almost all our most im-
portant manufactures were taxed," the net
revenue of the customs amounted to two millions
and a half, levied at an expense of more than
10 per cent in salaries and other incidents, and
more than 20 or 30 per cent if the perquisites
then exacted by custom-house officers are in-
cluded ( Wealth of Nations, bk. v. ch. ii. art. iv.)
In 1816, " with everything taxed that could be
taxed," the net amount received from customs
duties cost more than 14^ per cent to collect.
In 1825 this rate had fallen to less than 8 per
cent, in 1843 it was 5^ per cent, and in 1909
a little over 3 per cent.
The earlier economists concluded, from the
facts of which they were cognisant, that the cost
of collecting taxes on commodities was nuich in
excess of that of collecting direct taxes. The
operation of the various causes above enumerated
has, however, tended to equalise that cost, and
the same tendency is observable in other
countries. Thus in 1841 the cost of collecting
the customs duties was 5*33 per cent, and in
the case of excise 6-37 per cent as compared
with 2-16 per cent for stamps, and 4-13 per
cent for assessed taxes (Bohn, Cyclopcedia of
Political Knowledge, 1849, art. "Taxation").
In 1909 the cost of the customs had been re-
duced to 3 '12 per cent, and that of the inland
revenue (excise, stamps, and taxes) was 2*61
per cent. The cost of collecting direct taxes
in France before the Revolution was (Roscher,
Finanzwissenschaft, bk. iii. § 91) 6 per cent as
against 14 per cent in the case of indirect taxes,
but in 1881 the duties on commodities cost
only 5 "13 per cent to collect, and the direct
taxes 3*5 per cent. In Prussia the cost of the
direct taxes rose from 4 per cent in 1861 to 7
per cent in 1883-84, that of indirect imposts
fell during the same period from 1 2 to 9 per cent.
In the United Kingdom it may be said that
436
COST OF COLLECTION OF TAXES
the cliancellor of fhe exchequer need not now
concern himself with any considerations as to
the direct cost of collection when increasing or
diminishing the burden of taxation, so long as he
is content to alter and adapt existing taxes and
not to impose new ones. The expense of collect-
ing the considerable additions made to the stamp
duties previous to 1890 probably did not cause
an extra expenditure on the part of the state of
so much as 1 per cent on the amount received.
The customs and excise duties in 1892 cost
the state something over 4 per cent to collect,
as compared with 3*5 per cent for taxes and
1*3 per cent for stamps. The proportions
probably remain much the same. In the
latter case it is to be observed that much of
the business performed in connection with their
collection is met by the individual taxpayer,
who is frequently compelled to employ solicitors
• and agents for the preparation of the accounts
requii'ed in connection with the death duties,
and to enlist similar services in making payment
of many of the stamp duties on deeds. In the
case of the stamp duties levied in connection
with stock exchange and other commercial
transactions, expense and labour devolve upon
bankers, brokers, and others, the cost of which
cannot be precisely estimated, but which in the
aggregate must be considerable. The cost of
the collection of the income-tax is comparatively
low by reason of the great ease with which much
of the revenue under that head is obtained. The
deduction of the tax from dividends payable out
of the public funds and other similar incomes
is a simple matter, and it may be taken that one-
third of the tax costs less than 2^ per cent to col-
lect, which would bring up the cost of the remain-
ing two-thirds of the tax to about the same point
as in the case of the indirect taxes, viz. 4 per cent.
The small stamp duties on such documents as
receipts and cheques are collected at an excep-
tionally low cost, whether the charges defrayed
by the state or by the individual taxpayer be
taken into consideration.
It remains to consider the ground of objection
under this head against taxes on commodities,
viz. that a dealer makes an additional profit
by reason of their existence. Fawcett was of
opinion {Manual of Political Economy, 5th ed.,
p. 554) that the retailer is able to obtain "the
ordinary trade profit" on the amount of the
duty, and assuming this profit to be 20 per cent,
he estimated that the consumer would pay at
least this amount more than the revenue would
receive. This, he says, ''is the most serious
objection which can be urged against taxes on
commodities," It may, however, be doubted
whether this proposition is clearly established,
the fact that the price of an article is augmented
by the imposition of a tax will not of itself be
sufficient to enable the trader to secure the same
rate of profit on the enhanced price as that
which he Avould obtain on the price of the article
calculated duty free, as for many commercial
purposes it usually is. It is probable that the
only circumstances connected with the existence
of a tax on commodities which will affect the
amount of a trader's profit are either that the
tax is collected, and its evasion prevented, in
such a manner as to increase the labour and
skill necessary to prepare the commodity for
sale, or else that the tax is so an'anged as to
render the employment of additional capital
requisite. In so far as the taxation of com-
modities in the United Kingdom is concerned,
the direct cost attending their collection, whether
paid by the state or by the trader, has been very
low, and, as has been shown above, it does not
differ materially from that of other taxes. The
necessity for the employment of additional
capital in consequence of the manufacturer or
dealer being required to pay over the duty prior
to the delivery of the commodity for consump-
tion, has been very much reduced by the estab-
lishment of bonded warehouses, in Avhich articles
can be stored without payment of duty until
the time approaches when they are to be taken
into consumption.
"The English customs system is remarkable
for its vigorous adherence to the principle of
purely financial duties." See Prof. Bastable,
Public Finance, 1903, bk. iv. ch. vii. § 3.
The following table shows the actual gross
receipt of duty by the inland revenue depart-
ment, and the percentage of the cost of collec-
tion in the years specified : —
Year.
Total Gross
Receipt by In-
land Revenue
Department.
Net Charges
of Collec-
tion.
Percentage
of Charges
of Collection
to Gross
Receipt.
£
£
1847
32,812,000
1,451,000
4-42
1850
33,363,000
1,358,000
4-07
1860
44,141,000
1,608,000
3-64
1870
40,588,000
1,610,000
3-97
1880
49,817,000
1,831,000
3-67
1890-91
• 58,780,000
1,875,000
3-19
1900-01
90,467,000
2,177,000
2-40
1908-09
98,979,000
2,588,000
2-60
1909-10
47,494,000
1,644,000
3-46
1910-11
107,570,000
2,128,000
1-98
1911-12
86,631,000
2,044,000
2-35
1912-13
87,703,245
2,230,000
2-54
The following table is extracted from the
reports of the commissioners of customs for the
purpose of illustrating the decline which has
taken place in the cost of the collection of the
duties under their control. It is, however, clear
from the observations contained in the 29th
report of the commissioners (1885), that the
system of calculation adopted wasunduly favour-
able, and it has since been abandoned. Tl^e real
cost is probably about 1 per cent in excess of
that shown in the table.
w''*^'
COST OF PRODUCTION
r
I
Percentage of
Year.
Gross Receipt.
Cost of Col-
lection.
£
1847
21,824,000
5-97
1850
22,194.000
5-78
1860
23,517,000
3-27
1870
22,575,000
3-55
1874
22,867,000
3-47
1875*
22,042,849
4-36
1880
21,884,105
4-44
1890
22,670.425
3-95
1900
28,151.410
3-13
1909
83.263,703
3-12
* The cost of the collection of the excise and
customs duties has ceased to be published since
the alteration referred to above was made in 1909-
1910. T. TT. E.
COST OF LABOUR. See Cost of Tro-
DUCTION.
COST OF PRODUCTION. The real cost of
production of any commodity is held to be the
"sum of the efforts and abstinences" requisite
to make it ready for consumption, and the act
of production is not said to be completed until
the commodity is in the hands of the consumer
or until (as Mill phrases it) it has received the
utility of being in the place where it is wanted.
In a modern industrial society, mth a complex
system of division of labour and with raw
material and other requisites of production drawn
from all parts of the world, it is clear that in
most cases the series of efforts of all kinds, taking
into consideration those which are indirect as
well as those which are direct, would be practic-
ally infinite. This difficulty, however, may be
overcome as in other sciences by neglecting
quantities below a certain magnitude. But
even after the mental elements in real cost have
been reduced to a minimum in number in this
way, it is found that the analysis cannot for
most purposes, practical or scientific, be carried
so far, and we must attempt to arrive at some
common measure by which the summation may
be effected and a comparison made. This leads
to the position emphasised by Mill (bk. iii. ch.
iv. § 1), "If we consider as the producer the
capitalist who makes the advances, the word
labour may be replaced by the word wages ;
what the produce costs to him is the wages
which he has had to pay." After making
allowance for the partial error concerning wages
implied in the word "advances" (see Wages ;
Wages Fund), we arrive at the distinction which
is expressed by the phrase ^^ expenses of produc-
tion" (adopted by Prof. Marshall in his Eco-
nomics of Industry) as contrasted with the real
cost in the sense defined above. That is to say,
we are to consider only the money measures of
these various efforts of labour, and it is left to
the theory of wages and profits to explain how
the nominal or money expenses tend to become
proportioned to the real cost. We assume then
that in any industrial society there is at any
time a certain general rate of wages which is
necessary that labour may be forthcoming and
a certain general rate of profits which is neces-
sary for the creation and application of the
requisite auxiliary and sustaining capital. The
forces, whether " natural " or due to the " policy
of Europe," to adopt Adam Smith's language,
which are the efficient causes of variations in
these rates, or which account for the actual
rates at any time, are estimated in considering
the distribution of the wealth of the society,
and it only leads to confusion in considering
cost as affecting value to repeat the analysis at
the later stage. It may then be taken for
granted that in any modern industrial society
no article will continue to be produced which
does not yield the wages and profits which will
satisfy the labourers and capitalists concerned.
It must be added, however, as is shown also in
the theory of wages and profits, that there are
various natural and artificial causes of difference
in the returns in different employments even in
" the same neiglibourhood " (Adam Smith), and
with what would now be termed perfect mobility
of labour and capital. These causes of differ-
ence must be allowed for in addition to the
general rates, and we may then assume that in
any industrial society there are at any time
determinate rates of wages and profits requisite
to bring into play particular kinds of labour and
capital.
At this jjoint the fundamental law of cost
(or rather expenses) of production may be thus
stated : — 2Vie normal selling price of any article
tends to he such as to yield the wages, interest,
and profits involved in the expenses of production.
If the price is above this rate, labour and capital
are attracted to the industry, the supply is in-
creased, and the price falls ; whilst conversely,
if the remuneration is not so high, labour and
capital are repelled and the price rises. But it
must be observed that in any established in-
dustry, owing to the want of perfect mobility of
labour and capital, the effect of a fall in price due
to a lessened demand for the product on the part
of other industrial gi-oups may be to cause a
quasi-permanent fall in the rates of wages and
profits in that industry ; and thus lower for a
considerable time the expenses of production
(see Wages). If, however, we assume that
mobility is perfect, or allow time for the full
effect of the forces which determine wages and
profits, the normal expenses of production are
given in the law as stated. The argument in-
volved in this analysis will be found to coincide
with the ideas implied in the popular usage of
the phrase "cost of production." This is best
seen from considering a new industry. The
maker of a new article will expect to obtain
from the selling price a sufficient return to
438
COST OF PRODUCTION
attract the labour which he requires, and to
give besides a fair amount of profit. Otherwise
he will not continue to make the article, whilst
conversely, if the price is higher than this
normal rate, the industry will rapidly spread
until through competition the price falls.
We may now carry the analysis a step further
and consider the causes of variation in the
" cost price " of articles, to adopt a useful popu-
lar phrase. It must be assumed once for all
that price will vary exactly with or exactly
measure value, in other words that the causes
of purely monetary variations may be neglected.
It would be as absurd to repeat at this stage the
theory of Money and Prices {q.v.), as at an
earlier stage to bring in the theory of wages and
profits. To make the assumption quite clear,
let it be supposed then that so far as the causes
affecting the general level of prices are con-
cerned, there would be no variation in the prices
of particular articles.
"With this hypothesis it wiU be seen that a
rise in the general rate of wages, reckoned in
money, wiU so far raise the normal price of the
articles on which the labour is employed. It is
not necessary here to inquire in detail how such
arise might take place ; it might be at the expense
of profits, or be caused by a lessened amount of
unproductive consumption on the part of govern-
ments, municipalities, or individuals, or it might
be due to increased cost of living caused by
natural or artificial causes. It is sufficient to
assume that a general rise occurs as described.
There is in this case no necessity a priori for a
corresponding rise in the rate of profit, and in
fact that rate may decline. It follows, then,
that so far the cost price of things made by the
direct employment of labour will tend to rise
relatively to those in the production of which
there is much fixed capital and a longer time
involved. Thus a general rise in wages may
disturb relative prices, considered as dependent
on cost of production. Similarly a rise in
general profits would disturb relative prices,
acting of course in an opposite direction. Con-
versely a fall in general wages or profits would
also disturb prices mutatis mutandis.
It may next be noted that any change in the
quantity of labour or capital employed will so
far affect relative prices, as is best illustrated
by the effects of the adoption of labour-saving
machinery. Ricardo (and to some extent Mill)
appears to lay too much stress on the quantity
of labour, and in this way to fall into the
paradox, true only under extreme hypo-
thetical conditions, that movements in the
general rate of wages cannot affect relative
values.
Variations in the relative rates of wages and
profits requisite for the normal support of any
industry, naturally cause corresponding differ-
ences in the normal cost price. This is too
obvious to require amplification.
Besides labour and capital in the ordinary
sense of the terms, raw material is required.
This raw material, however, is itself the product
of labour and capital, and so far would come
under the analysis just given. But since
Ricardo gave such prominence to the economic
theory of rent, the text-books have emphasised
the fact that raw material is more directly de-
pendent upon natural sources of supply, and
that these sources of supply may be exploited
at unequal costs. This leads to the position
that when there is a difference in the cost of
producing the various parts of the normal supply,
the normal price must be such as to give a fair
return to that portion produced under most un-
favourable circumstances. If it falls below,
the supply from that source would be discon-
tinued until the price rises, whUst if the price
is above this limit resort will be made to in-
ferior sources until the *' source on the margin "
again just determines the normal cost. If,
however, the worst land or mine (or the like)
just pays the expenses of working at the price,
the better sources will give more than the
ordinary return. This difference constitutes
economic rent (see Rent). According to this
view it is oljvious that economic rent cannot
enter into the cost of production, in other words,
price determines rent not rent price.
Although economic rent, under the simple
hypothetical conditions laid down in the theory,
does not enter into cost price, the payment of
rent under actual conditions may affect this
price in several ways. The object of the land-
owner is to obtain a maximum net return when
the land is let, and it is possible that under a
system of cultivating ownership more labour
and capital would be devoted to land than it
would pay the landowner to sanction in the
case of a tenant. Many great improvements,
for example, have been effected by English
landowners with a very small return, and the
consequent increase in the supply must have
affected the price, whilst a farmer farming for
profit and paying rent would have invested
much less in the land. Peasant proprietors,
again, notoriously cultivate their land beyond
the point at which it would yield a rent, and
the produce is consequently somewhat cheaper.
On the other hand, the kind of produce may
be determined partly by the convenience of the
landlord {e.g. large grazing farms or deer forests
as against arable or crofts), and the consequent
effect on the supply operates on the price. If
we consider the case of a new kind of produce
introduced into a fully cultivated country, the
grower would naturally consider the rent which
he must pay for the necessary land as part of
the cost of production. In some cases also
there is in rent an element of monopoly, and in
all cases it is difficult to separate purely economic
rent from profit rent. This point has been
pushed to an extreme by M. Leroy-Beaulieu in
COST, RELATIVE— COTTON FAMINE
439
his Ripartition des Eichesses, which is much
criticised by Prof. "Walker in his work Land
and its Rent. On the whole it may be said that
economic rent, if it can be actually separated
from the other elements in cost according- to
the hypothesis assumed, does not enter into
cost, but that practically other factors are
closely combined with it to form rent in the
popular acceptation of the term, and that, in this
- sense, rent often does form part of the cost
(compare Prof. Marshall's Economics of In-
dustry).
To complete the enumeration of the elements
in cost of production, reference must be made to
the effect of taxes (see Taxation) and to the
manner in which cost operates when combined
\vith a complete or partial monopoly (see
Monopoly).
The doctrine of comparative cost as deter-
mining the course of international trade and
the limits of international values, originally
enounced by Ricardo, and developed by J. S.
Mill, Cairnes, and recently by Prof. Bastable, is
properly treated under the headings named
(see Difficulty of Attainment ; Interna-
tional TiiADE ; Value). It may simply be
noted here that in the statement of the theory
cost is taken in the sense of real cost, as, owing
to the absence of mobility of labour and capital
between different countries, there is not the
same correspondence between real cost and
expenses as may be assumed in the same in-
dustrial area.
The most recent criticism of the generally
accepted theory of cost of production described
above, as embracing wages and profits, is the
attempt of Prof. Walker to place profits on the
same footing as economic rent, and thus to ex-
clude it from cost of production in the same
way as rent is excluded (see Profit).
[Cost of production forms such an important
part of the general theory of Economics, that it is
fully treated in all systematic works, and it is not
necessary to refer to monographs on the question.]
J, s. N.
COST, RELATIVE. See Cost, Compara-
tive.
COTTIERS. Under the Stuarts the clan
system of joint occupation of land, based upon
the customs of gavelkind and tanistry, was
abolished in Ireland. In its place was intro-
duced the English system of private ownership
by landlords. The landlords let their lands
to tenants at a rack-rent. But these tenants
were not capitalist farmers, as in England, but
labourers who cultivated a small holding by
their own labour and that of their families.
This system of peasant-tenants, or cottiers, has
been extremely disastrous in its results. Owing
to excessive competition for land — resulting
from the absence of alternative occupations —
the tenants were in the habit of offering more
rent than they could possibly pay, and thus
scraped a miserable existence from the soil,
while owing ever -increasing arrears to the
landlord. In the early part of last century
Swift records that ''it is the usual practice of
the Irish tenant rather than want land to offer
more for a farm than he knoweth he can ever
be able to pay : and in that case he groweth
desperate and payeth nothing at all." The
inevitable result of the cottier tenure under
these conditions — aggravated by absenteeism
and the consequent presence of middlemen —
was a distressed peasantry and a wretched
system of agriculture. These evils have led in
the present day to the Irish land acts of 1870
and 1881.
[Lecky, History of England in the Eighteenth
Century, vol. i. p. 240 seq. — J. S. Mill, Political
Economy, bk. ii. — J. E. Cairnes, Political Essays ;
Fragments on Ireland, essay iv. ] R. L.
COTTON FAMINE (1861-65). Some of the
most serious economic disturbances of modern
times arose out of the great civil war in the
United States, occurring between 1861 and
1865. Amongst these, the most prominent,
so far as its influence upon the interests of the
United Kingdom is concerned, was the almost
complete extinction for four years of the chief
source of supply of cotton, the raw material of
the largest textile industry of this country.
In the month of July 1861 the United States
government established a blockade of the
southern ports, and, from that time the
American cotton field was practically closed for
four years. Fortunately the crop of 1860-61,
the largest ever grown up to that time, had
already been shipped, and stocks in the con-
suming countries had been abundantly re-
plenished. The existence of these stocks, and
the doubts, then widely entertained, of a long
continuance of the war, kept prices of cotton
comparatively low until nearly the end of 1861.
With the opening of 1862, however, a period
of scarcity and abnormally high prices began,
which has been fitly named the "cotton
famine." The immediate and most striking
commercial results of the famine were the
gi-adual establishment of new and extended
sources of cotton supply, and the diminished
use of cotton fabrics, accompanied by an en-
larged consumption of woollen and linen goods.
At the same time an industrial disturbance was
occasioned in Lancashire, Cheshire, Derbyshire,
and in the neighbourhood of Glasgow, which
stands out very prominently in the history of
those years. An excellent and very full record
of the painful consequences of the famine upon
the manufacturing population, and of the meas-
ures taken to mitigate them, is given in Dr.
Watt's Facts of the Cotton Famine. Its direct
commercial effects upon the cotton trade are
stated in a paper read before the Manchester
Statistical Society in April 1869, by Mr. Elijah
Helm, and entitled "A Review of the Cottou
440
COTTON FAMINE
Trade of the United Kingdom during the Seven
Years 1862-68."
When the civil war began the English
cotton industry had for more than a year been
in the enjoyment of unusual prosperity. Prices
of the raw material were lower than they^had
been since 1856, and to this advantage was
added a good general demand, home and
foreign, for cotton manufactures. The work-
people had been well employed at very high
wages, and the profits of spinners and manu-
facturers had put them into a comparatively
strong position. Those engaged in the industry
were, therefore, well prepared, for a time at
least, to battle with the difficulties which were
in store. This fact, together with the pre-
vailing opinion that the war could not last
long, explains to some extent the courage with
which the threatened disaster was at first faced,
and the refusal of external aid which was offered
very early. Towards the close of 1861, how-
ever, the advancing price of cotton, and the
absence of a corresponding rise in the markets
for cotton goods, which had previously been
supplied very freely, if not too abundantly,
began to tell upon the activity of the industry,
and as winter approached it was found that
the number of people applying for relief to the
guardians of the poor in Lancashire was steadily
increasing. It was then realised that the cotton
manufacturing districts had to face a public
danger of great magnitude, which would require
much endurance, co-operation, and effort, if it
was to be successfully averted. The rapidly
increasing number of applicants for pauper
relief told a story the significance of which
the employers were well able to interpret. It
meant that the various reservoirs into which
the savings of their workpeople had percolated
were beginning to run dry. The funds of the
savings banks, the co-operative and friendly
societies, and the trade xinions had been heavily
drawn upon, and their subscriptions had rapidly
fallen off. Private and public appeals for help
multiplied, and at length relief committees
were established in nearly every cotton manu-
facturing town or village. These formed the
machinery of distribution, by means of which
an untold amount of local and national assist-
ance was brought home to thousands of work-
people who were thrown out of employment.
Suggestions were often made during the winter
of 1861-62 that an appeal for national assistance
should be made, but they were at first dis-
couraged from a feeling of self-respect ; but in
the spring of 1862 a fund for relieving distress
in the manufacturing districts was started at
the London Mansion House, which before its
close reached the sum of £528,336. This
fund together with other contributions was
dispensed through the instrumentality of the
central committee in Manchester, the president
of which was the then Earl of Derby ; the active,
energising, and organising instrument being the
late Sir James Kay -Shuttle worth, who occupied
the position of vice-president. But besides the
national, colonial, and other contributions which
were forwarded through the Mansion House,
large local gifts in money and in other forms
were made, and the spinners and manufacturers
and other local employers freely gave their
labour (besides contributing abundantly in the
shape of money) in the work of distributing
help to their poorer neighbours by means of
" relief tickets, " and of clothing and household
supplies, of which large quantities were liber-
ally forwarded from many parts of the country.
Towards the close of 1862 Mr Cobden, who was
a member of the Manchester committee, taking
a very serious view of the crisis, advocated an
appeal for extended help. He accepted an
estimate of the loss of wages occasioned by
the want of cotton at more than £7,000,000
per annum, which he said meant a loss to
Lancashire of about £10,000,000. He added
that from facts which had come within his own
knowledge he had arrived at the conclusion
that the whole mass of the working population
had been brought down "to one sad level of
destitution." He urged, therefore, in view of
the fact that the shopkeeping portion of the
community was fast sinking into poverty, that
an earnest appeal should be made for more
liberal contributions. This appeal did much
to increase the funds at the disposal of the
committee. As time went on the sufferings
both of the workpeople and their employers
greatly increased. Poor rates and other
assessments became heavier, and the burden of
the famine fell upon all classes. The distress
was extreme and widespread. Emigration had
been often suggested, and in April 1863 an
"Emigrants' Aid Society" was formed. By
means of its funds more than 1000 persons
were sent to new lands. In that year the
number of emigrant spinners was 2086, whilst
in 1861 it was only 123. Many more left
their homes in the cotton manufacturing dis-
tricts, whose occupations were not specified.
On the whole, however, the prominent fact of
the cotton famine, so far as the working popu-
lation is concerned, is that it was kept at home.
The opportunity was used by local authorities
to employ by means of borrowed funds the dis-
employed population in the paving and sewer-
ing of streets, and in other improvements, the
advantage of which is now observable in the
generally clean and sanitary condition of the
streets in most Lancashire towns and villages.
The impetus given to the linen industry by the
cotton famine may be inferred from the fact
that whilst there were, in 1858, only 91,646
acres under fiax in Ireland, the area had in-
creased in 1864 to 301,942 acres.
The following figures, taken from the trans-
actions of the Manchester Statistical Society
COTTON LISTS— COULISSE
441
(1868-69), show the average yearly exports of
cotton, linen, and woollen piece goods during
the seven years preceding the cotton famine,
and the seven years which include that occur-
rence, and during which the three trades xare
influenced by it : —
Exports of Cotton Piece Goods.
Yards.
1855-61 2,311,234,538
1862-68 2,219,011,153
Decrease 92,223,385
or 3 "9 per cent.
Ex2)orts of Linm Piece Goods.
Yards.
1855-61 131,238,504
1862-68 210,304,491
Increase 79,065,987
or 60*2 per cent.
Woollen Piece Goods.
Yards.
1855-61 168,747,893
1862-68 245,091,834
Increase 76,343,941
or 45 "2 per cent.
[Arnold's History of the Cotton Famine.']
K. H.
COTTON LISTS. In the cotton industry
the wages of spinners and weavers are regulated
by rates or "prices" framed by committees
representing associations of employers and
employed. A certain rate of wages is taken
as a standard, and the object of the list is to
adjust wages to the very varying conditions
under which the trade is carried on. In the
spinning lists wages depend on (1) the amount
of yarn spun ; (2) the size of the spinning
mule ; (3) the fineness of the yarn ; and (4) the
twist in the thread. Any advantage arising
from improved machineiy is divided between
the employer and the employed, and any extra
work not coming within the normal duties of
the spinner is j^aid ibr separately. In the
weaving list the elements taken into account
are (1) the fineness of the yarn ; (2) the close-
ness of the threads ; (3) the width of the cloth ;
and (4) the length of the cloth. Neither in
the spinning nor in the weaving list is the price
of the raw material or the price of the finished
product taken into account. Adjustments
take place from time to time by adding or sub-
tracting a certain percentage from the standard
rate.
[See Reports on the Regulation of Wages in the
Cotton Industry : (1) Spinning ; (2) Weaving,
published by the British Association for the
Advancement of Science, 1887.] J. E. c. M.
COTTON, Sir Robert Bruce (1570-1631) ;
the founder of the celebrated library ; was
not a mere antiquary, but one who applied
the lessons of the past to practical problems.
Such is the character of his speech at the
council table, "Touching the Alteration of the
Coyne. " By numerous precedents. Cotton shows
the danger of tampering with the purity of
coin. The parity to be maintained between
the valuation of gold and silver, that the mint-
age may be reduced to some proportion of
neighbour parts, is also inculcated. Among the
"divers choice pieces of that renowned an-
tiquary" which have been preserved, may be
noticed here — 21ic Manner and Meanes how th^
Kings of England ham Supported their Estate,
in Cottoni Posthuma, 1651.
[M'Culloch, Collection of Tracts on Money. —
Jevons, Investigations in Currency and Finance,
p. 347. — Edwards's Lives of the Founders of the
British Museum.'] F. Y. v..
COULISSE. The name given to the unofficial
market on the Paris bourse and supposed to
have its origin in tlie word coulisse or sliding
bar which formed a passage for the agents de
change, outside which speculators used to
congregate to transact business. This irregular
market in time organised itself in a separate
building until the licensed brokers (see Change,
Agents de) in 1859 instituted proceedings
to defend tlieu" monopoly, and a number of
oifenders were condemned to heavy penalties.
The coulisse, however, altliough disorganised
could not be suppressed, and the agents de
change eventually submitted to tolerate it as a
lesser evil than an increase in the number of
their own offices, with which they were menaced.
It now forms two groups, each with its own
dii-ecting committee Avhicli decides on tlv.
admission of members and draws up a daily
price list of the business done. One grouj'
deals exclusively in French rentes, but three pei-
cents only ; the other in stocks and shares,
principally foreign, the number of which is
limited by tacit agi'eement with the syndicai
chamber of agents de change, French banks
and railways being among those excluded.
The coulisse docs not buy or sell for money ;
it has only one account day monthly, and its
rates of brokerage are lower than those of the
licensed brokers. Most of the speculative
transactions with London and the continental
bourses, are executed in the coulisse, and for
convenience prices of certain foreign govertiment
stocks are quoted in fractions instead of in
decimals as on the official market. Its members
have no common fund as a guarantee towards
the public, and contracts with them cannot be
enforced by law excepting for stocks and shares
not dealt in on the ofticial market, and con-
sequently not comprised in the monopoly of the
agents de change. The number of coulissiers
syndicated is nearly two hundred, but in addition
a certain number not "on the sheet," as it is
called, are recognised. They are not bound by
the strict rules of the agents de change, whc
442
COUNCIL BILLS
are forbidden to operate on their own account.
Business in the coulisse commences half an hour
earlier than in the parquet or regular market,
and governs in a great measure the opening
prices on the latter. The coulisse for rentes
meets in the bourse itself near the railed .en-
closure called the corheille reserved for the
agents de change ; the other is dispersed in
groups inside or around the building, but
always in the same places. The agents de change
recently adopted measures to defend their mono-
poly, and, May 1892, reduced the number of
foreign funds, dealings in which by the coulisse
were tolerated, and interdicted quotations of
prices on the coulisse before or after the business
hours of the official market. t. l.
COUNCIL BILLS (India Council Drawings).
Bills, or cabled instructions, issued by the
India Council in London on the treasuries of
Calcutta, Bombay, or Madras, as desired, and
sold through the Bank of England to bankers
or merchants requiring to remit to India. It
was not till after the Imperial government
superseded the East India Company, that India
Council bills were first offered for public com-
petition in London. The Indian government
found that it was necessary to make large pay-
ments annually in this country for interest upon
its sterling debt and for salaries, pensions, and
materials — payments which could hardly have
been made by remittances in money, and for
which therefore it was necessary either to secure
"exchange" operations, or to obtain funds in
London by additional borrowings. The latter
method was first resorted to. Between 1857
and 1862 the sterling debt raised by India was
increased from £4,000,000 to £35,000,000, and
for the time the necessity to remit to London
was obviated. Indeed the Indian government
was, on balance, compelled to remit extensively
to the East. At that time, too, the external
trade of India did not present the remarkable
features now disclosed. The exports of mer-
chandise were mostly somewhat larger than the
imports, but the movement of specie was suffi-
cient to counterbalance this difference, and,
including specie, there was, in each of the seven
years 1st May 1855 to 30th April 1862, a
balance of imports over exports. Then came
the American "War and India's opportimity,
when Lancashire had nothing but Indian cotton
to exist upon ; and in the four years 1862-1865
the exports of India averaged £13,500,000 a
year more than the imports, specie included.
From that date Indian exports have constantly
exceeded the imports, and that in spite of the
very large amount of silver sent thither from
Europe. Indeed in the past twenty years that
excess of exports has in value averaged quite
£15,000,000 sterling annually. Hence mer-
chants have had on balance constantly to remit
very large sums to India in payment for goods,
sums quite equal to the amount of the govern-
ment remittances homeward. Hence there
arose the possibility that the government and
the merchants should balance each other's com-
mitments by paying them, thus obviating cash
shipments out and home by a simple exchange
operation. The India Council drawings consti-
tute therefore a method whereby the Anglo-
Indian merchants, or rather the bankers on
their behalf, provide the cash to cover the Indian
government's requirements in this country,
while the government in India provides the
cash requisite to cover the merchants' payments
on the other side.
In 1861-62 there was a stoppage of the heavy
Indian loans issued in London, and the Indian
government in consequence had a balance ol
payments to make in England for which the
Secretary of State for India drew bills to an
amount of 1,20,03,592 rupees, obtaining for
these in London £1,193,729, the average rate
being Is. lid. -867 per rupee. Thenceforward
the India Council drawings increased rapidly.
In 1862-63 the bills drawn by the India Council
realised £6,641,576, and in the following year
£8,979,521. In the next five years they aver-
aged about £6,000,000 per annum ; and in the
five years 1st April 1871 to 31st March 1876,
these drawings realised an average of over
£12,000,000 sterling annually. In the next
five years the depreciation in silver became dis-
tinctly pronounced (see Table on next page) ; but
the India Council drawings increased until, in
1879-80, bills were allotted to the extent of
18,35,00,000 rupees, realising £15,261,810.
In the financial year ended 31st March 1882,
the total issued was 22,21,09,350 rupees, thp
sum received in respect to those drawings being
£18,412,429. In the twenty-seven years
ended March 1889, the total drawings were
357,47,59,165 rupees, realising £303,269,974,
or an average of close upon Is. 8d. per rupee.
Time was when these India Coimcil drawings
consisted wholly of bills which were offered
weekly on Wednesday by the Bank of England.
Gradually the character of merchants' opera-
tions changed, and the establishment of tele-
graphic communication with India worked a
revolution. The bill became too slow in its
operation, and the Indian government found
that a higher price was being paid for cabled
payments than for its bills. In January 1882
it was decided to sell telegraphic transfers as
well as bills, so as to obtain the additional
price which remitters were prepared to pay for
the advantage given by the more expeditious
means of remittance. From the first, these
telegraphic transfers were largely purchased.
In 1892 the continued fall in the gold price
of silver compelled the Indian Government to
consider closing the Indian mints to the free
coinage of silver, though they might be used
by the Government for the coinage of rupees
in exchange for gold at the ratio of 16 pence
COUNTERVAILING DUTY— COUNTY COUNCIL
443
the rupee. (See Rupee.) This arrangement
lia3 continued ever since. At first the value
of the rupee stood at about 13 pence. It has
since reached and often exceeds the required
rate of 16 pence. The Bank of England now
announce the amounts to be offered the following
week, the amounts sold, and the rates realised ;
these details are published regularly in the
money market intelligence of the newspapers.
Official
Years
ended.
Amount of
Sums re-
ceived in
Average
Rate
Bills drawn.
respect of
obtained
Bills drawn.
per Rupee.
is. ll'867d.
'Ch
/'1862 .
Rs. 1,20,03,592
£1,193,729
a,
1863 .
6,66,37,287 1 6,641,576
11-920
18(54 .
9,01,41,740
8,979,521
11-007
^
1865 .
6,82,45,100
6,789,473
11-876
o
M
V18()6 .
7,04,71,747
6,998,890
11S35
/1867 .
5,84,14,133
5,013,746
11-06U
18(58 .
4,28,18,177
4,137,285
11-190
186!) .
3,83,40,000
3,705.741
11-197
1870 .
7,20,00,000
6,980,122
11-267
1S71 .
9,00,85,000
8,443,509
10-U95
1S7L' .
10,70,00,000
10,310,339
11 -lae
1873 .
14,70,25,000
13,939,095
10-751,
1874 .
14,26,57,000
13,285,678
10-361
1875 .
11,74,37,000
1(1,841,615
10-156
1876 .
13,75,00,000
12,389,913
9-625
1877 .
14,85,75,1'J2
12,695,799
8 -508
1878 .
11,69,85,000
10,134,455
8-791
187!) .
1(5,91,23,612
13,948,565
7 -79/,
P
1880 .
18,35,00,000
15,261,810
7-961
3
1881 .
18,32,77,000
15,239,677
7-956
S^
1882 .
22,21,09,360
18,412,429
7-895
s
1883 .
18,58,56,593
15,120,521
7-525
CO
1S84 .
21,62,15,462
17,599,805
7-536
1885 .
17,10,22,119
13,758,909
7-308
1886 .
13,53,2o,c69
10,292,692
6-25 U
1887 .
16,70,03,150
12,13(5,279
5-ltUl
1888 .
21,85,76 993
15,389,388
U-897
1889 .
20,84,17,211
14,223,433
U-379
1890 .
22,41,86,638
15,474,496
U-566
1895 .
31,15,70,798
17,006,993
1-10
1900 .
27,96,27,9-13
18,722,564
k-07
1905 .
3(5,53,57,363
24,425,558
U-05
1910 .
38,68,06,214
25,851,367
h-ok
1911 .
40,39,09,748
27,058,550
U-075
1912 .
38.47,49,178
25,743,710
U-006
,1913 .
42.2(), 19,009
28.305.827
1,-075
COUNTERVAILING DUTY. A duty or
surtax imposed on imported goods in order
to place them on an equal footing with articles
of the same class manufactured at home, and
liable to excise or other inland revenue duties.
The duties of this character which are
levied in the United Kingdom are intended to
be the exact equivalent of the cost to the home
producer of the duties levied upon his products.
Thus, whilst British spirits are chargeable with
the duty of 10s. 6d. per proof gallon, imported
spirits are subject to a customs duty of 10s. lOd. ,
the additional 4d. being imposed in respect of
the loss and hindrance caused to the home
producer by the regulations of the excise
department. An interesting account of the
negotiations which led to the increase of the
countervailing duty from 2d., at which it was
fixed by the Commercial Treaty with France in
1860, to 5d., and to its subsequent reduction
to 4d., is to be found in the twenty-eighth
report of the Commissioners of Inland Revenue
(p. 11). Imported articles in the manufacture
of which spirits are used are, in the like manner,
subjected to countervailing duties, amongst the
principal of these being liqueurs, perfumed spirits,
chloroform, and transparent soap. On imported
methylated spirits, w^hich are not chargeable
with duty if prepared according to the pre-
scribed regulations, the countervailing duty
of 4d. is alone levied. In the case of imported
beer, the customs duty is 6s. 6d. per barrel of
thirty-six gallons, at the standard gravity of
1055 degrees, the corresponding charge on
British beer being 6s. 3d. On imported playing
cards, the stamp duty per dozen packs is 3s. 9d.
as against 3s. in the case of cards manufactured
at home. In all these instances, the counter-
vailing duty is estimated to be no higher than
is necessary to place home and foreign producers
on an equal footing as regards the real burden
of the home duty. If, in any case, the counter-
vailing duty were in excess of the amount
requisite for this purpose, it would become
protective in character.
The term is also applied to a duty imposed
on imported articles, the manufacturers of
which receive a bounty in respect of them.
Thus Sir Thomas Farrer discusses the proposal
to impose a countervailing duty on ' ' bounty
for sugars," and arrives at the conclusion that
it would be impossible to fix the amount of
such a duty, that it would be contrary to treaty
stipulations, and that its effect would be to
raise the price of a necessary article {Free Trade
versus Fair Trade, p. 262). (See also remarks
made by Ricardo in Letters of liicardo to
Malthus, " If I could convince myself that any
part of the price of corn was owing to taxation,
I should be in favour of a protecting duty to
that amount," p. 64.)
For a complete list of the countervailing
duties levied in the United Kingdom, see the
Statistical Abstract, 1891. T. H. e.
COUNTY BOROUGH. All boroughs having
a population of over 50,000, together with some
old county boroughs, were, by the Local Govern-
ment Act of 1888, created county boroughs so
as to exclude them from the administrative
business of the adjoining county. Retaining
all their powers as municipal corporations, these
boroughs exercise all the chief powers of county
councils, whilst as district authorities they ex-
ercise powers in rega,rd to infant life protection,
mad dogs, petroleum, habitual drunkards, and
slaughter houses (see Coeporation Muni-
cipal, and County Council). j. e. c. m.
COUNTY COUNCIL. County councils were
established by the Local Government Act 1888.
England and Wales are now divided into sixty-
two administrative counties. The council
consists of elected councillors and nominated
aldermen. All persons enrolled as county
electors possessing property to the amount of
£1000 in a county of four or more divisions, or
of £500 in a smaller county, or are rated to the
444
COUNTY RATE— COURCY
poor at £30 per annum in a larger or £16 in a
smaller county ; all persons entitled to be so
enrolled except in respect of residence, but who
are resident within 15 miles of the county and
have the above-mentioned property qualifica-
tion ; persons without property qualification but
who are entitled to elect to the office of county
councillor and reside within the county, peers
owning property in the county, and persons
registered as parliamentary voters in respect
of ownership of property in the county, are
qualified to be county councillors. The occu-
pation as owner or tenant of a building of any
value, provided the owner or tenant has been
in occupation for twelve months and has paid
the poor rate and county rate, qualifies a
person to be an elector, unless he is an alien,
or has received parish relief, or is disentitled
under some Act of Parliament, as the Felony Act,
during the qualifying period. The aldermen,
who are one-third in number of the number of
councillors, one-sixth in London, are chosen by
the council. County councillors hold office for
three years and retire together, aldermen for
six years, one-half retiring every third year.
The jurisdiction of the county councils extends
over: — county and police rates ; duties on licenses
for carriages, armorial bearings, guns, dogs, game;
supervision of county treasurer ; management of
county halls ; licensing of theatres, houses for
music and dancing, and racecourses ; pauper
lunatic asylums ; reformatory and industrial
schools ; bridges and main roads ; fees of in-
spectors, analysts, etc. ; coroner's salary, fees,
and district ; parliamentary polling districts and
registration ; contagious diseases of animals ; in-
jurious insects ; weights and measures ; sale of
food and drugs ; acquiring land for small hold-
ings and allotments ; exercising powers under
the housing acts ; enforcement of the River
Pollution Prevention Act 1876 ; wild birds
protection ; licensing of magazines and factories
of explosives ; formation and regulation of fishery
districts ; deciding claims for compensation for
damage by riot ; local education (Acts of 1902
and 1903) ; and recent acts have in minor
matters extended their jurisdiction.
Certain counties possess special powers. For
instance, London and the metropolitan counties
license music halls and racecourses, whilst the
Yorkshire councils have power to make rules
subject to confirmation of the lord chancellor
as to the registration of deeds. Some of the
general powers of county councils can only be
exercised with the assent of some department
of state, whilst the control of the police is vested
in a joint committee composed of an equal
number of magistrates and members of the
council. The London Metropolitan Police are,
however, under the control of the Home Secre-
tary. The revenue of the county councils is de-
rived from four sources: (1) The exchequer con-
tributions, i.e. (a) one-half the net proceeds of
the probate, etc., duty; (&) 1^ per cent of the
net capital value of personal property on which
estate duty is imposed in the place of probate
duty, and a further contribution from estate
duty in aid of rates on agricultural land ; (c) the
proceeds of the local taxation licenses ; (c^) certain
duties imposed on spirits and beer. (2) Income
from property belonging to the council. (3) Fees.
(4) County rates (see County Rate).
Powers of borrowing for specified purposes and
with the consent of the local government board
on the security of the council's revenue, for any
period not exceeding thirty years, have been
conferred on the county councils.
The county of London succeeded to tlie duties
and liabilities of the metropolitan board of works.
[A. Pilling, Handbook for Council Authorities,
London, 1889. — A. Macmorran, The Local Gov-
ernment Act, 1888, London, 1888.] j. e, c. m.
COUNTY RATE. Moneys required by a
county council over and above exchequer con-
tributions, income of the council, and fees, are
raised by a rate. The basis of this rate is de-
termined in the first instance by a committee
of the council, who estimate the net rateable
value of each parish. The council may alter such
basis, and any person may appeal to quarter-
sessions against the basis, on the ground that his
parish is treated unfairly. The 1 5 & 1 6 Vict. c. 81 ,
§ 2, directs the "basis to be founded and pre-
pared rateably and equally according to the full
and fair annual value of the property." On this
basis the county council rates each parish at so
much in the pound, and serves a notice on the
guardians of the parish requiring them to pay the
same. Usually the poor-law valuations are fol-
lowed ; but some county councils adopt the as-
sessment to income tax, schedule A, others form
a special valuation of their own. j. e. c. m.
COUPON". A certificate entitling the bearer
to payment of interest on a government or
other public security at the time and for the
period stated on its face. These certificates are
printed on the same sheet as the instrument
certifying the principal security, each of them
as it falls due being detached by the holder
and encashed by him. The original coupons
do not always cover the whole period of the
currency of the security, in which case there is
often a so-called "talon' which entitles the
holder, when all coupons are used, to obtain a
new coupon -sheet. In other cases the principal
document must be presented in order to have a
new series of coupons attached to it. E. s.
COUROY, Alfred de (1816-1888), born at
Brest, died at Montmorency. At the age of
seventeen he entered the employment of the
" Compagnie d'assurances generales, Paris," the
manager of which he afterwards became. He
translated the Thiorie des annuit^s viag^res et
des assurances sur la vie, by Feancis BAiLY(g'.'2;.)
(2 vols, in 8vo). He was the author of many
works on questions connected with insurance
COURNOT
44{
and similar subjects. Among the more import-
ant of these are Essai sur les lois du hasard
(in 32mo, 1862), Un Examen de la loi d,u S4
■juillet 1867, sur les socUles anonymes (in 18 mo),
Un Pr6cis de V assurance sur la vie (in ISino,
1870), Cominentaire dcs polices fran^uises
d' assurance maritime (in 18mo, 1874) ; finally,
Le Droit et les OuvTiers (in 8vo, 1886). His
principal claim to notice, however, was the
establishment in 1870 of a "caisse de prevoy-
ance " for the employees of his company, based
on the individual subscriptions of each. Many
other associations have folloAved the lead thus
given, to the ad^•antage both of employers and
employed. A law proposed by the French
senate, but not, at the date of wiiting, ratified
by the chamber of deputies, proposes to apply
the same system to government officials. De
Courcy's honest and laborious life was devoted
to the improvement of the condition of the
humble ; during his last years he established
the Society de secours aux families dcs marins
fran<^ais naufragis. His authority on all ques-
tions of maritime risk was reckoned the highest
that had ever been known in Paris. A. C. f.
COURNOT, Antoine Augustin, eminent
mathematician and philosopher (1801-1877),
deserves notice as the first who successfully
applied mathematics to political economy.
His success was signal. His Rccherches sur Jcs
Princijycs Matheinatiqncs de la Thearie dcs Hi ch-
esses, published 1838, is still the best state-
ment in mathematical form of some of the
highest generalisations in economic science.
This work may be summarised under three
headings : pure theory of price, abstract pro-
positions on taxation, and miscellaneous applica-
tions of mathematical reasoning.
I. Cournot appears to have been the first to
represent by means of an equation, or curve, the
relation between the price of a commodity and
the quantity saleable at that price in a market
consisting of purchasers competing with each
other. Let D stand for quantity demanded,
and p for corresponding price. Then the law
of demand is expressed by the equation D = F
(p), or the con'esponding curve whose ordinate
is D and abscissa p (ch. iv.) How much
logomachy is saved by this appropriate concep-
tion ! How difficult it is in words to distinguish
between what has been called a "rise" of
demand occasioned by a change in the form of
the function F, or displacement of the curve,
and an " extension " of demand due to a change
of the variable p, a movement along the curve.
The price for which the total value is greatest,
is found by making the expression D x ^ or F
(p)xp a. maximum. The price thus determined
is that which a monopolist would fix, on the
supposition that the expenses of production are
either zero, or a fixed charge independent of
quantity produced, as in the ease of a " mineral
soiu'ce." Otherwise, the expression to be maxi-
mised must be diminished by the cost of pro-
duction. This cost is to be regarded as a
function of the quantity produced, say 0 (D).
The relation of cost to product may be graphic-
ally illustrated by the curve p = (p'(D) ; where
p, the price, as before is the abscissa, and i^'(D)
represents the cost of producing the last unit
of the quantity produced. In the most general
and important case, the function (p'(D) increases
with the variable D agi-eeably to the law of
diminishing returns.
After analysing the operation of monopoly,
Cournot advances from the simple to the com-
plex by introducing a second proprietor (ch.
vii.) He argues, by reasoning which has been
traversed by M. Bertrand (Journal des Savants
for 1883 ; cp. Prof. Marshall, Principles oj
Economies, bk. v. chap. viii. § 2, note, 2nd ed.),
that with the division of the proprietorship,
the price diminishes. There is, however, one
curious exception to this rule. Suppose two
commodities have no other use biit to enter into
the formation of a certain compound commodity
in the fixed proportions m^ : m^ . And let the
"sources" from which the component commo-
dities are derived be initially in the hands of a
single monopolist ; but afterwards let each of
the two sources pass into the hands of an inde-
pendent proprietor. AVhat effect on the price
of the compound will be produced by this
breaking down of monopoly ? Common sense
would probably reply that the price would be
lowered by increase of competition. But
Cournot's reasoning concludes that the price will
be raised by the separation of the proprietor-
ship (art. 57). Cournot gives the imaginary
instance of zinc and copper having no other use
but to make brass. The following would be a
more important example. If a railway and
line of steamers have no other use except to
form part of a certain through journey ; then
primd facie, and in the abstract, it is more
advantageous for the public that the two should
be in the hands of a single monopolist than
that they should be owned by two competing
companies, each seeking independently to obtain
for itself the maximum net profit. This theorem
exhibits the power of Cournot's methods in a
very striking light.
When by the multiplication of producers,
monopoly becomes "extinct," the equation for
determining price assumes a certain simplicity.
It becomes of the form Q,{p) = F(p) ; where
D = F(p) is as before the demand curve ; and
I) = Q(p) is a curve expressing the quantity
that would be offered at any assigned price.
The function U is compounded out of the
functions expressing the cost of production to
each producer, in such wise as to bring out
very clearly the principle that the price is
equal to the cost of production of the last unit
produced. In symbols j9 = ^'^(0^) ; where p is
the price, D^ is the quantity of commodity
446
COURNOT
supplied by any one producer, and 0'^ a function
representing the cost to that producer of the
last unit produced. It is to be observed, that
cost of production as used by Cournot must be
interpreted as expense, exclusive of the remunera-
tion to the entrepreneur for his own labour.
Cournot does not take into account what Jevons
calls the "final disutility" of labour, any more
than he has expounded the theory of final utility
in the case of the consumer.
II. The formulae which take account of cost
are well adapted to investigate the effect of a
tax which may be regarded as an increase in
cost of production. Cournot has discussed a
variety of taxes, including "negative taxes,"
or bounties ; on the supposition either of mono-
poly, or a regime of perfect competition. The
following appear to be the most striking
theorems.
If a tax of so much per unit of commodity is
imposed on a monopolised article, the conse-
quent rise in price may be greater, equal to, or
less than, the tax. The loss to the monopolist
is greater than the gain to the treasury (arts.
33, 38).
If a similar tax be imposed under a regime
of competition, the rise in price will be less
than the tax. There is no general relation
between the loss to the producer and the gain
to the treasury (arts. 51, 52).
Converse propositions are true of bounties.
Similar conclusions are deducible with respect
to an ad valorem tax and a tithe (chaps, vi. and
vii.) There are also some interesting theorems
as to the effect of taxing one of two commodities
employed m a fixed proportion in the "joint
production" of a certain compound, and not
useful for any other purpose (art. 62).
The most remarkable results obtained by
Cournot's method are those which relate to a
tax on the importation or exportation of a com-
modity subject to the law of diminishing returns.
Cournot finds that the price in the importing
country may possibly be lowered by the im-
position of the tax (art. 70). This paradoxical
conclusion appears to the present writer to be
due to a flaw in the mathematical reasoning.
Equations (6) chap. x. appear not to be legiti-
mately deduced. The following is another
argument unexpectedly favourable to protection.
Suppose a restriction of trade in respect of a
certain commodity between two localities is
removed. Cournot concludes that neither the
quantity nor the total value of that commodity
is necessarily increased by freedom of trade.
III. Among miscellaneous topics treated
mathematically there occurs first variation in
general prices. Comparing ratios to differences
upon the principle which is at the foundation
of logarithms, Cournot illustrates the change
in the value of money in relation to other com-
modities by the motion of one body relative to
a set of other bodies. He compares the move-
ment of general prices caused by a change on
the part of money to the apparent motion ol
the stars due to the revolution of the earth
(chap, ii.) It will be seen that Cournot's
measure of the variation in the value of money
is of the nature of a mere type, or simple aver-
age as distinguished from a "weighted" index
number (see Index Numbers).
The next topic to be noticed is Cournot's
mathematical treatment of the foreign ex-
changes (chap, iii.) We may say with Jevons
of this investigation that it is "highly ingeni-
ous, if not particularly useful. "
It remains to speak of Cournot's theory of
"social revenue" (chap, xi.) He well defines
the national income so as to include the wages
of so-called "unproductive" labourers. He
gives formulae for the "real gain" and "real
loss " in revenue which are very similar to the
methods by which statisticians would now esti-
mate a change in the "volume of trade." In
the definition of "real gain and loss" abstrac-
tion is made of the detriment suffered by those
consumers who are deterred by a rise of price
from purchasing and the converse advantage
accruing to those who are induced by a lower
price to become purchasers. The peculiarity of
this definition permits the truth, while it
diminishes the importance, of Cournot's para-
doxical conclusion that, when a restriction of
trade in respect of a certain commodity between
two localities is removed, the importing country
suffers a "real loss" (art. 89). Cournot him-
self points out the limitations of his theorj'
He does not pretend to treat the question "au
point de vue de I'homme d'Etat." But he adds
with modest confidence, in words applicable to
his whole book and the mathematical method
in general :
" II y aurait toujours de I'avantage h, eclaircir
en quelques lignes, k la faveur de signes precis,
et d'une m6thode d'argumentation plus rigour-
euse, les difficult^s soulevees par des volumes de
controverse. "
The main outlines of Cournot's system have
been presented by their author in a form divested
of mathematical symbol, or rather in two such
forms, in two works dated 1863 and 1876 re-
spectively. Of these versions the latter seems
best to preserve the elegance of the original in-
vestigation. Both paraphrases are accompanied
with some additional and valuable matter.
Particular attention may be called to the cri-
ticism of Mill's theory of international trade,
and to the remarks on "economic optimism."
Some of these reflections may be found in an
earlier work treating of the relation between the
first principles of the different sciences.
Yet another debt of gratitude is owed by poli-
tical economists to Cournot. In his masterly
work on chances he has pointed out the bearing
of the calculus of probabilities on statistics.
F. Y. E.
COURT— COURT ROLLS
447
The following are the works of Cournot which
wholly or in part relate to political economy :
Recherches sur les Principes MatMmatiques de
la Theorie des Richesses (1838). — Exposition (^e la
Theorie des Chances et des Prohdbilites (1843). —
TraiU de V Enchainertxent des Idees Fondamentales
dans les Sciences et dans VHistoire (1861). — Prin-
cipes de la Them'ie des Richesses (1863). — Revue
Sominaire des Doctrines Economiques (1876).
COURT, PiETER DE LA (1618-1685), born at
Leyden where he succeeded his father as a cloth-
manufacturer after having studied law. He
emigrated to Antwerp, 1672, being an adherent
of the pensionary of Holland, John de Witt,
murdered that year. In 1673 he settled at
Amsterdam, where he resided until his death.
His principal works, all of a polemical character,
are : —
Het Welvaaren der Stadt Leyden [The Wel-
fare of the City of Leyden), edited for the first
time, 1845, by B. W. Uittewaall, under the title
Proeve uit een onuitgegeven staathuishondkundig
geschrift {Specimen of an unedited economical
Work). — Intrest van Holland of te Gronden van
Hollands Welvaren ungaaewezen door v. d. H. — ■
(Van den Hove de la Coiu-t), [Interest of Hol-
land, or Grounds of Holland's welfare explained
by V. D. H. ), Amsterdam, 1662, translated into
German 1665 (twice) and 1668. The second
edition of the same work was entitled Aanwij-
sing der heilsame politike gronden en 3Iaxim-en
van de Republike van Holland en West- Vriesland,
door V. d. H. — {Explanations of the wholesome
political doctrines and maxims of the Rejmhlic of
Holland and West-Friesland, by v. d. H.), Am-
Bterdam, 1669, translated into German, 1670 ;
into French, 1709, under the title Alemoires de
Jean de Witt ; into English, 1743, under the title
Political Maxims of the State of Holland, etc. by
John de Witt, Pensionary of Holland, etc. London,
printed for T. Nourse at the Lamb, without
Temple Bar. The fact is, that John de Witt
added only some remarks, and wrote the chapters
5 and 6 of part iii., as is now placed beyond
doubt. De la Court was a free-trader by con-
viction, but principally for the merchants' sake.
Monopolies, especially those of the Indian Com-
panies, he eagerly opposed. Industry too should
be free in developing itself — guilds hinder im-
provement ; governmental rules, prescribing the
mode of producing and the quality of merchandise,
give no security as to adulterations, and cannot
have any salutary efiect, the consumer being the
only person who can judge of what he wants.
A. F. V. L.
COURT ROLLS, MANORIAL ACCOUNTS
and EXTENTS. Among the mediaeval docu-
ments most valuable for the purposes of
economic history, must be placed those which
illustrate the manorial system. These may be
classified under the three heads specified above.
I. Court Rolls. The practice of enrolling
the business done in the king's court seems to
have been begun near the end of Henry II. 's
reign. The earliest extant roll is one of 1194,
and from that date onwards there is a fairly
continuous series of these rolls at the Public
Record Office. Some of the entries on them are of
interest to the student of economic history ; but
the rolls that are likely to interest him moro
are the rolls of local, usually manorial, courts.
Such rolls, not being public documents, must be
sought in the libraries and muniment rooms of
cathedrals, colleges, and landlords ; but the
Record Office has a fine collection of rolls
concerning manors which at one time or
another came into the hands of the king. A
few lords of manors had begun to keep rolls
before 1250, many before 1300 ; but rolls of
the 13th century are not now very common.
They are of gi-eat value as evidence of the
condition of the peasantry, the terms on which
they held their lands, and the mode in which
justice was done between and upon them. The
entries fall into three main classes : (1) cases of
litigation between the tenants ; (2) the punish-
ment of petty offences, either against the
manorial custom or against the general law ;
(3) the transfer of the customary tenements by
surrender and admittance, for the villain or
customary lands of the manor could not be
alienated %vithout being given up into the hands
of the lord, who thereupon admitted the new
tenant. In the earlier ages, entries of the two
former classes prevail ; in later times, the court
almost ceases to exercise a contentious jurisdic-
tion, and the court roll becomes little more than
a register of the titles of the copyholders.
The copyholders, as in the 15th century the
customary tenants or tenants in villainage came
to be called, acquired this name because copies
of the entries on the court rolls concerning
their lands served them as title-deeds. From
the older rolls a great deal may be learnt about
villainage, the common field system and the
state of agriculture. It may safely be said
that we never shall know how far the tenure of
the mediaeval peasant was precarious until these
documents have been examined. Rolls of
municipal courts, and of the courts which ad-
ministered "the law merchant" in fairs and
markets, illustrate another side of economic
history, the condition of trade, the nature of
merchant guilds and trade guilds, the treatment
of foreigners and to-\vn life in general. W^e have
some rolls of this class even from the thirteenth
century. As yet hardly a beginning has been
made towards publishing the court rolls ; but
the Selden Society's volume for 1889 contains
a selection of entries from certain rolls of the
13th century which may be considered as
typical.
II. Manorial Accounts. The accounts of
the manorial officers, bailiffs, and reeves, are
scarcely of such general interest as the court
rolls and extents, but they afford excellent
materials for the history of prices, and have been
largely used by Professor Thorold Rogers.
They have not been printed, at least on any
448
COURTEN— COURTS OF LAW
large scale, and must be souglit in tlie Public
Record Office and private muniment rooms. A
yery full and very early set of accounts relating
to the Bishop of Winchester's manors is in the
possession of the Ecclesiastical Commissioners.
It goes back as far as John's reign.
III. Manorial Extents. The "extent" of
a manor is a description of it which generally
gives the names of the tenants, the size of their
holdings, the legal character of their tenure, the
amount and nature of their rents and services,
whether rendered in money, in produce, or in
labour. Generally the extent is the result of a
sworn verdict returned by a jury of tenants to
a set of interrogatories addressed to them by the
lord's steward. To * * extend " (extendere) a manor
is to obtain by this process a full statement
and valuation of all the lord's rights. On the
continent, the practice of making such manorial
registers can be traced to very remote times and
possibly is of Roman origin. The most famous
of these very ancient registers is that of the
Abbey of S. Germain des Pres, made in the time
of Charles the Great (published 1844 by B.
Guerard under the title Polyptyque de I'dbhi
Irminon ; the first volume of a new edition by
Auguste Longnon appeared in 1886). The
England of the days before the Conquest has
apparently left us nothing at all comparable
with this. But the "extent" comes in with
the Conqueror, and is at once applied to
England on a vast scale ; Domesday Book is an
extent of the realm made on the king's behalf
by local juries. Gradually the lords of manors,
especially the religious houses, followed the
example thus set. We have a few extents
from the 12th, many from the 13th century.
Some have been printed ; some believed to be of
almost equal value still lie in manuscript.
[Among published extents are the Boldon Book,
a survey of the Palatinate of Durham, printed as
an appendix to the official edition of Domesday,
and again by the Surtees Society. — The Glastonbury
Inquisitions (Koxburghe Club). — The Cartulary of
Burton Abbey (Salt Society). — The Black Book of
Peterborough. — The Domesday of St. Paul's. — the
Register of Worcester Priory. — The Cartulary of
Battle Abbey (all for the Camden Society). — The
Cartulary of Gloucester Abbey, and the Cartulary
of Ramsey Abbey (both in the Rolls' series). — The
Hundred Rolls, published by the Record Com-
missioners, give very valuable extents of manors
in Cambridgeshire, and some other counties.]
P. w. M.
COURTElsT, Sir William (1572-1636).
See Interlopers.
COURTIER (Broker). See Change,
Agents de.
COURTS OF LAW (England). The princi-
pal courts in England are the County Courts ;
the Supreme Court of Judicature ; and the
House of Lords. The jurisdiction of the County
Courts is in most cases limited by the amount
or value ot the claims brought forward, the
limit varying according to the subject matter of
the action, but some matters cannot be taken
before a County Court, while in others their
jurisdiction is unlimited, as for instance in
bankruptcy proceedings. England and Wales
are for County Court purposes divided into five
hundred districts. The districts are grouped
together into fifty-nine circuits, one judge being
as a rule appointed to each circuit. The county
courts have no criminal business. The various
statutes relating to these courts, which were
first established in 1846, have been consolidated
by the County Courts Act, 1888 (61 & 52 Vict.
c. 43). The Supreme Court of Judicature con-
sists of Her Majesty's High Court and Her
Majesty's Court of Appeal. The High Court
has taken the place {a) of the Courts of Queen's
Bench, Common Pleas, and Exchequer now
united in the Queen's Bench Division ; (h) of
the High Court of Chancery now transformed
into the Chancery Division ; (c) the Courts of
Probate and of Divorce and Matrimonial Causes
and the High Court of Admiralty now merged
in the Probate, Divorce, and Admiralty Division.
The London Bankruptcy Court has also been
absorbed by the High Court, the London bank-
ruptcy work being, at present, allotted to the
Queen's Bench Division. The High Court has
original jurisdiction in aU civil matters which
may be brought before an English tribunal, but
a plaintiff instituting proceedings in the High
Court for which a County Court would have
been competent has to submit to unpleasant
consequences as regards costs. The active
judges of the High Court are the Lord Chief
Justice, the President of the Probate, etc
Division and twenty puisne judges (fourteen
in the Queen's Bench Division, five in the
Chancery Division, and one in the Probate,
Divorce, and Admiralty Division). The judges
as a rule sit alone, but some matters in the
Queen's Bench Division {e.g. appeals from
County Courts) are heard by divisional courts
consisting of two, and in exceptional cases even
of three judges. In Admiralty proceedings the
judge has frequently the assistance of two
nautical assessors. The courts of assize, sitting
periodically in the provinces, are now considered
as belonging to the High Court ; the matters
coming before these courts are generally tried
by judges of the Queen's Bench Division, but
they act as judges of assize by virtue of a special
commission issued separately on each occasion.
For the purpose of the assizes England and
Wales are subdivided into seven circuits. There
are also district registries in the provinces at-
tached to the High Court in which all pre-
liminary steps may be taken. In London these
preliminary proceedings take place partly in the
central office, partly in the judge's chambers.
Criminal causes are tried at the assizes and also
(exceptionally) by the Queen's Bench Division.
Five judges of the latter division form the Court
COURTS
449
of Crown Cases Reserved, hearing appeals on
points of criminal law reserved by judges of
assize, and in cases of particular importance all
the Queen's Bench judges sit together for that
purpose. The Court of Appeal hears appeals
from the High Court. It is composed of four
ex-offido judges : the Lord Chancellor, the Lord
Chief Justice, the Master of the Rolls, and the
President of the Probate, Divorce, and Admiralty
Division, and of five ordinary judges (called
Lords Justices of Appeal). As a general rule,
three judges of the Court of Appeal sit together ;
in particularly important cases the court is
sometimes composed of six judges. The Supreme
Court has been created by the Supreme Court
of Judicature Act 1873 (36 & 37 Vict. c. QQ),
and its constitution has been modified by a
number of subsequent acts. The House of
Lords hears appeals from the English Court of
Appeal, and from the corresponding com'ts in
Scotland and Ireland. There are four salaried
judges forming part of that tribunal who are
called lords of appeal in ordinary, and who
enjoy all the privileges of the peerage during
their lifetime (Appellate Jm-isdiction Act, 1887).
Besides these, the Lord Chancellor and such
peers as have held any high judicial office take
part in the judicial proceedings of the House.
It ought to be mentioned that the same lords
and a few other members of the Privy Council
form the Judicial Committee of the Privy
Council, a tribunal hearing appeals from the
ecclesiastical courts and from the highest courts
of appeal in India and the colonics and de-
pendencies. In addition to the courts which
we have enumerated, there are a number of courts
of exclusively criminal jurisdiction (such as the
Central Criminal Court at the Old Bailey, the
courts of quarter session and of petty session,
the stipendiary magistrates* courts, etc.), and
others of purely local importance (as the Lord
Mayor's Coui't in the city of London, the Liver-
pool Court of Passage, etc.). e. s.
COURTS (Ireland). The courts in
Ireland are, on the whole, organised on the
same system as the English courts. There is
a Supreme Court consisting of the High Court
and the Court of Appeal, the former consisting
of the Chancery, Queen's Bench, and Probate
Divisions. The Chancery Division has taken
over the jurisdiction of the former Landed
Estates Court (40 & 41 Vict. c. 57 ; 50 Vict.
c. 6). There is a Court of Bankruptcy which
remains distinct from the High Court, and local
bankruptcy courts have been constituted by an
act passed in 1888 (51 & 52 Vict. c. 44).
The courts corresponding to English county
courts are called Civil Bill Courts and are held
before the chairman of Quarter Sessions or the
recorder as the case may be. The chairmen of
Quarter Sessions are now called " County Court
judges and chairmen of Quarter Sessions," and
are appointed by the Lord Lieutenant. They
VOL. 1.
must be baiTisters of ten years' standing (14
& 15 Vict. c. 57 ; 40 & 41 Vict. c. 56).
The Lord Lieutenant is also empowered to
appoint stipendiary magistrates, having all the
powers of justices of the peace in counties and
boroughs (6 & 7 William IV. c. 13 ; 3 &
4 Vict. c. 108). The inspector -general ot
constabulary, his deputy, and assistants, have
power to act as justices of the peace throughout
Ireland (2 & 3 Vict. c. 75 ; 9 & 10 Vict.
c. 97). The jurisdiction and constitution
of the courts of Quarter Sessions and Petty
Sessions is similar to that of the corresponding
courts in England. The Land Commission
constituted under the Land Law (Ireland)
Act of 1881 (44 & 45 Vict. c. 49) and the
Purchase of Land Act 1885 (48 & 49 Vict,
c. 73) has quasi-judicial functions in con-
nection with the caiTying out of these statutes.
E. s.
COURTS (Scotland). The principal courts
in Scotland are (1) the Sheriff Courts, (2) the
High Court of Justiciary, (3) the Court of
Session.
Courts are also held by justices of the peace
and magistrates of burghs, but these are not of
the same importance as the corresponding
courts in England, as a great part of the juris-
diction exercised by the justices in England is
in Scotland entrusted to the sheriffs. In the
burghs of Edinburgh, Glasgow, and Aberdeen,
the magistrates (who are salaried officials) have
the powers of a sheriff, and occupy, in fact,
exactly the same position within their re-
spective burglis as slierilfs within their re-
spective counties.
(1) A Sheriff Court exists for each county
and has an extensive civil and criminal juris-
diction (including bankruptcy jurisdiction); it is
presided over by the sheriff principal (formerly
called sheriff depute) or by the sheriff substitute ;
juries act in criminal trials only, and even in
criminal trials the sherifi" is frequently com-
petent to act without a jury. The sheriff
principal and sheriff substitute are both salaried
judges and must be trained lawyers. An appeal
lies from the sheriff substitute to the slaeriff
principal, and from the sheriff principal to the
Comi; of Session.
(2) The High Court of Justiciary is the
supreme criminal court for Scotland. The
judges of this court are called "lords com-
missioners of justiciary " ; they hold sittings
with juries both in Edinburgh and in the
larger provincial towns (Circuit Courts). Since
1887 every judge of the Court of Session is one
of the lords commissioners of justiciary. The
lord president of the Court of Session, as
president of the High Court of Justiciary, has
the title of " lord justice general."
(3) Before the Court of Session, actions which
the sheriff is not competent to try must be
brought in the first instance; and as regards
2 G
450
COVERTURE— COXE
all other actions, it has a concurrent jurisdiction
with the Sheriff Court. Its judges are called
*' Senators of the College of Justice," or ** Lords
of Council and Session " ; the presiding judge
has the title "lord president," and the judge
next to him in rank is called "lord justice
clerk." The court is divided into (a) the Inner
House consisting of two divisions, presided over
respectively by the "lord president" and the
" lord justice clerk," four judges sitting in each
division, three forming a quorum ; and (6) the
Outer House consisting of five judges who are
called " lords ordinary." Actions are generally
brought, in the first instance, before one of the
lords ordinary, and may then go to one of the
divisions of the Inner House by way of appeal,
but certain matters (including appeals from the
Sheriff Courts) must go at once to the Inner
House. Actions of a certain description coming
before the Court of Session are tried with a
jury, but, on the whole, the trial by jury of civil
actions is not nearly as frequent in Scotland as
it is in England. e. s.
The Court of Session is the superior court
in Scotland : a court both of law and equity.
Appeals lie from the Court of Session to the
House of Lords.
In respect of the administration of estates
the court has the fuU powers of a court of equity,
but in practice the court interferes as little as
possible with executors or with the trustees
under a settlement ; and when it is necessary
for the court to do so, or to direct the adminis-
tration, it appoints judicial factors, independent
administrators, who give security, are paid a
commission, and report periodically. A. D.
COVERTURE. A legal term used to denote
marriage ; a married woman being said to be
"under coverture." At common law coverture
merged the wife's personality in that of her
husband, and the result was that her property
was governed by the following rules. (1) All
freeholds of which she was seised at the time of
marriage or afterwards vested in her and the
husband jointly during their joint lives, he
being entitled to the control and management
and to the profits, but only able to alienate
with the wife's consent. On the death of the
wife, the husband, under certain circumstances,
took a life interest in her heritable freeholds.
(2) All chattels real vested in the husband, so
that he could alienate them during his life ; but
if she survived him, and he had not alienated
them, they vested in her. (3) Chattels personal
vested in the husband absolutely, but if they
were choses in action his title only became com-
plete when he reduced them into possession.
The above rights of the husband were modi-
fied by the equitable doctrine, that if he re-
quired the aid of a court of equity to enable
him to acquire the property, such aid was only
given on tlie condition that he settled a portion
of the property on the wife and children. By
the Married Woman's Property Act of 1870 (33
& 34 Vict. c. 93) certain descriptions of property
which at common law would have vested in the
husband were declared to be separate estate,
and by the Act of 1882 (45 k 46 Vict. c. 75)
every woman married on or after 1st January
1883 is enabled to acquire, hold, and dispose of
property as if she were unmarried. The result
is that the wife's personality no longer merges
in that of her husband, though in some respects
she does not possess the same status as a single
woman.
[Macqueen's Law of Husband and Wife, 3rd
ed., London, 1885.] j. e. c. m.
COWELL, John Welsford, author of
Letters to the Bight Hon. F. T. Baring on the In-
stitution of a Safe and Profitdble Paper Currency,
1843 — an automatic arrangement for maintain-
ing a gold reserve, the third (or some definite)
part of the outstanding notes payable on demand.
This idea is reproduced in Further Letters on
Currency . . ., 1858. Cowell contributed, as
assistant commissioner, to the evidence col-
lected by the poor law commissioners, 1834.
F. Y. E.
COWRIE. A shell found on the shores of
the Maldive and Laccadive Islands, and used as
small change in Siam, parts of India, and on
the west coast of Africa. In Guinea 2000
cowries = 1 macuta, or ten-cent silver piece,
which is valued at 4 "Od. f. e. a.
COXE, Tench (1755-1824), born in Phila-
delphia, Pennsylvania. Having entered on a
mercantile life he became assistant secretary
of the treasury in 1790, and commissioner
of the revenue 1792-97. He early devoted
much attention to economic subjects, and in
1787 wrote An Inquiry into the Principles on
which a Commercial System for the United States
of America should be foumded; to which are
added some Political Observations connected with
the Subject, Philadelphia, 1787, pp. 52. This
favoured the prohibition of the coasting trade
to foreign shipping ; the importation of foreign
goods in the bottoms only of the country produc-
ing them, and in other respects was influenced by
the commercial policy of England at that time.
Coxe also demanded special encouragement to
manufactures and the exemption of raw materials
from tariff duties. In 1792 he published an
Examination of Lord Sheffield's Observations on
the Commerce of the United Provinces, to prove
that Lord Shefiield was wrong in his gloomy
prophecies for the future of the new republic.
These two articles with others and additional
matter may be found in a View of the United
States of America, in a series of papers, written
at various times between the years 1787 and 1794,;
interspersed with authentic documents ; the whole
tending to exhibit the progress and present state
of civil and religious liberty, population, agri-
culture, exports, imports, fisheries, navigation,
ship-building, manufactures, and general im-
CEADOCKE— CREDIT
451
provements, Philadelphia, 1794, pp. 513. He
laboured energetically for the establishment of
cotton manufactures, and is said to have b'^en
the first to attempt to bring an Arkwright
machine to the United States. Among his
other writings are Thoughts on Naval Power and
the encouragement of Commerce and Manufactures,
1806 ; Memoir on Cultivation, Trade, and Manu-
facture of Cotton, 1807 ; On the Navigation Act,
1809 ; and in particular A Statement of the Arts
and Manufactures of the United States of America,
for the year 1810, Philadelphia, 1814. This
latter was prepared under the direction of the
government for the census of 1810, and repre-
sents the first extended attempt to make an
industrial census of the country. The first
part of this is descriptive, and the remainder
statistical. As a statistical inquiry, it is almost
a failure as measured by modern standards.
His official papers, 1790-97, may be found
in American State Papers, Finance, vol. i.
D. E. D.
CRADOCKE, Francis, author of An Ex-
pedient for taking away all Impositions and for
raising a Revenue without Taxes, 1660 ; and of
Wealth Discovered . . . 1661. The author
proposes a land bank with *' imaginary money,"
as "a discovery of richer mines than any the
king of Spain is owner of." This projector was
added (along with Petty) to the king's council
on trade ( Wealth Discovered, flyleaf. )
[Quarterly Journal of Economics, vol. ii. p. 485.]
F. Y. E.
CRAFT GUILDS. See Corporations of
Arts and Trades.
CRAIG, John, of Glasgow, author of Ele-
ments of Political Science, 1814 ; and Re-
marks on soine Fundamental Doctrines in
Political Economy, 1821. All Craig's re-
marks are not so erroneous as his doctrine that
** value in use must be very accurately measured
by value in exchange. " f. y. e.
CREDIT. The fundamental notion in credit,
as the name itself implies, is trust or confidence,
but this characteristic obviously needs limita-
tion ; for the buyer of an article must always
repose some confidence in the dealer even when
the transaction is for cash, and the practical
rule is caveat emptor. There emerges then as
the second principal characteristic the idea of
deferred payment, taking payment in the widest
sense of the term. A credit transaction involves
time before it is completed, that is to say, a
commodity, or the use of a commodity for a
time, or service of some kind is rendered now,
whilst the reciprocal service or commodity is
given after a specified interval. Some writers
have regarded this time element as really the
primary characteristic, because in some species
of credit transactions there is practically perfect
security, and thus no demand on the confidence
of the person who makes the advance. It is
certainly useful to emphasise the time in some
In this way, for example, we understand
how the ecclesiastical economists of the Middle
Ages thought it sinful to demand or receive a
reward on account of deferred payment, because
they conceived that time in itself had no value,
whilst a modern writer who looks on time aa
fundamental in the accumulation and use of
capital, has no difficulty in giving moral
approval to the reward for Abstinence {q.v.)
Historically, however, and to a very great ex-
tent in the modern world, confidence or trust
is certainly of the essence, and not merely an
accident, of credit.
Much controversy has taken place as to the
distinction between capital, in the sense of pro-
duction capital (see Capital), and credit. The
individual merchant or manufacturer regards
his credit as one of the principal requisites in
carrying on his business. A manufacturer with
good credit can at once expand his business to
meet a growing demand, whilst his inferior in
mercantile standing must proceed more slowly.
It thus appears that, from the individual point of
view, it is naturally regarded as giving increased
productive power. Then, as so often happens
in economics, a simple summation is made of
the advantages of individuals, and credit comes
to be regarded as part of the national (produc-
tion) capital, just in the same way as a national
protectionist policy is fallaciously constructed
from considering the gains to particular pro-
tected industries. It is evident, however, that
in its simplest form, so far as production is con-
cerned, credit cannot directly increase the actual
means of production which are potentially at
the service of a nation, but can only transfer
the right to use these means from one member
of the community to another. Credit supplies
in fact (as pointed out above) a species of medium
of exchange, and logically the mere exchange of
products or instruments is quite different from
the actual increase of commodities. Thus,
credit in the ordinary sense of the term cannot
be considered as part of the national (production)
capital.
But although a sharp distinction may be
drawn logically between exchange and produc-
tion, it is obvious that in a modern industrial
society exchange is practically a necessary part
of production. For without exchange division
of labour, which is fundamental in production,
could not be carried out, and without credit
exchange itself, in the present state of society,
could not be effected sufficiently for division of
labour. Accordingly, so far a well organised
system of credit may be regarded as one of the
productive forces of industry. This is well illus-
trated by the occurrence of commercial crises,
which for the time being through the collapse of
credit place a check on the production of the
nation. Bagehot very justly ascribed a large part
of our commercial supremacy over continental
nations to the superior organisation of our credit
452
CREDIT
At the same time, however, it seems useful to
retain the old distinction so sharply emphasised
by Ricardo, M'Culloch, Mill, etc., between the
actual material (production) capital and the
mere transference of the right to use that
capital. If this is done, it will stiU be, open
to the economist to point out the different
methods by which indirectly credit tends to
increase production and also the accumulation
of capital (in the narrower sense). (1) By
means of credit capital finds its way into the
hands of those who can use it to most advan-
tage, as is shown in the increased discount of
bills when a trade begins to flourish. Again
many large undertakings would be impossible
without credit, e.g. the construction of rail-
ways, the improvement of lands by funds
obtained on mortgage, etc. The return for
the funds immediately advanced must from
the nature of the case be deferred. We may
go further and say that as soon as we pass
from the simplest stage of society in which the
individual provides for his own wants, this
deferred element which is the basis of credit
comes to the front. The landowner must give
credit to the mAtayer and also to the farmer,
and similarly at every stage of a manufacture
credit is given before the finished product is
available to meet the cost of production. (2)
By means of credit also the amount of national
capital available for production is increased.
Those whose savings would be too small {e.g.
the working classes) if used alone, and those
{e.g. the professional classes) who cannot use
their wealth in material production, are enabled
by credit institutions and all kinds of joint-
stock associations to add to the means of pro-
duction. In former times, as Adam Smith
points out, almost the only means of employing
possible surplus wealth was by keeping large
numbers of retainers who were for the most
part unproductive consumers.
The effects of competition in increasing the
efficiency of production in spite of the defects
of the entrepreTieur system, have often been
pointed out {e.g. by Walker), and even the
socialists often allow that from the production
point of view simply the regime of competition
is perhaps superior to that of organised state
control. But credit is evidently essential to
the full development of competition, and the
growth of credit is historically one of the most
marked characteristics of the progress of society
from status to contract. In nearly all contracts
there is a deferred element on one side at least,
in other words nearly all contracts involve
credit, and thus again, indirectly at least,
credit, by giving play to freedom of contract
and competition, increases production.
Even taking the comparatively narrow view
of Mill on the relations of capital to industry,
we learn that although industry is limited by
capital it seldom comes up to that limit, and
we may add the more perfect the credit organisa-
tion the greater the mobility of capital, and the
nearer it approaches to the limit. And when
we take the wider definitions of capital (see
Capital), now generally accepted, it seems
possible to include certain species of credit
directly under capital. An effective system of
banking certainly increases the revenue not
only of bankers but of the nation at large,
and the "bank money" of the money market
is to a great extent purely the creation of
credit, and is as efficient as actual coin. It
may of course be said that it is only "repre-
sentative" money, but it is the result of
highly -skilled labour and of reservation for
future needs which are the general character-
istics of capital. Thus John Law {q.v.) in his
famous system was guilty not of a direct
fallacy, but rather of exaggerating a truth
from the theoretical standpoint ; and prac-
tically, as he himself pointed out, he failed by
trying to compress within too short a time
what must take generations for its develop-
ment. Credit effects a very great economy of
the national resources, and thus may fairly
come under revenue capital. Nor does this
view appear to clash with popular usage, for
we find in estimates of national capital that
account is generally taken of the capital of
banks and insurance societies and the like,
although strictly, and taking only material
(production) capital, this would involve count-
ing the same elements twice over.
[Besides the treatment of credit in the text-books,
the reader may consult the masterly work of Knies
{Der Credit), which gives a critical historical sur-
vey as well as an original view of the theory, and
the article by Wagner in Schdnberg's HandMch,
which, more Oemianico, gives a complete biblio-
graphy up to date. For the views of Mr.
Macleod on credit see his works.] J. 8. N.
CREDIT. Influence on Prices. Credit
supplies the means whereby the transfer of
wealth from one person to another is effected for
a period of time, at the end of which it is restored
to its owner. Having given this very general
description of credit, it is necessary to be more
specific. Thus, credit may be given in the
form of commodities transferred by a tradesman
to a customer, and paid for in money after an
interval. In -this case, the "consideration" for
the credit given is sometimes not mentioned,
but as a matter of fact it is obtained by the
tradesman in the form of an addition to the
price. Sometimes it is expressly understood
that when goods are sold, some rate of interest
on the cash price will be charged if they are not
paid for at once. This form of credit, however,
is of little importance from an economic point
of view, though it is of importance in other
ways. The only prices it affects are retail
prices.
The credit given in wholesale transactions is
CREDIT
453
of much greater interest to the economist. It
is a powerful agent for influencing prices, since
it gives rise to what are known as bills of ex-
change (see Bill Broking ; Bill of Ex-
change), with all the consequences which
their use brings with it. In this case, how-
ever, the credit is given, or at any rate is
supposed to be given, as the result of a trans-
action in commodities, that is in real articles of
definite value such as actual bales of cotton, or
cotton cloth, pigs of iron, or other goods. The
biU is drawn by the seller on the buyer, and
the buyer "meets" it in three, four, or six
months' time according to the nature of the
bill. He gets the money, however, at once,
by "discounting" the bill with his banker,
who keeps it until it is due ; or the drawer may
discount it with a bill-broker if he has facilities
for such an operation, who in his turn may sell
it to a banker, or employ it as a "security bill "
in his business. When any particular trade
is active and profitable, bills arising out of it
appear in increased numbers. They not only
enable the drawer to use the money due to him
for a sale at once, and set the drawer free from
the immediate need of finding money to pay for
what he has bought, but they may also be used
as a basis for a temporary increase of the credit
commanded by the person who discounted them.
Bill-brokers sometimes pledge bills they have
bought with bankers, as security for a short loan,
and this leads to the consideration of another
form of credit, which is even more effective
than bills as an instrument for raising prices.
Bankers Advances. — Many people suppose
that a banker's " deposits " are solely the result
of the paying in of money to the customer's
account. As regards private individuals this is
so in the main (see Deposits), but a consider-
able part of a business man's deposit is the
result of advances made to him, usually but not
always on security. A successful manufacturer
or merchant has no difficulty in getting such
advances except in times of abnomial pressure
in the money market, sometimes as an "over-
draft," though this mode of giving credit is
rarely adopted by banks in the metropolis, but
usually as a loan, provided he can satisfy his
banker that the operation he wants the money
for is a sound one. In times of great trade
activity a gi-eat deal of the money in the hands
of bankers is placed at the disposal of enterpris-
ing men of business, and in these circumstances
prices generally are apt to rise very rapidly,
especially if the men to whom the advances are
made are engaged in one or two of the leading
trades of the country. A considerable rise in
the price of coal and iron is sure to produce a
rise in most other articles of commerce, and
during the middle stages of a general rise in
prices, money is lent freely, and under these
circumstances the economic organism is in a
state of the highest efficiency. Credit is then
at its mouxmvwm, and exercises its fuUest effect
on prices. Later on, when prices have risen
very much, bankers become aware that the
total volume of their customers' obligations ia
larger than is quite safe, and they therefore
make advances with more caution.
Bank Notes. — It used to be thought that
bank notes were the most powerful of all agents
for raising prices, but that idea has long been
abandoned, though it has been true where the
notes are inconvertible. All authorities are
now agreed that convertible notes cannot be
over-issued. Inconvertible notes can be and
have been over-issued, but they cannot be kept
in circulation at par unless their issue is care-
fully restricted to meet the actual needs of the
commercial community, as was done with con-
summate skill by the Bank of France after the
war of 1870. An excessive issue of inconvertible
notes may raise prices enormously. Theoreti-
cally the rise will be equal in all articles, but
in practice some commodities are usually affected
more than others. One peculiarity of an exces-
sive note issue is that it operates primarily on
retail prices instead of on wholesale prices as
an expansion of banking credit does. In some
countries — in Scotland, for instance — convertible
notes are an important part of the machinery
by which the business of bankers is carried on.
A person in a small way of business, for whom an
account is opened by a Scotch bank, may take a
large part of what he requires in the bank's own
notes, which thus practically take the place of
Cheques. The system works well in Scotland,
and it is quite probable that it would also work
in England, though it is questionable whether
it is absolutely needed, as owing to the great
extension of the cheque system any person who
has a good business, however small, can obtain
the support of a banker. In any case a sound,
that is a convertible, bank note issue cannot be
nearly as effective an agent for facilitating the
expansion of business as the system of advances..
or "book credits," as Mill called them. Such
credits are capable of expansion, limited only
by bankers' opinion of the solvency of their
customers. That opinion may at times be
wrong, and then too much money is lent to the
wi'ong people, prices are forced up too high, and
a commercial crisis ensues.
Cheques. — The cheque system is a necessary
part of the banking system, and cheques are
not, in the first instance, a form of credit at aU.
If a bank's customer merely draws against cash
actually deposited by him, it is obvious that
the cheques he draws to pay debts or to provide
himself with cash for daily use are not credit
instruments, except to a very limited extent.
Even when a cheque is drawn against an ad-
vance gi-anted to the customer by the bank, it
is not the cheque which is the instrument of
credit but the advance itself. But when, as is
occasionally the case, cheques pass through
454
CREDIT— CREDIT FONCIER OF FRANCE
several hands before being pi-esented to the
bank on which they are drawn, they become
instruments of credit, taking the place of coin
or notes in the district where they circulate.
In England, where a large proportion of people
have banking accounts, cheques do not circulate
long in this way, for they almost immedilitely
reach the hands of some person who pays them
into a bank, by whom they are "cleared" in
the usual manner, but there is reason to think
that in countries where banking is less developed
than in the United Kingdom, cheques on banks
of great reputation are made to do a good deal
of work as an aid to the coin and note circula-
tion. Cheques on London banks given to hotel-
keepers on the Continent often "remain out"
for months, and when finally cleared are covered
with the endorsements of the persons and firms
through whose hands they have passed. Such
cheques have, during the period in question,
formed a real addition to the circulation of the
districts they have traversed.
Foreign Cheques. — During the last ten or
twelve years there has been an important ex-
tension of the cheque system in connection with
foreign trade, cheques drawn in Berlin and
Paris on a London banking house having be-
come negotiable instruments payable at sight,
just like a cheque drawn in Manchester on a
London bank, so close are the relations between
these twj great capitals and London. A still
more remarkable feature of modern business is
the use of "telegraphic transfers," which are
largely used in trade with India and the United
States. They are of course merely orders sent
by bankers to their agents in foreign cities to
pay specific sums over to certain persons, but
they greatly facilitate the operations of mer-
chants and bankers.
Among the arrangements which have faciK-
tated the extension of credit must be included
the clearing houses established in London, Man-
chester and New York (see Clearing Houses ;
Clearing House, the London Bankers', App. )
[Ricardo, Works (M'Culloch), ch. xxvii. — Mill,
Political Economy, bk. iii. ch. xi. xii. and xiii. —
F. A. Walker, Money, pts. ii. and iii. — Bagehot,
Lombard Street^ passim. — Adam Smith, bk. ii.
ch. ii.] w. H.
CRl^DIT FONCIER OF FRANCE. This
institution is intended to enable house and
landowners to raise money on mortgage at a
low rate of interest, with facility of repayment
by an annuity including redemption of the
capital. The foundation of the Credit Foncier
was due to the economist M. Wolowski. It
dates from 1852, but had been preceded in
1820 by a mortgage bank called the Caisse
HypotMcairCf which, after a struggling exist-
ence, was finally liquidated in 1846. The new
establishment was created under governmental
patronage, and invested with special privileges
which constituted a virtual monopoly. The
original idea was to found a number of mort-
gage banks, each with its operations confined
to a prescribed region. Three only were
organised, those of Paris, Nevers, and Mar-
seilles ; the last two were afterwards absorbed
by the first, the operations of which were then
extended to the whole of France. They were
styled Banques Fonci^res with the name of their
locality. On their amalgamation the subsist-
ing one was at first called the Banque Foncihre
de France, but on representations by the Bank
of France, which feared a confusion from the
similarity of names, the title was changed to
that of Credit Foncier de France. The opera-
tions of this establishment were at first re-
stricted to loans on houses and rural property,
with or without redemption by a sinking fund.
They were extended in 1858 to loans for drain-
age ; in 1860 to Algeria, and in 1860 the
Cridit Foncier was authorised to lend to towns
and departments for public works and improve-
ments. This last exteusion contributed in a
great measure to the vast public works com-
menced under the empire and since continued.
The Grddit Foncier was also empowered in 1860
to make advances in the form of discounts to
the Sous-Comptoir des Entrepreneurs, a con-
tractors' bank, which lends on mortgage to
builders after their work has reached a certain
stage, and whUe in progress ; the Crddit Foncier
itself only granting loans on houses when ready
for occupation. When the buildings are
finished the bills discounted by the Sov^-
Comptoir, and rediscounted by the Credit
Foncier, are cancelled by a regular mortgage to
the latter company. The CrSdit Foncier patron-
ised in 1861 the formation of the Crddit Agricole,
instituted to make advances to agriculture
not authorised by its own statutes, and which
it assisted in a similar manner by rediscounts.
This involved the Cridit Foncier in difiiculties
in 1876, the Credit Agricole having impru-
dently taken in nearly seven millions sterling
of treasury bills of the Egyptian floating debt,
and passed them on to the Credit Foncier. The
Egyptian government having made default, the
Cr&dit Agricole had to go intd liquidation, and
was merged in the Credit Foncier, shareholders
receiving a part of their capital in new Credit
Foncier shares. The Credit Foncier absorbed
in 1882 a rival mortgage bank, the Banque
Hypothicaire, which had been founded on the ex-
piration of the exclusive privilege (granted for
twenty-five years) of the former. This led to a
further creation of shares, and as the business
of the Credit Foncier increased, new capital was
raised, the right of issue of mortgage and com-
munal bonds being limited to twenty times the
share capital, the amount of which then rose to
£6,820,000, with a limit of £8,000,000. The
government exercises a direct control over the
Cridit Foncier by appointing the governor and
two deputy-governors. Decisions of the elected
CREDIT, LETTER OF— CRISES, COMMERCIAL AND FINANCIAL 458
board of directors must be approved by the
governor. The Credit Fonder enjoys the special
privilege of issuing bonds which, in addition to
the fixed interest, give a right to drawings ior
prizes. Each issue of bonds with alottery requires,
however, a special authorisation by the govern-
ment. The Credit Fonder can only lend on first
mortgage, and to the amount of one-half the estim-
ated value of houses and farms, and one-third of
that of vineyards, woods, and other plantations.
The share capital is now (1914) £10,000,000
divided into 500,000 shares of £20 ; this may
be raised to £12,000,000 when the bonds in
circulation amount to twenty times the share
capital ; the increase may be made in one or in
two operations. The rate of interest on the
loans may not exceed by more than 60 centimes
per cent the rate of the return (interest, lottery-
fees, and other charges) from the bonds in circu-
lation at the time Avhen the rate of interest on
the loans is fixed. The rate of interest now
(July 1914) on tlie mortgage loans is 4 '85 per
cent, without commission. The annual payment
(interest and sinking fund) is 12 '7 4 per cent
for a loan to be redeemed in ten years ; 7 '87 per
cent in twenty years; 5-33 per cent in fifty
« years, and 4 '99 per cent in seventy-five years.
The rates for loans to the departments, com-
munes, and local bodies is now 4 '30 per cent.
The total amount of the mortgage loans granted
since the origin of the CrMit Fonder (1852) to
31st December 1913 was £267,112,247; of
this £32,792,993 has been paid off in annual
sums, £131, 401, 465 has been paid off' at earlier
dates than the time fixed, and £102,917,789
remains outstanding. The mortgage loans
issued in Paris and in the department of Seine
amounted to £154,097,492, and in the other de-
partments, Algiers and Tunis, to £113,014,754.
The communal and departmental loans issued,
1860-1913, amounted to£187,198,535, of which
there still remained to be redeemed (31st Dec.
1913) £94,705,378. The nominal value of
the bonds in circulation at that date was
£218,641,540 ; the balance in circulation,
£178,732,795. The charter of the Cr6dit
Fancier was extended for ninety -nine years from
1881.
[C. Gide, Prindpes D' Economic Politique, Paris,
1889; A. Courtois, Histoire des Banques en France,
Paris, 1881 ; A Hi story of Banking in all the
Leading Nations, New York, 1896. Economiste
Frangais and Monde Economique, 2Mssim. T. L.
CREDIT, Letter of. A letter addressed to
a banker, or some other person or firm, con-
taining a request to make payments or give
acceptances to a third person or firm for account
of the writer or -writers of the letter. Some-
times the letter, instead of being addressed to
I one particular person or firm, is directed to a
number of banks, with an indication that all
payments must be indorsed on it by the parties
eff"ecting them, so as to show what amount
remains unused. A letter of this kind is called
a circular letter of credit. Circular letters ol
credit are also issued in the form of a request
to the banks to whom they are addressed to
purchase the holder's drafts on the bank who
issued the letter, such drafts to be drawn on
the forms which are handed to the holders of
the letter of credit, each of these forms being
marked with a fixed amount. Another class of
letters of credit — commonly called confirmed
letters of credit — is much used in mercantile
transactions with foreign countries. These
letters are addressed to the person to whom
the credit is granted, and contain an authority
to issue drafts up to a certain amount on the
writer or writers ; and also an undertaking, not
only as against the drawer, but also as against aU
bona fide holders, to accept such drafts, pro-
vided they are issued within a certain time.
If the credit is given for the purchase of goods
there is a further condition added, according to
which shipping documents of a value corre-
sponding to the amount of the drafts must
accompany or precede them. e. s.
CRIMINAL PROSECUTION in Scotland is
conducted by public prosecutors, and private
prosecution, which cannot take place without
the "concourse" or concurrence of the lord
advocate, is almost unknown. When a crime
has been committed, all who are supposed to
be able to give evidence are called to testify
before a magistrate in private : the suspected
person may also make a declaration, which may
at once be satisfactory and entitle him to libera-
tion ; if not, he is at once, or after further
examination, committed for trial before a jury
of fifteen, who acquit, condemn, or find "not
proven," by a majority.
CRISES, Commercial and Financial.
Times of difficulty in commercial matters are,
when pressure becomes acute, termed crises.
The crises of 1857 and 1866 will be described
in some detail. The most important ones
which have occurred since the end of the last
century likewise deserve notice ; those earlier
than that date, though historically of interest,
exhibit features which have little in common
with the methods of conducting financial and
commercial business at the present day. The
crisis of 1792-93, of which Macpherson {Annuls
of Commerce, vol. iv. p. 266) was the his-
torian, is described by him as having followed
heavy investments "in machinery and in land
navigation." The number of bankruptcies was
unprecedented. "Many houses of the most
extensive dealings and most established credit
failed ; and their fall involved vast numbers of
their correspondents and connections in all
parts of the country." The usual features of
a panic followed. Temporary loans became
almost unattainable; hoarding followed. "It
was impossible to raise any money upon the
security of machinery or shares of canals, loi
456
CRISES, COMMERCIAL AND FINANCIAL
the value of such property seemed to be anni-
hilated in the gloomy apprehensions of the
sinking state of the country, its commerce and
manufactures ; and those who had any money,
not knowing with whom they could place it
with safety, kept it unemployed and locked up
in their coffers." At a meeting of some of the
principal merchants and traders in the city
(23rd April 1793) the government was asked to
assist business houses of real substantial stand-
ing by advances of exchequer bills. To this
Mr. Pitt, then prime minister, agreed : the
result entirely justified his resolution. "The
very first intimation of the intention of the
legislature to support the merchants operated
all over the country like a charm, and in a
great degree superseded the necessity of the
relief by an almost instantaneous restoration of
mutual confidence." A similar plan to that
adopted in London was pursued in Liverpool,
and parliament authorised the corporation of
Liverpool to issue negotiable notes to the
amount of £200,000 in support of the credit
of individuals. Tooke mentions {History of
Prices, vol. iv. p. 272) that in 1792, although
the bank rate of discount was not reduced
below 5 per cent, the market rate had fallen
to, or below, 3 per cent per annum, and the 3
pel cent consols had reached 97^ in the March
of that year. " This comparatively low rate of
interest had been, in some degree, both a cause
and an eff'ect of the great extension of the
country bank system, which about that time
took place." Too heavy advances on insufll-
cient or inconvertible securities, and an over-
stimulated spirit of mercantile enterprise, appear
to have been the causes of this crisis.
During the year 1796, and at the commence-
ment of 1797, a severe pressure in the money
market, extensive failures of banks in the
north of England, and great mercantile dis-
credit prevailed. The difficulties experienced
were very great. At a meeting held in the
city, 2nd April 1796, resolutions respecting the
"alarming scarcity of money" were passed,
and affirming "that this scarcity proceeds
chiefly, if not entirely, from an increase of the
commerce of the country, and from the great
diminution of mercantile discount which the
Bank of England has thought proper to intro-
duce in the conduct of that establishment
during the last three months." A plan was
drawn up for a board to be constituted by act
of parliament for the support of credit. They
were to issue promissory notes, payable six
months after date, bearing interest at the rate
of £1 : 18s. per cent per annum, upon receiving
the value in gold and silver. Bank of England
notes, or in bills of exchange not having more
than three months to run (Tooke, History of
Prices, vol. i. p. 201). This proposal was not
carried out. The pressure was aggi-avated to a
great extent by alarms prevalent at the time.
The next serious crisis, taken in chronologi-
cal order, took place in 1810-11. A careful
history of the events which led to this disturb-
ance is found in Tooke {History of Prices, vol. i.
p. 303). A great advance, and an enormously
high range of prices in this country, in 1808,
while on the continent they were low, through
the operation of the same causes which made
tuem high here (see Continental System), in-
duced merchants to make great efforts to over-
come or elude the obstacles to trade. Heavy
importations took place, a great fall of prices
followed, so great that in many instances the
importer, after paying for the enormous charges
on importation, was left with nothing whatever
to meet the previous cost. Simultaneously a
total stop was put to the exports from this
country to the Baltic. Here, as Tooke remarks,
all the incidents which lead to a severe crisis
were present. "So many circumstances, on so
large a scale, combining in the same direction,
the fall of prices, the reduction of private paper,
and the destruction of credit, were greater and
more rapid than were before, or have since been
known to have occurred within so short a space
of time." In August 1810 several failures
of banks, and of important business houses
were reported (monthly Commercial Report, 1st
August 1810). It is stated — "speculations in
Spanish wool, an article which has fallen about
50 per cent, are considered as the origin of
those unlooked-for disasters. Five Manchester
houses have stopped payment in the city, and
we are sorry to add, have involved numerous
industrious persons, both in town and country,
in their ruin. The demands upon the five
houses are said to amount to two millions ; but
it is supposed that their real property will ulti-
mately cover all deficiencies. Speculative ex-
ports to South America are the rock upon which
these houses have split. In consequence of
these unexpected events, public credit is at the
present moment as low as ever it has been in the
memory of man." The report continues, 1st
December 1810 — "A numerical evidence of the
present state of trade may be deduced from the
number of bankruptcies in the London Gazette.
They amounted —
This month in 1810 to 273
The same month 1809 „ 130
„ „ 1808 „ 100
1807,, 97
1806 „ 65
1805 „ 87
1804 „ 60
besides stoppages and compositions equal in
number to half the traders in the kingdom !
These failures throughout the kingdom have
wonderfully afffected the manufacture of every
description of goods ; and a general want of
confidence exists between the manufacturer and
the export merchant" (1st January 1811).
" In our last report we stated the vast increase
CRISES, COMMERCIAL AND FINANCIAL
457
of bankruptcies within the last month compared
with similar months for seven years back ; and
we regret to say that they still continue to in-
crease in number, and that confidence in tae
mercantile world seems nearly at an end. . . .
In Lancashire the cotton manufacturers appear,
by the late gazettes, as well as by private in-
formation, to be gi'eatly distressed, and business
quite at a stand. In Manchester and other
places houses stop not only every day but
every hour. Cotton wool is in no demand at
any price, and no export of the manufactured
goods, except a few fine sorts to Rio, etc. The
trade of Birmingham, Sheffield, etc., quite at a
stand, and no orders for execution there, except
a few for our home consumption." A reference
to the parliamentary debates in the spring of
1811 will show that this is no exaggerated de-
scription. A select committee of the House of
Commons made inquiries into the state of com-
mercial credit, and reported that the statements
as to the great embarrassment and distress were
founded on fact, and that it "had arisen out of
great and extensive speculations, which com-
menced upon the opening of the South American
market in the Brazils and elsewhere, to the
adventures of British merchants." The chan-
cellor of the exchequer (Hon. S. Perceval) re-
ferred to the subject in his speech during the
debate on the Commercial Credit Bill ; and after
mentioning the report of the select committee,
he continued, "the distress, originating with the
merchant, and disabling him from paying the
manufacturer, was felt most severely by the
manufacturer and those employed by him. All
the principal manufacturers had been compelled
to contract, and some wholly to suspend, their
works. It appeared by the report that there
was scarcely a cotton manufacturer in the king-
dom who had not diminished by one half the
number of persons employed in his mills ; and
that many of the smaller manufacturers had dis-
charged their people altogether." Those em-
ployed by the manufacturers who still carried on
business were retained at lower wages, and ' ' the
most calamitous distress " is described as prevail-
ing in many of the manufacturers' districts. The
commercial troubles of the time were not con-
fined to the United Kingdom ; the condition of
trade in the United States was fully as bad.
Tooke quotes a letter from New York, dated
11th February 1811, which states that : " Such
times for money were never known, and all con-
fidence among merchants is totally, and indeed
very justly, destroyed." This crisis appears to
have been one of great severity ; in reference to
it and to the further and even heavier troubles
of 1825 the very artificial conditions of business
induced by the restrictions on trade imposed by
the great war waged at the commencement of
the century in Europe, must be borne in mind.
i Tooke gives (History of Prices, vol. i. pp. 308-
I 314) many details of the heavy charges which
had to be paid by merchants. Thus the freight
and insurance on hemp from the Baltic to London
was, 1809, in some instances from £40 to £50
per ton. The charge of conveyance of silk from
Italy to Havre amounted nearly to £150 per bale
of 240 lb. The following cases referred to,
occurring between 1809 and 1812, are even
more extraordinary. "The charges of freights
and French licence on a vessel of little more than
100 tons burden, have been known to amount
to £50,000 for the voyage merely from Calais
to London and back ; this made the proportion
of freight on indigo amount to 4 s. 6d. per
pound. A ship, of which the whole cost and
outfit did not amount to £4000, earned a gross
freight of £80,000 on a voyage from Bordeaux
to London and back." Tooke says of this
period (jfftstory of Prices, vol. iv. p. 273), "the
commercial distress and banking discredit of
1810-11 nearly equalled, in point of intensity,
those of 1792 and 1825 ; and the losses caused
by the fall of prices in 1810 were, I am inclined
to think, gi'eater than they had been at any
former period. In the stiU more violent fluc-
tuation of prices which took place between
1812 and the close of 1815, it is possible that
the losses were greater ; but there was not then
any such sudden and extensive revulsion of
credit and commercial distress as occuiTed in
1810-11."
The next serious crisis occun-ed in 1825,
one of the most severe through which the
commercial and banking systems of the country
had ever passed. At this date speculation ran
very high, for the most part in loans and min-
ing adventures, and other investments abroad.
The foreign exchanges were so much depressed
as to be the cause of a nearly continuous drain
on the bullion of the bank. This foreign drain,
Tooke remarks, was not counteracted by any
operation of the bank ; it was suffered, he
observed, to run its course, till it ceased of its
own accord, that is by simple eflSux, towards
the close of the summer. Many and heavy
banking failures, and a state of commercial dis-
credit, preceded and formed the earlier stage of
the panic. The tendency to speculation, and
the undue extension of credit, was preceded,
probably caused, and certainly favoured and
promoted, by the Ioav rate of interest which
had existed for some time previously ; and this
low rate of interest was apparently prolonged
by the operations of the Bank of England.
Facility of banking accommodation which had
existed for some time previously, favoured un-
due extension of credit.
This gradually led on to the great diflaculties
of the year.
In the summer of 1822 the bank reduced its
rate of discount from 6 to 4 per cent. The
course of the rate of interest is marked by the
following statement of the price of the 3 pel
cent public funds.
458
CRISES, COMMERCIAL AND FINANCIAL
1823.
3rd April .
73h
,j
1st July .
80|
J,
3rd October
82i
1824.
1st January
86
)}
2nd April .
94^
28th „ .
97| (the highest)
f)
November .
96i
1825.
January
94i
1826.
14tli February
. 73| (the lowest)
The great severity of the pressure extended
over a very short time, hardly more than
three weeks. Some banking failures, princi-
pally in the provinces, in the month of Decem-
ber, were followed by the failure of several
banks in London. A severe drain on the
resources of the bank of England took place —
"the lowest amount of the bank treasure was
on the 24th of December, viz.,
Coin
Bullion
£426,000
601,000
£1,027,000
"The accidental discovery, for such it was
said by Mr. Harman, in his evidence in 1832
(Bank Charter Report, 1832) to have been, of
an amount of £1 notes which had been put
away in the bank was, doubtless, a fortunate
circumstance ; for, although the sum was not
large (between £700,000 and £800,000), it
«erved to meet the peculiar difficulty of that
time, which consisted in an extensive discredit
of the small note country circulation. And it
is probable that it had an immediate and very
great effect in stopping the demand from the
provinces for gold " (Tooke, History of Prices,
vol. iv. p. 343). Though the period of pres-
sure in 1825 was so short, it had been preceded
by considerable and extravagant speculations
in foreign loans and shares of companies,
mining and commercial. Besides several min-
ing companies for operation in Mexico, Chili,
Brazil, Peru, and the provinces of Rio de la
Plata, "so great was the rage for speculation
that, in the course of a very few weeks, in the
early part of the year (1824), the following
undertakings, among others, were brought for-
ward in London, and found subscriptions court-
ing their acceptance : — The Alliance Fire and
Life Insurance Company, with a capital
of £4,000,000; the Palladium Fire and
Life Insurance Company, with a capital of
£2,000,000 ; the British Annuity Company,
whose capital was £3, 000,000; theMetropolitan
Investment Company, with a capital of
£1,000,000 ; the Thames and Isis Navigation
Company, with a capital of £120,000 ; an Ale
Brewery Association, with a capital of £200,000 ;
a company for obtaining from government a
gi-ant of a million of acres in New South
Wales, and for improving the growth of wool ;
an association for the cutting a canal across the
Isthmus of Darien" [a curious anticipation of
the attempt made to join the Atlantic and
Pacific oceans by the recent Panama canal].
More than thirty private acts were brought
forward in the House of Commons to give effect
to these projects. " In all these speculations,
only a small instalment, seldom exceeding five
per cent, was paid at first ; so that a very
moderate rise on the prices of the shares
produced a large profit on the sum actually
invested." Tooke describes the spirit of specu-
lation aroused as follows. "This possibility of
enormous profit by risking a small sum was
a bait too tempting to be resisted ; all the
gambling propensities of human nature were
constantly solicited into action ; and crowds of
individuals of every description — the credulous
and the suspicious, the crafty and the bold, the
raw and the experienced, the intelligent and the
ignorant ; princes, nobles, politicians, placemen,
patriots, lawyers, physicians, divines, philo-
sophers, poets, intermingled with women of all
ranks and degrees (spinsters, wives, and widows)
— hastened to venture some portion of their
property in schemes of which scarcely anything
was known except the names."
The extent of the speculative rise in prices is
well shown by the following instances of the
upward movement in market prices of five of
the principal mining companies.
lOth December 1824. 11th January 1825.
£/£,£/ & & &
Anglo-Mexican 100 sh. 10 pd. 33 pr. 158 115 125
Brazilian . . 100 10 10s, dis. 66 70 44 pr.
Columbian . . 100 10 19 pr. 82 62 59
Real del Monte 400 70 550—1350
United Mexican 40 10 35 — 155 115 125
The recoil from these speculations was inevit-
able. The country banks, whose advances and
whose issues of notes had both exceeded the
limit of prudence, were among the principal
sufferers. Several London banks likewise failed.
A remark made by Mr. Huskisson, "that we
were within a few hours of a state of barter,"
has often been quoted as showing the severity
of the trial th> country passed through. The
turning point appears to have been in the week
ending Saturday 1 7th December 1825. On that
day, according to a statement made by Mr.
Richards, then deputy governor of the bank,
"whether from fatigue, or whether from being
satisfied, the public mind had yielded to cir-
cumstances, and the tide turned at the moment
on that Saturday night." The greater part of
1826 was a time of considerable depression, but by
1827 the trade and manufactures of the country
had resumed their usual and steady course.
The monetary disturbances of 1836-37 are not
included by Tooke among the memorable com-
mercial crises (History of Prices, iv. p. 269).
" It was confined in a great measure to two
branches of trade, the American and East Indian
including China. The bank raised its rate of
discount to 5 per cent, and laid some restric-
tion upon the bills of the American houses, who
were notoriously overtrading. But for purposes
CRISES, COMMEECIAL AND FINANCIAL
459
of trade generally there was no want of accom-
modation ; and the utmost rate that was heard
of was 6 and 7 per cent for fair commercial bills
of moderate length. And, with the exception
above mentioned, there was depression in the
prices of produce. " The derangement of trade
in 1836-37, as well as that of 1839, appears to
have been but slight.
Of a far different character was the crisis
of the year 1847. As was the case before
the crisis of 1825 came on, a considerable
period of speculative activity, fostered by a
low rate for money, preceded this crisis also.
Another circumstance has to be noticed. The
bank act of Sir R. Peel came into operation
2nd September 1844. The automatic arrange-
ment for the management of the note circulation
which that act introduced took away from the
directors alike any power or any responsibility
for the "regulation of the currency" so far as
this consisted of their notes. This responsi-
bility being removed, the old arrangement by
which a fixed or nearly fixed rate of discount
was usually charged passed away as well. The
demand for money being extremely slack at the
time, a charge of 4 per cent, as their rate then
was, had kept the bank entirely out of the
market. On 5th September 1844 the rate was
lowered to 2| per cent for first-class bills, with
not more than ninety-five days to run, and to
3 per cent for notes. 13th March 1845, the
rate was placed at 2^ per cent, both for bills
and notes, a lower rate than had ever been pre-
viously charged. The published rate was also
for the first time stated (March 1845) to be the
minimum rate, and this form of announcement
has been continued ever since. The fact that
the bank competed now, practically for the first
time, Avith the bill brokers in the open market
was a very important factor. The bank soon
became a large holder of commercial bills, and
exercised a gi-eat influence accordingly. ^lean-
while several other causes had contributed to
the stringency of affairs which deserve attention.
Such causes are usually to be traced to reasons
which have been in existence for some time
previously. Previously, both in 1 8 2 5 and 1847,
considerable reductions had been made in the
interest paid on the public funds. This had in
1825 the eff"ect of turning people's minds to
foreign investments. In 1847 speculation was
chiefly directed to the development of railways
and other improvements at home. "In social
and financial interest and importance railways
far surpass the other agencies of transport. The
creation of the present century, they have con-
Itributed largely to promote its special character-
istics." Prof. Bastable, Public Finance, London,
1892, bk. ii. ch. iii. § 12. Up to 1846 their
progress had been slow.
The amounts which parliament had authorised
railway companies to raise are given in Porter's
Railway Capital
Yearly
Average.
£
£
In four years 1826-29
3,267,000
817,000
,, „ 1830-33
8,629,000
2,157,000
„ 1834-37
43,522,000
10,880,000
„ „ 1838-41
14,458,000
3,614,000
In two years 1842-43
9,173,000
4,586,0U0
lu one year 1844
17,870,000
17,870,000
„ 1845
60,824,000
60,824,000
„ 1846
132,096,000
132,096,000
The enormous increase in this class of expendi-
ture, after 1841-43, explains of itself gi'eat part
of the monetary difficulties which succeeded.
Tooke gives (^History of Prices, vol. iv. p. 314)
an estimate of the actual outlay on labour and
materials of railways about this period which is
very instructive.
Estimated Outlay on Labour and Materials
(Railways).
1841 . . . £1,176,000
1842 . . . 2,384,000
1843 . . . 3,548,000
1844 . . . 4,880,000
1845 . . . 11,280,000
1846 . . . 29,188,000
1847, first half-year 20,560,000
After an outlay which in the first half of
1847 had been nearly two-thirds of the whole
of that in 1846, this class of expenditure was
sharply arrested. The eff"ect of these diff"erent
operations — (1) a sudden immensely increased
outlay of capital on fixed investments ; then
(2) an even more sudden and sharp stop put to
this outlay — on the business of the country may
be well understood. Meanwhile, simultaneously
with this double derangement to the ordinary
course of transactions, a wild speculation in rail-
way stocks went on.
Some idea of this may be obtained from a very
careful paper read before a meeting of the Sta-
tistical Society, January 1847, by Mr. Dawson.
"Between March and September 1845 joint-
stock speculations for the immediate investment
of capital were set on foot, involving a larger
aggregate amount than had ever before been so
involved in this country. The amount to raise
which, for railways alone, the sanction of parlia-
ment was actually applied for in the following
session, exceeded £340,000,000 sterling. And
if we include all the new schemes in which scrip,
or letters of allotment, were actually selling in
the market at a premium in July, August, and
September 1845, the amount cannot be esti-
mated at less than £500,000,000.
"Many of the schemes of 1845 reached a high
premium within a few weeks after their issue ;
and all those first in the market, and having
any substantial merit, were raised considerably
above their true value. For instance, the
Leeds and Thirsk Railway — £50 shares, with
only a deposit of £2 : 10s. paid — were selling in
March at £3 : 10s., in September at £23 : 15s.,
and in November at £4 : 15s. per share. Again,
460
CRISES, COMMERCIAL AND FINANCIAL
the Bolton, Wigan, and Liverpool — £40 shares
with £4 paid — were selling in January 1845
at £4 : 10s. ; in September at £42 : 15s. ; and
in December, when £9 had been paid, at £20
per share. If we assume an average premium
of £10 per cent upon the schemes then in the
market, the property temporarily created by
these speculations (and the repeated purchase
and sale of which, on commission, furnished
profitable employment to some thousands of
brokers) must have been at least £50,000,000.
"And to this there is to be added an increased
value, during the same period, of the shares in
the established lines of railway. For instance :
"The Midland stock— amount £4,180,000
— was selling in January 1845 at 114 per cent,
and in July at 188 per cent ; showing a rise
of 74 per cent, and an increase in the aggre-
gate value of the stock of £3,098,000.
"The Great Western — share capital issued
£8,100,000— £100 shares selling in January
1845 at £156 ; and in July at £228 ; and
(allowing for a call at £5 per share in the
interim), showing a rise of 67 per cent, and an
increase in the aggregate value of the shares of
£5,467,000.
"The Manchester and Leeds — share capital
£4,660,000 — £100 shares selling in January
1845 at £126 ; and in August at £215 ; show-
ing a rise of 89 per cent, and an increased
value in the aggregate of £4,147,000.
"The average increase in the value of £100
shares in these three lines was £76 ; and the
total increase of value in August and September
was upwards of £12,000,000."
Mr. Dawson continues: " It will be seen, on
reference to the tables, that during those
months in which the purchases and sales of
railway property were most numerous and
extensive, while everybody, was buying and
selling shares, and the current rate of interest
was only 2^ per cent, that portion of the
circulating medium which consisted of Bank of
England notes was but very slightly, if at all,
increased ; and that it reached its greatest
amount when the prices of shares were lowest —
when the number and amount of current
transactions were reduced to the lowest point
by discredit, and when the current rate of
interest for first-class bills had risen from 2-J- to
4^ per cent."
These last remarks of Mr. Dawson's refer to
an important point connected with this crisis —
the first authoritative suspension of the bank
act of 1844, and also, incidentally, to the
question of the connection between the circula-
lation of notes and periods of commercial crisis.
Reference will be made to this further on.
Meanwhile other complications occurred.
The failure of the potato crop in 1846
caused the need for a heavy importation of
corn. "The price of corn was very high in
1847, the average in May being 92s. lOd. per
quarter, but the imports rose in proportion.
In the three years from 1845 to 1847 they
were as follows :
1845
1846
1847
Wheat
Cwts.
8,777,140
945,864
241,667
Cwts.
6 207 894
Cwts.
11 fin sn?i
Wheatmeal and Flour
Maize
3,190,4291 6,329,058
18,024,883 lift 'ifi'i lO'l
r ' ' 1
The corn merchants, who for some time had
great difficulty in obtaining advances upon
cargoes in consequence of the high rate of dis-
count, lost immense sums from the great fall
in prices which took place, owing to the pro-
spect of an abundant harvest. And the result
was the failure of many houses in the com
trade, which became the signal for other heavy
bankruptcies. Several banks succumbed, and
credit was severely shaken" (L. Levi, History
of British ComTnerce, p. 310).
The fluctuations in the rate charged by the
bank were very considerable, and were the more
noticed at the time as nothing exactly similar
had ever occurred before.
On 1st January 1847 the notice of 27th
August 1846, fixing the minimum rate at 3
per cent per annum on 95 days bills, was still
in force.
1847. Per cent.
14th Jan. 3^ minimum on 95 days bills.
21st „ 4
8th April 5 ,,
15th ,, 5 omitting all stipulation as to the
term of the paper.
2nd Aug. 5 on 1 month bills ; 5^ on 2 months ;
6 per cent above 2 months.
5th ,, 5^ minimum rate.
2Qd Sept. 5 on loans till 14th Oct.
23rd ,, 5^ on 2 months bills ; 6 per cent on
3 months,
1st Oct. 5^ on everything falling due before
14th Oct., and total refusal to
advance on public securities.
25th „ 8 minimum rate under authority oi
the government letter of this date.
22nd Nov. 7 minimum rate.
2nd Dec. 6
23rd ,, 5 „
1848.
27th Jan. 4 ,,
The announcement of 1st. October that no
advances would be made on public securities
produced (see Economist, 9th October 1847) a
severe panic on the stock exchange. There
was no failure of a bank, however, except
that of Cockbums and Co. of Whitehall, tiU
13th October, when Knapp and Co. of Ai3ing-
don suspended payment. On 18th October
the Royal Bank of Liverpool stopped ; before
23rd October other important banking failures
took place at Liverpool, Manchester, Newcastle,
and in the West of England. 3 per cent consols,
which had stood at 84^ on 5th October, were
CRISES, COMMERCIAL AND FINANCIAL
461
by this time 77|, the lowest point, and a total
suspension of all business and all payments was
imminent. The reserve of the bank was reduced
to a very low ebb.
1847.
Reserve of Specie
16th Oct.
. £3,070,000
23rd „
1,990,000
30t]i „ .
1,600,000
Meanwhile the anxiety and alarm prevailing
were causing a general hoarding of coin and
bank notes, and it really appeared not unlikely
that the banking department of the Bank of
England might be compelled to stop payment
while there was more than £6,000,000 of specie
in the issue department. The chancellor of the
exchequer (Sir C. Wood, afterwards Lord Halifax)
was urged by many deputations and remon-
strances to relax the bank act, but he declined.
At last, on 22nd or 23rd October, some of the
leading city bankers had an interview with
the prime minister (Lord John, afterwards Earl
Russell), and on their explaining the necessities
of the position, the desired relaxation was given.
The official letter (25th October) recommended
"the directors of the Bank of England, in the
present emergency, to enlarge the amount of
their discounts and advances, upon approved
security." A high rate, 8 per cent, was to be
charged, to keep these operations within reason-
able limits ; a bill of indemnity was promised if
the arrangement led to a breach of the law.
The extra profit derived was to be for the bene-
fit of the public. No really adequate reason
has ever been given for this last stipulation,
unless it is supposed to have been made to pre-
vent the bank from maintaining the extra rate
unduly long.
The effect of the government letter in allay-
ing the panic was complete. When anxiety as
to obtaining bank notes or gold was removed,
the immediate pressure shortly disappeared.
Speaking in the House of Commons, during the
debate of 30th November on this subject, the
chancellor of the exchequer (Sir C. Wood)
stated that the tenor of the remarks made by
those who applied to him was ** Let us have
notes" . . . **We don't mean indeed to take
the notes, because we shall not want them ;
only tell us that we can get them, and this will
at once restore confidence."
The space which can be allowed here to this
subject does not permit further details being
given. It should be observed that the earlier
crises than the last one mentioned here, that of
1847, weie all so greatly influenced by the
highly artificial condition both of trade and
credit, caused by the terrible wars of the com-
mencement of the century, that the lessons to
be drawn from them are, comparatively speaking,
inapplicable to the business circumstances of
the present time. The commercial histories of
that period, including the admirable one con-
tained in Tooke and Newmarch's History oj
Prices, are fuU of remarks on the questions how
far the crises were brought on, or increased in
severity, by the issues of notes made by the
country bankers at that period. That those
banks em^iloyed their own credit frequently
unwisely there is no doubt, and equally that
they frequently gave credit unwisely to traders
on inadequate security. Notes were at that
date the recognised medium in which advances
were made ; and that there was by all banks,
including the Bank of England, at times an
over-issue of the circulating medium may be
conceded. It is, however, matter for fair dis-
cussion whether any statesman nowadays would
have arranged the bank act of 1844 on the
principles of Peel, or whether it is advisable to
concentrate the whole of the issues on one bank,
however powerful and well-organised.
Commercial crises may take place without any
reference to the circulating medium, as has been
exemplified in Hamburg and elsewhere. They
can only be averted or mitigated by the judg-
ment of those with whom the guidance of com-
mercial affairs and of the banking institutions
of the country rests at the time.
[The periodicity of crises has frequently been
noticed. Mr. Wm. Langton, in his paper " Ob-
servations on a Table showing the Balance of Ac-
count between the Mercantile Public and the Bank
of England," Trarisactions of Manchester Statis-
tical Society, 1857-58 (reprinted also in the
Transactions, 1875-76, Appendix), has made
valuable remarks on the subject. — Mr. John Mills
("Paper on Credit Cycles," Transactions of the
Manchester Statistical Society, 18(37-68), has shown
the connection between these periods and the vari-
ations of personal feeling. — Also paper by H.
Chubb [Statistical Society Journal, June 1872),
"Bank Act and Crisis of 1866.— Prof. Jevons
{Investigations in Currency and Finance, pp. 153,
203-8), has shown, with his customary ingenuity of
research, that the period of credit cycles and of the
solar cycles of maximum intensity coiTespond
with considerable exactness. The frequent recur-
rence of periods of excitement and depression in
monetary and commercial matters is likewise re-
ferred to by Mr. James Wilson, Fluctuations oJ
Currency, Commerce, and Mamifacture, referable
to the Corn Laws. We must be careful not to
yield to the belief that post hoc is identical with
propter hoc in these matters ; but this subject is
eminently one in which careful historical investi-
gation may be expected to produce useful and
practical results. For earlier history, Macpherson,
Annals of Cominerce (4 vols. London, 1805). —
Anderson, Origin of Commerce (4 vols. London,
1801). — Select Tracts on Commerce and Early
Tracts on Commerce, reprinted and edited by
J. R. M'Culloch, 1856-1859, may also be con-
sulted.— Max Wirth, Geschichte der Handelskrisen,
Frankfurt am Main, 1891. — D. Morier Evans,
Commercial Crisis, 1847-48 (published 1848).—
D. Morier Evans, Commercial Crisis, 1857-58
(published 1859). — C. Juglar, Des Crises Com-
merciales, Paris, 1889.]
462
CRISES, 1857-1866-1890
CRISES, 1857-1866-1890. The early panics
of the present century having been described
above, our attention will be confined here par-
ticularly to the events of 1857, 1866, and 1890.
One of the most remarkable and instructive
facts is negative, viz. that there has been really
no panic in England since 1866. The* differ-
ence between the events of that year and what
occurred in 1890 will be explained later on.
It was formerly regarded as almost a law of
nature that a crisis should arise every ten years
or thereabouts, and the years 1825, '37, '47, '57,
and ' 6 6 confirmed this impression. But since the
last date, with the exception of some alarm in
1878 (when the City of Glasgow and the West
of England Banks collapsed under circumstances
calculated to cause such disquietude as would in
former times have caused alarm if not panic),
though there have been many changes in busi-
ness, and a huge development of trade, we had
no crisis until November 1890. This last crisis
differed much from previous disturbances of
credit. In former times alarm was diffused
over the whole kingdom ; London was drained
of its reserves to fill up the wants of the country,
and the imprudences of banks having caused or
aggravated alarms, there was a general uneasi-
ness in the banking world and a consequent
increased holding of cash, and an indisposition
to grant assistance to the trading world. But,
on this last occasion there was no general
alarm in the country. Banks outside London
were hardly sensible of the crisis, and even in
London there was no panic except in Capel
Court. No bank failed in town or country,
and no suspicion of danger to banks seems to
have existed amongst their customers. Some
great issuing houses lost their position, and
narrowly escaped suspension. Enormous losses
fell on the public, but not on banks, except
indirectly. It was not a panic as involving
general alarm amongst the public, but a crisis
in special directions, which might easily have
extended, so as to have caused such a panic as
never yet has occurred in any country. The
danger was prodigious, but it was averted.
In former crises the danger was not averted,
and things were allowed to drift, so that great
houses and banks failed, and general alarm
ensued. In this case, no great house suspended,
though Barings, one of the greatest of all, went
into liquidation. Instead of a huge lock up of
mercantile capital in unpaid documents, busi-
ness was carried on without any serious incon-
venience to any one ; and it may be fairly said
that, for all practical purposes, nothing was
known of the crisis in the country at large,
until all was over.
In some respects all crises are alike, inas-
much as all such events arise from what
is called an "abuse of credit." But that
abuse may take various forms. Sometimes
the vagaries of banks in lending enormous sums
without any security that can be realised, have
caused the trouble. At other times, as for
instance in the case just referred to, great
investments by the public in stocks which are
worthless, or much depreciated, have had a
similar effect in arousing exaggerated alarms.
The causes varying, the results also vary much.
Of course, if the errors of banks start the
anxiety, it is natural that other banks should
feel the effects more than merchants who have
nothing to do with the matter, except that
they suffer for the mistakes of others. If, on
the other hand, as in 1890, mercantile impru-
dence originated the mischief, then, most natu-
rally, mercantile credit is affected more than
that of banks, who may suffer, but not
deservedly.
A glance at the peculiar features of the
several crises above mentioned will illustrate
what has been here stated, and will bring out
more clearly those resemblances and differ-
ences which tend to throw light on the whole
subject.
It is not very easy to define how far credit
may extend safely, but it is very clear that
during the years 1855 and 1856 the extension
of credit was enormous and dangerous. It has
been somelJimes asserted, though there is no
way of testing the truth of the assertion, that
during the years in question there were as many
bills offered for discount in Lombard Street as
there are now, though the real volume of trade
has vastly increased since 1857, the total of the
imports and exports being unitedly £311,764,000
in 1856, and £748,944,000 in 1890. In those
times it was a common thing for banks in
manufacturing districts to send great masses of
bills to London for rediscount, i.e. bills taken
by the banks, but which they were unable to
hold to maturity from their own resources.
The amount of this business in 1856 and 1857
was enormous, and even after the panic of that
year, when many bills came to an end by failures
of traders and of bankers, the amount of redis-
counts by banks continued to be very large.
But, at this moment, that business has almost
come tc an end. It was much reduced after
1866, and it is now confined within narrow
and perfectly legitimate limits. In fact most
of the banks which in 1857 were borrowers in
London are now large depositors there.
Those who are too young to remember 1857
would not find it easy to imagine the condition
of things which then existed. The reserve of
the Bank of England may be said to have been
continually at danger point (the amounts in
the autumn of 1857 are given in the table that
follows), although the daily transactions in
Lombard Street were large and important.
The demands were often heavy, as we have
said, but the reserve was miserably small. It
was a common thing for the largest operators in
bills to keep practically no reserve whatever,
CKISES, 1857-1866-1890
463
and to depend on application to the Bank of
England for the supply of their wants. The
average rate of interest paid on loans and dis-
counts was very high, and though it is true that
no prudent trader was ever killed by interest
paid on borrowed money, it is clear that in a
condition of things when traders generally were
large borrowers, the existence of a very high
rate of discount was one of those circumstances
which combined to create an electrical and ex-
citable condition in men's minds, so that alarm
and panic were very liable to supervene.
The immediate cause of panic is of course the
fear on the part of borrowers that they will not
be able to secure what they need, accompanied
by a fear on the part of lenders of giving what,
in ordinary times, they would grant with
pleasure. This fear arises in different ways on
different occasions. It may be caused by heavy
failures making even the solvent anxious as
to their future, for all traders have payments
for which they must provide. Or it may arise
from the condition of the Bank of England, as
her accounts are periodically published, and
are supposed to tell all the world what may be
expected as to borrowing and lending. How-
ever small may be the reserve kept by other
operators, "the bank " is expected to be ready for
every emergency, and if her reserve should be
depleted, every one gets alarmed and desires to
provide without delay against a very uncertain
future. So it comes about that adverse ex-
changes combine with internal alarms to reduce
the surplus notes of the bank, and this condi-
tion adds to the demands upon her just when
she is least able to meet them. Under our
system, however great the pressure, she cannot
take a sovereign from her issue department.
The gold held there is as sacred as if deposited
at Westminster in the custody of the govern-
ment. The bank, therefore, raises the rate of
interest, so as if possible to attract gold from
other countries. That movement cannot oper-
ate at once, but the fact of her taking such
action is quickly effective in increasing alarms
outside. Demands increase still more, so that
the bank has recourse to restrictions in one
form or another — restrictions which only
aggravate panic, until at last the bank must
either collapse as a bank, and cease to make
advances, or must obtain extraordinary powers,
so that she may allay alarm by a greater
freedom in her operations.
So marked has been the influence of these
considerations during recent panics, that some
writers have been disposed to attribute our
present liability to these alarms to the change
made in our currency laws in 1844, when the
two departments of the bank were separated,
and the old elasticity of the issues of the bank
was replaced by a hard and fast limit depend-
ent on supplies of bullion. But the answer to
tnia suggestion is very simple, viz. that our
panics before 1844 were probably far more
severe than those which have occurred since,
and that for forty-six years since 1866, with
the same law, we have had no proper panic.
In 1837 the bank was very nearly denuded of
gold, her issue of notes not being restricted,
whereas since 1844 she has never been deprived
of a large reserve in the issue department, a
reserve not available without special authority
from government, but still a reserve which is
available, and has been found ample for every
emergency of modern times. Alike in 1847,
1857, and 1866, a letter from the chancellor
dissipated the panic as by the wand of a
magician. Once remove the fear of a complete
break-down, and panic passes away far more
quickly than it arose. It is astonishing how
soon all real alarm disappears, and business
resumes an ordinary course. High rates of
discount may prevail for some time, but, sooner
or later, they too disappear, and " confidence is
restored, " until a renewal of commercial blunders
or follies brings about a renewal of discredit
and consequent alarm.
The following table shows the rapid change
which arises as soon as the panic has subsided : —
000 omitted in cols. 2 and 3. Figures from nearest return,
1
2
3
4
Gold
Rate of
Tear and Month.;:
Bullion
Reserve
Discount
in Bank.
of Notes.
per cent.
5h
September 4, 1847
£7,374
£4190
October 2, „
7,117
3409
6
November 6, „
7,248
2030
8
December 4, „
9,111
5583
6
January 1, 1848
10,444
7866
5
Septembers, 1857
10,836
6065
54
October 3,
10,078
4606
5i
November 4, „
7,947
2155
8
„ 11, „
6,666
957
10
„ 18, „
6,079
11481
10
„ 25, „
6,784
1918
lO
December 2, „
6,896
2268
10
January 6, 1858
12,113
7089
8
March 7, 1866
13,151
7416
7
April 4, „
13,486
6153
6
May 2,
12,712
4839
6
June 6, „
12,620
2167
10
July 4,
14,148
3336
10
August 1, „
12,932
2412
102
1 £2,000,000 was, under authority of Treasury letter,
12th November 1857, added to the securities in the
issue department, in the returns from 18th November
to 23rd December 1857, both inclusive. The strict
limits of the Act of 1844 were only exceeded in the
returns of 18th and 25th November 1857. They were not
exceeded in 1847 and in 1866. Tradition, founded on a
statement made by the late Mr. William Newmarch,
reports that they would have been exceeded in 1S66 had
not the banks in the city repaid to the Bank of England
every evening, during the worst of the crisis, the notes
which they had drawn out in the day.
S Reduced to 8 per cent 16th August.
464
CRISES, 185V-1866-1890
So far the features of both the panics now
under consideration are very similar. The
difference is more one of detail than of principle.
In both there was the high rate of discount
following adverse exchanges, and great demands
for accommodation by traders. In both there
was the depletion, more or less rapid, "of the
bank reserve, and finally the heavy failures and
the consequent alarms, ending in a sort of
"stampede" or "sauve qui peut," if one may
use such expressions in this place. In neither
case did a single solvent firm succumb, though
in both cases, and especially in 1857, more than
one solvent house escaped as by a sort of
miracle.
Of course the panic of 1866 was marked by
the great failure of the almost historic house of
Overend, Gumey, & Co., and by that memor-
able "Black Friday," when it seemed likely
that confidence might be utterly lost, whereas
in fact it was maintained in a truly astonish-
ing way. Lombard Street was given over
to an excited crowd who did not, however,
withdraw their deposits, if they had any, and
the day passed off with most trifling results
as compared with the fears that pervaded the
minds of many experienced persons. But the
panic of 1857 was in one way more striking and
more serious than that of 1866, inasmuch as it
was as widespread in America as it was in the
United Kingdom, and in fact began in New
York. But these differences are not of first-rate
importance. The grand distinction between
the two panics is that already mentioned, viz.
that in the former no warning was taken, and
the panic was followed in a few years by another
equally severe, while, in the latter case, the
lesson seemed to have been taken to heart, the
excessive credit was cut down, and the era
of panics seemed to have passed away. Why
this should be so is not very clear. Some say
that the disappearance of Overend, Gurney, &
Co., and their friends is one great cause of
the change. Without refusing to give some
weight to this fact, it is difficult to suppose
that this can be the only cause of so remarkable
a contrast. It seems more rational to say that
the tremendous lessons of 1857 and 1866 were
not lost on the financial or the mercantile world,
and that, as a result, credit has been maintained
on a far sounder footing than in former years.
This confidence in our present position was,
it is true, somewhat rudely shaken during the
year 1890. As already stated, although we
were not visited by an old-fashioned panic, the
events of 1890 bore no small resemblance to
those of former years, and, but for much judg-
ment and skill displayed by the directors of
the Bank of England, the crisis of 1890 might
have easily ended in failures and panic far more
serious than those of any former years. It is
probably quite true that the tremendous lessons
of 1857 and 1866 were not lost on the financial
or the mercantile world, and that credit was
maintained on a comparatively sound footing
for many years. There has been abundance
of enterprise since 1866, but those who have
been familiar with the money market for thirty
years will, we think, agi-ee that a much larger
proportion of business is now transacted on a
cash basis, and without recourse to credit, than
was possible a quarter of a century ago. But
though this is so, and, in ordinary business,
there may be less danger of "abuse of credit"
than there was when the country was much
less " capitalised " than it now is, the very
abundance of means may have given rise to
an inclination towards excessive confidence, as
if the capital available for loans of all kinds
had no limit. This feeling may also have been
intensified by the great accumulation of capital
in the hands of "trusts" or "investment com-
panies" eager for profit, and not always so
much alive as are individuals to the danger of
great mistakes.
But, probably, the most important distinction
which marked the position of 1890 as compared
with 1857 and 1866 will be found in the con-
dition of the Bank of England. When alarm
began at the latter end of- October 1857, the
reserve of the bank was under £5,000,000,
and at the end of April 1866 it was under
£6,000,000. In one day in 1866 £4,000,000
left the bank in notes and coin, in consequence
of the failure of Overend, Gurney, & Co.
Such a position was dangerous, and the publi-
cation of such returns, combined with the rais-
ing of the rate of discount to nine and ten per
cent, was sure to aggravate alarms. But in
1890 the reserve stood at £14,500,000 when it
became known that the great house of Baring
had gone into liquidation, and that its liabili-
ties would be paid by the bank. The position
of the bank being so strong, and it being known
or rumoured that the action of the bank was
approved and supported by the government,
panic did not arise, except as to the price of
securities directly affected by this great failure,
or by failures in America, and no mercantile
disaster of the least consequence occurred, nor
was the rate of interest charged on discounts
excessive. In fact, there was no general dis-
credit. Of course there was uneasiness, it being
known that other houses must have lost heavily
through South American complications, but
banking and other business went on as usual,
and prices of produce were not seriously affected.
There were none of the usual symptoms of
panic, except in the Stock Exchange, and the
contrast to those who had lived through 1857
and 1866 was very remarkable. In those years
people feared that the bank would be unable,
without an increased power of issue, to deal
with the emergency, and it was never absolutely
certain when, if at all, the government would
i come to the aid of the bank. In 1890, thanks
CRISES, 1857-1866-1890
465
to the forethought of the bank in providing
herself with an addition to her bullion by a
loan, her position was so strong at the critical
moment as to prevent the occurrence of any
general alarm. Men did not rush to supply
themselves with money one day, in fear that
they might find it difficult to procure it on the
following day, but attended to their businesses
without excessive anxiety as to the supplies of
capital. Caution prevailed, but not panic, and
the distinction is a very clear one.^
As to the effects of crises and panics, there is
perhaps but little to be said. It has been already
pointed out that trading people soon recover
their spirits and their confidence when the panic
is once well over. So it comes to pass that
prices which, before and during panics, have
been in some instances severely depressed, quickly
rise to their former level, and men cease to con-
sider the money market in their dealings, being
no longer afraid of monetary trouble as to the
discount of bills, or otherwise. The statistics
of our trade seem to confirm this view. Spite
of panics, our aggi-egate trade has gone on in-
creasing, with fluctuations no doubt, but not
with fluctuations which seem to point to panic
as the great disturber of our commerce. We
have had divers "depressions" in trade, often
very difficult to account for, and they are gener-
ally followed by improvement and even specu-
lation, often little expected, and arising no one
knows why. But certainly, in recent years,
neither depressions nor elevations can be traced
to the eff'ects of panic. Vast changes have
taken place, thanks to "many inventions," and
prices have fluctuated beyond all precedent
without any very marked oscillations in credit.
The supply of loanable capital since 1866 has
been, on an average of years, ample, and this
has no doubt lessened the tendency to panic
amongst traders generally. But there have
been these great fluctuations although the
money market has been so stable, and this
recent experience tends to confirm the opinion
1 The contrast of the three great crises with reference
to the reserves of the bank in its banking department,
is shown by the following Table.
Notes in reserve in the Banking Department of
the Bank of England.
1857.
1806.
1890.
£
£
£
Oct. 3
4,606,000
April 11
6,317,000
Oct. 15
10,275,000
., 10
4,024,000
„ 25
5,844,000
„ 29
10,600,000
.. 17
3,217,000
May 9
4,950,000
Nov. 12
10,024,000
„ 24
3,485,000
„ 16
730,000
„ 19
13,378,000
» 31
2,258,000
„ 23
830,000
„ 26
15,309,000
Nov. 4
2,155,000
„ .30
415,000
Dec. 10
15,904,000
» 11
957,000
June 6
2,167,000
,. 17
15,797,000
„ 18
1,148,000
„ 20
4,067,000
„ 24
14,205,000
„ 25
1,918,000
July 4
3,335,000
Dec. 2
2,268,000
„ 18
2,498,000
,. 9
3,900,000
Aug. 1
2,412,000
» 16
5,757,000
„ 15
3,611,000
» 23
7,426,000
„ 29
5,833,000
[For returns from 18th November to 23rd December
1857, see note 1, p. 463.]
VOL. I.
that we should not attribute much permanent
effect to the panics of former periods. No one is
likely to forget the temporary effects of a panic
if he has lived through one, but, as to perman-
ent results, panics are probably not important.
But panics in the United States have been very
severe. The sharpest were in 1837, 1857, 1873,
1893 and 1907. The closing months of 1907
were marked by an outburst of widespread and un-
reasoning alarm, and by the suspension of cash
payments by many of the 16,000 banks of the
country. Cash could not be obtained, and the use
of an emergency currency of cheques guaranteed
by the Clearing Houses, estimated at upwards of
£100,000,000, was required. The crisis beganin
New York connected with two of the National
Banks and continued with two of the Trust com-
panies. (-fifeo^.i/bwrTi., London, 1908, "The Ameri-
(3a.n Crisis of 1907"; Quart. Journ. of Econ.^
U.S.A., 1908, "Hoarding in the Panic of 1907.")
It is interesting to observe that countries
where panics are rare, as France and Germany,
do not appear to make greater commercial pro-
gress than England and the States, where panics
have been, comparatively, not infrequent.
In fact, in countries of great enterprise, and
where credit attains a great development, it is
obvious that there must be a danger of undue
expansion followed by excessive alarms. Such
people use up their means too closely, no doubt,
but, on the other hand, they do far more busi-
ness and acquire far larger profits from their
enterprise than can be secured by people who
are no doubt more prudent, but are less ener-
getic. The very prudent nations escape panic,
but they at the same time must accept a smaller
return on their capital. They no doubt keep
larger reserves than less cautious traders, but
such reserves are expensive to maintain, and it
may be well doubted whether in the long run more
is not gained by the more enterprising peoples,
even though they may subject themselves to oc-
casional alarms of a serious and painful nature.
The general result seems to be that, however
remarkable the phenomena of crises may be,
they are not of great permanent importance,
nor are they to be regarded as an inevitable
consequence of an active and enterprising con-
duct of business. They are really spasmodic
symptoms, and not symptoms of any serious and
continuous disease which has to be brought
under some legislative remedy. They illustrate
the results of a temporary suspension of the
laws which regulate the ordinary currency of a
nation when confidence between man and man
is lost, but events so exceptional defy regula-
tion, and the cure for such evils will probably be
found rather in the practical good sense of men
of business than in any expedients invented
by ingenious law makers.
It has, however, been suggested that some
kinds of legislation may aggravate panic ; as,
for instance, the law of the United States of
2 H
466
CRISES, PERIODICITY OF
America as to banlc reserves, and our own law
as to the issues of the Bank of England. We
certainly think that the experiences of 1847,
1857 and 1866 (to say nothing of 1890), show
that such a law as ours, which gives no power
of expansion to the bank, as such, no matter
how grave may be the emergency, is one of
very doubtful wisdom. It would, we believe,
be far more reasonable to adopt something like
the plan adopted by the German Bank law of
1875, whereby the bank can issue beyond the
usual limit on paying at the rate of 5 per cent
per annum to the government on all extra-
ordinary issue, as a sort of penalty — an arrange-
ment which ensures a reasonable charge to the
public on such extra issues, and thus compels
contraction of obligations by a sort of automatic
process. Panic is thus avoided, while a whole-
some warning is extended to the trading world,
and the money market is brought under the
rule of law, and is not, as with us, dependent
in the worst times on the caprice of a Chan-
cellor of the Exchequer, who may be a man
ignorant of the dangers and difficulties of com-
merce, or who only knows them vaguely, as set
forth in the books of mere theorists. w. f.
CRISES, Periodicity of. In the world of
physics the idea of "periodicity" of "cycles"
is familiar. The twenty-eight years period of
the sun is a simple illustration of a regular
cycle.
The recurrence of commercial crises over a
century, at intervals of ten or twelve years, has
been frequently noticed by economists, and the
suggestion made that possibly the physical law
which, every ten or eleven years, brings good
vintage years to Europe and droughts to India,
may control the commercial fortunes of men.
An enumeration of recorded years of acute com-
mercial distress— 1753, 1763, 1772-73, 1783,
1793, 1815, 1825, 1836-39, 1847, 1857, 1866,
1878, 1890 — suggests periodicity. Duringthese
140 years trade and banking have been carried
on in war and peace, with a silver standard, with
a gold standard, under a suspension of cash pay-
ments, in times of plenty, and in times of want ;
but the fatal years have come round with a
considerable approach to cyclical regularity.
While admitting that the commercial crises
to which this generation has been exposed have
been less acute than those which afflicted the
close of the last and the beginning of the
present century, the fact of their recurrence
in something like periodicity remains — a fact
which it is easier to record than to explain.
Space only permits a statement of some of the
more important crises, with a reference to works
from which fuller information may be derived.
To commence with the beginning of this
century, the question of the periodicity of cycles
is discussed by Henry Thornton, whose well-
known sagacity caused him to be greatly con-
sulted on financial questions by William Pitt,
in his work, An Enquiry into the Effects of the
Paper Credit of Great Britain, 1802. Thornton
speaks of the crisis of 1793 as the first material
one of the kind which had for a long time
happened. He points out that the panic greatly
abated, and mercantile credit began to be re-
stored, so soon as the intention to issue ex-
chequer bills was announced. He also mentions
as worthy of notice that, though the failures
had originated in an extraordinary demand for
gold, it was not any supply of gold which
eflfected the cure, but the idea of general solvency
which was created by the promised issue of
exchequer bills (pp. 49-51). He further men-
tions (p. 152) that the fluctuation in the balance
of trade with foreign countries which we ex-
perience had also become larger than heretofore,
in consequence of the greater extent of our
population and commerce. "The scale of all
things having increased, the scale of this balance
may have increased also in a degree unexpected
by the bank."
Tooke, in his History of Prices, vol. i. p. 176,
gives a clear account of the progress of events
leading up to the disasters of 1793. Tooke
states that immediately preceding that crisis
a great revulsion and derangement of commercial
credit had occurred, due to a pre-existing and
undue extension of credit and paper circulation.
In vol. ii. p. 5, in discussing the causes which
led to the discredit of 1816, he explains that
the speculation in exported commodities, which
had its first rise in the prospect of the down-
fall of the power of Napoleon I. in Europe,
reached its height in the spring of 1814, and
that the tardy discovery that the effective de-
mand of the continent had been over-rated pre-
cipitated the crisis of 1815-16.
The causes of the crisis of 1825 are discussed
by Tooke (vol. ii. pp. 149-159). In 1822, the
British 5 per cent had been reduced to 4 per
cent ; this had led to a general restlessness
among those whose incomes were reduced, and
a readiness to invest in foreign loans, the
principal borrowing states being South Ameri-
can. The South American loans ultimately
entailed a loss of nearly the whole of the sums
subscribed. The exaggerated views of coming
prosperity allowed full scope for an undue
enlargement and abuse of credit.
The panic of 1836 is fully described by Tooke
(vol. ii. p. 274). It is noticeable that whereas
the disasters in 1825 were principally due to
foreign speculations, those of 1835 were due to
home speculations, an undue extension of credit
arising from gambling in shares of railways,
joint-stock banks, etc.
In vol. iv., speaking of the crisis of 1847,
Tooke says : "In August 1845 the specula-
tion assumed all the apparent characteristics of a
mania. Symptoms of an approaching revulsion
were, however, then clearly discernible."
It is noteworthy that the gradual develop- ;
CRISES, PERIODICITY OF— CROME
467
ment and overgrowth of credit indicated by
Langton, Jevons, and Mills, are clearly stated
by Tooke.
A variety of causes brought about the serious
crash in 1847 — railway calls in excess of the
means of the country, high price of corn, etc. ;
but the evidence of a culmination of previously
developing causes is as clear on this occasion as
on the others which have preceded and followed
that date.
Mr. William Langton, of Manchester, speak-
ing of periodicity says (2Vansactions of the
Manchester Statistical Society, December 1857) :
"These disturbances are the accompaniment of
another wave which appears to have a decennial
period, and in the generation of which moral
causes have no doubt an important part. The
prompting cause of these convulsive movements
appears to lie in the inordinate use of credit."
The doctrine of periodicity was held strongly
by Professor Jevons, who carried his investiga-
tions into the subject over a great length of
time, and with his noted ability. In a com-
munication on the study of periodic fluctuations,
British Association 1862 (Cambridge), Jevons
says, "There is a periodic tendency to com-
mercial distress and difficulty during these
months (October and November). It is when
great irregular fluctuations aggravate this dis-
tress, as in the years 1836-39, 1847, 1857, that
disastrous breaches of commercial credit occur."
In elucidation of Jevons's allusion to "great
irregular fluctuations," a quotation from his
paper on "The frequent pressure in the money
market," Journal of the Statistical Society of
London, 1866, vol. xxix. p. 235, may be useful.
" These changes arise from deficient or excessive
harvests, from sudden changes of supply or
demand in any of our great staple articles, from
periods of excessive investment or speculation,
from wars and political disturbances, or other
fortuitous occurrences which we cannot calculate
upon, and allow for. " Still further developing
the notion of periodicity, Jevons {Political
Econx)my, 1878, Science Primers) says, "Good
vintage j'ears on the continent of Europe, and
drougnts in India, recur every ten or eleven
years, and it seems probable that commercial
crises are connected with a periodic variation
of weather aff'ecting all parts of the earth, and
probably arising from increased waves of heat
received from the sun at average intervals of
ten years and a fraction."
The influence of solar radiation, and the
possibility of a relation between the sim-spot
period and the price of corn and other events,
formed a subject of inquiry suited to the exact
and scientific mind of Jevons, For this the
reader may be referred to his Investigations in
I Currency and Finance, in which his detached
I papers are collected, and Letters and Journal of
W. S. Jevons.
The invention of the term "credit cycle" may
be traced to Mr. John Mills of Manchester
(Paper on "Credit Cycles and the Origin of
Commercial Panics," Transactions of the Man-
chester Statistical Society, December 1867).
Mr. Mills discussed the pathology of crises ;
and after alluding to "the occult forces which
swell or diminish the volume of transactions
through a procession of years," thus spoke of
periodicity. "It is an unquestionable fact
that about every ten years there occurs a vast
and sudden increase of demand in the loan
market followed by a great revulsion and a
temporary destruction of credit.
" The periodicity of commercial crises is at
any rate a fact. The decades interposed between
the great commercial crises are normal cycles of
development of credit under certain existing
conditions ; that during each of these decades
commercial credit runs through the mutations
of a life, having its infancy, growth to maturity,
diseased overgrowth, and death by collapse."
Mr. Mills enters into a minute examination of
the life-history of a credit cycle in a communica-
tion made to the Manchester Statistical Society,
Transactions 1871. Four years earlier, in his
paper read before the Manchester Statistical
Society in 1867, Mr. Mills had discussed the
possibility of finding remedies for the periodic
recurrence of commercial panics, in seeking for
which he laid stress on the increased spread of
information. Mr. Mills's anticipation appears
to have been verified in some measure by the
course of events.
[Max Wirth, Geschichte der Handelskrisen,
1883. — Clement Juglar, Des Crises Commerciales
et de leur retour periodique en France, en Angle-
terre, et aux ^tats-Unis, 1889.] g. h. p.
CROMBIE, Alexander (1762-1842), born
at Aberdeen, was for some time Presbyterian
minister, and then schoolmaster, in London.
He was known for his writings on etymology
and syntax, especially for his Gymnasium, a
book of exercises in Latin composition ; but
he wrote also on theology, philosophy, and
political economy. Apart from his books, he
seems to have had a wide personal influence.
Major Torrens dedicated to Dr. Crombie his
Fssay on Money and Paper Currency (1812),
and speaks of him with great deference in the
Essay on the External Corn Trade (1815). In
1813 Crombie published, in the Pamphleteer
(vol. X.) a Letter to David Ricardo containing
an analysis of his pamphlet on the Depreciation
of Bank Notes ; but Ricardo did not regard
him as a perfectly faithful exponent of his
views. Crombie's Letters on the Agricultural
Interest (1816) would seem to have been the
last of his economical writings.
. [Ricardo's letters to Malthus, 1887, Clar. Press,
p. 82, s7/i» dato 21st April 1815.] J. b.
CROME, August Friedrich Wilhelm
(1753-1833), a distinguished German statisti
468
3R0SS DRAWING— CROWN, ENGLISH
cian and economist, was bom at Sengwarden,
in the territory of Kniphausen. He studied
theology at Halle, and was for some time
instructor of the hereditary prince of Dessau.
From 1787 to 1831, he filled the chair of
statistics and cameral science at Giessen, Ho
is called by Roscher the ''Haupt-theoretiker
des Rheinbundes," having persistently defended
that confederation, and maintained it to be "a
liberation for Germany, alike beneficent to
rulers and to the people." He expected that
under its influence a better national economy
would be introduced, founded on the principles
of Adam Smith, "as improved by Soden,
Huf eland and Jakob. " In Deutschland' s Krise
und Errettung im April und Mai 1813, which
appeared immediately after the battle of Liitzen,
just when the national rising against Napoleon
was coming to a head, he attempted to show
by statistical reasonings the madness of oppos-
ing the "great hero," as certain to lead to the
ruin of the fatherland. This publication raised
a storm which was only partially appeased by
his treatise Ueber Deutschland' s und Europa's
Stoats- und National- Interesse bei und nach dem
Congresse zu Wien, 1814. His other principal
works were, Europa's Produkte, 1782 ; Ghriisse
und Bevolkerung der Eur op. Staaten, 1785;
Ueber die Culturverhdltnisse der Europ. Staaten,
1792 ; and Geographische Statistische Darstel-
lung der Staatskrdfte von den sdmmtlichen zu
dem deutschen Staatenbunde gehorigen Ldndern,
1820-1828. He translated into German (1795)
the treatise entitled Govemx) della Toscana sotto
il regno di Leopoldo 11. , 1790, which was the
work of that prince himself. Crome undertook
the translation by Leopold's desire, and, in the
comments which he added, he appears as an
advocate of an enlightened and reforming ab-
solutism, such as that of which the book is a
history. He was also author of an autobio-
graphy. (See Roscher, Geschichte der Natumal-
Oekon. in Deutschland, p. 649). J. k. i.
CROSS DRAWING. Another term for the
making of an Accommodation Bill {q.v.)
When such an instrument has been wilfully
put into circulation by a fraudulent trader, as
if founded on a real transaction, the nicest
penetration and judgment of experienced busi-
ness men, such as bill-brokers and bankers, will
sometimes be put to the test to discover the
true origin and character of the instrument.
Bills of this description are sometimes termed
"Wind Bills," or "Kites," from their want of
substantial basis.
[Hutchison, The Practice of Banking, vol. i.
p. 125.]
CROSSED CHEQUE. The crossing of
cheques is now regulated by §§ 76 to 82 of
the Bills of Exchange Act 1882 (see Cheques,
Law^ of).
CROAVN DEBTS. Debts due from a subject
to the crown have priority over all other debts.
and may be recovered by the summary process;
known as an extent. Every person who has
money belonging to the crown is a crown debtor.
Formerly, in order to enjoy priority, a crown
debt required to be a debt of record or to be
secured by deed, but since the 32 & 33 Vict. c.
4 6 , which abolished the priority of specialty debts,
any crown debt takes priority to all others.
Crown debts do not affect land until a writ oi
execution has been issued and registered.
[Elphinstone and Clark's Law of Judgments and
Searches, London, 1887. — Prerogatives of the
Crown, by J. CMtty, London, 1820.]
J. E. c. M.
CROWN (English). Gold coin (Henry VIII.
to Charles II.)
..^
Val^eingold
Reign.
Year.
Rat-
ing.
Fine-
ness.
916-6 fine, at
£3 : 17 : 10^
Henry VIII,
tS
an oz.
1627
5/
57-25
916-6
9/3^
Edward VI.
1549
.')/
42-25
883-3
6/2|
James I.
1605
5/
38-725
916-6
"
1605
(Thistle
Crown)
4/
31-00
»
5/Oi
»»
1612
5/6
38-725
„
6/3i
»i »
1612
(Thistle
Crown)
4/4|
31-00
5/Oi
„
1619
5/
38-725
jj
6/3^
Charles I.
1627
5/
35-12
»'
5/8^
Also doable crowns (James I. to Charles II.) and half
crowns in proportion.
Silver coin (Henry VI IL to present time).
if
Value in
Reign.
Year.
Rat-
ing.
1
Fine-
ness.
silver 925
fine, at
^
|5s. 6d.anoz.|
Henry VIII.
1542
(as a kind
of medal)
5/
480-00
925
6/6
Edward VI.
1551
(for cir-
culation)
5/
480-00
»»
5/6
Elizabeth
1601
6/
464-50
5/3|
George III.
1817
(and
subse-
8/
436-36
»»
5/or5-81fr8.
quently)
Also half-crowns in proportion. A crown in white
metal was struck in the reign of James I., but only a
few were issued.
Crown {Scandinavian). The standard of
value, but not a coin, 6-22278 grains of fine
gold. Value, Is. l-215d., 1-389 franc.
Standard Gold Coins.
Denomination.
Weight.
Fine-
ness.
Value in
gold 916-6
fine at
£3:17:10^
an oz.
Value in
gold
francs
(900 fine).
Twenty crowns .
Ten crowns
gr.
138-264
69-132
900
900
s. d.
22 Oi
11 Oi
francs.
27-78
13-89
CROWN LANDS— CRUSADES
469
Silver Token Coins.
Value in
Value in
Fine-
silver 925
standard
Denomination.
Weight.
fine at
silver
5s. 6d. an
oz.
francs
(900 fine).
francs.
gr.
s. d.
Double-crowns .
231-485
800
2 H
2-67
Cromis
115-7425
800
1 1|
1-33
Half-crowns (or
50 ore pieces) .
77-162
600
6|
0-67
Forty ore .
61-727
600
5^
0-53
Twenty-five ore .
37-346
600
3J
0-32
Ten ore .
22-376
400
u
0-13
CROWN LANDS. In Saxon times tlie
king owned three kinds of property in land :
(1) private estate which he could dispose of by
will ; (2) demesne lands that could be alienated
only by consent of the witan ; (3) certain
rights over his folkland. The folkland tended
to become merged in the royal demesne
(Stubbs's ConstitutioTial History, i. ch. vi. § 59 ;
c. vii. § 75), a process that was completed by
the Norman Conquest {Ih. ch. ix. § 95).
From Domesday we learn that the income
from royal lands amounted to £20,000 (Pear-
son's Early and Middle Ages, i. 385). An
important portion of the royal demesne con-
sisted of forests which were exempt from the
ordinary law, and subject to royal regulations
of great severity (Pearson's Hist. Maps, pp. 44-
48; Ellis's Intr. i. 103-116). The crown
was supposed to defray the expenses of the
household, of the administration of justice, and
of the military forces. Though the crown
revenue was greatly diminished by the loss of
the French possessions, it was increased by
marriages and by the dissolution of the monas-
teries. The alienation of the crown lands to
favourites led to the attempts of the barons to
limit the king's power of giving (Stubbs, ch. xvii.
p. 284), and to the passing of various statutes
with the same object.
By the 1 Anne, c. 1, §§ 5-8 ; 10 Geo. IV. c. 50,
§ 127 ; and 1 & 2 Vict. c. 2, §§ 1, 2, the right of
alienation was limited to leases for lives or a term
of years. By the last-mentioned act the crown
surrendered its hereditary revenues (see Rogers's
Economic Interpretation of History, Oxford, 1888,
ch. xix.) The management of the crown lands is
entrusted to the Commissioners of Woods, and is
governed by a series of statutes enumerated in
The Chronological Tahle and Index of the Statutes,
10th ed., Loudon, 1887. See also The Landed
Interest, ch. x., by J. Caird, London, 1878.
The crown, it is said (Chitty, Prerogatives of
tJie Crown, ch. xi., London, 1820), is owner of the
foreshore between high and low water mark in
ordinary tides, imless a grant in private ownership
can be proved, but Moore, in his History of the
Foreshore, London, 1888, maintains that the
theory of the crown's ownership of the jus priv-
atum of the foreshore did not exist until the reign
of Elizabeth, and that its origin is due to success-
ful attempts to extend the prerogative. See also
Hall's Rights of the Crown and the Privileges oj
the Subject in the Seashore, by R. L. Loveland,
2nd ed., London. Some ^vriters also maintain
that the crown owns all land imder the marginal
seas to the distance of a marine league, a view
taken by a minority of the court in R. v. Keyn,
L.R., 2 Ex., D. 63 ; but others deny such a right,
conceding only a right of jurisdiction (see Hall's
International Law, Oxford, 1880).
Forfeited estates formerly vested in the crown
(see 33 & 34 Vict. c. 23), and the crown is
owner of considerable private property in land.
In theory, state lands in our colonies are vested
in the crown, but control over them is vested in
the colonial legislatures. All crown lands, in-
cluding all private lands not disposed of, descend
with the crown. J. e. c. m.
CRUMPE, Samuel (1766-1796), Irish physi-
cian, deserved the prize awarded by the Royal
Irish Academy to his essay On tlie best riieans
of providing Employment for the People, The
causes of Irish distress are ably analysed.
Among the remedies is a bounty on the exporta-
tion of corn (p. 241). The author is prepared
to prohibit the export of wool (p. 303).
F. Y. E.
[Dr. Crumpe's prize essay is described as " an
excellent treatise " ; Malthus, Essay on Popula-
tion, bk. iv. ch. xi. note.]
CRUSADE. A Portuguese gold coin, bearing
the design of a cross. It was current in England
in Queen Mary's reign, and was valued at 6s. 8d.
F. E. A.
CRUSADES, Economic Effects of. The
crusades cover a long period of time, from the
11th to the 13th century, and their early
triumphs were followed by complete and dis-
astrous failure. This long duel between the
west and the east, between Christianity and
Islam, exercised the most profound influence
upon Europe : upon the position of popes,
emperors, and kings ; upon the relations be-
tween church and state ; upon the progress of
literature, education, and art. To the crusades
are due the breaking up of classes and the rise
of nations. No less marked Avas their influence
upon the economic conditions of mediaeval
Europe. The fall of the western empire and
the triumph of the Teutonic invaders had
resulted in the complete separation of the east
from the west, and in the annihilation of that
maritime commerce which had been first in-
augurated by the Phoenicians and developed by
the Greeks. So completely had naval enter-
prise been neglected that the early crusadera
had no alternative but to march overland to
Constantinople and to cross the Hellespont into
Asia. The first result of the crusades was to
revive maritime trade in those countries whose
geographical position fitted them for this,
especially in the Italian coast towns and such
cities as Marseilles and Barcelona. By the
13th century the Mediterranean had become
once more the centre of a world- em bracinij
470
CRUSADES— CULTUKli:
commerce ; from its shores the products of the
east were carried overland to the centre of
Europe, thence to England and even to the
Baltic coasts. The route by the Caspian and
southern Russia, through which a scanty trade
between Asia and Europe had been conducted
in the dark ages, was henceforth almost entirely
neglected.
Next to the development of trade due to the
crusading movements must be ranked the
advance of industry. The products of the east
had to be purchased by those of Europe ; thus
an enormous stimulus was given to manufactures
and agriculture. And not only were the old
industries developed, but many new ones were
actually introduced from the east. From
Greece came the manufacture of silk and the
cultivation of the mulberry. From Tyre the
Venetians learnt the art of making glass, an
industry which they retain still, long after the
days of their decline. The crusaders introduced
from Africa the cultivation of maize and the
sugar-cane. In Damascus they learnt notable
improvements in the working of metals, and
the making of cloth.
The increase of trade and manufactures led
to the growth and rise of towns, one of the
most important results of the crusades. The
greatest immediate profit was reaped by the
Italian cities, Venice, Pisa, Genoa, Amalfi, etc.
Increase of trade and manufactures also brought
wealth to the German towns in the valleys of
the Danube and the Rhine, to the communes
of France, to the trading and manufacturing
cities of Flanders, finally to the north German
towns, which formed the famous Hanseatio
League {q.v.) The traders required protection
from lawless oppression and from piracy. This
was acquired in the north by combination, in
the south by the promulgation of the earliest
codes of maritime law, and generally by the
acquisition of municipal privileges and inde-
pendence. The crusades owed their origin to
the spirit of religion and of chivalry. They
gave the popes a vast increase of secular
authority ; they led to the institution of reli-
gious orders, like the Franciscans, Dominicans,
and Carthusians ; and of the military orders
of the Templars, Hospitallers, and Teutonic
Knights. But their ultimate results were fatal
to the interests which they at first promoted.
The contact with the east gave the first stimu-
lus to the freedom of thought which was
destined to destroy the superstitions on which
rested the religious unity of Europe. The rise
of the burgher class was followed by the rise of
the spirit of nationality — both fatal to the class
institutions of feudalism and chivalry. The
nobles who fought in the crusades were com-
pelled to find money by the sale of privileges
to the towns, of their lands to the highest
bidder, of freedom to their serfs. The social
changes thus produced destroyed the mediaeval
system, and gave rise to those industrial rela-
tions which have been the dominant influence
in Europe ever since.
[Heeren, Versuch einer Entwickelung der Folgen
der Kreuzziige fur Europa (1808). — Adolf Beer,
Geschichte des , Welthandels (1860). — Blanqui,
Histoire de VEconomie Politique en Europe. —
Guizot, History of Civilisation in Europe. — •
Ranke, Weltgeschichte, viii.] b. l.
CULPA. An expression of Roman law ex-
pressing the want of proper diligence. The
Roman jurists distinguished between culpa levis
and culpa lata, and mediaeval writers introduced
a third degree of culpa which they called culpa
levissima. Culpa lata, i.e. gross negligence, was
treated nearly in the same way as unlawful
intention (dolus). In some contractual and
other relations there was no absolute standard
for the degree of diligence required ; the persona
concerned had to give the same amount of care
as they were accustomed to give to their own
affairs. The omission of this degree of diligence
is called culpa in concreto by mediaeval writers.
E. s.
CULPEPER, Sir Thomas, the elder (1578-
1662), author of ^ Tract against the high rate
of Usurie,^lQ2\, which, "presented to the
high court of parliament," conduced to the
reduction of the legal rate of interest from
ten to eight per cent in 1624. The tract was
reprinted with additions in 1641. The author
meanwhile "set forth another treatise to
evince the necessity of reducing money from
eight to six" (preface to the Discourse of Sir
Thomas Culpeper the younger), namely A
TroAt against the high rate of Usurie, 1640
(Brit. Mus., 1093 b. 98). The two treatises
were reprinted together, with a preface, by
Sir Thomas Culpeper the younger, 1688.
F. Y. E.
CULPEPER, Sir Thomas, the younger
(1626-1697), a worthy son of the elder knight,
assailed usury in a Discourse dated 1688.
Thomas Manley, gent., answered this discourse,
maintaining that "as it is the scarcity of
money (and many borrowers) that maketh the
high rates of interest, ... so the plenty of
money and few borrowers will make the rates
low." Culpeper retorted with The necessity of
abating Usury reasserted, 1670. Some other
publications on the same subject are ascribed to
Culpeper (Wood's Athen. Oxen., ch. iv. p. 447).
F. Y. E.
CULTURE, Large and Small. The
question of large or small holdings may be
ta-eated morally, socially, and economically.
Here it will mainly be discussed in the latter
aspect It is the physical formation of a
country which chiefly determines the size of
holdings. It may be laid down as an axiom
that, where the soil and climate are specially
adapted for cereals and sheep, and where the
physical configuration of the country admits of
CULTURE
4^1
large enclosures, there large holdings are the most
productive. On the other hand, where districts
are hilly, the soil rocky, the surface broken,
or where soil and climate are specially favour-
able to permanent grass, there small holdings
are best. It follows that, as a rule, grass
counties have most, and corn counties have
fewest, small holdings. But there are excep-
tions. Near large towns, small holdings will
necessarily pay best. A small holding is a
relative term. It differs in size when the
holding is a market garden, a grass farm, or
an arable land. A man may make his living
off a very small tract of market-garden land,
or off 5 acres of gi-ass. It is doubtful whether
an arable farmer, solely dependent upon the
produce of the soil, and not engaged in any other
profitable occupation, can live on less than 40
acres. All holdings may be considered small
which are 50 acres or under. In England there
were, in 1887, 294,729 small holdings, aggre-
gating 3,559,000 acres. (See Major Craigie on
"Agricultural Holdings," Journ. Stat. Soc,
1887.) In 1913 there were 249,773 small
holdings aggregating 3,581,375 acres, the de-
crease in number being among holdings not
over 20 acres {Agric. Stat. Pt. I., 1914), In
England, small holdings tend to increase.
This increase arises from the fall in the price of
cereals, the diminished cajjital of large farmers,
the growing number of men who combine farm-
ing with other avocations, and also recently
from encouragement by county councils, etc.
Grain, meat, and wool can be produced more
economically upon large farms, Avhile pork,
poultry, eggs, vegetables, are best suited for
small holdings. Fruit-farming is not profit-
able for small farmers, because the initial out-
lay is large, the crops precarious, and the
profits unreliable. In dairying small farmers
enjoy no advantage over large. But in
pigs, poultry, calf-rearing, vegetables, where
minute care and attention secure safe and
quick returns, small farms are economically
preferable to large, and chiefly for these
reasons. While labour has increased in price
and deteriorated in quality, small farmers
hire no labourers and employ the best that is
procurable — their own. Again, the depression
in prices has most particularly affected the
produce of large farms, and has fallen com-
paratively lightly on the produce of small
holdings, which is also of a more varied kind.
The eggs of large farmers are in one basket,
and the bottom has either fallen out or is
rickety. The eggs of small farmers are stored
in several baskets and the bottoms are re-
latively secure. Again, small farmers, selling
direct to consumers, not only feel the fall of
prices less, but eliminate the profits of middle-
men. Lastly, small farmers are under fewer
temptations to extravagance. They are more
frugal and more industrious. They are sparing
of everything except their labour, prodigal of
nothing but themselves. Employing no hired
labour, practising mixed husbandry, rearing
stock instead of feeding them, often enjoying
common rights, doing the work of two labourers
and eating the food of one, small farmers weather
storms which wreck their richer brethren. But
it is a false argument that small farmers are
necessarily more profitable to the community
than large farmers, because the former pay
higher rents. They undoubtedly pay higher
rents ; but they do so because the competi-
tion for holdings of this class is especially
keen, because the expenses ol" buildings, ap-
proaches, hedges, and repairs are far heavier
on small than on large farms, and because the
land devoted to small farms is, as compared
with ordinary agricultural land, what may be
called accommodation land. In point of material
comfort, wage-earning labourers in constant
employment are better off than small farmers,
whether they own or occupy the soil. It
cannot, for instance, be questioned that the
English agricultural labourer is better housed,
better fed, and better clothed than the French
peasant proprietor. Wherever a peasant pro-
prietary prevails, except under most favourable
conditions, the rural populations live hard,
fare hard, and are on the border-line of starva-
tion. In point of production, the product per
acre in England exceeds that of any country on
the continent except East Flanders. In point
of agricultural science, English farming is,
speaking generally, more advanced than in
countries where the small culture of peasant
proprietors prevails. Belgium affords a notice-
able example of the stagnation which is pro-
duced by the multiplication of small cultivators.
Seventy-five years ago the agriculture of Belgium
was the first in Europe. Since then the size of
the farms has decreased, and the number of
small farmers continuously increased. Enter-
prise and experiment diminished with the ex-
tension of la petite culture. Farming has rather
retrograded than advanced ; the stock, and
especially the sheep, have decreased ; the small
farmer only raises, and only eats, pork. In
point of pauperism, rural England has fewer
paupers than countries where small culture is
the rule. In Prussia the number of peasant
heads of families exempted from direct taxa-
tion because their earnings are less than £25 a
year, amounted in 1888 to nearly 1\ millions.
In France 3 millions out of the 7 million
proprietors are unable to contribute largely to
state objects by reason of poverty. In point
of encumbrances, the soil of England is less
burdened with mortgages than the land of
countries farmed by small cultivating owners.
In France, for example, the real owners of the
soil are local money-lenders, and in some de-
partments 80 per cent of the land is said to be
mortgaged. Small culture cannot be regarded
472
CUM DIVIDEND— CURRENCY DOCTRINE OR PRINCIPLE
as an agiicultural panacea. It can only thrive
in England under the economic conditions
mentioned above. (See Agricultuhal Hold-
ings Acts. Appendix.)
[Reports to the Royal Commission on Agricul-
ture, 1881 and 1882, especially those of the late
Mr. Jenkins. — James Howard, Continental Farm-
ing and Peasantry (1870). — Lady Verney, Cottier
Owners, etc. (1885). — W. Beauclerk, Rural Italy
(1888).— J. S. Mill, Princ. of Pol. Econ.'] b. e. p.
CUM DIVIDEND. On the London stock
exchange it is always understood that a share
sold includes also the dividend which may have
accrued upon it since the previous distribution,
unless the bargain is made specifically Ex Divi-
dend {q.v.) On Indian rupee paper, exchequer
bills, and corporation bonds, however, the bar-
gains are done ** clean," or exclusive of dividend,
which the buyer has to pay to the seller at the
conventional rate, according to the number of
days since the previous distribution of dividend.
A. E.
CURATOR BONIS. A guardian appointed
by a Scotch court to manage the estates of a
minor or of a lunatic. His functions are to
realise and protect the estate. He has no
charge of the ward's person, except in so far as
it is his duty to see the ward properly educated.
[Erskine's Principles of the Law of Scotland,
1880.] J.B.C. M.
CURRENCY. This word is sometimes em-
ployed in the sense of circulating medium,
sometimes in the sense of standard of value.
Adam Smith says (book iv. ch. iii.), in the weU-
known Digression concerning Banks of Deposit,
particularly concerning that of Amsterdam,
"The currency of a great state, such as France
or England, generally consists almost entirely
of its own coin." Here a standard of value is
referred to, and the constancy of the "Bank
Money " of the bank of Amsterdam is mentioned
as one of its advantages. Adam Smith's com-
parison of the currency to the road which con-
veys the produce of a country to market ( Wealth
of Nations, book ii. ch. ii.), and J. S. Mill's de-
scription of it as "a machinery for doing quickly
and commodiously what would be done, though
less quickly and commodiously, without it"
{Principles of Political Economy, book iii. ch. vii.
§ 3), illustrate the services which the currency
performs. An ideally perfect system of currency,
to be based on a system of tabulatory prices, is
dealt with by Jevons, Investigations in Currency
and Finance. Some idea of the same kind
appears to have passed before the mind of D.
Ricardo, Proposals for an Economical and Secure
Currency (Ricardo's Works, 2nd ed. p. 397).
His definition of a perfect currency is as follows :
"A currency may be considered as perfect of
which the standard is invariable, which always
conforms to that standard, and in the use of
which the utmost economy is practised." A
tabular standard of value was suggested by
Joseph Lowe to give a steady value to money
contracts through reference to the prices of
different articles. A similar method was recom-
mended by G. Poulett Scrope, whose remark,
" without . stability of value money is a mere
fraud," goes to the root of the matter. The
subject had also been considered by G. R. Porter.
Mr. Giffen has more recently carried on the in-
vestigation. The idea of a standard of value
to remain as far as possible constant, is included
in the principle on which Corn Rents {q.v.) are
based (see also Circulating Medium ; Index
Numbers, etc.)
[Jevons, Investigations in Currency and Fin-
ance.— Ricardo's Works, ed. M'Culloch. — Joseph
Lowe, The Present State of England in regard to
Agriculture, Trade, and Finance, 1822. — G.
Poulett Scrope, Principles of Political Economy,
1833.— Porter, Progress of the Nation, 1815.]
CURRENCY DOCTRINE or PRINCIPLE.
A name given to a doctrine or opinion which
supplies the basis for the method adopted by
Sir R. Peel when regulating the paper currency
by the Bank Act of 1844. It appears to have
been first used by Mr. G. W. Norman, who, in
his evidence before the House of Commons
Committeemen Banks of Issue, 1840, Q. 2018,
sppaking of the circulation, referred to "cur-
rency principles, according to which it would
increase or decrease with increase or decrease of
bullion." The evidence of Mr. Gilbart, before
the same committee, 1841, showed that he
understood the term in a similar sense. Q. 932,
"I mean by the phrase 'currency principles,' a
bank which shall do nothing else but issue
notes for gold, and gold for notes ; " and Q.
933, "I do not at all admit that those are
the correct principles upon which the currency
should be administered. " Mr. T. Tooke, History
of Prices, vol. iv. p. 167, and passim, agrees
with Mr. Gilbart. The controversy was con-
tinued by others, among whom may be cited
Mr. Jones Loyd (Lord Overstone), who, in his
writings and in his evidence before the Select
Committee, H. of C, 1840, and also before the
Select Committee on Bank Acts, H. of C, 1857,
expressed the same opinion, Q. 648, 1857,
"The paper notes or certificates ought to be
preserved at their proper value by making them,
under all circumstances, conform in amount to
the coins or metallic circulation which they
represent." Sir R. Peel employed the same
opinion as the basis of the argument, on which
he founded the reasons for the changes which
he introduced in the banking system of the
country, through the Bank Acts of 1844-45
(see speech in H. of C. on Bank Charter, 6th
May 1844). The principles and the methods
of actiou which Sir R. Peel supported on that
occasion, were in opposition, as he admitted,
to "the high authority of Adam Smith and
of Ricardo," who held that freedom of com*
petition and immediate convertibility into coir
CURVES
473
at the will of the holder, coupled, it should be
understood, with such provisions as would secure
the holder from loss under any circumstances,
would prevent the notes of banks from being
issued in excess. Sir R. Peel might have added
that this opinion of his own was also in
opposition to that of Mr. Huskisson. Sir R.
Peel referred in the speech quoted above to the
Bullion Committee Report (q.v.) which, it
should be pointed out, was made during the
period of suspension of specie payments, and
recommended a return to payments in specie
as a cure for the evils deprecated. Sir R. Peel
was by far the most powerful supporter of this
doctrine, which is of importance as laying down
a principle unknown before — namely that it is
essential that the bank notes circulating in a
country should always conform in amount to
the metallic circulation which they represent,
see above — the result of the acceptance of
which has been the separation of the banking
department from the issue department of the
Bank of England (see Bank of England).
The doctrine has never, it should be mentioned,
found general acceptance with economists. It
marks the diiference between those who regard
bank notes as ''money," and those who con-
sider them, in the words of Huskisson, as "cir-
culating credit," and a "substitute for money
in the transactions of tlie community " (Huskis-
son on the Deprcciatiov, vftJic Curmiqi). While
insisting, and properly, on adeipiate security
being given for the bank note, the currency
doctrine leaves out of sight the operation of all
other instruments of credit, e<[ually effective in
their way, as bank notes, on price and the move-
ments of commodities.
[See books referred to under Bullion Com-
mittee.— Evidence before Committee on Banks of
Issue, House of Commons, 1840-41. — Committee
on Bank Acts, House of Commons, 1857. — Tracts
and other publications on " Metallic and Paper
Currency," printed by Lord Overstone, 1837-57. —
Speeches of Sir R. Peel on "Bank Charter," House
of Commons, May 6, 20, etc., 1844, etc.]
CURVES are amongst the most useful appli-
ances which mathematics lends to the social
sciences. The curves most frequently employed
in this way are plane curves : such as AB in
the annexed figures ; referred to rectangular
axes OX and OY in such wise that the curve
represents the interdei)endence of two variable
quantities Ox and Oy, the change in one of the
variables Oy which attends a change in the
other variable O^-. Two species of curve may
be distinguished : (1) where the quantitative
relation between the variables is not supposed
to be numerically ascertained, the datum being
of an indefinite character, as that 0*; continu-
ally increases with the decrease of Oy ; and (2)
where the curve is the record of statistical
observations,
(1) The lirst kind of curve is used in abstract
economics ; where the data are in general quan-
titative indeed but not numerical, e.g. that the
demand for a commodity increases as its price
decreases. Jevons's hope of obtaining demand
curves by statistical observation {Theory, Intro-
duction, p. 23, 2nd ed.), may appear chimerical.
There is one datum of the kind indicated which
curves are specially adapted to represent, the
property of increase at a decreasing rate, which
is at the root of the two most exact theories in
political economy, viz. the law of rent and the
law of final utility. This important relation is
simply expressed by means of a curve concave
towards the axis OX such as AB in Fig. 1.
In this case the quantity represented by the
Y
line 0^ continually increases with the increase
of 0*-, but the rate of increase continually
decreases. The same idea may be expressed by
a descending curve such as AB in Fig. 2, if
one quantity is represented by the area con-
tained between the right lines OY, Ox, xp,
and the curve AB. This quantity continually
increases with the increase of Ox, but at a
decreasing rate. To represent such relations
curves appear a more potent aid than ordinary
language, and perhaps even than algebraic
symbols. Diagi-ams are preferred before sym-
bols by Prof. Marshall (Principles of Economics,
preface to first edition). "The use of the
latter [diagrams] requires no special know-
474
CURVES— CUSTOM : CUSTOMS DUTIES
ledge, and they often express the conditions of
economic life more accurately as well as more
easily than do mathematical symbols."
It may be observed, however, that, as com-
pared with Functions {q.v.), curves have a some-
what limited use. They are almost restricted
to the simple case of two variables. Thus in
the theory of rent, a curve happily represents
the returns yielded by successive applications
of doses of outlay, as in Jevons's illustration
{Theory of Political Economy, ch. vi.) Or,
according to a construction which De Quincey
appears to have been the iirst to use, the success-
ive parts of one co-ordinate Ox may represent
qualities of land (arranged in a descending
order), while the corresponding values of Oy
stand for the returns made to equal capitals
applied to each portion of land (cp. Prof.
Marshall, Frinci2)les of Economics, p. 483, 2nd
ed.) But, when it is attempted to combine these
two constructions, as the present writer has done
(British Association Report for 1886), the un-
familiar ideas of solids and surfaces are intro-
duced ; and clearness is sacrificed. To take
another example (the Demand Curves, q.v.)
so much extolled by recent economists, are
available only on the hypothesis that, while
the price of the article under consideration
varies, the prices of all other articles remain
constant (Auspitz und Lieben Theorie der
Freise). But this is a somewhat narrow hypo-
thesis, excluding the important cases of "com-
peting" and "completing" commodities (ibid.),
as we may call those articles which are related
either on the one hand, as beef and mutton,
or on the other hand, as tea and sugar. In
such cases a symbolic expression representing
the advantage of the consumer as a function of
his purchases is much more helpful than a
curve. Again, in the theory of distribution
the profits of the entrepreneur, depending on
the one hand on the sales of finished products,
and on the other hand on the expenses of pro-
duction, wages, interest and rent, and so forth,
is better represented by a function of several
variables than by a curve. A curve may be
best adapted to the Ricardian first approxima-
tion that the profits on successive doses of
capital are equal. But it is not so easy to
represent geometrically the modifications of
this conception which a nearer view requires —
that the profits of an entrepreneur are not
proportional to the amount of capital em-
ployed, that the wages of a labourer are in a
certain sense just equal to the product of his
labour (Marshall, Principles of Economics, 2nd
ed. vol. i. p. 566). Such theories appear to the
present writer to flow more naturally from the
analytical calculus of maxima and minima than
from any use of curves. For further observa-
tions as to the use of curves in economics, see
Functions and Mathematical Method.
(2) Of the curves obtained by statistical
observation it suffices here to remark that they
are for the most part derived from a discontinu-
ous set of points, such as p, q, r, s, in Fig. 3 (or
set of right lines joining those points). Here
Fig. 3.
P.
X4.
the lengths ^a-j qx^ rx^ sx^ etc., represent the
quantities of some variable under observation
at finite (not infinitesimal) intervals of time,
space, or other variable. Cases in which the
registration is continuous, as in some meteoro-
logical observations, are rare in social statistics.
(As to the use of curves in statistics see the
Geaphical Method and Statistics.)
y. F. Y. E.
CUSTODI, Pietro (1771-1846), born near
Novara. He was by profession a lawyer, but
soon entered into journalism and directed the
paper Ainico dclla lihcrta Italiana. He be-
came privy councillor and baron. The History
of Milan by Pietro Verri was continued by
Custodi ; as an economist he is widely known
as the editor of a collection of the princi]5al
Italian economists in fifty volumes. M. p.
CUSTODIA. An expression of Roman law
denoting a special duty of taking care of a
bailed object (see Bailee). e. s.
CUSTOM — Customs Duties. Duties
charged by law upon commodities imported
into or exported from a country. The duties
of customs " seem to have been called customs,
as denoting customary payments which had
been in use from time immemorial ; they
appear to have been originally considered as
taxes upon the profits of merchants " ( Wealth
of Nations, bk. v. chap. ii. art. iv.) As early
as 1336, however, complaints were made by the
producers of wool, at that time the most im-
portant dutiable article, that the intended
special taxation of merchants was not effected by
customs duties, and from 1344, when the price
of wool ceased to be fixed by law, such duties
were for a long period supported by merchants,
and opposed by the agricultural classes. In
1490, a "retaliatory" and additional duty im-
posed on malmsey wine imported from Crete
"until the Venetians should abate their new
impositions, " was the first step in the long series
of duties imposed for other than revenue pur-
poses, and eventually mainly for the protection
and encouragement of home industries. In
CUSTOM: CUSTOMS DUTIES
475
1815 when, as Mr. Dowell says, * * taxation reached
its zenith," the public demand that the enor-
mous necessities of the government should be
met as far as possible by the imposition of pro-
tective tariffs had resulted in a customs system
of the most complicated and onerous description,
and even when the burdens of Avar diminished,
the reductions effected in the customs duties
were small as compared with the diminution of
the direct taxes. In 1842 Sir Robert Peel
carried his first gi-eat measure of tariff reform,
his policy being to utilise the direct taxes, and
especially the income-tax, in order to remove
the comparatively unproductive duties with
which traders were met in every direction. In
that year some 750 articles out of about 1200
were removed from the tariff, the loss to the
revenue being not more than £1,200,000.
Three years later. Peel effected a further revision,
abolishing the duties on more than 400 articles,
principally raw materials, and repealing all ex-
port duties, at an aggregate loss of £3,500,000.
In 1846 the duties on corn and some other
articles of food were discarded at a cost of
£750,000. In 1853 Mr. Gladstone took a
fui'ther step in the same direction, and, by the
same means as his predecessor. In 1860 he
proposed further reductions of import duties,
and took what has been described as " the final
step in the reform of one of the most compre-
hensive and complicated lists of prohibition and
commercial restrictions, in the form of frontier
or port duties, that ever hindered the develop-
ment of the trade and manufactures of a nation."
This final step involved a loss of revenue of
£2,250,000.
The following table shows the net produce of
customs duties in the United Kingdom in each
tenth year from 1837 to 1907 inclusive : —
1837
£22,063,000
1877
£20,099,000
1847
21,656,000
1887
19,631,000
1857
23,276,000
1897
20,618,000
1867
22,655,000
1907
32,181,000
The following table shows in detail the net pro-
duce of the customs duties for 1912-13 : —
Chicory! . . £46,000
Cocoa V . . 332,000
Coffee J . . 170,000
Tea . . . 6,152,000
Total duties on imported
non-alcoholic beverages .
Spkits . . . £4,167,000
Wine . . . 1,110,000
Foreign Beer . . 27,000
1,700,000
Total duties on imported
alcoholic beverages
5,304,000
Sugar
3,052,000
Dried Fruits
465,000
Tobacco and Snuff
17,254,000
Motor Spirit
722,000
Other Receipts
20,000
£33,517,000
In 1909 the Excise department, formerly
under the control of the Inland Revenue, was
amalgamated with the Customs. The two de-
partments, though nominally independent, had
always worked in close relationship and trans-
acted much of each other's business, many of the
duties collected by each being interdependent or
countervailing. Both included duties on beer,
chicory, spirits and tobacco. The arbitrary dis-
tinction between customs and excise in the public
accounts was therefore of little value for eco-
nomic purposes. The two departments now work
together as the Board of Customs and Excise.
The department performs many functions
other than the collection of revenue. It is
responsible, inter alia, for the measurement of
the tonnage of vessels, the registration of ships,
the collection of light dues, the receipt of wreck,
the settlement of salvage claims, the mainten-
ance of fisheries conventions, the observance
of quarantine regulations, the examination of
merchandise marks, the collection of statistics
(import and export, etc.), the prevention of
the importation of injurious literature, lottery
advertisements, etc., the enrolment and pay-
ment of men for the Royal Naval Reserve. It
undertakes work in connection with the Old
Age Pensions and the National Insurance Act
(1911). Under the latter it investigates various
claims and questions and transmits the informa-
tion collected to the Insurance Commissioners,
distributes Insurance literature, and in seaport
towns gives information as to the Seamen's
National Insurance Society. Under the Sale
of Food and Drugs, and similar Acts, the de-
partment is entrusted with such duties as the
examination of imported tea and the disposal
of all declared unfit for human use, and the
prosecution for illegal importations of adulter-
ated or impoverished butter or milk. A number
of foreign reprints of English books also are
annually confiscated at tlie ports of entry by
this department (Copyright Act, 1911).
An important feature of any well-organised
customs system is that by which dutiable articles
are allowed to be deposited in warehouses
under bond for the due payment of the duties
when delivered for consumption (see Bonded
Warehouses). The earlier economists strongly
advocated the maintenance of such warehouses,
mainly on the gi'ound that the consumer escapes
charges for interest on the duties paid by the
merchant, but it is now evident that the system
is of gi-eat and very varied utility. Not only
is the payment of duty deferred, but it is not
exacted at all on the waste occasioned by natural
causes, and by the various operations allowed to
be effected under supervision in bonded ware-
houses, prior to duty being charged. Bonded
goods may be removed from warehouse to ware-
house, or they may be re-exported or transhipped
free of duty, which is in fact only paid when
the goods are to be taken into consumption.
476
CUSTOM— CUSTOM : HABIT
The incidence of customs duties, like those of
other taxes on commodities cannot be accurately
determined without taking into consideration
the various conditions attending the production
and supply of the article taxed, and its relation
to the requirements of the consumer, and even
when the incidence of such duties has been
established, their effect in restricting interna-
tional trade, or in diverting it from the channels
in which it would naturally flow, must be ascer-
tained before it can be seen whether the direct
and indirect cost of the duties outweigh their
advantages. It is usually considered that the
burden of customs duties will fall eventually upon
the consumer, whether they are charged on the
export or on the import of the dutiable article,
but in the case of export duties it usually
happens that the restriction of trade in the
dutiable article, or its diversion to other markets,
diminishes the profit of the home producers and
distributors to an extent far beyond the yield of
the duty, and in the case of import duties it has
been considered that some portion of the burden
will at times be borne by the merchant by whom
the duties are advanced, his ability to transfer
it to the consumer being by no means absolute.
(See Cost of Collection of Taxes.)
[Annual Reports of the Commissioners of Cus-
toms. — Ham's Customs Year Book. — Dowell's
History of Taxation and Taxes in England. —
Hall's History of the Customs Revenue.] t. h. b.
CUSTOM (Habit)— ITS Place in Eco-
nomics. When the two are distinguished, habit
is an unwritten law or tradition of our indi-
vidual selves, custom is so for a society of
men. Every custom has thus begun in some
habit ; and both custom and habit have a
power analogous to vis inertice as defined in
Newton's First Law of Motion. Men continue
in a state of rest or of uniform motion in a
straight line, except in so far as they are led to
change that state by force impressed on them.
"Where actions are determined by the necessity
of physical, physiological, or even of ethical
laws, they are not said to be done by habit or
custom, the latter words being confined to such
actions as are more evidently modifiable by
human caprice. They are not used of nature
but of second nature.
In men more than in other animals habits
become customs, social functions creating social
structures. The knowledge of the past is pre-
served, and in the case of scientific discoveries
and mechanical inventions, for example, one
generation of learners can begin at the point
where the preceding left off, and convert into
habit and custom what was at first a con-
scious efl'ort and deliberate act of wiU. It is
an essential condition of a skilled, i.e. of nearly
every industry that practice makes perfect ;
and the standard of perfection becomes higher if
the skill can be transmitted by teaching, and
need not be acquired by each individual ab initio,
unaided. This applies even to the art of walk-
ing upright and the perception of distance by
vision. The most familiar economical examples
are those given by Adam Smith in his first
chapters (see Division of Labour). To his
already old text must be added the equally old
commentary that the bent and fitness of the
individuals must be consulted. Some are born
to use tools ; others can make better use of their
eyes or voice than of their hands, etc. Where-
ever the bent lies, habit will be acquired fastest
when the bent is followed. In the present
condition of the working classes in Europe the
sons are as a rule brought up to their father's
trade ; yet, owing to the frequent changes
caused in a trade by new inventions, this
practice can hardly lead to the growth of castes
(see Caste) such as prevail in the East. But
even in our own country custom may often
make a long stand against new inventions,
to the great detriment of economy, e.g. in
retention of fallows and opposition to reaping
machines.
In the more complicated economical relations,
where distribution is concerned, custom as else-
where may be both a strength and a weakness,
to those bound by it. It may become an instru.
ment aiding progress ; or it may become a fetter.
Customary rates of wages may be rates that
neither fall so low nor rise so high as the rates
that would be fixed by competition in open
market, and so it is with customary rents and
customary prices. What has always been paid j
acquires an apparent justification from usage
and this is found in the case of taxes, as
appears in the very name Customs, where
novelty and unpopularity as a rule go together.
The times and ways of payment are largely
fixed by custom more than by conscious regard
to expediency. Wages, for example, are paid
in the case of London workmen by the week,
of many Scotch workmen by the' fortnight, of
domestic servants by the month, of many farm
servants by the year.
When wages have been raised by a temporary
cause, they may be maintained by custom, in
the sense that the labourers' standard of living
may be permanently raised. This result can
hardly be secured without some form of com-
bined action among the labourers. Combina-
tion implies criticism and initiative, and seems
a necessary aid if custom is to be a strength
instead of a weakness.
It is only roughly true that men are eman-
cipated from custom in proportion to their
education. They are seldom removed by it
from the influence of fashion (see Fashion),
which is simply a form of custom where the
capriciousness of the unwritten law is not con-
cealed, and where the matters concerned are.
supposed to be beyond exact utilitarian calcu-
lation. Fashion often determines not only
what men eat and wear, but where they buy
CUSTOM: HABIT— DAIRE
477
and even to some extent what they pay.
The goodwill of a business is simply this
fashion considered from the purveyor's point
of view. Thomas Telford the engineer formed
part of the goodwill of the Salopian coffee-
house at Charing Cross (see Smiles' Life of
Telford). It is perhaps the tendency of an
active commercial community to go from the
one extreme, of regard for custom, to the other,
regard for mere cheapness as measured by price
without due account of quality. Modern im-
provements, such as railways, and telegraphs,
and co-operative stores, play a great part in
breaking down custom and causing a rough
equality even in retail prices. In the whole-
sale markets, where both sellers and buyers
are alive to their commercial interests, the
power of custom is a smaller factor than in
retail dealings. But in the stock markets and
elsewhere it is still a factor (see e.g. Babbage,
Mach. avd Manuf, 3rd ed. ch. xv. p. 145; —
Ellis, "Influence of Opinion on Markets,"
Economic Journal, March 1892, pp. 109 seq.)
It may be doubted if customary profit is so
tangible a conception as it seemed to Adam
Smith ; yet in recent Continental Usury Laws
it figures still very largely, as it did in the
Middle Ages. Where instead of prices or profits
conditions of bargaining are concerned, it is
not only a factor but the main factor, for
commercial law is simply the customs of mer-
chants to which the state now gives legal eifect.
There is a sense in which nearly all statute law
is custom, defined, and made consistent and it
may be imposed on an unwilling minority, as
in the Factory Acts, q.v. To make custom
our friend for life we bind him under penalties.
If prices are affected by custom, still more
is the currency itself. Custom prevents our
adoption of a decimal currency. No money is
3urrency if it falls under suspicion, even ground-
lessly, like Wood's pence under Swift's attacks,
and is refused in ordinary transactions. Money
is unlike aU other tools in depending almost
entirely on custom, instead of mechanical fitness,
for its eflSciency. The general outward char-
acter of European coins has accordingly changed
only by a seiies of variations which were, each.
very slight indeed at the time of their intro-
duction. To be current, a coin needs to have
a familiar look and resemble its predecessors in
almost all respects. In paper money too, as
in Scotch one pound and English five -pound
notes, custom is essential to currency. Some-
what analogous is the recognition of articles as
good because of a well-known trade mark.
There are many instances of the power of
custom in political history. Good statesman-
ship is averse to an absolutely new departui-e,
and makes only such changes as at least seem
to be an outgi'owth of old customs, and a return
to some old Magna Charta instead of a new
institution. There is no contradiction between
custom and reflection. If the former by itself
is inertia, the latter by itself is insubstantial,
and its product ephemeral, like a learning that
dispenses with memory and history, and trusts
to unassisted original study. Though, especially
in matters economical, deliberate reflection and
calculation will inevitably subject all customs
and customary institutions to the test of criti-
cism, yet any new order will be built up out
of the materials of the old, and -will only itself
be permanent by becoming customary.
[For the influence of custom on Prices, Wages,
Rent, etc., see Rlcliard Joues, Political Economy ,
ed. Whewell, 1859. Distribution of Wealth (1831).
—J. S. Mill, Polit. Econ., ii., iv. (1848).— T. E.
Cliffe Leslie, Essays in Pol. and Moral Philosophy,
2nd ed. 1888. — On the emancipation of modern
industry from mediaeval custom, etc., see Cobden,
Engl., Irel., and America. — On custom and the
currency, see Jevons, Money, ch. viii. p. 78, and
in relation to the morphology of coins, see C. F.
Keary, Numismatic Chronicle, v. 165-98, vi. 41-
95. — On custom and habit in general see Rumelin,
Reden und Aufsdtze (1881), ii. pp. 148 seq.. Das
Wesen der Gewohnheit, and compare Hegel, Rechts-
philosophie, § 151. — On custom as standard of
living, see Malthus, Essay on Pop., i., ii., iv.,
viii. — On fashion, see Hermann, Staatswirth-
schaftliche Untersuchungen (2nd ed. 1870), pp. 99,
100. — On custom as Status in distinction from
Contract, see Maine, Ancient Law, passim. — On
goodwill, etc., see Schaffle, Die nationalokono-
mische Theorie der ausschliessenden Absatzver-
hdltnisse (Tiibingen) 1867.] J. b.
DAIRE, EuGfeNE, born in Paris 1798, died
there 1847. He commenced life as a collector
of the contributions directes, a direct tax on in-
dividuals imposed on their incomes, at Arpajon
(Seine -et-Oise), but was dismissed from his
employment after the revolution of 1830, on
account of the opinions held by a relation of his,
which he himself, however, did not share. He
was afterwards restored to his post at the request
of the inhabitants of the place. In 1839 he
resigned his office, desiring to apply himself to
economic study. After some preliminary
attempts he discovered the direction in which his
true vocation lay, and devoted himself to pre-
paring the collection of the works of the principal
economists, published by Messrs. Guillaumin.
Of the fifteen volumes of this collection he edited
six : Les J^conomistes financiers du XVIIIe siecle
(Vaubanj Boisguillebert, J. Law, Melon, and
Dutot), Les Physiocrates (Quesnay, Dupont de
Nemours, Mercier de la Riviere, Abbe Baudeau,
and Le Trosne), the (Euwes de Turgot, the
(Euvres diverses de J. B. Say, the first volume
of M^latiges (David Hume, V. de Forbonnais,
478
DALBIAC— DAMAGES
Condillac, Condorcet, Lavoisier, and Franklin).
Daire wrote, in these volumes, a special notice of
each author. Some of these are of great value,
for example, those of Law and Turgot. Equally
important is his introductory exposition of " the
theories of the Physiocrats," which gained him
a prize of 1500 fr. (£60) from the Academy of
Moral and Political Science. The news of this
success only reached him on his deathbed. An
able financier and a distinguished economist,
Daire was too early lost to the science, of
which, had his life been spared, he might have
been a distinguished expositor. A. c. f.
DALBIAC, General Sir James Charles
(1776-1848), served with distinction in the
Peninsular War, was Tory member for Ripon
1835-37. He published, in 1841 (London), A
few words on the com laws, wherein are hroiight
under consideration certain of the statements
which are to he found in the Srd ed. of Mr.
M'GullocKs pamphlet on the same subject. See
M'Culloch, Liter, of Pol. Eeon., p. 80. He
wrote also a Military Catechism for the use of
young Officers and non-commissioned Offi/xrs of
Cavalry (1817).
To the same author is perhaps to be attributed
the following tract ascribed on the title page to
"J. a. Dalbiac, of Buckham Hall, Uckfield "
(Sussex). Proofs of existing agricultural dis-
tress, and an endeavour to show the necessity of
permanent and efficient protection to agriculture
by permanent and efficient legislative enactments
(Lewes, 1820). The writer employs the form
of a dialogue between a farmer and a manu-
facturer. He argues in the spuit of Western,
whose "Resolutions" of March 1816 he quotes
in his appendix. j. b.
DALRYMPLE, Sir John, 4th baronet (1726-
1810), was the eldest son of Sir William
Dalrymple of Cranstoun. He was educated
at Edinburgh and at Cambridge, and became
an advocate at the Scottish bar in 1748. From
1776 to 1807 he was one of the barons of the
exchequer. In 1757 he published an Ussay
towards a General History of Feudal Property
in England (4th and enlarged edition, 1759,
8vo), praised by Hume (J. H. Burton, Life,
ii. 37). Part of this work was revised by
Montesquieu. Dalrymple printed in 1764 Con-
siderations on the Polity of Entails (2nd ed. 1765,
8vo), a very able defence. His Memoirs of
Great Britain and Ireland, 1681-92 (3 vols. 4to,
1771-88, new ed. 1790, 3 vols. 8vo), largely
based upon unpublished documents, is chiefly
interesting from a biographical and anecdotal
point of view. He received a visit from Dr.
Johnson at Cranstoun in 1773 (Boswell, Life,
1887, V. pp. 401-404). He was given to
chemical and industrial experiments, and in
1798 interested himself in teaching the making
of soap from herrings. He was succeeded in
the baronetcy by his fourth son, who became
eiglith earl of Stair in 1840.
His economic writings are :
An Appeal to Facts in a Letter to Earl Temple,
London, 1763, 4to (includes an account of the
money raised on loan for the public service from
1755 to 1762). — The Question considered: Whetlier
wool should be allowed to he reported when the
price is low at home on paying a duty to the public ?
London, 1781 (2nd ed. 1782, answered by Rev. N.
Forster and two anonymous pamphleteers. The
author gives various reasons why it should be
permitted). — Address and Proposals on the subject
of the coal, tar, and iron branches of trade, London,
1784, 8vo (written to attract the attention of
speculators to the coal, ironstone, and limestone on
his estate in Edinburgh). — Address to the Land-
holders of England upon the interest which they
have in the state of the distillery laws, London,
1786, 8vo (proposes a tax on stills).
[Dictionary of Nat. Biogr., xiii. 424-425 :
M'Culloch, Literature of Political Economy, 1845].
H. K. T.
DAMAGES. The technical name for a sum
of money claimed by a person who has suffered
injury or loss by reason of a breach of contract
or of another's wrongful act or omission. In
actions for damages it belongs to the province
of the jury to assess the amount, but there are
certain established rules, according to which
they ought to find, and which the judge ought
to explain to them, e.g. the rule relating to
remoteness of damage, according to which the
loss for which compensation is claimed must
be something immediately connected with the
breach of contract or wrongful act or omission,
and must be such as the defendant would
reasonably have contemplated as the result of
such breach, act, or omission. The non-receipt
of money promised to be paid on a certain date
may prevent the promisee from making a pro-
fitable investment, or may even, through caus-
ing his insolvency, bring about the ruin of his
prospects ; but these are not the ordinary
results of the non-payment of a debt, and no
damages can therefore be claimed beyond the
amount of the debt with interest. In a case of
breach of contract for the sale of goods, the
measure of damages is the difference between
the price named in the contract and the market
value of the like goods at the time when the
contract was broken. As a general rule,
damages are not awarded as a compensation for
injuries which do not result in a pecuniary loss,
but in exceptional cases it is admissible to
compensate the plaintiff" for wounded feelings
or bodUy pain, e.g. in actions for breach of'
promise to marry, in actions for defamation ,
(libel or slander), in actions for assault, etc.
In some cases the conduct of the defendant
may be such as to make it permissible for the ,
jury to award damages in excess of the amount j
which would be sufficient to compensate thai
plaintiff" for the injury suff"ered by him, e.g.
trespass of a particularly insulting character,
seduction under aggravating circumstances.
I
DAMAGES— DAMNUM EMERGENS
479
In such a case the damages are said to be
"exemplary" or "vindictive." On the other
hand the damages may be so small that they
could not reasonably be looked upon as com-
pensation for any injiiry. Damages of the
latter kind, which in technical language are
called "nominal damages," may occur in two
classes of oases :—(l) When the plaintiflTs in-
tention is not so much to obtain compensation,
as to make use of an action for damages as a
convenient mode of procedure for asserting a
right, e.g. action of trespass for the purpose of
establishing a title to lands ; (2) When the
plaintiff, though technically in the right, ought
not, according to the opinion of the jury, to
succeed in the action, e.g. in action for defama-
tion when the defendant through flaws in the
evidence, has failed to establish his plea of
justification, but has convinced the jury that
the plaintiff's character is worthless. The
expression " ordinary damages " is used in con-
tradistinction to "nominal" or "exemplary"
damages. In certain cases it is recognised by
the law that the requirements of the plaintiff
cannot be adequately satisfied by damages, and
Specific Performance {q.v.) is decreed, e. s.
DAMAGES, Measure of. Damages are the
pscuniary satisfaction which a plaintiff may
obtain by success in an action. The rules by
which such satisfaction is measured form a
branch of law known as the Measure of
[See as to English Law, Damages, by J. D.
Mayne and L. Smith, London, 1884 ; and as to
American Law, The Measure of Damages, by T.
Sedgwick, New York, 1874.] j. e. c. m.
DAMETH, Henri (1812-1884), born at
Paray-le-Monial (Sa6ne-et- Loire), died at
Geneva. He was in early life a devoted fol-
lower of Fourier {q.v.), but became, through
conscientious study, one of the most ardent
popularisers of economic science. He published
in 1842 a work entitled Defense du FourUrisme,
1 vol. in 18mo ; then in 1849, Un Tnimoire
sur lafoTidation des citis industrielles dites ciUs
de V Union, in 8vo; after this he filled, from
1850 to 1855, the position of editor-in-chief to
the Avenir de Nice. Becoming convinced of
the soundness of economic theory he shook
himself clear of the doctrines of Fourier, and
published: Le Juste et V Utile, 1859, 1 vol. in
8vo ; L'J^cononiie politique et le spiritu/ilisme,
1862, 1 vol. in 8vo; Introduction d Vitude de
Veconomie politique, 1865, 1 vol. in 8vo; Les
Banques publiques d' Amission, 1866, 1 vol. in
8vo (in this he supported the freedom of banks) ;
Le mouvement socialiste et Viconomie politique,
1869, 1 vol. in 18mo ; La question sodale, 1871,
1 vol. in 12mo ; and finally Les Bases naturelles
de I'iconomie sodale, 1872, 1 vol. in 18mo.
He lectured with success, in 1864, on political
economy at Lyons, in connection with the
chamber of commerce of that city, and at the
Academy of Geneva, from 1865. His works
are lucid in style and temperate in tone. He
assisted MM. Victor Philippe, Jean Tisseur, and
Alph. Courtois in founding the Society of Politi-
cal Economy at Lyons (1866). a. c. f.
DAMNUM EMERGENS, i.e. the loss or
injury resulting to one person in consequence
of his having made a loan to another, was
usually regarded by canonists and theologians
in the later middle ages as justifying a demand
for Interest (in the original and limited sense
of that word, q.v.) The doctrine of compensa-
tion to the creditor arose out of an obscure
passage in the Roman law ; and the sharp dis-
tinction between damnum emergens and Lucrum
Cessans {q.v.), which was for a long time
rigidly observed by writers on the subject seems
to have been first drawn by the greatest of the
mediaevaf glossators, Accursius. But while the
civil law recognised both these reasons as justi-
fying a demand for compensation, Aquinas and
many of the schoolmen accepted only damnum
emergens. Until the end of the middle ages,
moreover, the principle was maintained that
compensation was only due when the period for
which the loan was originally made had expired,
and the debtor showed culpable neglect in ful-
filling his obligations. The theoretical distinc-
tion between usury and interest tended, how-
ever, to disappear, owing to (1) the concession,
which even Aquinas made, that such a recom-
pense could be justly bargained for at the time
of making the loan, (2) the concession that the
payment might take the form of a certain
percentage for each period of delay, and (3)
the practice of making the original term, during
which no payment for the use of the money was
required, so short that the loan came to bear in-
terest almost from the first. The final step was
taken when some of the Protestant theologians,
especially Melanchthon, and many of the later
Roman Catholic canonists, especially Navarrus,
recognised the justice of contracting to receive
interest even before there had been any delay,
i.e. from the time the loan was contracted. As
by this time lucrum cessans had also cojne to
be accepted as a sufficient cause for the payment
of interest, it was possible to meet all the
necessities of the growing trade of the period
without a violent breach with the doctrine of
usury.
A characteristic example of the transitional
literature of the 16th century is The Arraignment
and Conviction of Usury by Miles Mosse, London,
1595. He sums up the matter as follows : " There
are two manifest and essential differences between
Usury and Interest, which do so distinguish the
one from the other, as that they cannot possibly
be confounded. One difference is this : Usury is
an overplus or gain taken more than was lent ;
Interest is never gain or overplus above the princi-
pal, but a recompense demanded and due for the
damage that is taken or the gain that is hindered
through lending. Another difference is this :
480
DAMNUM FATALE— DANGEUL
Usury accrueth and groweth due by lending, from
the day of borrowing, unto the appointed time of
payment ; Interest is never due but from the
appointed day of payment forward, and for so
long as I forbear my goods after the day in which
I did covenant to receive them again," w. J. a.
[By far the best treatment of the subject is to
be found in Endemann, Studien in der Momanisch-
hanonistischen Wirthschafts- und Rechtslehre, vol.
ii. (1883) ch. viii. §§ 1-3. For the views of the
Reformers, see also Schmoller, Zur Geschichte der
national6kon.Ansichtenin Deutschland, etc. 1861,
p. 98 [reprinted from Zeitschr. /. d. ges. Staats-
wissenschaft, Bd. xvi. ] The subject is also slightly
touched in F. X. Funk, Zins u. Wucher, 1868,
and Geschichte des Kirchlichen Zinsverbotes, 1876.
For brief accounts in English, see Ashley, JSco-
nomic History, vol. i. part i. (1888), and Bohm-
Bawerk, Capital and Interest, tr. Smart, 1890.]
DAMNUM FATALE (Scot.) Loss arising
from inevitable accident beyond prevention by
human prudence. a. t).
DANEGELD. This is the first money tax
of which we have any record in English history.
Ethelred IL levied two shillings on every hide
of land to provide a fund for buying off the
Danes. His successors, even the Danish kings,
retained this as an annual tax, long after the
original pretext had disappeared. Edward the
Confessor is said to have abolished the Dane-
geld, but William L again exacted it, though
at three times the original rate, viz. six shillings
for every hide. But under the Norman kings
it was an occasional instead of an annual tax.
That tlie impost was unpopular is proved by
the assertion of Henry of Huntingdon tliat
Stephen, on his accession, promised to abolish
it. The promise was not kept, and the Dane-
geld was regularly collected in the first seven
years of Henry IL's reign. By this time the
tax had become a fixed sum from each county,
and any surplus went into th.e pockets of the
sherifis who collected it. In 1163 Henry IL
proposed to take the tax out of the hands of
the sherifis, and to bring it direct into the
exchequer. The proposal was opposed by
Becket, and from this time the term Danegeld
disappears from the Pipe Kolls. It has often
been asserted that Becket's opposition led to
the abolition of the tax, but this is an error.
The two shillings from the hide were frequently
levied in the later years of Henry II. under the
name of hydagium. They were collected under
Kichard I. in 1194, and in 1198 were raised to
five shillings on the hide or carucate. Dane-
geld and hydagium are merely two names for
the same tax, which was collected from all free
tenants, whether holding by knight-service or
by socage.
[Dialogus de Scaccario, i. 11. — Stubbs, Consti-
tutional History, vol. i.] b. l.
DANGEUL, Makquis de Pltjmart (fl.
1750), was born at Mans, and became a
commissioner of the Cour des Comptes. He was
a relative of Forbonnais, and, like him, devoted
himself to the study of the works of the Spanish
mercantilists. He translated one of these :
Le Ritahlissement des manufactures et du com-
merce d'Espagne, traduit de Vespagnx)l de Bernard
de Ulloa, 1763. After this, at the suggestion
of Gournay, he, as Turgot did, made himself
acquainted with the works of Josiah Tucker,
and following Tucker in the lines of free trade
and development of commercial enterprise, he
wrote his book Remarques sur les avantages et
les disavantages de la France et de la Grande
Bretagne par rapport au Commerce et aux autres
Sources de la Puissance des J^tats. Traduit de
VAnglois du Chevalier John Nickolls, Leyde et
Paris, Estienne, 1754. This work is pseudony-
mous ; the author admits that he borrowed the
title and the introductory sections from Tucker's
Brief Essay on Trade (1750). In it he expresses
his regret at the want of interest in economic
questions in France (p. 49), he states the diffi-
cult problems of agricultural and financial policy
in which his country was involved ; he describes
the strength of the leisured and the wants of
the labouring classes ("p. 60), the efi'ects of
unequal taxation (p. 43), and the absenteeism
of the nobles (p. 64), the centralisation of
government, the multitude of holidays, and the
low standard of the working classes (p. 26).
On the other hand he praises English husbandry
as being the time mine of riches (p. 101), and
shows the practical and theoretic literary interest
taken in English trade (p. 152). Dangeul, how-
ever, condemns, like Tucker, the monopoly of
the home trade, exercised in England, by cor-
porations and companies (pp. 205-216), as being
opposed to the interests of the population and
its growth. According to both, competition,
entirely unfettered, is most advantageous for
a nation's trade, as it diminishes the profits of
dealers (p. 253) and assists the introduction of
machinery in manufactures. Dangeul is an
admirer of Decker's Proposal for a single tax on
luxmies in lieu of duties and excises (p. 404) ;
he also differs from Forbonnais in one very
important point of taxation : he proposes to
exempt the absolute necessaries of life, con-
sidering that the taxation of these extinguishes
the spirit of private property among the poor
(pp. 407-409). In 1756 he wrote anonymously,
Examen de la conduite de la Grande Bretagne d
Vusa^e de la Hollande depuis la naissance de
la ripuUique, Paris et La Haye, 1756. The
writings of Dangeul are interesting in so far^^
as they are evidence of the practical influence]
of the now undeservedly neglected Dean of]
Gloucester, Josiah Tucker, the spiritual father]
of Gournay, Dangeul, Turgot, and also of Adai
Smith.
[See Querard, La France littiraire, t. vii. p. 21 J
— M'Culloch, Literature of Political Economy,
62. — Morellet, MSmoii'es (inSdits), 1823, t. i. pp.
37-38. — Tucker, Instructions for Travellers, 1757,-
DARG— DARWINISM
481
p. 9. — Quesnay, Oeuvres, ed. Oncken, pp. 148,
206 note 2, p. 230 note 2, approving quotation by
Voltaire, Dictionnaire Philosophiqibe, 1765, art.
Agriculture, Oeuvres Completes, 1875, ch. xvii.
p. 83. — Le Blanc, Discours politiques de M. Hume,
Dresde, 1755, t. i. p. 21 ; t. ii. p. 271.] 8. b.
DARG. A Scottish term for a day's work.
Cottars were formerly bound to give the labour
of a certain number of days to their superior in
lieu of rent : these days were called darg-days,
i.e. days of work.
[Scottish Dictionary (Supplement), by John
Jamieson, Edinburgh, 1825.] J. B. C. M.
DARIC. Ancient Persian coin of approxi-
mately pure gold, first sti'uck about 1516 B.C.
by Darius I., bearing the effigy of the king as
an archer, but with no inscription. Double
darics, struck about the time of the fall of the
empire, bear Greek letters or symbols, f. e. a.
DARIEN COMPANY. The originator of
this disastrous enterprise was "William Paterson,
the founder of the Bank of England. His idea
was to found a company for colonising the
Isthmus of Darien, and conducting overland
the trade between the Atlantic and Pacific.
By this means, he thought, the whole commerce
between Europe and Asia might be diverted
from the route round the Cape, and Scotland
might supplant Holland as the great emporium
for the wealth of the East. Without divulging
the details of his scheme, he succeeded in
exciting the speculative interest of his country-
men, and a bill to establish the new company
was carried through the Scotch Parliament and
received the sanction of the Lord High Commis-
sioner on 26tli June 1695. The "Company
of Scotland trading to Africa and the Inrlies,"
was authorised to seize unoccupied territories
in Asia, Africa, and America, to plant colonies,
construct forts, wage war and conclude treaties ;
while the king was pledged to obtain reparation
from any foreign state which molested the
company. The company received a monopoly
of the trade with Asia, Africa, and America for
thirty-one years, and for twenty-one years their
imports, except sugar and tobacco, were to be
free from all duties. Scotchmen hastened to
invest their scanty savings in the new venture,
and £220,000 was actually contributed towards
a nominal capital of £400,000. But Scotland
was then a poor country, and the financial
success of the scheme could only be secured by
English support.
The hostility of England, in those days of
commercial jealousy, was from the first a
certainty. A new trading colony would
certainly lead to war with the country whose
monopoly was attacked, and the burden of such
a war must fall upon England, as Scotland had
neither army, nor navy, nor military revenue.
England would never go to war to secure to
Scotland trading privileges which would be
injurious to herself. The English Parliament
VOL. L
protested against the scheme, and William III.
recalled the commissioner who had given the
royal sanction to the act. No English capital
was subscribed, and it was even proposed to
prosecute the directors of the company.
But English opposition, ascribed to national
jealousy, only increased the obstinate determina-
tion of the Scotch to carry out the enterprise.
In 1698 some 1200 colonists, including Paterson
and his wife, sailed from Leith to Darien,
where they took formal possession of the
country under the name of New Caledonia,
concluded treaties with native chieftains,
established a representative parliament, and
began to fortify New Edinburgh as their capital.
The enterprise was almost insane in its rashness.
The isthmus had been discovered and crossed
by Spaniards nearly two centuries before, and
they had only failed to settle there because it
was too unhealthy for Europeans to live there.
But Spain would never tolerate foreign intruders
in the heart of her American provinces, and an
expedition was being fitted out to expel the
settlers when disease compelled the decimated
remnant to sail to New York. Before this
terrible news reached Scotland a second expedi-
tion had sailed to Darien, where they arrived four
months after the departure of the first colonists,
to find New Edinburgh a deserted ruin. With
the courage of despair the new settlers landed,
but their fate was already sealed by dissensions
and disease, when the arrival of a Spanish fleet
compelled the survivors to surrender and return
homewards. The ill-feeling which this ill-
starred undertaking excited between England
and Scotland, and the risk of similar misunder-
standings of the same nature, gave an impulse
to the projects of a legislative union between
the two counti'ies which was finally effected
in 1707.
[The best modern narrative of the Darien Ex-
pedition is to be found in Macaulay's History oj
England, vol. iv.] R. L.
DARWINISM is a name sometimes given to
the theory put forward in Darwin's Origin of
Species that the struggle for existence among
plants and animals results in natural selection
or survival of the fittest varieties. This
theory is sometimes spoken of (e.g. in Maine's
Popular Government, p. 37) as if it had been
anticipated in Malthus's doctrine of population.
But Malthus, though he insists on the fact of
the struggle for existence among mankind, had
no notion of its altering or improving the
human race by causing the fittest varieties to
survive. Darwin {Life and Letters, vol. i. p.
83), says that the idea of natural selection
occurred to him on reading Malthus's Essay,
not that he found it there.
Mr. Herbert Spencer and some writers who
have followed him have used the theory as an
argument against state interference with private
property and industrial competition. They
2i
482
DATE OF DRAWING— DAVANZATI
urge that if the state interferes with the struggle
for existence it will hinder natural selection,
and thus obstruct the evolution of a superior
race; "Now more than ever before," Mr.
Spencer asserts, "people are doing all they can
to further survival of the unfittest " {Man versus
the State, p. 69). The socialist meets this
argument by pointing out that "survival of
the fittest " means survival of those who are
fittest to undergo a particular struggle, not
those who are the absolutely best, and if the
struggle is abolished it will not matter whether
people are fit for it or not (Sidney Webb,
Contemporary Review, Dec. 1889, pp. 868, 869).
Prof. Huxley says : " It is an error to imagine
that evolution signifies a constant tendency
to increased perfection" {Nineteenth Century,
Feb. 1888, p. 163), and even if it were uni-
versally admitted that the absolutely best
individuals of each generation do come to the
top in industrial competition, it might still be
questioned whether this results in the survival
of the best families. Mr. Francis Galton urges
very strongly that the Malthusian advice to
delay the period of marriage is likely "to
bring utter ruin upon the breed of any country
where it is followed by the prudent, while the
imprudent are left free to disregard it " {Heredi-
tary Genius, p. 356). Now the wealthier and
therefore presumably "fitter" individuals
certainly marry later than the poorer (see
Marriage-Eate), and it cannot be said to be
proved that the greater mortality among the
poor is — or would be if there were no state
interference — sufficient to counterbalance their
earlier marriages and so to make them less eflec-
tive continuers of the race than the wealthy.
The subject has not been much discussed by
economists of any school, because the analogy
between industrial competition and the struggle
for existence among the lower animals is too
imperfect to be of much service. It is contrary
to sound economic traditions to look upon com-
petition as a "private war" (Maine, Popular
Government, p. 50), and on an improvement in
the powers of labour as "sharpening our claws
that we may fight our neighbours the more
fiercely " (Kitchie, Darwinism and Politics, p.
31). Competition is not a struggle for a pre-
existing determinate quantity of wealth, in
which each man's gain is so much subtracted
from the possible gains of all the rest. Though
the success of one producer often damages other
producers of the same commodity, it almost
always benefits the community at large, and
makes it not more difficult but easier to obtain
the means of existence. Thus it happens that
in countries where the industrial powers are
most highly developed, individuals who have
naturally the least industrial power, e.g. the
blind, deaf and dumb, and paralytic, find it
easier to make a living than they do in more
backward countries.
There is a curious anticipation of Mr. Herbert
Spencer's theory in Joseph Townsend's Disserta-
tion on the Poor Laws (1786). "By establishing
a community of goods, or rather by giving to the
idle and vicious t\i& first claim upon the produce
of the earth, many of the more prudent, careful,
and industrious citizens are straitened in their
circumstances and restrained from marriage. The
farmer breeds only from the best of all his cattle ;
but our laws choose rather to preserve the worst,
and seem to be anxious lest the breed should fail "
(p. 426 in Overstone's Select Tracts, " Miscel-
laneous"). B.C.
DATE OF DRAWING. As a general rule
a bill of exchange is dated ; the absence of a
date does not, however, according to the law of
the United Kingdom, make a bill invalid (Bill
of Exchange Act § 3 [4a] ). The holder may, in
such a case, insert the true date of drawing, and
the bill is then payable accordingly {ibid. § 12),
the date appearing on the face of the bill being
presumed to be the true date of drawing until
the contrary is proved ; a holder in due course
has, in any case, the same rights as if the true
date had been inserted {ibid. § 13). According
to continental law the date is an essential re-
quirement, and an undated document is not
available as a bill of exchange (German Codes, 4
[6] ; French Code de Commerce, § 110 ; Italian
bodice di Commercio, § 251). If a bill is to
operate as from a date previous to the actual
issue, it may, according to the law of the United
Kingdom, be dated accordingly (ante - dated),
and if its operation is to begin as from a subse-
quent date, that date may be inserted — the bill
is then said to be post-dated. It thus becomes
possible to evade the stamp duty by post-dating
a biU payable on demand, which has the same
effect as if the bill had been drawn from the
right date payable on the date which appears as
the date of issue — in which case an ad valorem
stamp duty would have been payable. The
holder of a post-dated bill cannot, of course,
present it for acceptance before the date appear-
ing on its face. If a bill is drawn from a
country in which the Greek calendar is used,
the date of issue must be taken as the date
according to the Greek calendar. Thus a bill
drawn in St. Petersburg on the 1st November is
treated as drawn on 13th November according
to our computation. It is, however, customary
to insert the two dates thus : St. Petersburg ,
1/13 November. E. s.
DAVACH. Ancient measurement of land, ■
N.E. Scotland ; equal (average) to four
"ploughgates," which amount to 416 Scotch
acres, or 528-5 imperial acres.
[Cosmo Innes, Scotch Legal Antiquities.'] a. d.
DAVANZATI, Bernardo (1529-1606), bom
in Florence. This name will always be famous
in the history of Italian literature, because,
writing in prose, he attained to the same
vigour and precision that Dante displayed in
poetry. The writings of Davanzati are stUl
DAVANZATI— DAVENANT
483
models of style. He undertook to translate
Tacitus and to surpass him in conciseness, and
asserts that, on an average, a hundred Italian
words are required where Tacitus needs a hun-
dred and eight Latin ones, and a French trans-
lation a hundred and sixty. Besides his trans-
lation of Tacitus, a history of the Reformation
in England under Henry VIII., and minor
academic essays, two economic writings, for
which he merits here a mention, are extant.
These are his Lezione delle moTiete, 1582, and his
Notizia dei cambj, published in 1588, and in-
chided in Custodi's Scrittori Classici. To judge
him correctly it must be considered that he was
a contemporary of Scakuffi (1582), of Jean
BoDiN (1578), and of William Stafford
(1581), men who wrote their books half a cen-
tury before Petty and Locke were born (Petty,
1623-1687 ; Locke, 1632-1704). Davanzati be-
gins by showing how "barter is a necessary com-
plement of division of labour amongst men and
amongst nations"; he then passes on to show
how there is easily a "want of coincidence in
barter," which calls for a "medium of ex-
change" ; and this must be capable of "subdivi-
sion," and be a " store of value." He then goes
off upon a historical digression on currencies, and
on returning from tlience recognises in money "a
common measure of value." This leads him to
a dissertation on the causes of value in general,
in which respect his remarks are also worth
mentioning, because he has clearly shown that
utility and value are "accidents of things"
and functions of the "quantity in which they
exist." Proceeding to examples, he remarks
"that one single egg was more worth to Count
Ugolino in his tower than all the gold of the
world," but that, on the other hand, "ten
thousand grains of corn are only worth one of
gold in the market," and that "water, however
necessary for life, is worth nothing, because
superabundant." In the siege of Casilino "a
rat was sold for 200 florins, and the price
could not be called exaggerated, because next
day the man who sold it was starved and the
man who bought it was still alive." Returning
to his argument, he says aU the money in a
country is worth all the goods, because the one
exchanges for the other and nobody wants
money for its own sake. Davanzati does not
know anything about the rapidity of circulation
of money, and only says every country needs a
different quantity of money, as different human
frames need different quantities of blood. The
rest of his treatise is directed against artificial
deterioration of money. The mint ought to
coin money gratuitously for everybody ; and
the fear that, if the coins are too good, they
should be exported is simply illusory, because
they must have been paid for by the exporter.
Davanzati insists particularly on the injury the
defrauding government is the first to experience
when it tampers with the coin. In his essay
on exchanges Davanzati goes minutely into the
mechanism of exchanges, but he evidently does
not suspect the causes of the phenomenon noi
its limits. Davanzati was by profession a mer-
chant, and lived a part of his life in France.
[For a criticism of Davanzati, see Travers Twiss,
View of the Progress of Pol. Econ., 1847. Lec-
ture i.j M. P.
DAVENANT, Charles, LL.D. (1656-
1714), economist and politician, son of Sir
William Davenaut, the poet, was born in
London. He way educated at Cheam Grammar
School, Surrey, and in 1671 matriculated at
Balliol College, Oxford, but did not then
proceed to a degree. After composing, at the
age of nineteen, a tragedy under the title of
"Circe," which had some slight success, he
turned his attention to the law, and appears
to have taken the degree of LL.D., but at
what university is uncertain. He held the
office of commissioner of excise from 1683 to
1689, and represented St. Ives, Cornwall, in
the first parliament of James 11. His first
work of economic interest. Ways and Means of
supplying the War, was published in 1695. In
it he strongly objected to meeting war expenses
by borrowing money, and advocated an excise
as the best and fairest tax. He sat again in
parliament, this time for Great Bedwin, in
1698, continuing to write on economic and
political subjects. Under William III. he did
not hold office, and criticised the financial
policy of the government with some bitterness ;
but, on the accession of Queen Anne, he returned
to official life as secretary to the commission
appointed to treat for the union with Scotland.
In 1705 he was appointed inspector -general
of exports and imports, which office he held
until his death.
As an economist, Davenant must on the
whole be classed as an adherent of the mercantile
theory. In opposition to the bullionists he
points out that an energetic people with good
seaports and a soil fertile in variety of com-
modities, can easily exchange its products for
as much gold and silver as it may require.
"M(5ney," he says, "is the servant of trade —
at bottom no more than the counters with
which men in their dealings have been ac-
customed to reckon." He seems to have con-
sidered, however, that the possessors of money
in specie were in a position of advantage
compared with the possessors, and would-be
sellers of commodities. " Those who stand
possessed of the ready money have, in all
times and all countries, given the law."
Especially is this the case with perishable
commodities, and articles of luxury, which
should not be bought by any nation to a
large amount, except for the purpose of being
re-sold. On the last ground he strongly
supported the East India Company in the
controversies which raged about 1697 on the
484
DAVENANT— DAVIES
subject of the importation of East India goods,
and opposed the act which was passed in the
supposed interest of. English manufacturers,
forbidding the wearing or use of Indian silks
and muslins. Such a measure would only
benefit the French sUk trade and encourage
smuggling. "The natural way of promoting
the woollen manufacture is not to force its
consumption at home, but by wholesome laws
to contrive that it may be wrought cheaply in
England, which will enable us to command the
markets abroad." Europe was foolish enough
to be ready to pay for luxuries from India ;
much wealth could be gained by the nation
which would act as the go-between ; and for
England to refuse to reap the harvest would
be merely to leave it to the Dutch.
In his earlier economic period Davenant
shows distinct tendencies towards what might
almost be called a free- trade position. " Trade
is in its nature free, finds its own channel, and
best directeth its own course, and all laws to give
it rules and directions, and to limit and circum-
scribe it, may serve the particular ends of
private men, but are seldom advantageous to
the public. . . . The various products of
different soils and countries is an indication
that Providence intended they should be helpful
to each other." In the works, however, which
he published after his return to official employ-
ment, he did not venture to disturb current
economic ideas, devoting himself to carrying on
the statistical work of Sir "William Petty and
Mr. Gregory King, and attempting by an
elaborate investigation to ascertain the precise
position of England in regard to the balance
of trade (see Balance of Trade, History of
THE Theory), His views on taxation have
been already alluded to. He thought that
the incidence of taxation should be proportional
to the tax-payer's ability to pay, and that
taxes should bear chiefly on consumers
of luxuries. He thought that "all taxes
whatsoever were, in their last resort, a charge
upon land." Trade with uncivilised countries
such as Africa was, he thought, best carried
on by a monopolistic corporation (see Foreign
Trade, Regulation of). As regards the
labour question, he strongly advocated the
compulsory employment of the able-bodied poor
in manufactures, as a means to cheap production
and the consequent command of foreign markets.
Davenant's chief works were —
An Essay on the Wai/s and Means of Supplying
the War, London, 1695. — An Essay on the East
India Trade, London, 1697. — Two Discourses on
the Public Revenues and Trade of England,
London, 1698. — An Essay on the probable means
of making the people gainers in the balance of
Trade, London, 1699. — A Discourse on Grants
and Resumptions. — Essays on the Balance of
Power, London, 1701. — A Picture of a modern
Whig, London, 1701. — Essays on Peace at Home
and War Abroad, London, 1704..— Reflections on
the Constitution and Management of the Trade to
Africa, London, 1709. — Two Reports to the Com'
missioners for taking the Public Accounts, London,
1712 and 1715. A collected edition of his works,
edited by Sir C. Whitworth, was published at
London in 1771.
[Stephen's Dictionary of Nationxd Biography,
London, 1888. — Conrad, Handworterbttch der
Staatswissenschaften, Jena, 1888. — Gnillaumin
and Coquelin, Dictionnaire d'jSconomie Politique,
Paris, 1858, and heading "East India Trade" in
British Museum Catalogue.] a. h.
Davenant is perhaps best known to most readers
by his employment of the estimate made by
Greqoby King (q.v.) of the effect of deficiency
in supply on augmentation of price. The passage
in which this is mentioned is as follows :
" It is observed that but one - tenth the defect
in the harvest may raise the price three-tenths,
and when we have but half our crop of wheat,
which now and then happens, the remainder is
spun out by thrift and good management, and
eked out by the use of other grain ; but this will
not do for above one year, and would be a small
help in the succession of two or three unseasonable
harvests. For the scarcity even of one year is
very destructive, in which many of the poorest
sort perish, either for want of sufficient food or
by unwholesome diet.
" We take it that a defect in the harvest may
raise the price of c6rn in the following propor-
tions : —
Defect.
1 tenth \
2 tenths I
3 tenths Vraises the price-
4 tenths I
5 tenths y
Above the
common rate.
3 tenths
8 tenths
1*6 tenths
2-8 tenths
4 '5 tenths
So that when corn rises to treble the common
rate, it may be presumed that we want above one-
third of the common . produce ; and if we should
want five-tenths or half the common produce, the
price would rise to near five times the common
rate" {D'Avenant, vol. ii. pp. 224, 225).
DAVIES, David, D.D. (d. 1819?), gradu-
ated at Oxford, and was appointed rector of
Barkham, Berkshire. When in 1775 and 1785
parliament ordered returns to be made of the
poor rates throughout the kingdom, no inquiry
was thought necessary as regards the actual cir-
cumstances of poor families. To remedy this
omission, Davies collected budgets of labouring
families in his own parish about Easter 1787.
Of these accounts an abstract was printed ;
many copies were distributed with the help
of friends throughout England, Wales, and
Scotland. The valuable information collected^
in this manner is tabulated in the following
work, and furnishes minute particulars as to*
the wages, food, etc., of agi'icultural labourers.
The author offers various suggestions for the
encouragement of thrift, with recommendations
for rating wages by statute and according to
the price of bread.
TJie Case of Labourers in Husbandry stated and
DAVILA— DAYS OF GRACE
48fi
considered, in three parts : Part I. A View of
their Distressed Condition. Part II. The Princi-
pal Causes of their Growing Distress and Nuniher,
and of the Consequent Increase of the Poor-Rate.
Part III. Means of Relief Proposed. With an
Appendix containing a collection of accounts
showing the earnings and expenses of Labouring
families in different parts of the Kingdom. Bath,
1795, 4to.
[M'Culloch, Literature of Political Economy,
1845, p. 285.— Sir F. M. Eden, State of the Poor,
1797, vol. iii. — A. Toynbee, Industrial Revolu-
tion.'] H. R. T.
DAVILA, EL Padre Batjtista (17th cen-
tury). In his Resumen de los medios prdcticos
para el general alivio de la Monarquia (A
short account of the practical means of the
general Relief of the Monarchy), printed in
1651, Davila advocates a single and progressive
poll-tax. He thus aims to remedy the fright-
ful state to which Spain had been brought by
the bad administration of the ** Rentas Reales "
and by the vexatious exactions and dishonesty
of the collectors. He also deals with the pro-
blem of the debased currency.
[Colmeiro's Biblioteca de los Economistas Es-
pailoles aud Historia de la Economia Politica en
Esparla (vol. 11. pp. 494, 575, 576).] e. ca.
DAVILA Y LUGO, Don Francisco (17th
century). Davila's Desengafios y Replicas a las
Proposiciones de Gerardo Basso (Disproof of and
Reply to the proposals of G. B.), Madrid 1632,
is addressed to Philip IV., and strongly remon-
strates against the adoption of a plan suggested
by a Milanese writer, Gerardo Basso, Avho in his
Arbitrios y Disaursos Politicos (Madrid, 1627)
had suggested the recoinage of the existing
Vellon, debased small coins of silver and copper,
which made up almost the whole of the existing
currency in Spain. This recoinage was to be
effected at the joint cost of the state and of the
public, and reissued at a nominal value gi-eatly
superior to the intrinsic value. Davila explains
the objections to the tampering with the value
of the currency and insists that the latter must
be brought into strict correspondence with the
currency of the neighbouring states. All
monetary exchanges ought to be regulated
according to a book of rates, which he con-
siders that he alone is qualified to compile, and
which must be based on the real metallic
correspondence betAveen the national and foreign
coins in circulation.
[Colmeiro's Biblioteca de los Economistas Es-
pafioles.] E. ca.
DAY, DAY WORK, AND DIET. A term
given by the court at the prayer of the demand-
ant or plaintiff, especially at the Exchequer for
accountants of the crown to render their
accounts (Dialogus, ii. 4). Also Days of grace
were certain days allowed to the acceptor of a
bill or to the maker of a note in which to make
payment in extension of the term specified in
the bill or note. They were so called because
at first allowed only as a matter of favour,
perhaps originally through the mediation of the
church, but this custom of the merchants has
long been recognised by the law. Also a year-
and-a-day.
In another sense, one day's entertainment or
reception in lieu of service and rent, as in
Domesday Book, where many such fee-farm rents
are mentioned usually reserved to the king in
so many days' or nights' provision, e.g. "so
much honey as was sufficient for the king's
family for half a day, and as much as was enough
for a whole day " (Spelm. Domesday).
Also an allowance or diet for officers of state
calculated according to the expenses of a day's
journey or sojourn. A table of diets for the
sheriffs of the English counties according to the
number of days' journeys completed in attending
at the exchequer at AVestminster or at York is
preserved in an ancient record (Red Book of
Exch^qiLer, fol. 14). Especially used of ambassa-
dors or other agents of the crown (Audit Office
Declared Accts., "Ambassadors," "Agents").
Also of soldiers, labourers, etc. paid by the
crown (Q. R. Wardrobe Accounts, "Army," etc.)
Diet is also used of a day's journey, formerly
calculated as twenty miles, jn-esumably for a
horseman.
Also in agriculture of the day's work of one
ploughman or cart, namely one "journey"
(Jotirn4e). Hence sometimes used as a specific
quantity in grants of land (Cart. Reading, fol.
90d.) The extent of land ploughed in a day
was variously computed, but was commonly fixed
at four perches. In another sense a day-work
was a recognised proedial service rendered by the
villeins in most manors to the lord, and thess
"opera diurna" are enumerated in many cus-
tumals, and often in connection with an allow-
ance of food — " Et debent facere LX opera
diurna, ut supra, in gardino, vel alibi, ut supra,
capiendo LXV panes, ut supra." (Cust. of
Battle, p. 10).
[Spelman, Gloss. — Cowel, Interpr. — Nordeu's
Surveyors' Dialogue. — Notes and Queries (3rd
series), iii. 512. — Custumal of Battle Abbey
(Camden See.)] h. na.
DAYS OF GRACE. These are the days
which, in the case of bills of exchange, not
being payable on demand, are added to the
time of payment appearing on the face of the
instrument. According to the law of the
United Kingdom there are three such days of
grace (see Bill of Exchange, Law of) ; but
a bill may (by the use of the words " without
grace " or some similar expression) stipulate
that the day appearing on its face is to be the
final due date. In most continental countries
"days of grace," in the sense indicated above,
do not exist ; the holder may take out protest
without waiting for any additional days ; but
he does not lose his right of recourse, if the
presentation or protest is deferred for a certain
486
DEAD FREIGHT— DEALER
time (two days according to tlie German and
Italian codes, §§41 and 296 ; one day accord-
ing to the French code, § 162). These ad-
ditional days, which may be called "days of
grace at the holder's option " are convenient, as
they enable the holder to exercise some leniency
in favour of acceptors who, by reason of some
accident, are not in possession of liquid funds
on the exact day ; but the English days of
grace have no practical object whatever, and
only add an unnecessary complication in the
computation of the time of payment. E. s.
DEAD FREIGHT. Compensation paid by
the freighter of a whole ship for space remaining
unoccupied when the cargo is not a full one.
A. D.
DEADLY, Warrandice Against All
(Scot.) Warranty against all mortals {contra
omnes mortales). (See Warrandice.) a. d.
DEAD RENT. A rent reserved in a mining
lease and payable whether the mine be worked
or not. The object of such reservation is to
secure the working of the mine. In some
leases the dead rent and the royalty (see
Royalty) are made payable cumulatively ; in
others the dead rent merges in the royalty
actually paid (The Law of Mines, by R. F.
MacSwinney, London, 1884).
[As regards the amount and economic effects of
dead rents, see Mining Royalties, by W. R. Sorley,
London, 1889, and The Reports of the Royal Com-
mission on Mining Royalties, c. 6195 of 1890, c.
6331 and c. 6529 of 1891.] j. e. c. m.
DEAD'S PART (Scot.) The portion of a
man's free movable estate which he is at
liberty at common law to bequeath by will ;
that is, if he have neither wife nor child, the
whole ; if he have either wife or child, one
half ; if he have both wife and child, one
third. In other words, the wife is entitled to
one equal share ; the child or the children
jointly to another equal share ; the testator is
limited to one equal share, the deceased's
share, or "dead's part." This common-law
scheme of distribution may be modified by
ante-nuptial contract of marriage (see Mar-
riage Settlement), or, after the marriage,
by formal renunciation of their legal rights by
the wife or children respectively. a. d.
DEADWEIGHT ANNUITY. A terminable
annuity the creation of which was sanctioned
in 1822, in lieu of certain naval and military
pensions payable out of the public funds. The
phrase was originally employed by Cobbett.
The distressed condition of agriculture in
1822 led Lord Londonderry's government to
propose various measures for the lessening of
the public burdens. Amongst them was a
scheme for the creation of an annuity of
£2,800,000, for a period of forty-five years, in
lieu of the "dead expense" or "dead weight"
of the naval and military pensions and half-
pay amounting altogether to about £5,000,000
a year, which had arisen out of the recent wars.
It was claimed that the government were justified
in distributing this charge equally over a period
of years, instead of awaiting the gradual extinc-
tion of the burden by the death of the pen-
sioners. The scheme was opposed by Ricardo,
amongst others, on the ground that it was a
covert attack upon the sinking fund, and a
relieving of the then taxpayers at the expense
of posterity, but it eventually became law (3
Geo. IV. c. 51). In 1823, the Bank of Eng-
land agreed to purchase £585,740, part of the
proposed annuity, paying for it the sum of
£13,089,419, spread over the six years 1823-28
(4 Geo. IV. c. 22), but this was the only sale
efiected, and the original act was repealed in
1828 (9 Geo. IV. c. 79) on the unanimous re-
commendation of the House of Commons ; thus
the whole of the annuity, except the £585,740
per annum sold to the Bank of England, was
cancelled. In July 1839 the Bank of England
invited tenders for the purchase of their annuity,
with a view to counteract a long- continued drain
upon the stock of bullion, but the biddings fell
short of the minimum advertised price, and the
annuity continued to be paid to the Bank until
1867, when it expired.
[In addition to the Acts above named, Hansard,
2nd Series, vol. vii. pp. 164, 280, 316, 737, 1319,
1396, vol. xix. p. 646 ; Tooke's History of Prices,
vol. iii. 88, 100-1, vol. iv. 333 ; and the Report of
the Select Committee on Banks of Issue (No. 602
of 1840), may be consulted.] t. h. e.
DEALER (Stock Exchange). A dealer is
a man who, in concert with others, makes what
is called a market. He stands ready to buy or
sell certain stocks, or shares, or bonds and.
when a stockbroker approaches him with a
demand for a quotation, the dealer (or jobber,
as he is still called in and about the stock ex-
change) replies by mentioning two prices, the
lower being that at which he will buy, and the
higher that at which he will sell. For instance,
when quoting the price of consols, he offers to
buy each £100 stock at 98, or to sell at 98'
There is no legal obligation upon him to quote
prices or to deal after quotation, but it is part
of the etiquette of the stock exchange, which
is quite as much a club as a market, that the
dealer should follow up his quotation by buying
or selling as the case may be up to the value
of £1000. Indeed, were a jobber to give a
quotation and then refuse to deal at either
price named in the quotation, he would fall into
disrepute, and perhaps be reported to the Stock
Exchange Committee for General Purposes. In
theory the dealer is supposed to be ignorant
of and indiflFerent to the desire of the broker
who accosts him — that is, he is supposed to be
ready to sell or to buy — but in practice a
shifty dealer will try to delay giving his quota-
tion until he has discovered, or thinks he has
discovered, the intentions of the person who
DEALER— DEARNESS
487
has come to him. If he thinks that the latter
wishes to buy he raises his selling price ; if he
has reason to believe that the party wishes to
sell, he quotes as low a buying price as possible,
unless the state of his book makes it his interest
to deal freely. Dealers sometimes transact
business among themselves, for at the end of
a day it may happen that dealer A has con-
tracted to buy more stock than he can pay for,
while dealer B has, on the other hand, con-
tracted to sell more of the same stock than he
can possibly deliver. Then A and B come
together, and each relieves the pressure upon
the other dealer's "book." In short, they
institute a kind of clearing-house among them-
selves, writing off liabilities to sell against
liabilities to buy. It need not be said that the
dealers who compose a market have many
opportunities for discovering facts which may
lead them to a correct conclusion as to the drift
of prices in the market. At the end of one
week they will discover that the public has been
absorbing a certain stock so freely as to limit
the supply on the market. A week or two later
they will have found that the tide has turned,
and once again they are enabled to take measures.
The dealer is a product of division of labour.
He gives his time and attention exclusively
to the consideration of one or two securities, and
gradually accumulates in his own mind a record
of the forces which go to raise or depress that
group of securities in the market. He also
preserves a kind of continuity, and acts as the
middle link between the buyer of a stock who
may be at Penzance, and the seller who may be
at Middlesbrough. If it were not for the dealer
or jobber, a man with stocks or shares to sell
would have to run about, or employ a broker
to run about, from place to place, ofiering these
shares and remaining, perhaps, in the dark as
to what is a good average market price. Thus
the dealer forms the nucleus of a perpetual fair,
and whereas a horse fair, for example, is often
only an annual function, persons in the neigh-
bourhood of the town in which it is held being
almost compelled to keep their cattle until a
fair takes place, the attendance of a concourse
of dealers on the stock exchange makes it
always possible to buy or sell the stocks in
which they are concerned. In active times the
price quoted by a dealer is usually more "close "
— that is, the interval between the buying and
selling quotation is narrow — whereas in dull
times the dealer hesitates to offer anything
like a middling quotation for fear of inability to
cover or "undo" his bargain by a resale or a
repurchase at such a price as would leave the
dealer a turn or profit. A. E.
DEARNESS, Artificial. When action is
consciously and deliberately directed to enhance
the price of some commodity in some market
above the competitive level, any resulting
deamess may be called artificial.
We are not here to consider natural mono-
polies, for the deamess produced by these may
be regarded as in a sense normal ; and the end
of the monopolist is not dearness, but high net
profit, which may in some circumstances be
produced by cheapness.
Nor can we conveniently consider under this
head such artificial monopolies as copyright in
books, or works of art, or patents for inventions.
Dearness so produced is in a sense artificial, as
deliberately created by the state. But the
price of such things is not on the average
higher than is necessary to induce the author
or the inventor to work for the community.
The protection of home products by duties
on imports may produce artificial dearness, but
is more conveniently considered separately
under the head Protection.
The cases in which demand can be artificially
created are not important. Laws such as the
English law in the reign of Elizabeth for the
eating of fish on Wednesdays and Fridays, and
the charitable endeavoui'S of leaders of fashion
to foster local manufactures, e.g. Irish poplins,
have had this end and possibly this effect.
The eflect of false rumours is generally transi-
tory and followed by an equivalent or greater
reaction. But the issue of misleading reports
and fraudulent balance sheets may maintain
the shares of banks and companies at an
artificial level for years, as in the case of the
city of Glasgow Bank (1878). Again a govern-
ment may use its power as a purchaser to en-
hance the price of commodities for the benefit
of a section of its subjects, or for the profit of
influential persons. The laws passed in 1878
and 1890, to regulate the purchase of silver for
currency purposes in the United States, had
this effect if not this object.
Artificial dearness can only be permanent
when the individual, or association, or public
authority engaged in enhancing the price has
either practical control over the most important
of all possible sources of supply, and thus can
limit the output, or has absolute control over
the market of demand.
Thus the East India Company and, in later
days, the Indian government, had practical
control over the sources of supply of a specially
high quality of opium. We are told that the
Company used this power in a very arbitrary
way to limit the supply of their opium (Adam
Smith, bk. iv. ch. vii.). And the Indian
government placed this restriction on a regular
basis with such profitable results that a mono-
poly revenue of some seven millions sterling
was drawn from this source (see Opium). But
the market was not under English control, and
a war with China was necessary in order to
maintain it. The rate of profit also diminished
through increased consumption of Chinese
opium, which, although inferior, was a com-
peting substitute.
488
DEARNESS
The Dutch East India Company had long
after 1607 sovereign control over the Molucca
Islands, once almost the only sources of supply
for certain highly valued spices. Discovering
by experience that a small increase of supply
creates a more than proportional fall in the
price of such commodities,- they rigorously
limited the supply by destroying a part of the
plants in their own islands, and by extirpating
as far as possible the clove and the nutmeg in
the islands where they had no settlements (Adam
Smith, I.e.) In abundant seasons they also
destroyed a large part of their own produce.
In modern times the monopoly of the spice
trade is no longer in the hands of any nation.
Mines and salt mines have been commonly
regarded in Europe as state monopolies. Until
modern times the price has been thus main-
tained at an artificial level. Where the whole
sources of supply are, as in this case, col-
lected in one hand and foreign competition
is excluded, it is not necessary to restrict the
output. The price can be fixed, and the
demand at that price will determine the output.
Somewhat similar are the state monopolies
of matches, tobacco, etc. which exist in France
and other European countries. They are
highly profitable to the state, but the consumer
has to put up with inferior quality. More
convenient in the latter respect are customs duties,
supplemented by equivalent excise, or levied
on commodities not produced at home. These
also produce artificial dearness for the profit of
the state. But the rate of taxation does not
measure the increase in price. It may be less
or more according to the law which the produc-
tion of the commodity obeys (see Diminishing
Returns, and iNCREAsiNa Returns). Ex-
port duties can only be levied with permanent
advantage to the state when a country has
a natural monopoly of a commodity, or pro-
duces it under exceptional advantages. So
with English wool in the thirteenth and four-
teenth centuries. Such duties result in artificial
dearness of the commodity, which is generally
accompanied by a reduced demand and may
ultimately destroy the trade. A bounty on
exports has the opposite efiect, and raises the
price for a time at least to the home consumer.
A trading body, not fortified in a monopoly
by the power of a state, can rarely obtain such
control over all the sources of supply of any
commodity in any market, as may be possessed
by a public authority or a chartered company.
The attempt has been made in recent times by
great associations of capitalists, trading and pro-
ducing bodies known as syndicates and trusts.
The Standard Oil Trust in the United States was
formed in 1881, to control three-quarters of the
total petroleum refining power of the States, and
exercised also, as it is alleged, influence over the
output of crude petroleum, and the carrying
corporations. It is not suggested that the I
trust enhanced the price of refined petroleum
above its previous level, but the considerable
profits of the trust suggest that it partly
prevented a natural decline. The Sugar Re-
fining Company, which united under one
control the chief sugar refining establishments
in the States, is admitted to have raised the
price of refined sugar two cents a pound. But
in spite of their overwhelming power, neither
of these two great associations was able to
control the whole of the producing power and
effectually keep down the output. Though
protected in their own country they could not
control the foreign trade, and there remained
even at home a smaU body of outside com-
petitors and a vast power of potential
competition which might at any time, if
tempted by exaggerated •profits, have come into
the field. In the case of the Cotton Bagging
Trust, a syndicate of consumers, known as the
Farmers' Alliance, was formed in opposition.
The moderation with which trusts have been
generally conducted has not saved them from
unpopularity. In some States such combina-
tions have been pronounced illegal, and attempts
have been made to crush them by legislation.
One of the best conceived of such schemes
was the English Salt Union formed in 1888, to
controlthesupply of salt from the English mines.
The effect of their action was immediately seen
in the decline of English exports of salt from
898,000 tons in 1888 to 667,000 tons in 1889,
with a rise in values from £486,000 to
£539,000, thus illustrating a well-known law
which is the strength of those who attempt to
forestall necessaries. In September 1888 the
price of lump salt delivered free in Cambridge
was 26s. a ton, in July 1889, 48s., July 1890,
52s., July 1891, 36s. The company paid in
the first year 10 per cent on its ordinary
shares, in 1890, 7 per cent, and in the first
half of 1891, 5 per cent only. The 7 per cent
preference shares in October 1891 stood at a
discount. Excellent as are the sources of
supply controlled by this company, necessary
and universal as is the use of salt, its bulk
comparatively small and the burden per head
light, the rise in price cannot fail to affie.ct the
export trade, and the greater the rise in price
the greater the inducement to competition,
which for the great export trade is serious and
even in England may become active. The
difficulties of a trust increase with its success
and with the duration of its success (on the
whole subject, see a Foreign Office Report,
1890, c. 5896-32).
Even more hopeless is the task when the
attempt is made to enhance price over a con-
siderable period, with no control over the
output, by buying up the stock in the
market. The copper syndicate started in ,
France towards the end of 1887, with a capital
of 4 millions sterling, and the resources of the
DEARNESS
488
Comptoir d'Escompte at its back. Copper was
then and had long stood at about £40 a ton.
Demand for copper was reviving. The opera-
tions of the syndicate raised copper to £85 in
January 1888, and to £99 a ton in September
of the same year. They had contracts with all
chief copper-producing companies binding the
syndicate to take over all their copper up to a
certain amount at a certain price. But they
had not the power to keep down the output,
which increased from 224,000 tons in 1887 to
262,000 tons in 1888.
During the period the visible supply in-
creased from 45,000 tons to 118,000 tons.
Meanwhile consumers were minimising their
purchases. Copper is not a necessary of life,
and in March 1889, when the resources of the
society and of the Comptoir d'Escompte were
exhausted, the society itself held 130,000 tons.
In April 1889 the price of copper was back
at £40. As a speculative venture the syndicate
had very favourable prospects. But its ill-
regulated attempt to artificially enhance and
maintain the price failed, through want of
power to keep down the output in proportion
to the reduced consumption.
In the middle ages local markets were
sometimes so far isolated by difficulties of
communication and carriage that a very con-
siderable difference in price would be long in
attracting supplies from other markets. Such
exceptional markets may occasionally have
been looted by speculators, whose resources
were large in proportion to the market. In
dealing with necessaries, it would be enough
to buy up a large part of the available
supply, to withhold, export at a loss, or even
destroy a part, in order to realise substantial
profits (see Jevons, Theory of Political Econ-
omy, 1879, 167 seq., and the estimate there
quoted, which, though resting on an insufficient
inductive basis, is the guess of a shrewd man of
much experience). Such events may have
occurred to justify the popular hatred of
FoRESTALLERS AND Regrators and Accajpa-
reurs, and the legislation on the subject from the
lex Julia de Annona downwards. But the
enterprise could rarely be attempted with
success, and Adam Smith (bk. iv. ch. v.) did
good service in pointing out the useful function
of corn dealers as mitigating the severity of a
scarcity, and in condemning all such legislation.
It is very difficult to believe that a pacte de
Famine, in eighteenth-century France, can have
been successful, unless by the aid of legislation
restrictive of trade.
The modern market for necessaries is co-
extensive with the world. The modetn
harvest continues from January to December.
No combination of capitalists has yet arisen
which could even threaten an artificial
scarcity of food, unless in a strictly protected
country, or a country where modem means of
communication have not been developed. On
the other hand, to produce in a sensitive market
a transitory enhancement of price does not re-
quire great resources. The device is familiar
on the stock exchange and the produce market.
But to make this manoeuvre profitable the in-
fluence of example is necessary. When a lead-
ing financier buys largely, small speculators
rush in to profit by the boom, and the master
may unload at the expense of his imitators.
If this expectation is not fulfilled the market
must be depresued by the operator's sales, as
much as it was raised by his purchases. On
the whole, such fluctuations tend to depress
average prices by discouraging legitimate pur-
chase for consumption or investment, though
they may be profitable to individuals.
At an exceptional conjuncture, when the
supply of some necessary runs low, the action
of some corner or ring may stimulate normal
demand into frenzy. This was the case in New
York in September 1869, when £22,000,000
sterling in gold were locked up in the treasury
and the available market supply fell to£ 3,000,000
sterling. The currency being inconvertible,
this supply might have been sufficient for nor-
mal needs. But it was easy for a few specula-
tors to control the whole, and exact a ruinous
price from purchasers whose needs were pressing.
A ring was formed and in one day the premium
on gold was forced from 40 to 60 per cent.
The excitement was so gieat and the dealings
so large that the gold clearing-house was un-
equal to the strain. The further rise of gold
was only stopped by government sales of gold.
It is, however, easier to create such movements
than to profit by them. The means taken on
this occasion by the conspirators to protect
themselves are said to have been outside the
limits of legitimate trade.
When speculators are rashly bearing a
stock of which the real supply is small, a
corner may sometimes be formed to lock up the
whole, and prices are then forced up to an
abnormal level, for the bears cannot find stock
to deliver on settling day (see Backwarda-
tion ; Corner ; Ring).
The so-called cotton corner of 1889, on the
collapse of which (September 30th) "Septem-
bers " fell thirty points in one day, was rather
a case of exaggerated speculation for the rise
than a genuine case of artificial dearness.
The mutual relations of individuals are
becoming less important to economics than the
mutual relations of great associations. The
labour market has been lately swayed by great
combinations, not unlilce those which attempt
to control the production of commodities. The
object of their action is to enhance the rate of
wages, and in so far any dearness of labour
produced may be termed artificial. But bar-
gaining is one of the normal functions of the
economic man, and the desire to obtain the
490
DEARTH— DEATH DUTIES
best terms possible one of the ordinary forces
that determine prices. It seems best therefore
to confine the term, in the labour market, to
any dearness that may be produced by the
exclusion of certain men from certain labour
markets, by limitation of apprenticeship, or
by intimidation of outside competition! The
attempt is subject to the difficulties already
mentioned. The greater the artificial en-
hancement of price the greater the attraction
to outside competition, whether of man with
man, or producer with producer, or port with
port, or country with country.
The various modes in which it has been
attempted to enhance price artificially have
been surveyed, according as the enhancement
has been permanent, temporary, or what may
be called momentary. The success of the
attempt depends upon the nature of the com-
modity dealt with, the extent of the market of
supply, and of demand, and the character of
the resources commanded. Price may be
momentarily enhanced by taking advantage of
peculiar circumstances of the market. It may
be temporarily enhanced by buying up the
stock, but such attempts cannot be successful
unless it is possible to exclude extraneous
supplies, or unless such supplies are by the
circumstances of the case excluded. If this be
so, in the case of necessaries there is hardly
any limit to the possible enhancement of price.
In other commodities consumption is minimised
and substitutes employed. Permanent enhance-
ment requires either a practical monopoly of the
sources of supply, which is apt to break down
if the strain be severe, or such command over
a market of demand as only a government can
exercise. The safeguard of the community
against the tyranny of great capitals rests in
the practical difficulty of keeping great voluntary
combinations together, and of finding a com-
modity indispensable, without substitutes, of
which the sources of supply are absolutely
limited.
[Adam Smith, bk. iv. ch. v. — Cournot, Prin-
cipes Mathimatiques, ch. i. § 2. — John Stuart
Mill, Principles of Political Economy, bk. iv.
ch. ii. § 5. — Roscher, Political Economy, bk. ii.
ch. ii. § 108. — Sidgwick, Principles of Political
Economy, bk. ii. ch. ii. § 4, § 7 ; bk. ii. ch. x.
See also Corner ; Customs ; Excise ; Porestal-
LERS AND Reqrators ; MONOPOLIES ; Protection ;
Ring ; Syndicate ; Trade Unions ; Trusts.]
S. M. L.
DEARTH. See Famine.
DEATH DUTIES. The collection of a tax
on the occasion of the transference of property
from the dead to the living has been made
a means of raising public revenue from very
early times. Adam Smith cites as examples
the vicesima hereditatum of the Romans,
the duties payable by heirs under the feudal
law, and the Dutch tax on successions. Duties
of this class now rank, with common consent,
amongst the most legitimate and least detri-
mental to individual interests of all descriptions
of taxation.
Adam Smith discusses the arguments for and
against these duties at considerable length
( Wealth of Nations, bk. v. ch. iii. ), and points
out that they are, or may be made, "perfectly
clear and certain," "the time of payment is
. . . sufficiently convenient," and "they are
levied at very little expense." On the other
hand he considered them unequal, on the
ground that the frequency of transference was
not always the same in property of equal value,
and he also thought that so far as they diminish
the capital value of property they "tend to
diminish the funds destined for the maintenance
of productive labour." The latter point was
emphasised by Fawcett (Manual Polit. Econ.,
bk. iv. ch. ii.), but MUl (Principles, bk. v.
ch. ii. § 7) attached no importance to the
objection in a wealthy country. He considered
that "the amount which would be derived
from a very high legacy duty in each year
is but a small proportion of the annual increase
of capital in such a country ; and its abstrac-
tion would but make room for saving to an
equivalent amount." Prof. Sidgwick adopts
a similar view, and says that the bad efiect
of such duties "is not at all likely to be at
all equal in proportion to the similar efiect
that would be produced by extra taxes on
income ; in fact, the limits of taxation on in-
heritances will be practically determined for
the financier rather by the danger of evasion
through donMiones inter vivos than by the
danger of checking industry and thrift."
(Principles, bk. iii. ch. viii. § 11).
Mill regarded legacy and inheritance duties
as taxes in respect of which it was both ex-
pedient and just that the principle of gradua-
tion should be adopted (Principles, bk. v. ch.
ii. § 3), but Prof. Nicholson contests this view
and expresses the opinion that "graduated
taxation, even in the modified form proposed
by Mill, would tend to check production on
a large scale" (Encyclopaedia Britannica, art.
" Taxation "). The levy of a larger percentage
on a larger sum has, however, received distinct
recognition in the scale of death duties in force
in the United Kingdom.
Prof. Nicholson (ibidem) says that "it is
obvious as regards incidence that taxes of
this class are the most direct of all taxes, in
the sense that they cannot be transferred to
other persons by the beneficiaries " ; to which
he adds, that the principal difficulties connected
with them arise in connection with the canon
of equality of taxation.
The death duties levied in the United
Kingdom date from the year 1694, when a
fixed duty of 5s. each was imposed on all pro-
bates of wUls and letters of administration.
This duty was increased four years later to 10s.,
DEATH DUTIES
491
but in both cases the charge was more analogous
to the stamp duties levied on instruments of
a legal character than to the death duties as we
now know them. In 1779 Lord North, taking
note of the observations of Adam Smith,
proposed that the charges should vary accord-
ing to the amount of the estate, the maximum
duty to be a fixed sum £2 : 10s. on each estate
of £300 and upwards. In the following year
these charges were supplemented by a graduated
duty on receipts given for legacies. Frequent
changes in the scale of probate duties were
made between 1779 and 1815, the maximum
charge being gi-adually augmented, and in the
latter year a distinction was drawn between the
duties levied on testate and intestate estates.
During the same period the legacy duties were
also increased, and their payment made more
secure. The most important alterations were
those proposed by Pitt in 1796, when executors
were made responsible for the payment of the
duty, and the charge was levied at different
rates varying according to the consanguinity of
the legatee to the testator. These rates were
enlarged in 1804 and again in 1805. No com-
plete record of the yield of the death duties
exists prior to the year last named, but they
then produced £495,000, a sum which had in-
creased to £882,000 in 1810, and to £1,298,000
in 1815.
In 1842 the Irish probate duties were
brought up to the level of those levied in
Great Britain, but, with this exception, the
death duties remained unaltered for thirty-eiglit
years. The amount they produced, however,
steadily increased, rising from £1,696,000 in
1820, to £2,189,000 in 1830, £2,192,000 in
1840, and to £2,343,000 in 1850.
In 1796, Pitt had endeavoured unsuccess-
fully to obtain a tax on successions to landed
property, analogous to that on legacies of
personal estate, and it was reserved for Mr.
Gladstone, in 1853, to bring within the scope
of the duties all successions to property, by
reason of death, whether the property was
real or personal, and whatever the nature of
the title to receive it. Mr. Gladstone found
it essential to make considerable differences
between the new duties and the old ones,
alike in the amount to be paid and the manner
of payment, and his estimate of the produce
of the duties he imposed proved excessive,
their yield never having amounted to one-half
of the sum, £2,000,000, which he thought
they would realise. Some slight modifications
of the death duties were made in 1859 and in
1864, and six years later Mr. Lowe proposed,
but without success, to so rearrange them as
to secure an additional £1,020,000 a year, but
it was not until 1880 that any substantial
changes were made. Meanwhile the aggregate
.produce had risen from £2,547,000 in 1853
ito £3,564,000 in 1860, £4,953,000, in 1870,
and to £6,400,000 in 1879, figures which
strikingly exemplify the growth of the national
wealth.
In 1880, Sir Stafford Northcote revised the
scale of probate duties, and a year later Mr.
Gladstone followed his example and, at the
same time, abolished the distinction between
the duties payable in respect of testate and in-
testate successions, transferred the duty from the
probate or letters of administration themselves
to a detailed affidavit of value to be lodged
with the application for representation, and re-
pealed the 1 per cent legacy or succession duty
payable by direct lineals wherever the increased
probate duty was paid. On the same occasion
Mr. Gladstone afforded relief to small estates
not exceeding £300, alike in the amount to
be paid and the mode of payment, whilst a
new duty, styled the "account duty," was
imposed as an equivalent to the probate duty
in certain circumstances in which the pa3rnient
of the latter was avoided. The yield in the
year 1880-81, under Sir Stafford Northcote's
scheme, was £6,826,000, and in 1882-83,
when Mr. Gladstone's proposals first took full
effect, the receipts were £7,438,000. Five
years later the produce had risen to £8,242,000.
In 1888 Mr. Goschen proposed that the ex-
chequer should surrender one moiety of the
probate duty for the benefit of various local
authorities, and he accompanied this proposal
by an addition of a ^ per cent to the 1 per cent
rate of succession duty and of l^- per cent to
the higher rates. In 1889 he imposed a new
duty, analogous to the probate and succession
duties, which was termed the "estate duty" by
reason of its limitation to estates or successions
of £10,000 and upwards.
In 1894 Sir William Harcourt in his Budget
of that year, rearranged the system of the Death
Duties into which he introduced the principle
of graduation. A new estate duty was imposed
to take the place of probate and account duty
and of the former estate duty. The new duty
was levied on the principal value of all settled
property passing at death, at rates varying from
1 per cent on property from £100 to £500 in
value, to 8 per cent on estates valued at over
£1,000,000. The net produce of this tax in
1901-2 amounted to £13,908,490, legacy duty
yielded £3,133,588, and other duties, including
succession duty, £1,308,136, brought up the
total proceedsofthedeath duties to £18,513,714.
In 1907 Mr. Asquith raised the Estate Duties, and
in 1910 Mr. Lloyd George passed his Finance Act,
by which the rates were considerably increased.
The Act of 1914 proposes still further changes.
It will now be convenient to describe, undei
their respective heads, the death duties at
present levied in the United Kingdom.
(1) Estate Duty.— This duty, imposed by
Sir William Harcourt, as stated above, took
the place of the Probate, Administrative and
492
DEATH DUTIES
Inventory Duties, the Account Duty and Estate
Duty, which had been in force up to that time.
It requires that prior to the issue of any grant
of probate or letters of administration of the
estate of any deceased person, the applicant
should deliver an affidavit containing detailed
particulars of the value and description of all
the property belonging to the deceased which
the executor or administrator has the right to
recover virtute officii. All property must be
included, whether real or personal, settled or
not settled. Leaseholds are personal property
and should also be entered in the affidavit.
Debts payable out of the estate, together with
reasonable funeral expenses, may be deducted
from the assets, and the duty is charged upon
the principal amount of the estate according to
the following scale imposed by Mr. Lloyd
George's Budget, 1910.
1
Principal Value of the Estate.
Rate of
Duty.
Above £100 and not above £500
£1 per cent
500 „ „ 1,000
2 „
1,000 „ „ 5,000
3
5,000 „ „ 10,000
4
10,000 „ „ 20,000
5
20,000 „ „ 40,000
6
40,000 „ „ 70,000
7
70,000 „ „ 100,000
^ '■
100,000 „ „ 150,000
9
150,000 „ „ 200,000
10
200,000 „ „ 400,000
11
400,000 „ „ 600,000
12
600,000 „ „ 800,000
13
800,000 „ „ 1,000,000
14
1,000,000
15
The duty is denoted by means of a stamp on
the affidavit, and provision is made for the
delivery of a "corrective affidavit" where an
adjustment of the duty originally paid is found
necessary. In the case of small estates not
exceeding the gross value of £300 a fixed duty
of 30s., and of estates between £300 and £500
gross value 50s., may be paid, the grant of
representation being obtained through the
agency of the officers of inland revenue on
payment of a fee of 158. in lieu of the fees
ordinarily charged in the Probate Division of
the High Court. In Scotland, where the pro-
cedure at death differs from that in force in
England and Ireland, the duty is payable on
the inventory which is required to be exhibited
in that country — where property is situated in
more than one of the three kingdoms, arrange-
ments are made by which one grant of repre-
sentation suffices.
Among other alterations introduced by the
Budget of 1910 was the Increment Value Duty.
This, after April 30, 1909, is leviable at the
rate of £1 for every complete £5 of the in-
creased value of the land, when, on the occasion
of any transfer or sale, and at the death of the
owner, the property is valued for Estate Duty.
For details see the Finance Act, 1910. It
further enacted that Real Property may be
transferred as payment of Estate Duty, Settle-
ment Estate Duty, or Succession Duty ; that
gifts of over £100 made during the last three
years of life, with the exception of gifts for
public or charitable purposes, in consideration
of marriage, or as part of reasonable norma
expenditure, are regarded as property passing
at death and taxed accordingly. Settlement
Estate Duty was raised from 1 to 2 per cent.
The Estate Duty produced the sura of
£14,231,000 in the year 1908-9. Taken as a
whole they form the most important branch of
the death duties — more than 77 per cent of
the total. The yield exceeded £500,000 for
the first time in 1814, £1,000,000 in 1837,
£1,500,000 in 1863, £2,000,000 in 1872,
£4,000,000 in 1883, £10,000,000 in 1895,
£12,000,000 in 1900. The produce for 1908-9
represented the duty levied at the rates imposed
by the Act of 1907; in 1912-13 it was
£20,046,347, the large increase resulting from
the Act of 1 9 1 0. The estates upon which the duty
was collected may be classified thus (1913) : —
Net Value of Estate.
=1
Value.
Not above £1000 . . . .
Above£1000Mnclnotabove £100,000
Above £100,000 . . . .
48,179
22,316
293
£
19,906,000
174,914,000
84,442,000
70,788
279,252,000
(2) Legacy Ihity. — This duty, originally a
stamp duty on receipts, is now more fitly
described as "a tax upon movable property ;
its incidence depends upon the domicile of the
deceased owner, and its amount upon the value
of the bequest or succession, and upon the
degree of consanguinity existing between the
1 per cent
1 „
10
deceased and the legatee." It is
(1914) at the following rates : —
Husband or wife ....
Lineal issue or lineal ancestor .
Brothers and sisters and their de-
scendants
Uncles and aunts, all other relations
and any other person .
The 1 per cent duty is not levied when the
principal value of the property is less than
£15,000, or when the value of the legacy or
Succession does not exceed £1000 (£2000 in
the case of widow or child of deceased), what-
ever may be its principal value. The duty is
payable when the legatee comes into the posses-
sion of his legacy, and owing to the complexity
of the manner in which property may be dis-
posed of by a testator, the rules for its assess
ment are of an exceedingly complicated char
acter. The duty is paid in money, althoug'
a stamp is impressed on certain forms of ai
count in order to denote the discharge of the
DEATH DUTIES— DEATH-RATE
498
liability. There are some exemptions in favour
of the Royal Family, learned societies, etc.
The legacy duty produced £3,336,000 in
1908-9, and it then comprised nearly 18 per cent
of the total yield of the death duties. The receipts
amounted to £546,000 in 1809, £1,070,000 in
1822, £2,935,000 in 1877, £2,731,000 in
1895-6, and £3,909,000 in 1907-8. This last-
named sum was not exceeded until the figures
increased considerably under the present scale
of rates (1914), being £4,506,923 in 1912-13.
Considerable difficulties arise in the collection
of the legacy duty by reason of the length of
time which may elapse between the death of a
testator and the receipt of a legacy. But these
difficulties cannot well be avoided if a consan-
guinity scale is maintained, and the retention
of such a scale is now almost universally sup-
ported by public opinion. All present and
future claims for legacy duty under a will may
be compounded for by agreement, but this
course is not adopted to any large extent.
(3) Siiccession Duty. — This duty supple-
ments and completes the duty on legacies. It
charges " all successions to property, real as
well as personal, whether the title be under
settlement or will, by descent, intestacy, or sur-
vivorship." The rate payable depends on the
consanguinity of the person from whom the
succession is derived. Where Estate Duty
is not payable the following is the scale : —
Lineal issue or lineal ancestor. . . l^V per cent
Brothers and sisters and their descendants 4^!- ,,
Uncles and aunts ,, ,, Oj ,,
Great uncles and aunts „ ,, V:V ,,
Any other x^erson 11 i ,,
The capital sura upon wliich these rates of
duty are calculated is ordinarily arrived at by
ascertaining the net annual value of the suc-
cession after deduction of necessary outgoings,
and by calculating the worth of an annuity for
an amount equal to such net annual value, for
the life of the successor, according to the
annuity tables set out in a schedule to the Act
16 and 17 Vict. cap. 51. Thus if the annual
income of an estate be £350, and the necessary
outgoings £50, the successor being thirty-five
years of age, the duty is calculated on £4725,
that being the assumed value of an annuity of
£300 at that age. The amount so assessed
is payable either by eight equal half-yearly
instalments, the first being due twelve months
after the succession opens, or, as an alternative,
by three annual instalments of one-eighth of the
duty and by a fourth instalment equal to the
amount of the remaining five-eightha. Like
the legacy duty, the succession duty is payable
in money, although a stamp is impressed on the
account required to be brought in. Certain
small successions are exempt and provision is
made to prevent the charge of both legacy and
succession duty on the same succession.
The succession duty produced £565,000 in
1858-59, and twenty years later the produce
was £725,000. In 1890-91 it was £1,209,000,
and £1,309,000 in 1901-2, the maximum
amount reached. Since that date it has fallen,
and was only £767,039 in 1912-13.
The succession duty has been criticised on
the ground that the charges it imposes on real
property are less than tlie corresponding ones
on personal estate. Tliis inequality was to
some extent redressed by the legislation of
1888, but the manner in which the duty is
assessed and paid still favour settled personalty
and, to a greater extent, realty. The inequality
is, however, defended by reference to the excep-
tional pressure of the income tax on landed
property, and to the incidence of local and
imperial taxation generally.
[Wallace, Epitome of the Death Duties, 1886. —
Trevor, Digest of Taxes on Successions, 4th ed.
1881. — Hanson, Probate, Legacy, and Succession
Duty Acts, 3rd ed. 1876. — Hanson, Revenue Acts
of 1881, 1883. — M'Culloch, Treatise on Succession
to Property vacant by Death. — Thring, Introduction
to the Succession Duty Act, 1853. — Archbold, Suc-
cession Duty Act of 1853, 1854. — Griffith, Digest of
the Stamp Duties, 9th ed. 1886. — Harris, English
Death Dxcties, 1890. — Buxton and Barnes, Hand-
hook to the Death Duties, 1890. — Dowell, History
of Taxation and Taxes in England. — Hansard,
Debates, Reports of the, Covimissioners of Inland
Revenue. — Finance (1909-10) Act.^ t. h. b.
DEATH-RATE
Analysis of Contents.— Definition and division of the
subject. I. Duath-rate as a factor in the natural
increase of population, p. 493. II. The causes ol
variation in death-rate ; (a) such causes as age and
sex; Qj) such as vice, unhealthy occupations, indi-
gence, insanitary residences, p. 494. III. Death-rate,
as indicating (by its decline) national prosperity, p.
497. IV. In relation to insurance, p. 497.
I. Death-kate may be defined as the ratio
between the number of persons dying, out of a
certain population, in a unit of time, generally
a year, and the number of the population. But
as the number of the population cannot be
supposed constant for any considerable time,
there is some difficulty in rendering precise
the conception which has been indicated. To
remove the diflSculty completely the use of the
differential calculus would be required, but it
is not necessary to call in that aid except for
certain actuarial calculations. For the less
technical inquiries which are the object of
this article the general idea which the definition
above given conveys is sufficiently clear.
The death-rate is the most important ratio or
coefficient in vital statistics. While co-ordinate
with birth-rate as a factor in the natural in-
crease of population, death-rate is more import-
ant than Birth-rate {q.v.) on the following
grounds. The investigation of the causes which
affect death-rate is more directly connected with
a practical art, that of preventing disease.
Again birth-rate by its variation gives a more
equivocal sign of national prosperity or the
reverse, than death-rate. A rise in birth-rate
494
DEATH-RATE
may be due to increased improvidence or illegi-
timacy, as well as to material prosperity ;
whereas a fall in death-rate can hardly admit
of any other than a favourable construction.
Again the chance of death is an object of wider
and deeper interest than any other dat^mi in
vital statistics ; and a great practical business,
that of insurance, is based on these probabilities.
These points of comparison being taken as
headings ; it may first (I.) be observed that the
natural increase, being the difference between
birth-rate and death-rate, is not necessarily small
where death-rate is large, or large where death-
rate is small. Thus the death-rate for Russia
in recent years, 35 "7 per mille (Marshall, Prin-
ciples of Economics, bk. iv. ch. iv. and authori-
ties there cited), exceeds the average of Europe,
28 per mille, by a fourth, yet the natural increase
for Russia, 13 per mille, is above the average
for Europe. Again the death-rate for England
is below, the natural increase above, the average
for Europe.
Other examples are given in the article on
Birth-rate ; where it was pointed out that
large birth-rates are frequently attended by,
but do not cause, large death-rates.
II. The question there raised is to be more
fully considered here under the head of causes
of variation in death-rates, (a) One such cause
is difference of age. If the population of any
country is divided into groups of different ages,
the death-rates for the different groups differ
enormously. Thus (according to the English
Life-Table, No. III., which may be regarded
as a standard) the mortality for infants under
one year old is m England 165-6 per 1000
(Vital Statistics, Selections from the writings of
William Farr, by Noel A. Humphreys, p.
491), while it is only 5*2 per 1000 at the age-
period 10-15 (ibid. p. 487), After that period
the death-rate increases with the age. At the
period 75-85 it has become 140 per 1000, and
is still greater at later ages ; the death-rate of
second childhood equals that of infancy. The
general law is happily indicated by Addison in
his Vision of Mirza {Spectator, No. 159, 1st
September 1711), where the human race is
imagined passing over the flood of eternity by
a bridge, supported on as many arches as there
are years in man's life. " Hidden pitfalls were
set very thick at the entrance of the bridge, so
that throngs of people no sooner broke through
the cloud but many of them fell into them.
They grew thinner towards the middle, but
multiplied and lay closer together towards the
end of the arches."
It follows from this law that in a population
where there is a particularly large proportion
of infants or old persons the general death-rate,
the mortality "at all ages," as it is called, is
apt to be high. Now in an increasing popula-
tion, as compared with a stationary one, the
number of births continually augmenting, the
number of infants is particularly large. Henca
it is plausibly argued that an increasing popula-
tion, just because it is increasing, will have a
high death-rate ; that high birth-rates, per se,
make high death-rates ; other things, and in
particular the mortality at each age-period,
being supposed the same.
But here, as so frequently in statistics, first
appearances are fallacious. It is true, no doubt,
that in an increasing population there is a par-
ticularly large proportion of infants subject to
a high mortality. But it is also true that, in
such a population, the proportion of persons at
those advanced ages at which the mortality is
high is apt to be particularly small as compared
with the numbers in the period of healthy
adolescence (Farr, Vital Statistics, "Deaths."
Humphreys "On the Value of Death-rates,"
Journal of the Statistical Society, 1874, vol.
xxxvii.)
From these considerations it appears that
great care must be exercised in allowing for the
influence of age on mortality before drawing
inferences from the death-rate as to the sanitary
condition of a population. To take an extreme
instance, suppose that the death-rate for the
inmates of a prison were the same as that for
the general population, this at first sight might
appear a satisfactory state of things. But
when it is considered that the prison population
consists of adults, a class of which the mortality
under ordinary conditions might be expected
to be half that of the general population, the
conclusion becomes very different.
To take a less simple case. The death-rate
in many towns is particularly high. But it
has been argued that this is not an unfavour-
able symptom, for that it is due to the presence
of a great number of infants. But the truth
is, that the inference from the high death-
rates becomes d fortiori unfavourable when
proper account is taken of the ages of the urban
population.
A usual method of exhibiting such conclu-
sions is to construct what is called a "normal"
death-rate for any group under consideration ;
by supposing the persons at each period of age
in that particular population to be affected
with the mortality prevalent at that age in
the general population (or any other popula-
tion taken as standard). Thus in the case of
three counties containing large towns, instanced
by Mr. Humphreys in his instructive paper
above cited, the actual death-rate was 26-5.1
But the normal death-rate, or that which
might have been expected, if the mortality at
each age was the same as for the general popu-
lation, was only 22.2.1 ^^go the actual death-
rate for three rural counties was 19 ; while the,
normal death-rate was 23-8. The two pairs oU
figures, whether compared with each other or|
1 Taking the simple average of the death-rates given
for each of the three counties.
DEATH-EATE
496
with the standard death-rate for a stationary
population, which Mr. Humphreys gives as
24*47, show that the unfavourable inference
concerning the urban as compared with the
rural counties is stronger than at first sight
appears. The original figures, 26 '5 and 19,
differ only by 7 "5. But we may regard the
excess of the mortality in the urban over the
rural counties as virtually nine ; if we take
into account that the former normally would
have been less by nearly two than the latter.
A more exact method of drawing such com-
parisons is to express the mortality of each
section as a ratio of its actual to its normal
mortality. This plan is adopted by Mr.
Humphreys in his article on "Class Mortality
Statistics," in the Journal of the Statistical
Society for 1887. T^ie following figures (ex-
tracted from Mr. Humphreys' Table IV., loc.
cit., p. 281) relate to the mortality in two
classes of the Dublin population :
Description of
Class.
Recorded
death-rate
per 1000.
standard
death-rate
according
to English
Life-table.
Coefficient of
comparative
mortality.
Professional
Class .
General Service
Class .
19-8
36-8
25-2
21-3
632
1659
The first column gives the actually observed
mortality at all ages for the more and less
favoured class. The second column gives the
corresponding normal mortalities (obtained on
the hypothesis that the numbers at each age
were those observed for Dublin, and the mort-
ality at each age that observed for England).
The third column gives the coefl[icients express-
ing the force of mortality ; being each the
ratio of normal to actual mortality, multiplied
by 1000, or expressed as a per mille. It will
be observed that the evidence of diff'erence in
healthiness afforded by the first column be-
comes d fortiori in the third column. The
mortality of the "general service" class
appears to be nearly twice as great, and is
nearly three times as great as that of the pro-
fessional class.
The cause of variations in death-rate which
has been considered, namely diff'erence of age,
may be placed in a category of causes which
are of practical importance, largely on the
ground that it is necessary to allow for their
action in order to estimate the effect of another
class of causes which it is more within the scope
of human art to alleviate. This distinction is
nearly identical with Dr. Farr's of "causes
inherent in the population, and causes outside
the population" {Vital Statistics, p. 159 ei
seq.) Another cause belonging to the first
category is sex. The full effect of this cause
may be seen on inspection of a life-table. At
the early ages the difference between the mort-
ality of the two sexes is marked. At the zero-
point of age it appears that the proportion of
male to female still-born children is 139 : 100.
For the period 0-5 the proportion of mortality
is 72 : 62 (according to Dr. Farr's Life-Table for
England and Wales). At the age of adoles-
cence female mortality gains upon male ; but
again lags behind at later ages. The disturbing
effect which this cause exercises on inferences
drawn from the general death-rate is not so con-
siderable as the effect of age. Mr. Humphreys
in his paper "On the Value of Death-rates"
already referred to (Journal of Stat. Soc,
xxxvii. p. 444), contrasting the English towns
which have the greatest and the least pro-
portion of male to female inhabitants, argues
that the extreme perturbation of the general
death-rates which may be expected from this
cause is not more than two per mille.
Here may be mentioned the effect on mortal-
ity of the variations of the seasons. Of the
four quarters of the year the first is the most
fatal ; next comes the fourth ; the mortality of
the second quarter is for this country on an
average in excess, but occasionally below, that
of the third quarter (Reports of the Registrar-
General, tables showing death-rates in each
quarter of the years since 1838). A very
elegant graphical representation of such vicissi-
tudes is given by M. Levasseur (after M.
Janssens) for Belgian infants, in the Jubilee
volume of the Statistical Society, 1885, p. 232.
Quetelet's investigations of seasonal mortality
in Belgium are particularly instructive {Physique
Sociale, liv. ii. ch. v. § 8). He shows that the
curve of death-rate at different seasons varies
for different ages ; and that very generally it
presents two maxima, one in winter the other
in summer. Besides the obvious importance
attaching to such observations, they are valu-
able as enabling us to avoid perplexity in
investigating other causes. The Registrar-
General, in the investigation which will be
presently noticed concerning the death-rate in
different occupations, has very properly selected
the samples (of deaths) on which his conclusion
is based from all seasons indifferently {Supple-
ment to the 45th Report of the Registrar-General,
p. 29). A sophist by taking the samples for
one occupation from a healthy season, and for
another occupation from an unhealthy season,
might have brought out almost any conclusion
which he wanted.
Other causes, not admitting of such exact
measurement, are race and climate (including
properties of soil, water, etc.)
Also it may be expected that the mortality
of unmarried persons will, ceteris paribus, be
particularly large. The married have the
advantage at almost all ages, as is shown by Dr.
Farr {Vital Statistics, p. 441, and references
496
DEATH-EATE
tihere given). But it is a nice question whether
celibacy can be regarded as a cause of high
death-rate. The high death-rate attending
celibacy may be a case of post hoc not propter
hoc ; the finest individuals being selected for
marriage ; while "men with a weak constitu-
tion, ill-health, or any great infirmity of Hody or
mind will not often wish to marry, or will be
rejected " (Darwin, Descent of Man, pt. i. ch. v.)
(h) The causes which have been mentioned
require to be taken account of by those who
would avoid perplexity in investigating another
set of causes which are perhaps of more direct
practical interest : as being capable of remedy
by human eff'ort. This second category of
causes may be divided under four heads : (1)
vice, (2) unhealthy occupations, (3) indigence,
and (4) insanitary residences, — agencies which
are apt to be entangled with each other as
well as with the first set of causes.
(1) There is much truth as well as exaggera-
tion in Siissmilch's dictum ascribing the chief
differences in mortality to " the manner of life,
. the moral circumstances, virtue and vice, indol-
ence and industry." One example is the great
mortality of illegitimate children. Dr. Farr
cites instances in which the death-rate of
illegitimate infants is double that of the legiti-
mate {Vital Statistics, p. 198). A similar
excess of mortality among illegitimate children
is shown by Quetelet {Physique Sociale, bk. ii.
ch. vii. § 2), Wappaeus {Bevolkerungs Statistik,
pt. i. p. 214), and other continental statisticians.
The vice of drunkenness is also conspicuously
fatal. On this subject some of the most recent
observations together with a reference to the
best authorities will be found in the Report on
the connection of disease with habits of intemper-
ance by the collective investigation of the British
Medical Association, edited by Isambard Owen.
Among the earlier authorities may be mentioned
Neison, who in his Contributions to Vital
Statistics fully proves the connection between
deep drinking and high death-rate ; bringing
out the remarkable fact that spirits are more
fatal than malt liquors {Contributions to Vital
Statistics, p. 218). Another authority particu-
larly free from suspicion is the Eegistrar
General, whose statistics with respect to
occupations (Supplements to Reports for 1865,
1875, and 1885) point unmistakably to a
connection between drink and death. The
mortality of hotel-keepers and theii- servants is
appalling, about three times as great as that of
the most healthy classes. Among the diseases
to which the classes mentioned and several
others succumb, "alcoholism " plays a large part
(Supplement to Report for 1885, p. xxx. et seq.)
At this point, however, the action of the
cause which has been considered is intermixed
with that which we have distinguished as cause
(2), unhealthy occupations. It is difficult to
pronounce with respect to the mortality in some
occupations how much thereof is occasioned by
unresisted temptation to drink, how much ia
due to other circumstances. Thus in the case
of drivers ("Cab, Omnibus, Service," loc. cit.),
the bill of mortality due to " alcoholism " is par-
ticularly large ; but the same class also succumb
in numbers to phthisis and diseases of the
respiratory system, which may no doubt be
connected with the exposure incident to the
occupations in question.
(2) The observations referred to prove the
influence of occupation on health in many cases
to be real and considerable. The number of
deaths observed in 188 1-82 — more than 400, 000 ;
the scrupulosity above noticed with which these
samples have been selected impartially from
healthy and unhealthy seasons ; the allow-
ance for the effect of ag^ (expressed in the last
column of table J, Supplement to the 45th Report
1885, p. xxvi.), are very convincing. The sus-
picion of accident is precluded by the general
agreement between the statistics for 1861-62,
1871, and 1880-82. The same occupations
constantly come out low or high in the scale of
mortality. At one end of the scale are clergy-
men with a co-efficient of death-rate or ' * compara-
tive mortality figure" 556, gardeners and
farmers with co-efficients respectively 599 and
681, with at the other end of the scale hotel-
keepers and their servants, for whom the corre-
sponding figures are respectively 1521 and 2205,
also chimney-sweeps, workers in earthenware
(1742), and the residual class of general labourer
(2020). (See J. T. Arlidge, M.D., The Hygiene,
Diseases, and MortalUy of Occupations, 1892.)
(3) In the last case and probably some
others, a further cause — indigence, comes into
play. The term indigence must be construed
strictly as want of necessaries, "inadequate
warmth and food" (Farr). Mere absence of
riches is not fatal to life, as Nelson's statistics
with respect to members of friendly societies show
{Contributions to Vital Statistics ; cp. Wappaeus,
Bevolkerungs Statistik, pt. i. p. 201). The very
different consequences of actual indigence may
be traced in certain statistics of class mortality
among the population of Dublin compiled by
Dr. Grimshaw, and discussed by Mr. Humphreys
in a paper already referred to {Journal of the
Statistical Society 1887, vol. 50). In the same
paper reference is made to the observations made
by Mr. Ansell and Hodgson and others, proving
that the more favoured classes enjoy greater vital-
ity. Especially with respect to infant mortality
is the poverty of the poor his curse. The death-
rate for infants under 5, in the " general service "
class of the Dublin population, was 110 pei
mille, in the "professional " class 22 per mille
{ibid. p. 282). So the mortality of peers' and
clergymen's children is three times less than
the mortality of infants of the same age in
large towns (Farr, Vital Statistics, p. 159).
These conclusions are confirmed by numerous
DEATH-RATE
497
observations on the comparative death-rate in
the poorer and more flourishing parts of towns ;
some of which are cited by Wappaeus {Bevollc-
erungs Statlstik, pt. i. p. 200).
(4) Here, and indeed generally, mere indi-
gence, the want of necessaries, is aggravated by
a fourth cause, insanitary conditions of resid-
ence, or, m Dr. Farr's more exact language,
"exposure to poisonous effluvia and destructive
agencies. " The interaction of these two causes
is very strikingly exhibited in an article in the
GiomaledegliEconomisti, " NuovaPolitica Sani-
taria, in Italia " (March 1891) ; where it is con-
tended that the sanitary measures carried out
in Italy defeated their own end. For the tax-
payer, deprived by the burden of taxation of the
necessaries of life, becomes thereby more exposed
to the shafts of disease. In our terminology
cause (4) might be reduced, and yet the effect
would be more fatal if concurrently cause (3)
were aggravated.
The nature and variety of insanitary condi-
tions are ably discussed by Dr. Farr (Vital
Statistics). A vast mass of experience as to
the evil effect of crowding is summed up by
him in the simple formula that the mortality
of districts is as the twelfth root of their densi-
ties {Vital Statistics, p. 175). In symbols
m _ /D\ -12.
— > — ( ^ j The fact that in an earlier
paper the sicdh root was proposed, and that in
the formula the index '12 does not signify the
twelfth, but rather the eighth or ninth root,
is not suggestive of extreme precision. At
any rate the law makes no claim to be more
than empirical. It is not fulfilled by the
experience of the crowded Peabody Buildings ;
where the mortality is less than for London
generally (Newholme, Journal of the Statistical
Society, 1891). It is interesting to inquire
whether the causes of death which admit of
reduction are being reduced by science ; or : —
III. More generally, and without reference
to causation, whether a decline of death-rate
attends the progress of civilisation. The most
extended series of observations is that which
the Swedish census presents (quoted in the
25th vol. of the Journal of the Statistical
Society, and by Wappaeus, op. cit., p. 229).
Looking at these we may now say with even
more truth than Malthus said : "The gradual
diminution of mortality since the middle of
last century is very striking." According to
Dr. Farr " the mortality of the city of London
was at the rate of 80 per 1000 in the latter
half of the 17th century, 50 in the 18th,
against 24 in the present day" {Vital Statistics,
p. 131) ; 14-7, Kept. Registrar-General, 1908.
On the other hand the returns for France
and Russia, extending over a long period of
years, which Wappaeus adduces {loc. cit.), do
not show a marked decline. And it is remark-
VOL. L
able that the death-rate for England and Wales
has remained virtually unaltered for the greater
part of the time over which the record extends,
from 1841 to 1871. Since that period indeed
a decline has set in, ascribed by some to im-
proved sanitation.
There is some difficulty in estimating the
gain which has been made in recent years,
owing to the circumstance that while the death-
rates at some (the earlier) ages decreased, at
other (later) ages the death-rates increased.
Such at least was the relation when the stat-
istics bearing on this point were first discussed
by Mr. Humphreys in his valuable paper in the
Journxil of the Statistical Society ior 1883 ; since
that date the gain in vitality at diflferent ages
may have become more uniform (cp. Report of
the Registrar-General for 1885, Supplement).
IV. The significance of the recent change in
death-rates may best be appreciated by glancing
at that aspect of the subject which in the
arrangement here adopted has been placed
last ; namely, that which relates to life insur-
ance. The business of insurance is beyond the
scope of this article. But the theory of life-
tables on which that business rests must be
understood in order to make a right use of
mortality statistics, even for the general pur-
poses here contemplated.
The simplest view of the matter is that
according to which a population is regarded as
"stationary" — a steady influx of life through
the channel of birth, a steady efflux at each
age, at a rate proper to each age. To compare
the vitality of two populations thus conceived,
there are available several measures besides the
common death-rate hitherto considered. One
consists of that age which is such that just as
many persons die before it as live after it ; the
" equation of life " as it is called. For instance
in the life-table constructed for the healthy
districts of England and Wales by Dr. Farr,
this meridian point is at the age 58 nearly. It
is an even chance that a new-born infant will,
or will not survive that age. Similarly may
be determined the age to which it is an even
chance that a person aged 10 or 20 years will
live. Thus Mr. Neison finds that for males
aged 10 in the rural districts of England and
Wales, the equation of life is 58*375 years;
in the city districts the corresponding figure is
61*743 {Contributions to Vital Statistics, p.
100). This eminent statistician holds that
* ' the equation of life . . . appears to be the
best mode to determine the comparative value
of Hfe in different classes or different districts "
in certain cases {ibid.) at least.
Another measure of vitality, however, has
obtained more vogue, namely, the average dura-
tion or so-called "expectation" of life, or
"mean after- time" as Dr. Farr proposed to
call it. For instance, the mean after-time foi
males at birth, according to the English life
2 K
498
DEATH-RATE— DEBASEMENT OF COIN
table No. 3, is 44*4 years ; at the age of 11 (the
prospect of living having improved for those
who have cleared the dangers of infancy) the
mean after-time is 51 years nearly.
The following is an instructive exapple
of the uses to which this co-efficient lends it-
self. Observing the age at which a number of
sovereigns or other notables, as popes, during
a series of generations had acceded, we can
compare the average length of their reigns
with the average length of life deducible from
a standard life-table ; and thus ascertain that
the lives of men are lengthened "with the
process of the suns."
This example illustrates what is implied in
the idea of an average duration, the putting
together and treating as commensurate quanti-
ties the lives lived by different persons. In
fact, actuaries often consider not so much the
mean life as the sum of lives, the "years lived "
by a whole population. It is thus that the
gain in vitality referred to under the last head-
ing is measured. Considering the infants bom
in any one year in England and Wales number-
ing say 859,000, the registrar-general calculated
that the years to be lived by this generation
will, in vu'tue of the change in death-rates at
various ages which have occurred during recent
years, be more numerous by some two million
years of life (Report of the Eegistrar-General
for 1885, Supplement; cp. Humphreys, Journal
of the Statistical Society, 1883). Of the millions
of lives thus yearly gained, by far the greater
part are lived at the ages 25 to 60, which are
most "careful," most conducive to the defence
and enrichment of our country.
So far with reference to a stationary popula-
tion, abstracting the fact that the actual popula-
tion is continually increasing. But the logic of
the subject and its fallacies would be imperfectly
treated without noticing the modifications which
this fact introduces. In a stationary population
it is evident that the mean duration, or " ex-
pectation," of life is identical with the mean age
at death ; and a little attention will show that
each of these co-efficients is identical with an-
other measure with which we are here more
particularly concerned, namely, the number of
persons out of whom one dies per annum, the
inverse death-rate as we may call it. But when
population increases these identities are broken
up. The inverse death-rate becomes a little
greater, the mean age at death becomes much
less than in a stationary population. Thus the
mean expectation of life being, in Dr. Farr's
time, 41 for England and Wales, the inverse
death-rate was 1 in 43 ; the mean age at death
about 29. The neglect of these distinctions
has proved fatal to the work of amateurs who
have attempted to use measures of mortality
more delicate than the common death-rate "at
all ages." The indications given by this last
are less fallacious, as has been shown above
(under the heading of age and sex), than might
have been supposed. Yet it is desirable to
supplement if possible this rough measure by
arranging our observations in the form of a
Life- Table.
[The authorities on this subject are almost as
numerous as the writers on statistics. As a lucid
statement of the principal facts for the leading
nations of the world the Confronti Internazionali
per gli anni 1865-83, issued by the Ministero di
Agricultura, Industria, e Commercio, Rome, may
be specially mentioned. Works which instruc-
tively place a number of facts in the light of
theory are : — Quetelet's Physique Sociale. — Wap-
paeus, Bevulkerungs Statistik. — Mayr's Gesetzmas-
sigkeit in Gesellschaftsleben. — Haushofer's Lehr-
und Handbv/ih der Statistik. — Westergaard's
Theorie der Statistik, and other books cited in the
text. For some of the finer logical points which
have been touched, Dr. Farr's Vital Statistics,
edited by Mr. Noel Humphreys, should be studied ;
and Mr. Humphreys' own papers in the Journal
of the Statistical Society for 1874, 1883, and 1887.]
F. Y. E.
DEBASEMENT OF COIN, History of
THE. Coins may be debased in three ways —
(1) a debasement in total weight ; (2) a debase-
ment in fineness ; (3) a debasement by increas-
ing the rating or nominal value, the coins
continuing at the same standard weight and
fineness. The effect of the last may also be
brought about unintentionally by a fall in the
value of the precious metals, and herein lies
the secret of much of the debasement of the
middle ages.
The first historically recorded debasement is
that effected at Athens by Solon (b.c. 594) to
redeem the poorer citizens from debt. By his
advice the weight of metal in the silver drachma
or standard Athenian coin was reduced more
than 25 per cent, thus enabling 100 drachmae
to be coined out of the mina or unit of weight
instead of only 73 as previously (Plutarch,
Solon, c. 15). Creditors were compelled to
take these light coins as full payment, and
were thus obviously defrauded ; but perhaps
in this case the end may have justified the
means (Grote, Hist, of Greece, pt. ii. ch. xi. ;
Boeckh, Metrologie, ch. ix.) It must be ad-
mitted too that, as a rule, the Greek states
were not often to blame in this respect, partly
perhaps because their philosophers inculcated
sound principles (Lenormant, Gontemp. Hev.
Feb. 1879), but more probably owing to their
small size. This naturally caused a large pro-
portion of their money transactions to be inter-
national, and in foreign trade coins can onlj
be exchanged for their value as bullion whatever
their rating as legal tender within the issuing
state ; debasements therefore would be avoided
for mere convenience where the foreign trade
was of primary importance.
In the large and constantly growing Roman
state no considerations of this sort existed, nor,
DEBASEMENT OF COIN
499
as far as we know, was the subject of money at
all adequately studied ; on the contrary, a con-
tinuous series of debasements lends colour to
the opposite view. The history of these is pro-
fessedly given by Pliny (xxxiii. 13), but the
evidence of actual coins that have been dis-
covered makes it probable that his account is
incomplete. According to his view the Roman
coinage, wliich originally had the "as" or pound
of copper for the unit of value, remained un-
changed till the First Punic War. The coined
"as" was then reduced suddenly to 2 uncice or
ounces, that is, to ^th of its former weight.
About this time 10 asses made a denarius and 22-
a sestertius ; but during the Second Punic War
the unit was further reduced 50 per cent, and
asses were coined weighing only 1 oz., 16 of
which made a denarius and 4 a sestertius.
Finally, by the Papirian law, B.C. 191, the
"as" was made to weigh only ^ oz., but it is
hardly necessary to regard this as a debasement
of the standard, for by this time silver was
also largely current. The silver, however, was
in its turn debased, and the denarius, which
had weighed jK^d of a lb., was reduced to ^th.
In B.C. 91 a plated coinage was issued, but was
soon withdrawn. The denarius, however, con-
tinued to fall, and under Nero weighed only
^ig^th of the lb. In the same reign the gold
aurei, which had originally been coined at 40
to the pound, had become debased 12 per cent.
Under Alexander Severus these coins got the
name of solidus, corrupted afterwards into the
French "sou." Constantine fixed them at 72
to the pound, but the mere name gives a
measure of their subsequent debasement in the
West. In the Byzantine empire, on the con-
trary, this standard was long preserved, and
seems to have still existed in 1204 when the
Crusaders captured Constantinople.
In the dark ages gold again fell into disuse,
and endless variations took place in the silver
standards set up by the numerous barbarian
rulers. The first monarch with the power and
the will to alter this was Charlemagne. He
introduced a silver solidus -^^th of a lb. in
weight and divided into 12 denarii, but his
death in 814 cut short the attempt to get it
uniformly adopted throughout his empire. Its
use, however, gradually spread, and ia England,
since the conquest, has formed the basis of our
monetary system. Charlemagne's liber, solidus,
and denarius are the origin of the £ s. d. we
still use, and WiUiam the Conqueror's only
coin, the silver penny, really did weigh -g-^Tj-^ii
of the lb. This, the so-called Tower pound, was
I oz. lighter than the Frank pound, but the
English standard of fineness (11 oz. 2 dwt. of
pure silver to 18 dwt. of alloy) was very high.
The history of the English debasements does
not begin till 1300, when Edward I. reduced
the weight by cutting the pound into 243
pence. This bad example was soon followed ;
by 1344 the number had increased to 266, and
in 1352 it rose to 300. Early in the next cen
tury the pound weight of silver was valued at
£1^ or 360 pence, which by the reign of
Edward IV. became 450. In 1526 Henry
VIII. abolished the Tower pound as the unit
of weight and substituted the French pound
troy, weighing | oz. more ; he, however, con-
tinued to reduce the weight of the penny, 540
being coined out of the new pound, equivalent
to 506|- out of the old. Further, he was the
first king to tamper with the fineness. This
began in 1543, when he increased the amount
of alloy in the pound from 18 dwt. to 2 oz,,
following this up by an issue of coins in 1545
containing 50 per cent of alloy. Under
Edward VI. the money became still worse, and
in 1550 the greatest amount of debasement
ever known in England was attained, when a
pound of metal containing no more than 3 oz.
of pure silver was coined into as many as 864
pence. This lasted only two years. In 1552
an improvement began, which, though not
completed till the great recoinage by Elizabeth
in 1560 (Froude, Hist, of Eng., vol. vii. ch. vi.),
in the end reduced the number of pence cut from
the pound to 720, and restored the standard
English coins to their old degree of fineness.
The latter has been maintained ever since, but it
was not till 1600 that the weight was definitely
settled. Silver was then coined at 744 pence
to the pound, and this continued in spite of some
famous proposals for debasement (Macaulay,
Hist, of Eng., ch. xxi.) so long as silver re-
mained the standard. Ever since the 14th cen-
tury gold has been coined in England, but for
the greater part of the time only as a subsidiary
coinage. It is consequently unnecessary to
discuss the numerous debasements and changes
of rating to which the earlier coins were sub-
jected in the endeavour, usually a fruitless one,
to preserve a proper proportion between the two
precious metals. England, however, by the end
of the 17th century had become so rich, and
gold so much used, that it gi-adually assumed
the superior position. In 1717 a recoinage took
place in which the change was legally recog-
nised, and ever since our standard coinage has
been gold. When, therefore, in 1816, the silver
puund was ordered to be cut in 792 pence, no
debasement, properly speaking, occurred, as the
object was to make the coins tokens. Since
gold has been the standard, there has been no
intentional debasement, but a gi-eat recoinage
was necessitated in 1774. The present money
system is regulated by the Coinage Act 1870,
33 & 34 Vict. c. 10.
In Scotland the system of coinage was orig-
inally borrowed from that of England, and
the two remained identical as late as 1355, in
which year Edward III. intentionally debased
the English silver in imitation of David II.
Subsequently, however, the Scotch kings, under
500
DEBASEMENT OF COIN
the influence of French ideas, so multiplied
their debasements that they left the English
far behind. By 1 3 9 0 English money was worth
twice as much Scotch, and the latter eventually
ceased to be current by tale in England. . In
1600 £36 Scotch were coined from the pound
of silver as compared with 62s. English. The
greatest debasement in fineness occurred be-
tween 1576 and 1579, but the amount of alloy
in the pound never rose above 4 oz. The two
coinages were again assimilated at the union in
1707.
In Ireland regular coinages were first intro-
duced by John in 1177, and regular debasements
by Edward III. By 1465 the Irish shilling
was worth only 9d. English. Three years later
960 pence were coined from the pound and a
reaction set in, but in 1520 the coius were
again so bad that payment by weight became
general. As in England Henry VIII. debased
the fineness, and even Elizabeth transferred
Edward VI. 's worst debasements to Ireland
when she restored the English coinage ; James
I. attempted to restore the old Irish fineness
(9 oz. silver to 3 oz. alloy) and decried Eliza-
beth's shillings to 2d,, but the bad money
drove out the good. Complaints of scarcity
became constant, and in 1651 aU sorts of tokens
and foreign coins were in circulation. In 1689
James II. raised the rating of all coins 8^ per
cent, as a war measure against William III.,
and this remained permanently in force till
1825. It, however, failed to bring in the
necessary funds, and in 1690 he issued a coin-
age of old guns, broken bells, nails and pewter
pots. In the next century there was little
improvement, but much dissatisfaction ; the
case of Wood's copper coinage is the most
famous. In 1804 twenty-one shillings of the
best Irish silver were not worth nine English ;
in fact, the debasements only terminated when
the Irish and English coinages were assimilated
in 1825. On the continent France may be
taken as the typical country, and there the
debasements were far worse than in England,
as no central power was for a long time
developed. In 1315 thirty-one barons claimed
the right of coinage besides the king, and
mutual rates of exchange were arranged for
their coins. Dante has (Par. xix.) singled out
Philip le Bel as the typical false moneyer,
but many other sovereigns were quite as bad.
The standard which the people always claimed
was that of St. Louis, who in 1226 cut the
marc of 8 oz. into 58 solidi or sous, but un-
fortunately this was afterwards very rarely
attained. During the long wars with England
the country practically became bankrupt, and
the kings dealt recklessly with the coinage.
In 1360, when John was captive, the silver
marc was once rated at 240 sous, but this was
only a temporary measure, and before the end
of the year the marc had again fallen to 100
sous. In 1454, when the English were finally;
expelled, the marc was coined into 175 sous,
but quieter times only brought more regular
debasements. In 1575 the sou had become so
small that silver livres, worth 20 sous each, took
their place as the ordinary money of account.
17j of these, equivalent to 345 sous, were
coined from the marc. They soon, however,
sank in value, each Bourbon king in succession
reducing the weight till 1789, when as many
as 52 were coined from the marc. In other
words a livre of this date weighed only ^^ of
the liber of Charlemagne though bearing the
same name. During the Revolution even the
name was discarded and the synonym "franc"
substituted. In all other countries the history
has been the same. In modem Germany the
mark is only worth a shilling. In Spain the
maravedi, originally a gold coin worth 14
shillings, is now a small copper coin not worth
a farthing. In Portugal the reis, too small at
last for use, are calculated in hundreds. No
country, however, has been worse than France.
[A fairly full general outline of the debasements in
classical British and French coins maybe found in
Macleod's Diet, of Pol. Econ., vol. i., "Coinage."
For France the standard book is Le Blanc's TraiU
Historique des Monnoyes de France ; for England
Lord Liverpool's Coins of the Realm. — Conigliani,
Note historichi sulla Questione giuridica dei paga-
menti monetarii (1891). — Galiani, Delia Moneteb^
bk. ii. vi. iii. ii. — Adam Smith, Wealth of Nations^
i. xi. — Del Mar, Money in Ancient Countries
(1885).] w. J. c.
Debasement of coin "in its proper sense
means a reduction of fineness," according to
an authority quoted by Prof. Walker {Money,
p. 187). In a wider sense the term denotes
also, the reduction of the quantity of pure metal
in the coin by diminishing its weight whUe
preserving its customary fineness ; whether that
diminution is effected at the mint, or after
mintage by abrasion, clipping, or sweatiag.
For example, Henry VIII. practised debasement
proper when, by introducing an increased pro-
portion of alloy, he lowered the fineness of silver
to nearly a third of what it had long been
before he began tampering with it. Debasement
in the wider sense was committed by Edward
VI. when he "not only continued the issue of
base money commenced by Henry, but lowered
the quantity of mixed metal" in each coin
(Rogers's History of Agriculture and Prices, vol.
iv. p. 734). (See Alloy.) Another example
of the less specific sense is afforded by the
"debased state of the currency," "previous to
the recoinage of 1696," to use Ricardo's words
{Reply to Bosanquet, p. 96). Elsewhere
Ricardo speaks of the metallic cun-ency being
"debased by wearing or clipping." {High
Price of Bullion, p. 26). The term is to be
taken in its wider sense in Ricardo's important
proposition : ' ' However debased a coinage may
DEBENTUEE
501
become, it will preserve its mint value, that is
to say it \\ill pass in circulation for the intrinsic
value of the bullion which it ought to contain,
provided it be not in too great abundance " ;
and provided that, as Prof. Walker adds, it is
not discredited (Ricardo, Political Economy, ch.
xxvii. ; Reply to Bosanquet, ch. vi. ; AValker,
Money, p. 199). The first of these conditions
is not likely to be fulfilled in the case of de-
basement proper. Governments which debase
are likely to over-issue. Striking instances of
this abuse are given by Rogers in his Historical
Gleanings (i. pp. 95-97 quoted by Prof. Walker,
loc. cit.) F. Y. E.
DEBENTURE. The word "debenture"
has been judicially defined as "a document
which either creates a debt or acknowledges
it " (Justice Chitty in Levy v. Abercorris Slate
and Slab Company, 37 Chancery Division, on
p. 264) ; every document which answers that
description is a debenture, and the use of the
word in itself confers no rights whatever on the
holder. It is very important that this should
be generally understood, as there is a vague
belief in the minds of many persons that a
debenture must always be secured by a charge
on some property, or at least entitle the holder
to priority over other creditors. There are
certain classes of debentures, issued by virtue of
certain acts of parliament, which confer special
privileges on the holders (as, for instance, the
mortgage debentures issued under the Land
Debentures Acts of 1865 and 1870, as to which
see Mortgage Banks, or the debentures issued
by local authorities under the Local Loans Act,
1875, as to which see Loans, Local) ; but,
speaking generally, the rights of the holders of
any particular issue of debentures must be
ascertained from the instrument or trust-deed
or other document referred to in the same.
Debentures issued by foreign or colonial govern-
ments or municipalities, as a general rule, do
not confer any special privileges on the holders ;
they are simply promises to pay the principal
sum on a given date and interest at a certain
rate in the meantime. Debentures of companies
registered under the Companies Acts, on the
other hand, are now mostly secured by a mort-
gage of some particular property, or by a charge
on the whole undertaking. The latter is called
a "floating charge" and does not prevent the
company from disposing of its property by sale
or mortgage in the ordinary course of business,
but it is generally provided that as soon as
default is made in the payment of interest or
principal, or as soon as the winding-up of the
company is ordered or resolved upon, the de-
benture holders may enforce their secm"ity,
which thus attaches to the whole of the com-
pany's property existing at that moment, but
subject to any mortgages or charges created for
the purposes of the company's business while it
was a going concern. If any property is to
serve as a secm-ity for debentures in a way which
makes it impossible for the company to alienate
it at any time, there must be a regular mortgage
of such property to trustees acting for the
debentm-e holders by a separate trust-deed. A
trust-deed by which movable goods are mort-
gaged must be registered as a bill of sale, but
a debenture issued by an incorporated company
which contains a charge on such goods need not
be so registered (see Bill of Sale). Deben-
tures containing a charge or mortgage are some-
times called mortgage debentures.
It should be pointed out that the law of most
foreign countries does not recognise mortgages
of immovable property unless they be registered
according to the law of the place, and also that
according to most systems of foreign law, mov-
able property cannot be charged in favour of a
creditor Avhile remaining in the debtor's posses-
sion. Holders of debentures secured by foreign
property should remember these facts and not
be surprised if, in trying to realise their security
abroad, they find themselves in conflict with
foreign mortgagees or judgment creditors or a
foreign trustee in bankruptcy ; and when
trustees are acting for the debenture holders,
they should be careful to perfect their security
as much as possible, by complying with the
formalities required by the law of the place
where the property is situate.
The special acts of British railway companies
generally incorporate the provisions of the Com-
panies Clauses Act, 1845, with respect to tlie
issue of debentures (§§ 38-55), but these pro-
visions leave a wide margin as to the rights of
debenture holders, which mainly depend on tlie
special act, authorising a particular issue, or on
the conditions attached to it by the company.
A debenture must always be repayable at
some time ; a fixed date may be appointed for
that purpose, or the gradual repayment of the
debentures of a particular issue by yearly draw-
ings, or in a certain order of succession, may
be provided for. In many cases the company
or corporation issuing debentures reserves the
right of redeeming the same before the date
fixed for repayment, either on the happening
of a given event (e.g. the sale of the property)
or entirely at the borrower's option. There are
also so-called "perpetual debentures," Avhich
are usually made payable only in the event of
winding-up or default on the part of the
borrower in the paying the interest.
Debentures may be issued to bearer or to the
registered holder, or they may be transferable
by indorsement. Debentures to bearer pi'ima
facie are not "negotiable instruments" (see
Commercial Instrument). The question in
each case turns upon the conditions of the par-
ticular issue and on the usage of the stock
exchange.
As debentures to bearer are now subject to a
stamp duty of 20s. per £100, which must b«
502
DEBENTURE STOCK
paid by the borrower, whilst the stamp duty
payable on the transfer of a registered debenture
is payable by the transferor, companies have of
late years preferred to issue registered deben-
tures.
[As to debentures issued by companies under
the Companies Acts, see Lindley on Company
Law. — Palmer, Company Precedents. — Buckley on
the Companies Acts. As to debentures issued by
railway companies, see Hodges on Railways. —
Brown and Theobald on Railway Companies.
As to the negotiability of debentures, see also
Chalmers, Bills of Exchange, 4th ed. p. 319.]
B. s.
DEBENTURE STOCK. No general defini-
tion can be given of this term, as a distinction
must be drawn between two different kinds of
debenture stock.
(a) Debenture stock issued by companies
incorporated under the Companies Acts differs
from debentures in form but not in substance.
A debenture is an instrument embodying the
contract between the company and the holder,
and generally creating a charge on property.
"Debenture stock," on the other hand, is only
a name for the debt which it represents, which
debt is created and secured by a trust deed
between the company and the persons who act
as trustees for the holders of debenture stock.
By the effect of this deed the holders of deben-
ture stock are, as a rule, placed in the same
position as the holders of debentures secured in
the usual form, and in cases where a general
charge is to be given, it is usual for companies
to issue debentures for the amount of the
debenture stock to be held by the trustees as a
collateral security for the payment of the
debenture stock and the interest thereon.
Debenture stock of this kind usually takes
the form of so-called "perpetual debenture
stock," that is to say, the holders are not
entitled to claim repayment of ,the principal
sum until the winding-up of the company, or
until default has been made in the payment of
the interest ; but it also frequently happens
that a date is fixed for repayment ; any of the
ways in which redemption or repayment may
be provided for in the case of a Debenture
{q.v.) is also permissible in the case of deben-
ture stock.
Each individual holder of debenture stock
receives a certificate stating that he is the
holder of a certain amount of stock, and that
the redemption of the said stock and the pay-
ment of the interest thereon is secured by a
deed dated from a certain date, and made
between certain parties. Stock certificates may
be issued to bearer, but this is of rare occur-
rence, the rule being that the names of the
stockholders are registered. In such a case it
may be provided that any portion of the stock
may be transferred, or fractions of one pound
may be excluded, or it may be stipulated that
all sums transferred must be multiples of £5
or of £10, or of any other sum. The possibil-
ity of transferring any portions of the stock is
one of the advantages of debenture stock as
compared with debentures, and probably one
of the principal reasons why the issue of
debenture stock by companies has become so
popular within the last few years. Debenture
stock certificates to bearer are subject to an ad
valorem stamp duty payable by the company.
See the books on companies quoted s.v. De-
benture.
(&) Debenture stock issued by a British
railway company or other company obtaining
a special act incorporating the Companies
Clauses Act, 1863, is with the interest thereon
a charge on the undertaking of the company,
and the interest of such debenture stock has
priority over the dividends or interest on any
ordinary shares or stocks. If any interest
remains unpaid for thirty days after the date
on which it is payable, stockholders whose
total holding amounts to a certain sum, may
obtain the appointment in England or Ireland
of a receiver, and in Scotland of a judicial factor,
and any stockholder may also recover the
arrears by action against the company. The
stockholders are not under any circumstances
entitled to claim repayment of the principal
sum paid up in respect of the debenture stock,
and they cannot, under any circumstances,
become entitled to the possession of any part
of the property of the company. On the other
hand it is not in the power of the company to
redeem the stock, unless they obtain a special
act of parliament for that purpose.
It has been said that "debenture stock of
this kind is nothing but preference stock with
a special preference" (Court of Appeal in
Attree v. Hawe, 9 Chancery Division, on p.
349), but this statement was made with refer-
ence to a special point, and was not intended
to convey the meaning that there is no essential
difference between debenture stock and prefer-
ence stock. This has been pointed out by Mr.
Justice Chitty {in re Bodman, Law Reports
(1891), 3 Chancery, on p. 138); he says:
"the holder of debenture stock is a creditor
of the company with a security in the assets
of the company . . . debenture stock is bor-
rowed money capitalised for purposes of con-
venience." The fact that debenture stock
issued by a British railway company, or other
similar company, is never repayable, while the
debenture stock of a company incorporated
under the Companies Acts must always be
repayable, though not necessarily on a fixed
date, constitutes a material difference. Stock
of the first kind is in the nature of a perpetual
annuity, whereas stock of the second kind is a
debt secured in the same way as a debt for
which debentures are issued.
The holders of British railway debenture
DEBIT— DEBT
503
stock receive certificates registered in their
respective names, and transfers are made in
the same way as the transfer of ordinary rail-
way stock. See the books on railway companies
quoted, s.v. Debenture, also Lindley on Com-
pany Taio. E. s,
DEBIT. That side of an account on which
everything in the nature of a debt is entered.
The word is also used to denote the entries
so made, i.e. a debt. J. e. c. m.
DEBITUM FUNDI (Scot.) "A debt owed
by the land itself," in whosesoever hands it
may be ; a real burden or lien preferable to all
rights of the proprietor, and enforceable not
only against the vassal himself, but also by a
"real action" against the lands themselves.
By law the feu-duties and some other feudal
duties due to the superior, are in this category ;
and by agreement, "annual rents," debts
secured on land, reserved burdens, and the like
may be made debita fundi, and may by regis-
tration secure a preference postponed to the
superior's rights (see Poinding of the Ground).
A, D.
DfiBOUCHl^S, Thi5orie des, generally re-
garded as the main original contribution of
J. B. Say to economic science. This theory of
outlets or of vent affirms that a general glut or
general over-production is impossible. If all
products could be had for nothing, men would
everywhere spring into existence to consume
them. Products are bought with other pro-
ducts. Therefore each product is more in
demand as other products increase and bid
against it. In other words, as the same pro-
duct constitutes the producer's demand and the
consumer's supply, a general excess of supply
over the general demand is absurd. Moreover,
human desires expand indefinitely. So long as
these are unsatisfied there can be no over-pro-
duction except from lack of purchasing power
arising from under-production on the part of
the would-be purchasers.
Hence it is concluded that to maximise pro-
duction is the interest of all ; that industry is
solidaire ; and that cosmopolitanism in com-
merce is true wisdom, imports stimulating the
sale of indigenous products. This theory, Say
predicted, "wiU change the politics of the
world" {Traitd, 5th ed. 1826, I. ciii.)
The theory was resisted by Malthus and
SiSMONDi {q.v.), but was supported by James
Mill and Ricardo, whose friendship grew out of
this agreement, as we learn from J. S. Mill
{Principles, 1875 ed., III. xiv.) The last-
mentioned writer's examination of the theory,
though enforcing the strength of the main posi-
tion, leaves still something to be desired.
Arguments are used which take no account of i
the relativity of demand to price, the imperfec-
tion of the world market, or the element of
time necessary to create new habits of produc-
tion or consumption or to raise up a new
generation of consumers. The case is, however,
conclusive against those whose view involves
the fallacy of a general fall of values, or who
mistake the phenomenon of a commercial crisis,
in times of contracting credit, for over-pro-
duction. The remedy, says J. S. Mill, for
"what may be indiscriminately called a glut
of commodities or a dearth of money, is not a
diminution of supply, but the restoration of
confidence."
[For modern opposition to Say's theory, see
Uriel H. Crocker, Excessive Saving, Boston,
U.S.A., 1884, and in Harvard Quarterly Journal
of Economics, April 1887 and April 1892.— Ed-
ward F. Sweet, " Over-Production," Chicago Times,
26th April 1880. — Mummery and Hobson, Physi-
ology of Industry, 1889. — See also Report of tlie
Royal Commission on the Depression of Trade and
Industry, 1885, and for alterations in price and
standard of value, Appendix B, by R. H. Inglis
Palgrave.] H. H.
DE BROUCKERE, Charles, born at
Bruges in 1796, died at Brussels in 1860. One
of the most eminent and honest of Belgian
politicians. He served from 1815 to 1820 with
the army of the Low Countries, and after this
engaged in the business of banking. He then
commenced his political career as a deputy in
the second oliamber of the states - general, in
which he sat among the opposition. After the
Belgian revolution of September 1830, he was
appointed a member of the national congress,
resisted the republican party, declared himself
in favour of a monarchy and of the exclusion
of the family of Orange-Nassau from the throne.
In conformity with these views he voted for the
Duke of Nemours, in opposition to the Prince
of Saxe - Coburg ; but when the latter was
elected king, and reigned as Leopold I., he
supported him warmly, first directing the
finances, and then acting as minister of war.
After holding other offices, he returned, for a
period of eight years, to private life, engaged in
business, was appointed, in 1847, burgomaster
of the city of Brussels, which office is considered
equal to the j)ositiou of a minister of state. He
was also elected a member of the chamber of
representatives, and held both these posts till
his death. Besides this he lectured on economic
science, on which his views were so liberal that
they included free trade. His only work in
economics is called Principcs g6n6raux d'eco-
nomie politique, 1851, 1 vol. in 18mo, an able
though a short production. a. c. f.
DEBT.
Debt, p. 503.
Debt, Imprisonment for, p. 504.
Debtor and Creditor, Law of, p. 505.
Debtor's Summons, p. 500.
Debt. A "debt" may be defined as an ob-
ligation to pay a sum certain in money, with or
without interest. But it is to be noted that,
504
DEBT— DEBT, IMPRISONMENT FOR
by English law, when goods are sold, or work
and materials are supplied without any stipula-
tion as to price, there is an implied obligation
to pay a reasonable price for them. If the
parties differ, the amount payable can onl^ be
ascertained by litigation, which in substance,
though not in form, resembles an action for
Putting aside recognisances, and statutory
penalties, recoverable by civil process, debts
may be divided into three classes, namely,
judgment debts, specialty debts, and simple
contract debts. When, by the judgment of a
court of competent jurisdiction, a person is
ordered to pay money, the judgment creditor
may usually enforce his rights either by the
process of the court which gave the judgment,
or by bringing an action on the judgment as if
it were an ordinary debt.
A specialty debt is a debt created by an
instrument under seal. Formerly specialty
debts had priority over simple contract debts,
but recent legislation has now practically effaced
this distinction, and the main difference between
the two classes of debts consist in this ; (a) a
specialty debt may in general be created without
consideration, as for example by a voluntary
bond, and (&) the period of limitation for a
specialty debt is twenty years, while in the
case of a simple contract debt it is six years.
Any debt, other than a judgment or specialty
debt, whether evidenced by writing or not, is
called a simple contract debt. It is to be noted
that the term applies not only to obligations to
pay arising from agreement between the parties,
but to cases where the law implies such an
obligation apart from agreement. These quasi-
contracts, as they are sometimes called, fall
chiefly under two heads. First, when a person
is compelled to discharge the liabilities of
another, he becomes the creditor of that other
person for the money so paid. For instance, if
one of two sureties pays the whole debt due
from the principal debtor, he can recover the
proportionate share from the other surety as a
debt. Secondly, when a person has wrongfully
received money, the party entitled to it can
generally recover it as a debt. For instance, if
an account by mistake be paid twice over, the
second payment can be recovered as a debt due
from the person who received it.
As a general rule debts do not, according to
English law, carry interest. The obligation to
pay interest arises only (a) by agreement, or (&)
by mercantile usage, as in the case of debts
secured by bills or notes, or (c) by statute.
Scotch law is more favourable to claims for
interest, see Interest (see also Debtor and
Creditor, Law of ; Receipt). m. d, c.
Debt, Imprisonment for. Most civilised
countries have now got rid of imprisonment for
debt. It was abolished in France in 1867, in
Belgium in 1871, in Switzerland and Norway
in 1874, in Italy in 1877, and in Scotland in
1880. But in England the system is in full
force. It is true that in 1869 a statute was
passed bearing the title "An Act for the Aboli-
tion of Imprisonment for Debt, for the Punish-
ment of Fraudulent Debtors, and for other
purposes " (32 & 33 Vict. c. 62), but it appears
from the county court returns of 1889 that
during the preceding year 201,335 applica-
tions were made to commit judgment debtors
to prison, 54,995 warrants of committal were
issued, and 6429 debtors went to prison.
The fact is the act in question merely
regulates imprisonment for debt, but in no
wise abolishes it (see § 5). Imprisonment on
mesne process has been abolished, but when a
suitor has recovered judgment for debt, damages,
or costs, he has two courses open to him. He
may proceed either against the property or
against the person of his debtor. If he elects
to proceed against his person he takes out what
is called a "judgment-summons" calling on
the debtor to appear before the court on a day
named, to be examined as to his means, and to
show cause why he should not be committed to
prison for having neglected or refused to pay
the sum specified in the judgment or order.
The summons may be taken out in the county
court, whether the judgment be in that court
or the high court. At the hearing, if the creditor
proves, or the debtor admits, liiat the latter
either has or has had since the judgment the
means of satisfying it, the court may order him
to be committed to gaol for a period not exceed-
ing six weeks. The imprisonment does not
operate as a satisfaction of the debt, but on the
other hand the debtor cannot be twice im-
prisoned for the same sum of money. The
debtor can at any time obtain his release by
paying the debt and costs. While in prison
the debtor, like any other prisoner, is kept
there at the public expense. Execution against
the person therefore differs from execution
against property, for in the latter case the
creditor has to pay the costs of the execution if
they cannot be recovered from the property of
the debtor. When a judgment is ordered to
be paid by instalments, default in paying any
instalment constitutes a ground for committal.
Suppose then a debt of £2 is ordered to be paid
by instalments of 4s. a month, a common order
in the county courts. Theoretically for this
debt of £2 the debtor might be committed ten
times for periods of six weeks each. Practi-
cally the discretion vested in the court would
prevent so harsh an application of the law. It
has recently been held that a married woman
cannot be committed for non-payment of a
judgment debt, for under the Married Women's
Property Act, 1882, the contracts of a married
woman do not bind her personally, but merely
bind her available separate estate if any. By
one of the eccentricities of modern legislation a
DEBT, IMPRISONMENT FOR— DEBTOH AND CREDITOR, LAW OF 505
married woman, who has a husband to rely on,
is thus put in a more favourable position than a
single woman or widow who has no one to help
her. From the figures cited above it appears
that not more than 3 per cent of the applica-
tions to commit result in the actual imprison-
ment of the debtor. This result is due to a
peculiar mode of administering the act of 1869
adopted by most of the county courts, namely
the system of suspended orders. It can best
be illustrated by an example. Suppose a work-
man whose standing wages are 2ys. a week is
summoned for non-payment of a judgment debt
of £2 which is three months old. It is clear
that since the date of the judgment he has had
more than £2 wherewith he could have paid
the debt, but on the other hand he probably
cannot pay £2 forthwith. The creditor is
entitled to his order of committal, but he has
no desire that his debtor should go to prison.
His only wish is to get his money. The court
therefore makes an order committing the debtor,
but directs that the waiTant of an'est shall not
issue as long as the debtor pays a certain
weekly or monthly instalment into court, say
5s. a month. This mode of enforcing the act
was probably not contemplated by the legisla-
ture, but after being questioned by the court of
appeal, its validity has been finally affirmed by
the House of Lords.
The policy of the act of 1869 is defended on the
ground that without it debts would be practi-
cally unrecoverable from the working classes,
who as a rule have little or no property avail-
able for seizure under an execution. Against
this argument it is urged that imprisonment
for debt encourages a system of factitious credit
which is injurious alike to debtors and creditors.
All sound credit should rest on one of two
bases, namely property or character. If a man
has neither property nor character it is better
that he should not be able to obtain credit by
what is practically a mortgage of his body.
The recovery of debt by means of imprisoning
the debtor is usually a tedious and expensive
process. The creditor is for a long time kept
out of his money, and the impecunious debtor
has heavy costs to pay in addition to the debt.
The tradesmen who deal with the poor no
doubt fix their prices with reference to the
difficulty in recovering the money, and the
result of the present system is to raise normal
prices as regards the honest poor who pay their
way. The question of imprisonment for debt
was inquired into by a select committee of the
House of Commons in 1873, who reported
strongly against the existing procedure, and
suggested various amendments in the law, but
no action has hitherto been taken on their
report. It is to be noted that under the Bank-
ruptcy Act of 1883 a debtor can file his own
petition, and that as soon as a receiving order
is made against him he is protected from
proceedings under § 5 of the Debtors Act
1869. The same result follows if an adminis-
tration order is made by a county court in the
case of a small debtor, whose total liabilities
do not exceed £50.
[See the subject further discussed in Glasson's
Ilistoire du Droit de V Angleterre, vol. vi. § 296,
and Fortnightly Review, September 18S8.]
M. D. C.
Debtor and Creditor, Law of. The
salient points of the English law of debtor and
creditor may be noted under two heads, firstly,
the rights and obligations of creditors and their
debtors ; and secondly, the means for enforcing
those rights and obligations.
When a debt becomes due, it is the duty of
the debtor to pay it without waiting for any
demand. Hence it has been held that an
action may be maintained on a promissory note
payable on demand, without showing any
presentment to the maker. The control of
the courts over costs prevents this rule from
working any practical injustice. If no place
of payment has been fixed either by custom or
agreement, it is in general the duty of the
debtor to seek out his creditor for the purpose
of paying him, imless the latter be "beyond
the seas," that is to say out of England.
In most continental countries a creditor is
entitled to draw a bill on his debtor for the
amount of his debt, but in England the obliga-
tion to accept or pay a bill of exchange only
arises from agreement between the parties. It
is to be noted that when a man has an account
at a bank, the banker is not a trustee of his cus-
tomer's funds, but the relationship between them
is simply that of debtor and creditor, with a
superadded implied obligation on the part of
the banker to honour his customer's cheques
to the extent of the balance to his credit.
A creditor is not bound to give change to his
debtor. It is the duty of the latter to tender
the exact amount of his debt in legal currency
as defined by the Coinage Act, 1870 (see Legal
Tender). Hence it follows that the creditor,
apart from agreement, is not bound to take a
cheque or other negotiable instrument in pay-
ment of his debt. Bank of England notes are
legal tender, except when tendered by the bank
itself.
By th'e common law the relationship of
debtor and creditor is regarded as a strictly
personal one. Hence, as a general rule, if a
third person voluntarily pays the creditor
without the debtor's consent or subsequent rati-
fication, the payment is ineffectual. It neither
liberates the debtor nor creates any obligation
against him. The law merchant has intro-
j duced certain exceptions, as, for instance, the
payment for honour of a bill of exchange.
These exceptions are doubtless borrowed from
countries where the rule of the civil law pre-
i vails, according to which debitorem ignarwm^
506
DEBTOR'S SUMMONS— DEBTS, PUBLIC
sive etiam' invitum, solvendo liberare possumus.
In accordance with the principle that the obli-
gation created by a debt is a personal one, the
common law did not recognise the assignment
of debts ; but now by § 25 of the Judicature
Act, 1873, when a debt is assigned absolutely,
by writing under the hand of the assignor,
and notice in writing is given to the debtor,
the assignee is entitled to receive the debt or
to sue for it in his own name.
In coimtries which follow the civil law,
mutual debts extinguish each other by what is
known as ** compensation," but English law
acknowledges no such rule. If parties who
have cross accounts choose to strike a balance,
the balance is recoverable as a debt, but that
is by virtue of the agreement. Agam by
virtue of the Judicature Act 1873, any claim
may now be answered by any cross-claim that
the defendant may have ; for instance, a claim
for rent may be met by a counter-claim for
damages for trespass, but it is purely optional
with the debtor whether he sets it up or not.
There is yet another rule which seems
peculiar to the English common law. It has
been held that where there is an undisputed
debt, payment of a lesser sum cannot discharge
the debt, even though the lesser sum be
accepted by the creditor in satisfaction of the
whole. The alleged reason is that there is
no consideration for the abandonment of the
balance. The courts, feeling the hardship of
the rule, have narrowed its application as much
as possible, and have confined it to money pay-
ments. For instance, if a creditor, to whom
£100 is owing, agrees to take from his debtor
the promissory note of a third person for £50
in satisfaction of the debt, the debt is dis-
charged ; and it has even been held, in a case
of somewhat doubtful authority, that the
debtors' own cheque may have the same
effect, though a payment by him in cash would
not.
Passing now from the creditor's rights to his
remedies for enforcing them, the ordinary mode
of enforcing a debt is by action. If, however,
the debtor has committed one of the overt acts
of insolvency known as "acts of bankruptcy,"
proceedings in bankruptcy may be taken against
him. A corporation or company under, the
Joint Stock Companies Acts cannot be pro-
ceeded against in bankruptcy, but if it be
unable to pay its debts, the creditor may
petition to have it wound up. In the case of
an ordinary debtor, if the debt do not exceed
£50, the creditor may sue for it in the county
court, where the procedure is cheap and summary.
If the debt exceeds £50 but does not exceed
£100, the action must be commenced in the
high court, but either party can apply to have
it removed into the county court. If the debt
exceeds £100 the high court is the only court
competent to adjudicate on it, unless the
cause of action has arisen within the jurisdic-
tion of one of the few local inferior courts, such
as the Mayor's Court of London, which have
unlimited pecuniary jurisdiction within certain
local limits. When the creditor has obtained
judgment he may enforce his rights in three
different ways. First he may under certain
conditions proceed against the person of his
debtor (see Debt, Imprisonment for).
Secondly, he may proceed to realise his debt
from the property of his debtor by means of
execution against that property, and thirdly,
he may by the assistance of the court attach
any debt owing by a third person to his debtor.
M. D. c.
Debtor's Summons. Under the Bank-
ruptcy Act 1869, bankruptcy proceedings were
commonly initiated by what was known as a
"debtor's summons." Any creditor for £50 or
upwards could take out a summons in the
bankruptcy court, calling on his debtor to pay
the sum due within seven or twenty-one days,
according as the debtor was a trader or a non-
trader. If, subject to certain qualifications, the
debt was not then paid, an act of bankruptcy
was deemed to have been committed, on which
a petition might be presented. The system
was grossly abused, and a select committee of
the House of Commons in 1880 recommended
its abolition. The Bankruptcy Act 1883 gave
effect to this recommendation, and substituted
the procedure by " bankruptcy notice " founded
on the final judgment of a court of justice, on
which no stay of execution had been granted,
thus eliminating all questions as to really
disputed debts.
A debtor's summons must be distinguished
from a judgment -summons, under which a
creditor, who has obtained judgment, seeks to
enforce execution against the person of his
debtor (see Debt, Imprisonment for).
m. d. c.
DEBTS, Public. In primitive society, where
commerce is small and manufactures are scanty,
the tendency of both sovereign and subjects is
to hoard rather than to invest the surplus pro-
ducts not immediately consumable. The ele-
mentary state of credit and the difiiculties in
the way of the exchange of commodities impel
both public authorities and individual members
of the community to make provision against
special contingencies, and when such provision
fails, force is resorted to in order that collective
and private wants may be satisfied. As, how-
ever, commerce and manufactures expand, con-
sumption becomes easier and more attractive
both to sovereign and people, and the means of,
and inducement to, profitable investment in-
crease. Under these conditions there is a grow-
ing disinclination to do more than provide for the
current expenses of the government, and when
extraordinary exigencies arise, extraordinary
measures for raising the funds have to be resorted
DEBTS, PUBLIC
507
to. These measures are rendered the more easy
by reason of the expansion of credit and exchange
to which they are in a great degree due. Hence
Adam Smith, who treats this phase of the sub-
ject at some length, remarks ( Wealth of Nations,
bk. V. ch. iii.) : **The same commercial state
of society . . . produces in the subjects both
an ability and an inclination to lend. If it
commonly brings along with it the necessity of
bon'owing, it likewise brings with it the facility
of doing so ; " whilst Prof. Adams, in whose
work on Public Debts the most complete presen-
tation of the economic aspects of the subject of
this article is to be found, observes that "the
funding system seems to be capable of wide
acceptance only among people whose labour is
of a high grade of efficiency and who have
developed for themselves representative govern-
ment."
At the outset, borrowing by the state, even
when incurred for extraordinary purposes such
as war, took the form of a mere anticipation of
revenue rather than of permanent indebtedness.
In the United Kingdom, in the reign of William
III. and the earlier part of that of Queen Anne,
various loans were raised on the assumption
that they would be discharged out of the pro-
ceeds of taxes which were at the same time
imposed for periods varying from 5 to 10 years,
and it has been and is still the constant practice
of the government to borrow in anticipation of
revenue, it being practically impossible so to
adjust the collection of taxes as to meet at the
due dates throughout the year the payments
requiring to be made from the Exchequer. The
limits within which loans can be contracted
under such conditions are, however, necessarily
narrow ; in our own country the increasing
requirements of the government soon led to the
adoption of a less onerous system, and, as Adam
Smith points out, " taxes which before had been
anticipated only for a short term of years were
rendered perpetual as a fund for paying, not the
capital, but the interest only of the money
which had been borrowed upon them by difier-
ent successive anticipations. " When this point
has been reached the funding system may be
said to attain its full development.
Two of the principal causes which have led
to public borrowing have already been alluded
to — temporary necessity and special emergency.
A third remains — the construction of public
works, in some instances the most potent of
all. When capital is required to be expended in
order to provide works which will be a source
of benefit and profit to the community over a
long period of years, the taxpayers of a single
year are unwilling, and indeed unable, to bear
the whole of the burden, and in proportion as
the conception of the province of the state is
enlarged, the public debt incurred in order to
provide the capital requisite for its undertakings
is necessarily augmented.
Economists have discussed in considerable
detail the advantages and disadvantages of
public borrowing, as compared with the only
alternative possible under a constitutional
government — the increase of taxation. It is
urged on the one side that a public debt affords
a convenient form of investment, especially to
those investors who, desiring full security for
their investment rather than a high rate of
interest, are anxious to obtain a public guar-
antee. It has also been shown that a public
debt may be made the means of materially
assisting the establishment and provision of
banking facilities ; and, as an argument against
the repayment of an existing debt, it has been
contended that its pressure "is necessarily
decreased from year to year by the gradual
depreciation in the value of the monetary unit
in which all obligations are expressed," and
that even when this cause is not operative " all
the practical effects of debt reduction may be
realised through the natural growth and prosper-
ity of the nation." None of these considera-
tions, however, appears to outweigh the dis-
advantages of public indebtedness j5g?' se, even
when it takes the most convenient form which
can be devised ; but they require to be taken
into account in determining whether the crea-
tion or maintenance of a public debt is prefer-
able to the retention of existing taxes or the
imposition of new ones.
The weight of the intrinsic objections to
public borrowing depends to a considerable
extent upon the purposes for which debt is con-
tracted. In this connection it is to be noted
that many of the objections to the funding
system which are pointed out by Adam Smith
and other early economists, and their predic-
tions of its disastrous consequences, proceed on
the assumption that the contraction of debt by
the state implies the destruction of capital, and
not its profitable investment. Even, however,
when borrowing is resorted to in order to pro-
vide funds for the purposes of war, it may well
be that the net result to a nation may be
entirely favourable, for, as M'Culloch elo-
quently observes, " the integi-ity and increase of
our dominions, the protection of our rights and
liberties, and our triumphs by land and sea, are
the real equivalents of the public debt and of
all the blood and treasure we have spent in
warlike enterprise, and they are quite as ample
and conduce as much to our prosperity as a
nation as if they had been realised in an increase
of population and wealth ; no sacrifices can be
too great that are required to preserve national
security and independence, and a loan expended
on armies or fleets employed for such a purpose
is quite as well and profitably employed as if
it had been laid out on agriculture, or in pro-
moting manufactures or trade."
Prof. Adams, in the work above referred to,
discusses the objections to public debts under
508
DEBTS, PUBLIC
the three heads of their political, social, and
industrial effects. Under the first he points
out that the result of borrowing is to conceal
from the nation the full effects of the policy
and course of action pursued by the government,
an argument which in a somewhat different
form is urged by Adam Smith, who regarded
the borrowing of money as the removal of an
adequate check on the undertaking and continu-
ance of war. It may, however, be observed
that if borrowing be not resorted to, the diffi-
culty of providing funds by reason of the
impatience of the taxpayer may easily prevent,
under a democratic system of government, the
adoption of a policy in all respects advantageous.
A further political objection presents itself in
the case of weak states, the autonomy of which
may be endangered by the contraction of foreign
loans. Under the head of social effects,, the
same writer exj)resses the opinion that public
debts "exert a social influence in rendering
permanent such class relations as spring from
disparity of possessions, and they introduce
conflicting interests between citizens." It is,
however, to be doubted whether this result of
the creation of debt is long maintained when
it takes an extremely mobile form, as in our
own country.
The industrial effects of borrowing are those
which will ordinarily have the gi-eatest influ-
ence in determining whether a public loan
should be contracted, and on this point Prof.
Adams may again be cited. "Public loans
influence industrial affairs through the medium
of capita^., but the character of this influence
depends upon the nature of the loan, upon the
conditions under which it is contracted, and
upon the fund of capital from which it is filled.
So long as the placement of a debt by the state
does not affect the market quotations of com-
modities, the full extent of its influence is to
divert capital, which might otherwise have gone
to extend existing industries, to the purposes
of the government. But the moment the state
offers unusual inducements the price of com-
modities is thereby affected. Future loans
must therefore be contracted on a rising market,
and by taking this step the government enters
upon a policy which contains the germ of indus-
trial disturbance and social injustice. ... At
the same time there is a wide margin between
a slight increase of the normal rate of interest
and an offer of excessive inducements ; and
although the industrial and financial principles
.are the same in either case the practical results
may be very different. It is therefore, impos-
sible, to determine how far a government is
justified in raising the rate on public bonds,
unless the probable results of this method of
securing money be compared with what must
follow frojn running the taxing machinery at
a higher rate of speed." M'CuUoch arrived
at substantial! v the same conclusion. "The
policy of raising the supplies for a war by
means of a loan or by an equivalent increase oi
taxation, cannot be decided on general prin-
ciples, but must always be determined by refer-
ence to the state of the country at the time.
Whenever there is no risk of prejudicing
industry by increasing taxation, that plan
should be preferred, and although a loan should
be required to obviate too rapid an increase
of taxation, the inconveniences attending the
accumulation of debt are so very gi-eat, that |
every practicable effort should be made to I
raise the revenue to the highest limit to which m
it can be safely carried, and to make it defray ^
a part, at least, if not the whole, of the extra-
ordinary expenditure."
As to the manner in which public debts J
should be contracted, there is now but little m
difference of opinion amongst economists. It
is an axiom that "floating debts should be
sparingly used," by reason of the disturbing
influence which they exercise upon the money
market, and vice versa, by reason of the difficul-
ties which a government may experience in
keeping such debts on foot. It is also agreed
that whenever a debt is large enough, it should
take a varied form in order ta suit the varying
requirements of investors. On this point,
however, it is to be observed that it is essential
that each class of debt should be large enough
to be readily marketable if it is of a negotiable
character. The question of whether stock
should be issued at par with interest at the
full current rate at which the money can be
borrowed, or at a discount at a lower rate of
interest, has been the subject of considerable
discussion, and it cannot be said that any
general rule has been laid down. Many
investors are very willing to accept a low rate
of interest for their money if they see in front
of them an increment of value, and it may be
important to the borrowing power to satisfy its
present requirements at as low an immediate
charge as possible. There can be no doubt,
however, that the system has frequently
resulted adversely to the state. M'CuUoch
(Dictionary of Commerce, art. " Funds ") states
that "in consequence of the prevalence of the
practice, the principal of the debt now existing
amounts to nearly two-fifths more than the
sum actually advanced to the lenders, " and the
balance of opinion is now distinctly in favour
of the issue of stock at par, wherever possible.
The course pursued by the British municipal
corporations confirms this conclusion.
Many of the considerations presented with
regard to the advantages and disadvantages of
borrowing as compared with the imposition of \
taxation apply equally to the repayment of
debt. It is probable that the evil effects of an
ill-devised system of taxation altogether out-
weigh the consequences of the existence of debt,
and that surplus revenue may be much more
DEBTS, PUBLIC
509
wisely devoted to the revision of the former
than the repayment of the latter. When,
however, this has been accomplished the gradual
liquidation of the debt increases the financial
strength of a country and its ability to meet
future contingencies when they arise. This
object requires therefore to be kept in view in
determining the mode in which public debt is
contracted, and it is usually accomplished by
the periodical drawing of bonds, or as in our
own case by the conversion of debt into termin-
able annuities. This latter course is materially
assisted by the constant growth of the funds
coming under the control of the government in
the shape of savings bank deposits or moneys
in Chancery, which can safely be made the
subject of financial operations of the character
referred to. In many instances, however, and
especially in the loans of local authorities,
repayment is agreed to be made en bloc at a
given date, the necessary funds for the purpose
being accumulated in the interim. The rate
at which a public debt should be repaid, and
the period during which it should subsist must
be determined by the general considerations
above summarised, but in the case of loans
contracted for the construction of public works,
especially by local authorities, it is obvious that
regard must be had to the character of the
works and the length of time during which
their full utility is likely to endure.
[Nearly all the general treatises on Political
Economy refer to this subject. In addition,
Adams ou Public Debts, London, 1888. — Leroy-
Beaulieu, Traite de la Science des Finances. — Fenn
on TJie Funds, London, 14th ed., 1889, and the
articles " Funding System " and " National Debt "
in the 8th and 9th editions of the Encyclopaedia
Britannica may be consulted. — C. F. Bastable,
Public Finance, London, 1903. See also An-
nuity; Conversion; Funding System; National
Debt ; and Sinking Fund.] t. h. e.
DEBT, Public, Statement of (Government
indebtedness). In the following tables a state-
ment is given of the national debts — (1st) of
Great Britain and her Colonies, and (2nd) of all
the foreign countries of the world which have
created such liabilities. It is impossible to
bring all the statements down to a fixed date ;
but the returns are all comprised within the
years 1911-1912 and £8,815,930,670, which
is the total of the two tables, may be stated to
closely represent the national indebtedness of
■the world at the close of 1912. Side by side
will be found the population of these countries
at the same date as nearly as possible, and a
statement of the debt per head. But any bald
statement of the capital is misleading. Where
a debt carries 6 per cent interest it is a far
greater burden than where it carries only 2\
per cent, as in the case of Great Britain and
some Canadian stock ; and the interest is
therefore added as a guide to what the burden
of the debt really amounts to. But even the
interest is not a guide to the burden of a
country's national debt. By many countries
large sums have been raised for the construc-
tion of railways, and some of these public works
make a return sufficient to cover the interest on
the national debt. The endeavour has been
made in cases where the figures are available to
show what portion of the interest has been made
good by the earnings of reproductive works,
and the net burden met out of national taxation.
It would occupy far too much space to describe
the results indicated. They must be allowed
to speak for themselves. In dealing with
foreign nations, especially with the Continent
of Europe, it has been found impossible in some
instances to separate the Revenue from Public
works from that obtained from State Domains,
Forests, etc. In some cases inconvertible paper
currencies are included in the total debts.
Amongst the debts have been included the
amounts raised by separate states — such as
those comprising the United States and the
German Empire — but not county or city
indebtedness of any description.
As compared Avith a previous estimate made in
1892 (see art. in First Edition, 1894), when the
debts were found to aggregate £6,505,375,562
the increase is shown to be £2,310, 5:35, 108,
A comparison of the following tables with those
given in the first edition of this Dictionary will
show that almost all countries have increased
their debts. In the ten years 1882 to 1892,
the national debts of the world increased by
£1,111,000,000. Between 1872 and 1882 the
increase was only £789,000,000, between 1862
and 1872 it was £2,000,000,000. There were
three great wars between 1862 and 1872, while
between 1892 and 1912 several leading countries
have been engaged in serious warfare, which has
added greatly to their indebtedness.
[Statistical Abstract of the Principal and other
Foreign Countries. Secretary of Legation Reports.
— Almanack de Ootha, 1892. — The Statesman's
Year Book, 1892.— Fenn on The Funds, 1889 and
1892. — Annual General Report of the Corpora-
tion of Foreign Bondholders. — The Victorian
Year Book, 1890-91.— T'Ae Seven Colonies of
Australasia, 1892 (Sydney). — The Year Book of
Canada. — Generally the official statistics of
foreign countries.]
DEBT^, Great Britain and Ireland.
Public, pp. 510, 511. Local, pp. 512, 513.
England a7id Wales. — Side by side with the
national debt of the United Kingdom a very
large amount of debt has been contracted by
the local authorities, which should not be lost
sight of in any estimate of the public indebted-
ness of the country.
For outstanding loans of local authorities in
England and Wales at the end of the financial
years 1874-5, 1886-7, 1898-9, and 1910-11, see
next page.
510
DEBTS, PUBLIC
Revenue
from
Country.
Population
Debt
Debt per
Debt
Invested
Net Burden
(1911).
(1912).
Head.
Charge.
Funds, Re-
of Interest.!
productive
•
Works, etc.t
British Empire
No.
£
£ s. d.
£
£
£
United Kingdom .
45,662,646
724,806,000
15 15 3
24,500,000
260,582*
24,2.39,418
Colonies and Possessions
British India ....
244,221,377
303,680,788
1 U 6
9,884,000
19,871,777
nil
Straits Settlements (includ-
ing Labuan)
722,075
6,913,852
9 13 5
94,147
large
a
Ceylon
4,106,350
6,130,727
1 9 10
288,875
606,828
nil
Mauritius ....
375,481
1,290,691
3 5 1
a
large
a
Seychelles . . . .
22,691
13,875
0 n 2
a
a
a
Hong-Kong ....
456,739
1,485,733
3 5 0
a
large
a
Commonwealth of Australia
New South Wales
1,646,734
100,052,635
60 lU 11
3,867,017
3.290,720
576,297
Victoria . . . .
1,315,551
60,737,216
U6 3 0
2,207,232
1,158,757
1,048,475
South Australia .
408,558
29,440.113
72 3 1
a
large
a
Western Australia
282,114
26,283,523
93 k 1
1,101,561
1,896,579c
Tasmania . . . .
191,211
11,302,411
59 3 5
414,2o5
large
Queensland.
605,813
47,068,186
77 13 h
1,724,3046
1,117,683
606,621
New Zealand
1,008,468
90,060,763
89 6 11
2,656,344
1,197,895
1,458,440
Fiji
139,541
82,815
0 11 10
a
a
a
Union of South Africa .
5,973,394
117,260,534
19 12 7
3,970,472?;
a
a
Swaziland ....
99,959
100,000
10 0
3,500&
a
%
Nyasaland ....
970,430
60,000
0 10
a
a
a
Uganda ....
2,843,325
295,000
0 2 0
Or
a
a
East Africa ....
2,402,863
250,000
0 2 1
a
a
a
South Nigeria .
7,857,983
8,267,665
110
228,042
26,271
201,771
Gold Coast ....
1,501,793
2,469,118
1 12 10
a
a
a
Sierra Leone
1,403,132
1,248,048
0 17 9
61,336
..
Dominion of Canada
7,204,838
99,331,136
13 15 9
2,684,681
a
a
Newfoundland .
238,670
5,650,713
23 12 10
a
a
a
West India Islands
Bahamas ....
55,944
47,223
0 16 9
a
a
a
Jamaica . . . .
831,383
3,843,074
U 12 5
245,535
a
a
St. Lucia ....
48,637
142,230
2 17 11
a
a
a
St. Vincent.
41,877
50
a
a
a
Barbados ....
171,982
436,900
2 10 9
a
a
a
Grenada ....
66,750
123,670
1 17 0
a
a
a
Leeward Islands
127,304
266,850
2 2 6
a
a
a
Trinidad and Tobago .
833,552
1,045,093
3 2 2
a
a
a
Bermuda . . . .
18,994
45,500
2 5 0
a
a
a
British Honduras
40,458
194,541
U 17 6
a
a
a
British Guiana .
296,041
884,615
2 19 2
a
a
a
Malta
211,564
79,081
0 7 5
22,5966
a
a
Cyprus
Total British Empire .
273,964
269,227
0 19 6
a
a
a
417,559,646 d
1,658,011,443
3 19 5
* England also receives about £1,400,000 annually from her Suez Canal Shares.
t Approximate figures only. a Information unobtainable. b Interest only.
c Gross returns from railways. d Population of the whole British Empire.
Note.— It is very difficult to state the exact sinking fund of the Home National Debt. Nominally £1,000,000
was so applied in 1914. But a considerable portion of the annual chargelou the Terminable Annuities is in reality
sinking fund, and out of a total charge of £24,500,000 some £2,000,000 may be applied to reduction of capital.
Year.
Amount of loans outstanding.
1874-75
£92,820,100
1886-87
186,343,678
1898-99
275,327,374
1910-11
540,211,480
The liabilities of local authorities in respect
of their outstanding loans had thus increased
by £447,391,380, or 480-6 per cent in 1910-11
as compared with 1874-75. Of this increase
£93^523,578 falls in the twelve years from
1874-75 to 1886-87, £88,983,696 in the twelve
years 1886-87 to 1898-99, and £264,884,106
in the twelve years 1898-99 to 1910-11. The
loans raised during the thirty-six years amounted
to over £500,000,000. A considerable part has
been repaid in that time. It should be remem-
bered that the above loans have been incurred
for purposes of public utility, as harbours, docks,
piers, waterworks, gasworks, and markets, from
which considerable revenue is derived. Others,
such as those incurred for schools, though not
yielding an immediate return, have been raised
for highly useful purposes. The proportion
which the local indebtedness bears to the rate-
able value of the several districts in respect of
which it has been incurred varies greatly in
DEBTS, PUBLIC
511
Debts of Foreign Countries.
Country.
Population
(1911).
Public Debt
(1912).
Debt per
Head
(1912).
Interest,
Debt
Charge,
etc. (1912).
Income from
Invested
Funds, Repro-
ductive Works,
etc.t
Net Burden
of Interest.!
European
No.
£
£ s. d.
£
£
£
Austria ....
29,003,000
519,631,229
11 0 U
20,278,487
7,700,000
12,578,487
Hungary.
21,239,619
274,702,000
12 18 8
12,210,259
25,000,000
nil
Belgium ....
7,571,387
162,385,545
21 8 11
7,642,435
entirely covereil
nil
Denmark.
2,800,000
19,716,996
7 0 8
4,554,673
560,000
4,000,000
France ....
39,601,509
1,071,848,000
27 1 U
50,824,000
2,700,000
Germany, Empire .
64,925,993
242,743,000
3 lU 9
11,825,400
large
Prussia
40,165,219
471,443,702
11 17 3
20,517,457
large
Bavaria
6,887,291
114,299.000
16 12 10
847,427
1,500,000 e
..
Saxony.
4,806,661
43,445,000
9 0 9
1,939,475
large
..
Wiirtemberg
2,437,574
31,240,000
12 8 0
1,368,750
large
Baden ....
2,142,833
28,384,000
13 h 10
1,685,302
1,490,000
Minor States
3,899,561
75,407,000
19 6 5
a
large
Greece ....
2,800,000
42,827,021
15 5 9
1,536,457
300,000
1,200,000
Italy . . . .
34,687,000
537,174,000
15 9 9
18,043,000
2,275,000
16,000,000
Luxemburg .
259,891
973,145
3 7 2
439,725
large
Montenegro .
516,000
390,000
0 15 1
a
a
Netherlands .
6,114,302
96,954,638
15 17 1
3,153,614
470,000
2,800,000
Portugal ....
5,958,643
188,986,980
31 Ik 5
6,915,603
3,200,000
3,700.000
Roumania
7,248,061
65,991,727
9 12
3,976,198
1,155,000
2,800,000
S-irvia ....
2,911,701
26,362,240
9 10
1,295,782
750,000
500 000
Spain ....
19,588,688
409,250,978
20 17 9
16.420,594
916,000
15,500,000
Sweden ....
5,604,192
33,478,180
5 19 5
i;615,223
covered
nil
Norway ....
2,439,300
20,156,000
8 5 2
950,681
1,700,000
ml
Switzerland .
3,781,430
9,313,700
2 9 3
251,885
266,160
nil
Russia ....
167,920,000
945,553,000
5 12 6
42,611,000
100,000,000
nil
Finland
3,140,000
7,053,539
2 h 8
338,964
2,238,000
nil
Turkey ....
21,273,900
128,834,486
6 10
Bulgaria and Eastern
Roumelia
1 Total European .
4,337,516
24,407,976
5 12 3
1,605,880
a
a
514,061,380
5,592,953,082
American
United States .
Separate States .
95,656,000 1
573,674,774
96,326,800
5 11 11
10 1
10,252,800
a
10,745,000
a
a
Argentine Confederation
7,171,910
109,282,923
15 U 9
6,654,501
a
a
Bolivia ....
2,267,935
784,008
0 6 10
136,989
a
a
Brazil ....
24,308,219
136,271,000
5 12 0
6,336,000
a
a
Chili ....
3,505,317
42,183,952
12 0 8
2,307,117
a
a
Colombia
5,472,604
5,602,686
10 5
a
a
a
Costa Rica
399,424
3,433 110
8 12 1
159,386
a
a
Cuba ....
2,382,990
13,524,000
5 13 6
622,000
a
a
Ecuador ....
1,500,000
4,513,579
3 0 2
a
a
a
Guatemala
1,991,261
3,523,222
1 15 U
a
a
a
Haiti ....
2,500.000
7,976,000
3 3 9
576,493
a
a
Honduras
566,017
23,271,656
Ul 2 k
a
a
a
Mexico ....
15,115,612
46,174,065
3 11
2,557,935
a
a
Paraguay
800,000
2,204,770
2 15 1
a
a
a
Peru ....
4,906,900
10,920,083
2 h 6
218,754
a
a
Salvador ....
1,200,000
3,543,297
2 18 k
a
a
a
San Domingo .
600,000
3,643,743
6 15
296,553
a
a
Uruguay ....
1,225,914
28,054,796
22 17 8
1,638.731
a
a
Venezuela
Total American .
2,755,685
7,192,560
2 12 2
215,776 1
a
a
174,325,788
1,122,101,024
..
..
..
Asiatic
China ....
325,000,000
74,446,750
0 h 6
3,852,554 1
o
a
Japan ....
52,312,068
254,593,000
U 17 3
16,459,658
a
a
Siam ....
Total Asiatic
8,117,953
8,000,000
10 0
a
large
a
385,430,021
837,039,750
..
African
Congo (Belgian)
15,000,000
11,149,888
0 Ih 10
430,000 t
a
a
Egypt ....
11,287,359
94,350,000
8 7 2
4,028,000
4,700,000
Liberia ....
Total African
Total Foreign
1,500,000
325,483
0 h k
a
a
a
27,787,359
105,825,371
..
..
1,101,604,548
7,157,919,227
t Approximate figures only.
o Information unobtainable.
e Against Railway Debt only.
512
DEBTS, PUBLIC— LOCAL
different localities. The annual rateable value
of England and Wales for the purposes of the
poor-rate, according to the valuation lists in
force at Lady-day 1913, was £221,011,832.
The relative proportions which the debts of
local authorities bore to the national debts at
the end of the financial years 1874-75 and
1910-11 are shown by the following figures.
Years.
National Debt.
Local Debt.
Proportion of
Local Debt to
National Debt.
1874-5
1910-11
£
768,945,757
733,072,610
£
92,820,100
540,211,480
per cent.
12
73
The following statement shows, so far as it
has been found practicable to apportion them,
the amounts outstanding in respect of the
principal purposes for which the loans of the
local authorities had been raised.
Loans outstanding {England and Wales),
year 1910-11.
Local Authorities.
Administration of Justice
Baths, Washhouses, aud Open Bath-
ing Places ....
Cemeteries .....
Education (Schools, Appliances, etc)
(1) Elementary Education
(2) Higher Education
Electric Lighting ....
Fire Engines, Stations, Appliances
Gasworks
Harbours, Docks, Piers, Canals, and
Quays . . . . .
Highways, Bridges, and Ferries
Hospitals
Housing of the Working Classes .
Lighting Highways, etc.
Lunatic Asylums ....
Markets .....
Parks, Pleasure-grounds, and open
spaces .....
Police Stations and Gaols
Poor Relief (Workhouses, In-
firmaries, Offices, etc.)
Private Street Works and other
works of private improvement .
Sewerage and Sewage Disposal
Small Holdings and Allotments
Tramways and Light Railways
Unemployed Workmen Act, 1905 .
Valuation .....
Waterworks ....
Other Works and Purposes (includ-
ing destruction of house refuse) .
Unapportioned Loans .
Total .
£940,301
3,235,704
3,028,622
41,370,651
6,099,671
29,681,430
1,925,249
23,119,160
72,304,050
.59,502,561
5,841,792
10,880,962
189,670
10,885,767
7,329,207
8,574,665
1,877,266
12,283,844
1,336,435
42,322,260
1,853,139
36,419,547
28,028
1,424
128,687,495
26,598,708
3,893,872
£540,211,480
Amount remaining at the end of the year 1910-
1911, in sinking funds and similar funds, towards
the repayment of the part of the total entered in
column 4, which is repayable by means of those
funds £21,595,096
The local taxation returns from which these
figures are obtained relate to the accounts of the
local authorities of England and Wales. These
authorities are very numerous.
During the year 1910-11 the accounts of the
following local authorities were audited by district
auditors : 62 County Councils ; 29 Metropolitan
Borough Councils with the Corporation of London ;
the Managers of the MetropoHtan Asylum District ;
the Metropolitan Police Authority ; 1136 Town
Councils ; 666 Rural District Councils ; 7073
Parish Councils and Parish Meetings ; Overseers
of the Poor for about 14,553 Parishes ; 653 Boards
of Guardians ; 56 Authorities for the Management
of Harbours, Docks, Piers, Canals, and Quays (in-
cludmg the Port of London Authority) ; and 1384
Miscellaneous Authorities. Total — 25,614.
The management of the local debt of the
country is thus divided between a vast number
of persons, and, as is usually the case where
individual responsibility is lost sight of,
administration is lax. For the system of
administration, see Local Government.
Loans outstanding {Scotland), 1911-12.
Local Authorities.
Revenue-producing Undertakings :—
Gas and Electricity Supply
Tramways and Light Railways .
Water Supply ....
Markets .....
Slaughterhouses
Public Baths and Washhouses .
Working - class Dwellings and
Lodging-Houses^ . ...
Burial Grounds
Harbours and Ports .
£10,265,149
4,389,877
12,787,161
418,184
319,973
299,996
2,169,675
211,355
12,877,591
£43,738,961
Common Good (not falling under
other heads) ....
644,652
Non-Revenue-producing Services : —
Poor Relief ....
939,172
District Lunatic Asylums .
1,538,168
Education ....
6,648,030
Cleansing ....
420,529
Sewers, Drains, etc. .
3,968,525
Hospitals ....
1,236,582
General Sanitary Operations
59,446
Roads, Streets, and Bridges
2,051,195
Watching, Police Stations, and
Prisons ....
383,240
Public Libraries . . ,
87,681
Sheriff Court Buildings
6,602
Public Lighting
67,693
Fire Brigade ....
131,446
Public Parks, etc. .
1,109,354
Buildings (not allocated to other
Heads)
2,186,133
Distress Committee under Un-
employed Workmen Act, 1905
11,611
District Fisheries
405
Heritors, for Ecclesiastical Pur-
poses
13,345
Other Purposes
1,009,552
Total .
£66,252,322
1 Erected under the Housing of the Working Classes
Acts and under Local Acts.
DE CARDENAS DI MAQUEDA— DECENTRALISATION
o]3
Heritors, for Ecclesiastical purposes £13,345
Other purposes . . . 1,009,552
£66,252,322
The rateable value of Scotland for 1912
was £32,983,165.
Loans outstanding (Ireland) 1911-12 : —
Local Authorities.
Councils of Counties .
£431,743
Lunatic Asylums
1,230,379
Town Councils ....
7,462,925
Commissioners of Towns
1,171,795
Commissioners under Towns Im-
provement Act
1,121,546
Belfast City and District Water
Commissioners
1,898,723
Joint Boards for Sewerage, Burial,
Port Sanitary, and other purposes 243,552
Rural District Councils
6,769,765
Boards of Guardians .
362,920
Harbour Authorities .
3,431,977
£24,125,331
The local debt of the United Kingdom was
thus, at the dates mentioned, as follows :
England and Wales, 1910-11 £540,211,480
Scotland, 1911-12 . . . 66,252,322
Ireland, 1911-12 . . . 24,125,331
£630,589,133
This amount should be added to the National
Debt in estimating the indebtedness of the
country. The Local Debt bears now a propor-
tion of about 88 per cent to the National Debt
and is continually increasing. Other countries-
show the same tendency. According to the
Statesman s Year Boole, 1913, the debt of the
French Communes was more than £170,000,000
in 1910 — including Paris. The debts of that
city alone were over £100,000,000. The
departmental debt stood at over £36,000,000
in 1908. The local debts of the United
States (of States, Counties, etc.) aggregated
$1,865,000,000 (£373,000, 000)in 1902. The
growthof debts of this description is rapid, and no
very accurate general statements are attainable.
[Sir S. H. Northcote (Lord Iddesleigh), Twenty
Years of Financial Policy, App. B, p. 398, Lon-
don, 1862. — K. H. Inglis Palgrave, The Local
Taxation of Great Britain and Ireland, London,
1871. — G. J. Goschen, Reports and Speeches on
Local Taxation, London, 1872. — Essays edited by
J. W. Probyn on Local Government and Taxation
in the United Kingdom, London, 1882. — Wright
and Hobhouse, Local Government and Local
Taxation, London, 1884. — C. F. Bastable, Public
Finance, 1903, Bk. v. oh. viii. — Keports of the
Local Government Board. — Local Taxation Returns
(Scotland). — Local Taxation (Ireland) Returns.]
DE CARDENAS DI MAQUEDA, Diego
Raffaele, lived in the second half of the 18th
century. He belongs to that set of people who,
VOL. T.
if two are discussing what four and four is, and
one says "eight" and the other "ten," will
drop in an intermediate opinion, and think it
might be "nine." Liberty of commerce, par-
ticularly of corn, is wrong, so is state interfer-
ence ; the truth is, of course, between the two
— a little liberty and a little regulation by the
state. For De Cardenas, the causes of dearth
in the kingdom of Naples are three : scarcity
of production as a rule ; large harvests excep-
tionally ; then government interference. The
one only remedy in his opinion is the creation
of public store-houses, and the giving power to
the government to decide annually what portion
of the harvest might be exported. The corn
in the public store-houses ought to be saleable
by a system of warrants.
The title of his work is Governo economico
intorno ai grani. Napoli, presso Gaetano
Tardano, 1784. m. p.
DECENTRALISATION. Few terms are
used more at random or are harder to define
tlian decentralisation. It is the reverse of
Centralisation {q.v.) If centralisation be
defined as the centring of all the powers of
government in the hands of a single person, or
body of persons, and presumably in a single
place, namely the capital of the state, decen-
tralisation may be defined as the distributing
the powers of government among various persons
or groups of persons, and presumably in various
places of which the capital is only the most
important. Complete centralisation and com-
plete decentralisation are alike impossible.
Complete centralisation is impossible, because
the central authority must under all cii-cum-
stances leave much to agents and subordinates,
and cannot wholly deprive them of a discretion
in executing their functions. Complete decen-
tralisation is impossible, for this Avould imply
the perfectly independent action of many
authorities, in other words the dissolution of
the body politic. The decentralisation Avhich
is possible without destroying the state may
take different forms. The functions of govern-
ment are distinguished as legislative, judicial,
and executive or administrative. All those
functions, or only one or two of them, may be
decentralised. AH are decentralised to a con-
siderable degree in such a commonwealth as
the United States of America. Legislation is
centralised in most states which are not federal,
e.g. in the kingdom of Italy or in the French
republic. Administration is decentralised in
England to a far greater degree than in France,
since English local authorities enjoy a far larger
independence than do French local authorities.
On tiie other hand the administration of justice
is far more centralised in England than in
France. By means of the system of circuits a
very small number of superior courts has been
made to serve the wants of the whole kingdom.
In France, under the monarchy, there were
2 L
614
DECENTRALISATION—DECIMAL SYSTEM
thirteen parliaments or high courts of justice,
and although these have disappeared, the
number of courts and of judges has been much
increased in the present century. Thus we see
that itis possiblefor different functions of govern-
ment to be decentralised in different states.
Again the political significance of decentral-
isation differs according to the nature of the
function decentralised. Of all the functions of
government, legislation is the most momentous.
Its centralisation is therefore intimately con-
nected with the unity of the state. The legisla-
tive decentralisation in federal states, arises
from the fact that these are aggregates of
smaller states, which, although willing to com-
bine for certain purposes, are unwilling to fore-
go individual existence and at least nominal
sovereignty. Judicial decentralisation usually
owes its origin to the desire for cheap and
speedy justice, which can be had only by bring-
ing a court of justice within convenient reach
of every one who wishes to go to law. Adminis-
trative decentralisation usually arises from a
totally different impulse, from an instinct of
self-government, a desire to execute the laws
for oneself rather than to have them executed
by officials.
The good or bad consequences of decentralisa-
tion diff'er with the different modes of decentral-
isation, as well as with the circumstances of
each community. Legislative decentralisation
is seldom strongly desired or long maintained,
unless in states spread over a vast area like the
British empire or the United States, or divided
by differences of race or religion like the Austro-
Hungarian monarchy or the Swiss republic.
Legislative decentralisation has the advantage
of allowing a freer play to national or quasi-
national characteristics. It has, however, the
disadvantage of leaving the less civilised parts
of a state to persist in their barbarism. It has
also, in states under popular government, the
disadvantage of opening a field to politicians
of low moral and intellectual type. Judicial
decentralisation is good in so far as it renders
justice cheap and rapid, but bad in so far as it
tends to produce judges undistinguished either
for learning, for ability, or for character. Few
states have attained the right medium in
judicial decentralisation. In England it has
not been carried far enough ; in France and in
America it has been carried much too far.
Administrative decentralisation is good in so
far as it places the administration in the hands
of those whom it immediately aff"ects, calls forth
their public spirit, and exercises their political
capacity. It is bad in so far as it entrusts
administration to men who have not competent
intelligence or are not conspicuous enough to
fear public opinion. In short, decentralisation
is good, not as an ultimate end, but as a means
of good government and of national training.
Its eff"ects are strictly relative to all the con-
ditions of the state decentralised. In what
directions and to what extent decentralisation
should be carried in any given commonwealth,
can be determined only upon mature examina-
tion of all the circumstances and cautious trial
of what is possible. There are few general pro-
positions on the subject which cannot be shown
to be unsound or at least incorrect by familiar
historical instances.
[Upon the theory of this subject the reader may
consult De Tocqueville's works, especially De, la
Dhnocratie en Amh^que, and Mill's Representative
Government; for illustrations of the working of
decentralisation, 'Bvyc&'& American Comtnonwealth,
— especially the chapters relating to the state and
municipal authorities ; for a statement of the
degree of administrative decentralisation now ex-
isting in England, the volumes on Local Govern-
ment and Poor Relief in the English Citizen Series.]
F, c. M.
DECIMAL SYSTEM (Coinage, Weights
AND Measures). Viewed from an economical
standpoint, the non-adoption in a compulsory
manner of any decimal or metric system of
current money, weights, and measures, through-
out the British Empire is one of the most
glaring examples of national waste, financially
and educationally, that the spirit of unwilling-
ness to face the trouble of a change from old
ways has ever inflicted. Over and over again
this has been pointed out to parliamentary
committees, to successive prime ministers,
chancellors of the exchequer, presidents of the
board of trade, and other high executive func-
tionaries, but in vain so far as any practical
action is concerned. Not only scientific men
and professors, mathematical and politico-
economical, but commercial men and chambers
of commerce, and educational experts at home,
and British consuls abroad, have urged in the
most convincing manner that our weights and
measures and money are, as a whole, utterly
unintelligible to the large majority of foreign
persons with whom it is our desire and interest
to further extend our trade, and that this
renders English price lists and circulars a mere
dead letter to many who might otherwise become
customers, and greatly handicaps British in-
dustries in export trade. It has also been fully
demonstrated that the loss of valuable time,
and the imperfect intelligence developed, by
teaching the young an antiquated non-decimal
system, is a fearful extravagance even in a
country like ours where the State can afford
twenty millions a year in the cause of education,
some considerable part of which would be saved
if a proper decimal system were substituted for
the present effete and unscientific want of
system. If such a change be adopted by the
legislature, within a very limited time there
would gradually be no necessity to teach, in
public or other schools, the present puzzling,
because incoherent with each other, denomina-
tions of money, weights, and measures that are
DECIMAL SYSTEM
515
behind the age and internationally discredited.
Our space does not admit of more than a few
remarks under each head of importance in any
comprehensive view of this question.
I. Origin of the deciTnal system. Our fellow-
subjects in Hindostan were the precursors of the
Arabians, and it is believed also of the Chinese,
in the discovery and use of the decimal system
of notation. Writers of authority on the early
history of mathematical science concur in re-
marking that the Arabians, who were the real
introducers of the system into Europe, borrowed
it from the Hindoos. In Arabian arithmetical
works which date back more than a thousand
years the decimal system is called the Indian
method of computation, the Hindasi, or Indian
arithmetic.
II. Use of the system in ancient times. So
far as Europe is concerned it was not until the
close of the 18th century that any effective
decimalisation of coin, weight, or measure took
place. In fact the theory itself of decimal
fractions was unknown until nearly the end of
the 16 th century. Calculations of the value
of annual rents or of capital sums, receivable
for a certain term of years or at the expiry of
a given time, at any particular rate of interest,
or, in other words, the ascertainment of their
discounted present worth, had continued to be
attended with so much complexity that the
search for some remedy for this led to more
easy and effectual means of computing such
values being sought by Simon Stevin of Bruges.
This illustrious man of science invented the
theory of decimal fractions, in the construction
of tables showing the values of such annuities
and periodical payments ; and with far-seeing
foresight predicted the enormous boon his new-
found science would prove to mankind, in
practice as well as theory, for all future time.
The discovery was first printed in Flemish and
in French some three years after the tables.
In French it is included in the second, but
separately-paged, part of his duodecimo volume
on arithmetic, printed at the press of Christophe
Plantin, at Lej^den, in 1585. The fame and
practical utility of "Xa Disme" or " De
thiende," as Stevin entitled it, echoed through-
out Europe. In no country was it better wel-
comed than in England, or received earlier
attention by way of translation and of extension.
In this treatise it was suggested that not only
all weights and measures should be decimalised,
but money also, by the latter being struck in
future in various countries into "commence-
ments," Stevin's term for units, and ther
subdivided into "primes" (tenths) ; "secondes"
(hundredths); "tierces" (thousandths); and
80 on. This was tantamount, so far as England
was concerned, to taking the pound sterling as
the unit or commencement, the florin or two-
shilling piece as the prim£ or tenth of the unit,
the 10 mil piece or cent as the seconde or
hundredth of the unit, and the 1 mil piece as
the tierce or thousandth of the unit. All this
is practically identical with the pound and mil
scheme, so well known to the British parliament
and public at the present date.
At the beginning of the 16th century, it is
well evidenced by the book on arithmetic by
Cuthbert Tonstall, bishop -elect of London,
printed in 1522 at London and Paris, that not
only in England and France commercial accounts
were kept according to a vigesimal and duo-
decimal subdivision of pounds and livres into
twenty shillings or sols, and of shillings and
sols into twelve pence or deniers, but that such
was the general practice amongst the merchants
of other commercial states of Europe. And so it
continued in France until the era of the great
revolution. But that from that time until now
France and every other country, except England,
should have one by one altered to a decimal
system is the most undeniable proof that the
advantages of a decimal system over all others
must have made themselves felt and understood
and acted upon by all except our own country.
III. The decimal system in France. Although
the United States of America had decimal sub-
divisions of the dollar into cents and half cents,
by its legislation in 1786, whilst the great
metric reform in the coinage of France was not
made before 1791, the change by France from
her old vigesimal and duodecimal division of
the livre tournois or old franc into the new
decimal and metrical franc and centimes, has
been the real turning-point whereby all other
European countries except our own have been
led to decimalise their coinage either wholly or
in part. Those which, like the several nations
comprised in the Latin monetary union, have
adopted the French coinage system in its
entirety, have of course the full advantage of a
wholly homogeneous system wherein weights of
coin and all other weights and measures have a
definite mutual scientific relation to each other.
But even those wdiich, like the German empire
or Russia, have merely decimalised a not strictly
metric unit, as for instance the mark or rouble,
have derived much substantial advantage from
the substitution of decimal for other systems.
IV. History of the deci^nal movement in
England.^ This country was specially, indeed
exclusively, invited by the French government
at the very inception of the idea in 1790 to
send commissioners to Paris to join with theirs
in the metric and decimal reform. The anta-
gonism to almost anything French which pre-
vailed here at the time prevented us from
joining this movement, much to our national
loss, as it has retarded for more than a century
our participation in its advantages. Let us
hope that the twentieth century, upon which
we have now entered, will not find our execu-
tive of the same slow and halting minds as
we shall presently show they have been in the
516
DECIMAL SYSTEM
last century. It would be well, with the
present progress of education, that they should
approach this question with a greater disposi-
tion towards securing uniformity Avith the
more scientific theory and practice of other
great nations which have long experienced the
benefits that accrue from it. The matter has
in the meanwhile been before the English com-
mercial and scientific world, and the House of
Commons, over and over again. So early as in
1824, when the anti-Gallican spirit had begun
to tone down, Sir J. Wrottesley (afterwards
Lord Wrottesley) moved in the House of
Commons for inquiry into the possibility of
coining the subdivisions of the pound sterling
decimally, that is, into double shillings or
florins, and into 1000 farthings or mils, instead
of 960 farthings as heretofore. The govern-
ment rejected the plan as inconvenient, although
they admitted its advantages. In 1841 royal
commissioners were appointed to restore the
standards of weight and measure destroyed at
the fire which burned down the houses of Parlia-
ment. They reported unreservedly in favour
of a decimal subdivision of the pound sterling,
and upon the facility of interposing between
the pound and the shilling a new coin equivalent
to two shillings, and of considering the farthing,
now passing as the -g-^th part of a pound, as
the TTjVirth part of that unit, of establishing a
coin of value equal to rh^^^ P^^t of the pound,
and of circulating, besides these principal
members of a decimal coinage, other coins
bearing a simple relation to them, including
coins of the same value as the present shilling
and sixpence. In 1843 a second royal com-
mission, consisting of the same members as the
former one, with the addition of a few more
scientific men, was appointed. They proposed
that the recommendations of the first commis-
sion should be carried out. The government
however shelved the matter, and took no action
whatever. In 1847 Sir John Bowring moved
in the Commons for an address to the Crown
in favour of the coinage of silver pieces of ^ijj-th
and rhr^^ of the pound. The government fell
in with this view, but in a tentative manner
only. They came to a resolution, and acted
upon it, that the first step in the decimal system
should be to establish a coin equal to tV^^ ^^ ^
pound. This was the origin of the modern
English florin, stamped one tenth of a pound,
the mintage of which was immediately com-
menced and has continued until now. In 1853
the commissioners appointed ten years before
wrote to Mr. Gladstone, then Chancellor of the
Exchequer, strongly m-ging the government to
issue coins related to the millesimal subdivi-
sion of the pound sterling, and of the value of
TTJWth, TArtli and TTyV-irth of a pound (diff-er-
ing little from the farthing, the halfpenny, and
the penny), and that these might be extensively
used by the public without present inconveni-
ence, while the inscription of their values, aa
estimated in the decimal scale, would afibrd the
means of shortly introducing that scale through-
out the entire system. These were sensible
suggestions and about the best that can now
be offered. They admit, however, of one im-
portant improvement which we have personally
repeatedly urged, namely, that the coinage of
the new farthing (one mil), the new halfpenny
(two mils), and the new penny (four mils) ;
should be struck in nickel. A small-sized,
unmistakably distinct series of new coins of
that metal would obviate all confusion or trouble
with the concurrent old bronze coins, for such
time at least as the latter might have to cir-
culate with the new nickel coins until the
bronze coins were called in. A transition period
would have to be faced, and it would practically
decide in which direction the reform is to work,
by the voice of the public, based on the adjust-
ment of its common wants in which every one
is interested on both sides of the question, as
debtor and creditor, consumer and producer, of
commodities and conveniences measured by^the
penny and its subdivisions. The great question
would be whether penny fares and postages and
the price of any article, or service, now measured
by the penny or -^^-^^^ of a pound, should be
measured in future by the 4 mil piece or -rr^-o-th
of a pound, or by the 5 mil piece or -ij-^th of a
pound. The halving and quartering of the 5
rail piece present awkward fractions, but the 4
mil piece with its perfect halving and quartering
is dynamically equally convenient with the
present penny, and it has the positive advantage
of tending to economy by expenditure of -^-^--j-th,
instead of -s^i-g-^h part of a pound, often answering
the same purpose, and preventing waste by its
more minute subdivisions. Mr. Gladstone, in
1863, declined to act upon the recommendations
of the commissioners, but consented to a select
committee on decimal coinage. The twenty-
five witnesses examined were unanimous in
recommending it, and, with one exception,
supported the pound and mil scheme. The
committee itself reported that having well
weighed the comparative merits of the existing
system of coinage and the decimal system, and
the obstacles which must necessarily be met
with in passing from one to the other, they
desired to repeat their decided opinion of the
superior advantages of the decimal system, and
to record their conviction that the obstacles
referred to are not of a nature to create any
doubt of the expediency of introducing that
system as soon as the requisite preparations
shall have been made for the purpose by means
of cautious but decisive action on the part of
the government. Our readers should note this
well-advised verdict, that after weighing the
advantages and disadvantages as between the
present vigesimo-duodecimal coinage and the
proposed decimal coinage, they pronounce, as
DECIMAL SYSTEM
517
we take it any man of practical and theoretical
knowledge would do, in favour of the decimal
system, so that, as we have now got about forty
years more education into the understandings
of our people than when the commissioners met
in 1853, it may be taken for gi*anted that they
were right in their view. But it neither pleased
Mr. Gladstone nor his government, and the
taking of any action by them was the last thing
thought of in appointing the commission. The
public had, however, even in 1853, its attention
so roused by the favourable report of the select
committee that all kinds of rival plans were
submitted for discussion at meetings of societies
and in printed pamphlets. There was so mucli
doctrinaire attachment still existing even to the
last thread of the strange web of our singular
coinage system, that champions set forth the
existing farthing, halfpenny, penny, ten pence,
twenty pence, lour shillings, eight shillings,
crown, ten shillings, even the long-abandoned
guinea, as better bases than the pound sterling
in a decimal system. Even the American dollar
and the French franc had their advocates.
The farthing, halfpenny, penny, and the ten-
penny schemes were perhaps the strongest-
supported of these opposition methods, but all
four of them fail by disturbing the pound
sterling to an impracticable extent, as they
make this time-honoured unit change into one
of £1 : 0 : 10, instead of, like the pound and unit
scheme, leaving it quite undisturbed. In
1854 the late Sir William Brown of Liverpool,
a practical commercial man, after having well
considered the question in concert with the
"Decimal Association," of which he was chair-
man, and amongst whose members were the
most accomplished men of the day in trade as
well as in science, moved three resolutions in
the House of Commons : (1) That in the
opinion of the House, the initiation of the
decimal system by the issue of the florin has
been eminently successful and satisfactory.
This was carried by 135 to 36. (2) That a
further extension of the system will be of
public advantage. Carried unanimously. (3)
That an humble address be presented to her
Majesty to complete the decimal scale with
the pound and florin, as suggested by two
commissions and a committee of the Commons,
by authorising the issue of silver coins to re-
present the value of the one-hundredth part of a
pound, and copper coins to represent the one-
thousandth part of a pound, to be called cents
and mils respectively, or to bear such other names
as to her Majesty may seem advisable. This
was withdrawn, as, with its usual tactics on
this question, and on the then alleged interests
of the poorer classes, and other such plausible
pretexts, but really with the view of again
strangling the reform, the government agreed to
appoint a royal commission, which consisted,
in the result, of three men being appointed
commissioners who were bitter enemies to any
change, two of them. Lord Overstone and Mr.
Hubbard (afterwards Lord Addiugton) being, to
our certain knowledge, given to saying that they
had made their money, as bankers and merchants,
under the old system, and that as that was good
in the past, it would be good enough in the
future. The inevitable result of the commis-
sion, notwithstanding they had the testimony
of men of advanced scientilic intellect, and of
high commercial reputation, before them in
favour of the decimal system of coinage, and
especially of the pound and mil scheme, was
imfavourable. The royal commission arrived
at twelve, on the whole, antagonistic resolu-
tions. It was, however, admitted that the
pound and mil scheme is the only form in
which, under the then state of public feeling
in this country on the question, the introduc-
tion of the decimal principle into our coinage
covdd be contemplated with any reasonable
probability of sufl&cient support. It was also
alleged that there appeared to be no approach
to unanimity of opinion, on the question of the
introduction of decimal coinage, in the com-
mercial or other classes of the community. This
is, however, only the usual stereotyped sort of
phrase in which governmental non jJossiimus
is wont to be wrapped up. But if we are to
wait until the plebs move as one body in such
a cause we may indeed sit still and await the
Greek kalends. Light must be diffused upon
it, but the reform is practicable over, and not
by, the heads of the million. The "Decimal
Association," founded to fan the sacred flame
of the movement in its favour, faded out of
view by the removal through death of such
active friends of it as Sir William Brown,
Professor De Morgan, Sir John Bowiing, etc.
Then on its dissolution another body, with
like objects, the "Metric Association," was
founded, and although neither money nor pains
were spared by its members, of whom the
writer is one of the few survivors, in educating
the public to the advantages of the decimal and
metric systems, by meetings, deputations,
pamphlets, and conferences of all kinds with
educational and scientific notabilities, still,
that association also came to an end, as human
nature tires at last in the thankless task of
pushing' forward reasoning on subjects of argu-
ment that are necessarily, in the order of things,
abstract and theoretical in form, although they
are, in this particular instance, also both real
and practical and within the possible range of
not very distant adoption. On the ruins as it
were of the first two associations, a third
"Decimal Association" has been founded, and
has succeeded in gaining a more influential co-
operation from the chambers of commerce than
was formerly possible. It remains to be seen
if it can attain its objects better than its pre-
decessors, the associations of the ^mst generation.
518
DECIME— DECKER
It has this advantage over them, that public
education of the masses has now made vast
progress, and places the latter in a far better
position to accept and welcome a decimal
reform than when some of us laboured in .the
same cause in years long gone by. It would
seem, notwithstanding, that although individuals
may improve in their grasp of the question,
ministers do not. A Palmerston, a Gladstone,
or a Goschen are all much the same in their
desire to put a spoke in its wheel, which may
pass on the burden and responsibility of the
change to some distant future. Having attended
all the deputations in a long series of years
which have ventured to trouble the Treasury
and Board of Trade with the expression of
wishes for present action upon it, we can say
we have never discerned even the faintest
glimmer of sympathy, in any minister, for the
movement. If it were felt in their inner non-
official conscience, it was stifled by the know-
ledge that not only would the cry of reform to
a decimal system, either of coinage or of weights
and measures, or of all of them, gain them no
political votes, but perchance might lose them
a few, from the feeling that it would cost the
masses trouble and thought, and the collecting
and spending branches of the executive the
same, and some ingenuity of arrangement
besides, if any change in the present antiquated
system be brought about. There is unfortun-
ately an excess of timorousness here. If actual
experience be a guide, the example of a
great country like the German Empire having
decimalised its coins, weights, and measures,
within quite recent years, proves that a nation,
certainly not better if so well educated as
England in these days, can carry out such a
reform in a limited space of time without any
real difficulty, and much to its advantage both
in the multifarious daily dealings of home life
and in its trade intercourse with the rest of
the world. f. h.
DECIME. French bronze token coin of the
nominal value of 10 centimes, or one-tenth of a
franc. Weight 10 grammes or 154*3 grains.
English value -96 penny. f. e. a.
DECIMES. In France, as in other countries
of Europe, the clergy long contended for the
privilege of exemption from taxes. It was a
favourite and frequent assertion that they owed
nothing to the state but their prayers. The
kings were natiu-ally unwilling to dispense with
the contributions of the wealthiest corporation
in the realm. From the time of the crusades
the clergy were frequently induced or compelled
to make occasional grants to the crown, usually
for some definite object, and often sanctioned
by the pope. It was not till the middle of
the 16th century that these grants, under the
pressure of Huguenot schemes of confiscation,
became permanent and regular taxes. In 1561,
by the contract of Poissy, the clergy undertook
to pay 1,600,000 livres a year for six years.
This contract was renewed in 1567, and ulti-
mately the d^cimes, as they were called, became
a regular payment, granted every ten years by
a grande assemble of the clergy, attended by
four deputies from each province. To settle
all disputes about the assessment and collection
of this payment a bureau ginircd des dicimes
was erected in 1580 in each of the eight metro-
politan sees of France.
Though the consent of the clergy to the
grant of taxes became more formal than real,
they retained the assessment and collection in
their own hands. Necker goes out of his way
to praise the system they had adopted in the
18 th century. The decimes formed a direct tax
upon all clergy except the charitable orders.
For the purposes of assessment the clergy were
divided into eight classes, in which attention
was paid to other considerations than mere
difierence of income. Thus the first class was
composed of the non-resident officials such as
the abbes and secular priors ; whereas the arch-
bishops and bishops only came in the second
class. The other classes were mainly arranged
according to income, the lowest consisting of
cures with 500 livres a year. The first class
paid a fourth of income, the second a sixth,
and so on down to the last, which paid only a
twenty-fourth. But the arrangement was not
strictly carried out, and the collegiate clergy
succeeded in throwing an ever-increasing burden
upon the cures.
The dicimes were not paid by the clerge
dtranger, i.e. the clergy in the provinces added
to France in the 17 th and 18 th centuries. In
four of these provinces the clergy paid the
ordinary secular taxes, and in the rest a com-
position for them.
[Necker, De V administration des finances de la
France, tome ii. — Gasquet, Precis cUs institutions
jpolitiques et sociales de Vancienne France. ] r. l.
DECKER, Sir Matthew (1679-1749),
merchant, and economic and trade writer, was
born in Amsterdam and came to London in
1702. His business life was eminently suc-
cessful, leading the way to great wealth and
many honours. He was a director of the East
India Company, member of parliament for
Bishops Castle, high sheriff for Surrey in 1729,
and was created a baronet 20th July 1716.
His estates were large, and he is reputed, by
mistake, to have been the first to produce pine-
apples in England, one of which was served up at
a great banquet at Richmond when he enter-
tained George I.
His importance as a writer rests on two
treatises : —
1. Serious Considerations on the several high
duties which the Nation in general, as well as
Trade in particular, labours under, etc., with a
proposal for preventing the removing of goods,
discharging the trader from any search, and
DECKER
51d
raising all the Publick Supplies by one single
tax. 1743 (name affixed to 7th edition 1756).
2. An Essay on the Causes of the Decline of the
Foreign Trade, consequently of the valv^ of the
lands in Britain, and on the means to restore
both. 1744 (said to have been begun 1739).
Decker's authorship of the last-named treatise
has been impugned by M'CuUoch on grounds
both external and internal. On the authority
of Fauquier, IFays and Means, p. 56 (1756),
he assigns it to Richardson. He further
considers the dissimilarity of the systems respec-
tively expounded as evincing an obvious ditier-
ence in authorship. With regard to external
evidence it may be noticed that the evidence
rests on the assertion made by Fauquier which
is followed by Chalmers in 1782. Against this
may be placed Postlethwayte's authority {Great
Britain's True System, pp. 163-175); a letter
from Lord Townshend to Tucker speaking of
the treatise as Decker's in 1752 (Hist. MSS.
Com. Report, xi. App. 4) ; and lastly, the 2nd
edition printed in Dublin in 1749, which has
Decker's name on the title page as author.
Turning to the question of internal evidence,
it is necessary to point out that there is very
little ground for M'Culloch's observations with
regard to incongi'uity. So far, indeed, is this
from being a remarkable feature that the
opposite may rather be said to be the case,
the scheme expounded in the second treatise,
of general licenses for consumption, being an
expansion of the scheme of particular licenses
for the consumption of tea, treated of incident-
ally in the tirst {Serious Considerations). The
tone of the two is similar, and the grievance
complained of the same.
To sum up the matter it may be said that
the internal evidence is strongly in favour of
the two treatises being written by the same
man, and as there is no ground for supposing
that Decker did not write the Serious Considera-
tions, etc., a work always attributed to him,
he must be credited with the authorship of the
second treatise also, unless the external evidence
be directly opposed. So far, however, is this
from being the case that its balance is largely
in his favour.
Kext, we may turn to the contents of these
two works. The first, the Serious Considerations
on the High Duties, etc., opens with long com-
ments on the inducements offered by heavy
custom duties to smuggling (" running "), which
will take place in defiance of all attempts at
suppression. Such a condition of things bring
about two chief evils, civil disorder and
perverted morality. Decker then notices the
great advantage which would be brought about
by a repeal of the import duty on tea, and the
substitution of a license duty on households
wishing to consume tea. But the great scheme
developed in this treatise consists in the
replacement of all custom duties by an excise
on houses. This he would impose in proportion
to the rating, with total exemption for the
poor. Its chief advantages are, he urges, (1)
just and certain incidence, (2) convenience in
time of collection, (3) economy. He thus
forestalls the four canons of taxation enunciated
by Adam Smith.
The second work, Decline of the Foreign Trade,
is in every way more important than the fore-
going. While proceeding on the same lines
and aimed at the same evil, it has a wider and
more liberal scope. It seeks to attain its end
by measures which would affect the conduct of
trade throughout the whole kingdom. Although
the title is pessimistic in the extreme, it must
be observed that the drift of the whole treatise
is rather to show the possibility of improvement
than to assert any absolute decline. In other
words England might be made much greater
than she is. At the outset he has to confront
a particular aspect of the question dealt with
in the foregoing work. The proposal to abolish
customs and to make England a free port was
met by the objection that such an alteration
would destroy the value of the land. This he
desires to controvert, and in order to do so
really divides his work into three parts. The
first part is devoted to a detailed criticism of
the fiscal difficulties under which England is
labouring ; the second part to showing the
intricate connection between the trade of a
country and the value of the land ; while in
the third part Decker displays the great sources
of wealth and prosperity possessed by England,
and shows how the references he suggests would
permit her to avail herself of these, her natural
strength. Some attention must be paid to
each of the foregoing.
The first part treats of the causes of difficulty.
These are (1) present taxes, (2) monopolies,
(3) ill-judged laws, (4) heavy burden of the
national debt. It may be noticed that he
criticises the East India Company with great
severity, and urges very strongly the repeal of
the navigation laws which have, he says, evil
effects on trade ana shipping alike. The criti-
cisms and complaints comprised under the fore-
going headings group themselves round two
great matters of giievance : —
(a) The undue and artificial exaltation of
certaiuf branches of trade.
(b) The enhancement of the price of labour.
In the second part. Decker claims that the
value of the land is diminished by what foreign-
ers take from others instead of us, by what the
poor have given them instead of buying, by the
scarcity of people and the scarcity of money.
The third part opens with a description of
the natural advantages which England ])0ssesse3
over her two chief rivals, France and Holland.
Decker shows how the uniqueness of her position,
the wealth of minerals she possesses, the fertility
of her soil, the moderation of her government,
520
DECLARATION OF PARIS
and the daring of her sailors combine to give
her a position which no other nation can claim.
He then proceeds to unfold his proposals.
These are eleven in number and are fiscal,
economic, and political. Of course on^ of
them is the general repeal of import duties and
another the abolition of bounties. To replace
the revenue derived fi'om the former of these
he advocates a tax on the consumption of things
which are not strict necessaries. The tax, as
he develops it, partakes of the nature of an
income tax with considerable exemptions, since
indulgence in different luxuries is supposed to
indicate the possession of a certain income.
Thus the unambitious drinker of tea is to be
taxed on an income of £25, the owner of two
coaches and six on one of £8000.
Such are the contents of these two works,
which, taken together, supply a body of practical
economic doctrine, set off by illustration of
fact, of such weight and importance that their
author must rank as one of the most important
of the precursors of Adam Smith.
[Nat. Diet Biog. and auth. cited, especially
ref. in Oent. Mag. The works have been very
insufficiently treated of, though A. Smith refers to
" the well-known proposal of " Decker in bk. v.
c. 2, W. of ]Sr.'\ B. c. K. G.
DECLARATION OF PARIS. The name
given to an important international agi-eement
which was signed at Paris in 1856. During
the maritime wars of the 17th and 18th
centuries England had acted upon the rule
that it was lawful to capture the goods of an
enemy in the vessel of a neutral, while the
goods of a neutral in the vessel of an enemy
were not under ordinary circumstances good
prize of war. During the same period it had
been the traditional policy of France to con-
fiscate neutral goods found in enemies' ships.
Thus, when in 1854 England and France
entered into an alliance against Russia, there
seemed to be no escape for neutral commerce.
The prospect caused much perturbation among
merchants, and a considerable amount of press-
ure was brought to bear by neutral govern-
ments upon the allied powers. Accordingly in
March 1854 Great Britain declared that "Her
Majesty will waive for the present the right of
seizing enemy's property laden on board a
neutral vessel, unless it be contraband of war."
France notified at the same time that she
would not capture neutral goods found in an
enemy's ship. And further, both states an-
nounced that they would not make use of
privateers (see International Law, section
on Laws of War). At the close of the war the
powers assembled in conference at Paris, agreed
upon a "Declaration concerning Maritime Law,"
which embodied and made permanent the con-
cessions granted during the struggle. The
Declaration was adopted on 16th April 1856,
by Great Britain, France, Austria, Prussia,
Russia, Sardinia, and Turkey ; and all maritime
states except the United States, Spain, Mexico,
and Venezuela have since acceded to it. Its
enacting clauses run as follows :
1. Privateering is and remains abolished.
2. The neutral flag covers enemy's goods
with the exception of contraband of war.
3. Neutral goods, with the exception of
contraband of war, are not liable to capture
under an enemy's flag.
4. Blockades in order to be binding must be
efiective, that is to say, maintained by a force
sufficient really to prevent access to the coast
of the enemy.
It was further agreed that no signatory
power should be at liberty in its dealings with
non-signatory powers to enter into arrangements
contrary to the foregoing articles.
The Declaration of Paris is one of the greatest
triumphs won by commercial interests over the
strict rules of maritime warfare. Its importance
resides in its first three articles. The fourth
did no more than formulate a principle that
had been acknowledged for more than a century.
Taken literally it requires an impossibility ; for
no blockade (see International Law, section
on Laws of Neutrality), however strict, can
always "prevent access to the coast of the
enemy." But the explanations given by states-
men at the time and afterwards made it clear
that the words were meant to be understood in
a reasonable sense as merely prohibitory of
ineffective or "paper" blockades (Dana's note
233 to Wheaton's International Law). The
first article struck at a most obj ectionable practice.
The current of opinion had long been runniag
strongly against the use of privateers. Nelson
had declared that they were only one degree
removed from pirates. It may be hoped that
their prohibition by the Declaration has per-
manently banished them from civilised warfare.
But the new device of a volunteer navy bears
some resemblance to ancient privateering. Dur-
ing the Franco-German War of 1870-71, the
Prussian government invited private shipowners
to fit out their vessels for attacks upon French
men-of-war, and offered temporary commissions
to the officers of such ships. The project was
never carried into effect. France denounced
it as a violation of the Declaration of Paris ;
and publicists and lawyers have differed widely
as to its admissibility. Its legality must
depend upon the nature and degree of the con-
trol exercised over the volunteer cruisers by
the naval authorities of the state to which they
belong (Hall, International Law, part iii.
ch. vii.) But there can be no valid reason
for questioning the position of vessels bought
by private persons and handed over to the
government as an addition to the fleet, or of
merchant ships built under an agreement that
they may be taken by the government and fitted
out as commissioned cruisers in the event of war.
DECLARATION OF PARIS— DECLARED AND REAL VALUES 521
The second article of the Declaration has
provoked an enormous amount of controversy.
Taken along with the third it amounts to a
new departure in the law of maritime capture.
Up to 1856 the great naval powers had been
divided between the old principle that the
liability of goods to capture should be deter-
mined by the character of their owner, and the
more modern principle, introduced by the
Dutch in the days Avhen they were the great
carriers of the world's merchandise, that the
character of the ship in which the goods were
laden should settle their fate. The plenipoten-
tiaries assembled at Paris in 1856 combined the
two principles and adopted that application of
each which was most lenient to commerce. A
great outcry was raised in this country because
the government accepted the rule "Free ships,
free goods" (see Hansard, vol. cxlii.) Many
of our leading statesmen, among them the late
Earl Derby, the late Earl Russell, and the late
Earl of Beaconsfield, expressed opinions hostile
to this part of the Declaration ; and a popular
agitation against it was maintained with great
vigour by the late ]\Ir. David Urquhart. On
the other hand it was supported by such high
authorities as the late Lord Palmerston, the
late Earl of Clarendon, and Mr. Gladstone.
The truth seems to i)e that, while Great Britain
remains neutral, her commerce, and especially
her 'carrying trade, is favourably affected by
the Declaration, but, should she be engaged in a
great maritime war, the enormous volume of her
exports and imports would offer a most vulner-
able mark for the attack of the swift cruisers of
the enemy, whose trade would seek safety under
neutral flags. This being the case, it seems
worthy of consideration whether we should not
go a step farther, and agree to the exemption
of all private property from maritime capture,
unless it is contraband of war or destined for a
blockaded port (Lawi-ence, Essays on some Dis-
puted Questions in Modern International Law,
vii.)
The Declaration of Paris is practically irre-
vocable. Commercial interests are much more
powerful now than they were in 1856 ; and the
pressure they can bring to bear upon govern-
ments is amply sufficient to prevent a with-
drawal of the privileges then gained. Strictly
speaking the Declaration is not binding on the
powers which have declined to sign it. But
those of them who have been engaged in war
since 1856 have. invariably observed its rules,
Spain and Mexico have signified their approval
of the second, third, and fourth articles. The
United States would have signed the Declara-
tion, when invited to do so by France immedi-
ately after the Conference of Paris, had the
first article been extended so as to forbid the
capture of private property at sea unless it were
contraband. The opposition of the British
government prevented the acceptance of this
amendment ; and consequently the great Ameri-
can republic held aloof. But in its civil war
of 1861-65 every article was acted upon, in-
cluding the first. Thus there is an uninter-
rupted prescription of thirty-six years in favoui
of the Declaration. Every year that passes
without a breach of the rules gives them an
authority derived from usage and precedent.
Should they remain unbroken much longer, they
will become part and parcel of the corpus of
International Law.
[The following books may be consulted : Annual
Register for 1856. — Phillimore, International Law,
vol. iii. 3rd ed. (1879). — Wheaton, International
Law, Dana's edition, notes 173 and 223. — Hal-
leck, International Law, Baker's edition, ch. xviii.
— Hall, International Law, pt. iv. ch. vii. 3rd
ed. (1890). — Wheaton, Digest of the International
Law of the United States, vol. iii. §§ 342 and
383-385. — Calvo, Le Droit International, vol. iii.
3d ed. (1880).] t. j. l.
DECLARATION OF WAR. Formerly it
was the practice to make a formal declaration
of war either by letter of defiance or by heralds.
The modern custom is to issue a manifesto,
but any act of hostility will mark the begin-
ning of a state of war. The property of enemy
subjects residing in the belligerent country is
not liable to seizure, and is protected in many
cases by treaties. Existing contracts between
subjects of the two states are either suspended
or extinguished according to their nature, whilst
all fresh trading or other intercourse, and every
species of private contract is forbidden.
[W. E. Hall, International Law, Oxford, 1890.]
J. B. c. M.
DECLARED AND REAL VALUES. For
the purpose of compiling the trade statistics
periodically presented to parliament it is re-
quired of every importer or exporter of goods
that an entry should be made at the custom-
house of the port of arrival or departure, con-
taining amongst other particulars those of
quantity and value. These values are now
termed "declared" in distinction from former
values denoted as "computed real" and
"oflBicial." The earlier form was the latter of
these three, and so styled because there were
"fixed official rates" founded on the ascertained
prices which all known articles bore in the year
1694, with the addition of such new articles as
sprang up afterwards at the prices they each
bore in the first year of their introduction.
This method was discarded from the "trade"
accounts in 1854, but continued to be used in
the " finance " accounts until 1870, when it was
dropped altogether.
In 1854 the import values assumed a new
aspect, and became known as "computed real."
The average prices which had prevailed during
each month were obtained from experts, and
applied to the quantities returned by the cus-
toms officers as having been brought to account
522 DECLARED AND REAL VALUES— DECREE OF REGISTRATION
during the past month. This system gave
place in 1871 to one by which the importer
was required on the first entry of his goods —
which took place before they left the ship — to
state the quantity, so far as that could be esti-
mated by weight or measurement, and the
value also of each parcel as it arrived. This is
termed the "declared value," and is that shown
in the monthly and annual statements issued
from the board of trade and custom-house.
For the exports the "official" values were
prepared in like manner up to 1870, but for
other reasons merchants were at a much earlier
period required to declare the value of their
respective shipments, and thus the "declared
value," obtained as in the year 1798, has con-
tinued up to the present time.
Since 1870 the published values rest solely
upon the authority of the persons by whom
the several entries are passed ; subject to such
control as can be exercised by the customs
authorities from a close inspection of such
imports as, being liable to duty, are weighed
or measured, and a cursory examination of
such as are free from any charge in the shape
of duty. There is also the power which the
clerks engaged in the compilation of statistics
possess of calling upon the importers to prove
the accuracy of their statements by the pro-
duction of the invoices or other documents in
their possession. For the exports of British
goods the values are also obtained from the
declarations of the shippers, rendered some few
days after the vessels in which they are ex-
ported have sailed.
For the purpose of comparison between recent
and earlier years it is necessary to bear in mind
the reversal of previous rules as to the period
when the appraisement took place. It used,
for the imports, to be after the goods had been
landed and been subjected generally to the test
of the markets in which they were bought and
sold. It is now, before they have been even
seen by the owners or consignees. For the
exports the valuation used to be prior to their
being sent for shipment, and when the quan-
tity that could be received on board was uncer-
tain. Now the declaration is made after they
are beyond the reach of inspection, but when
the shipper is presumed to have full knowledge
of their cost. Thus the values given for imports
are now estimates made by those through whose
hands they pass, of what they ought to be
worth. Those for the exports should be the
actual amounts for which they have been ob-
tained. Formerly, that is since the abrogation
of "official values," that for the imports was
ascertained after many or most of them had
been dealt with ; for the exports at a time when
the shipper to a great extent knew only the
orders he had given, but not the extent to which
they had been executed.
Another point which needs to be borne in
mind in the institution of a comparison between
imports and exports is, that the moment oi
valuation is that of arrival in the one case, and
departure in the other. Thus the valuations for
imports includes all the charges which they have
incurred for transit from the place of production,
that for the exports excludes everything accru-
ing after they leave the place of shipment.
It is obvious that in both cases the accurac}'
of the valuation depends upon the extent to
which the facts are known to the person by
whom the customs entry is made, and the care
he bestows upon the estimate or record which
he makes ; and in neither is there any reason
why these should not be as close an approxima-
tion to the truth as was secured at any formei
time, or in the records of other countries. In
the absence of any motive for wilful error it is
not probable that they are intentionally mis-
stated. The chief danger lies in the fact that
the entry may be made upon insufficient infor-
mation, and there is a tendency to adopt aver-
age prices without due regard to the fluctuations
which are continually taking place. To procure
absolute accuracy would entail such a minute
inspection and calculation as would tend much
to impede trade transactions and be the occasion
of great expense. The chief security consists
in the multitude of small entries which go to
make up the large totals, and in the many
agents, acting independently of each other, by
whom the particulars are gathered. Thus in-
dividual errors may be supposed to correct
each other. Confidence may be reposed in the
results obtained, at least for comparison of
one period with another, if not for the perfect
accuracy of each especial year or month. Al-
though compiled from difi'erent sources and
varying methods, there should be no breach of
continuity in the records of the "computed
real" and the "declared" values, but no fair
comparison can be made in either case between
the present records and those formerly known
as "official."
[For fuller information on this subject reference
may be made to " Eeport of Inspector- General of
Imports and Exports in 1854," — " Keports of
Commissioners of Customs." — Bourne, S., "Offi-
cial Trade and Navigation Statistics," in the
Stat Society's Journal for 1872, p. 196, and
" Trade, Population, and Food, " 1880. —Gifi"en, R.,
Essays in Finance (2nd series). — M'Culloch, J. K,
Commercial Dictionary, articles ' ' Imports and
Exports," "Balance of Trade." — Newmarch, W.,
" Progress of Foreign Trade of United Kingdom,
1856-77," in Stat. Society's Journal for 1878,
p. 187. — Parliamentary Paper, No. 405, 1881,
"Trade with France from 1861 to 1879."— "R.
Giffen's Reports upon changes in the prices of
Imports and Exports," 1879, et seq.'\ 8. Bo.
DECREASING RETURNS. See Diminish-
ing Returns.
DECREE OF REGISTRATION (Scot.) A
Scotch contract usually contains a clause of
DEDUCTIVE METHOD
523
consent to registration for preservation and
execution ; this may be followed by registra-
tion in the court books, and an extract of the
deed from the court books is equivalent to
an extracted judgment of the court, not in
foro, but enabling summary execution to be
obtained, unless an action of suspension be
raised to challenge the validity of the deed
r6£ristGrG(i A d
DEDUCTIVE METHOD. By the deductive
method is meant a method of reasoning which
begins by investigating the principal forces
determining a given class of phenomena, and
the general laws in accordance with which
these forces operate, and then goes on to trace
the consequences which ensue from their action
and interaction under specified conditions. It
proceeds, theiefore, from the more general to
the less general. The conclusions reached may
indeed possess a high degree of generality
considered in their relation to actual concrete
facts ; but they are particular, relatively to the
very wide generalisations which constitute the
premisses.
Recourse is had to the deductive method in
cases where the method of direct induction is
rendered specially fallible by reason of the
great complexity of the phenomena under in-
vestigation. There are, therefore, prima facie
grounds for availing ourselves of its aid, if
possible, in the social sciences ; since, as Mill
observes, "of all effects, none depend on so
great a complication of causes as social phe-
nomena" {Logic, bk. vi. ch. 7, § 1). If we
can effect a mental isolation of the principal
forces in operation, then the problems to be
solved will be simplified, and it may be possible
to deal separately with their different aspects.
The deductive method must not, however, be
identified with pure deduction. In its complete
form it is found to consist of three steps.
There is, first, the selection of premisses ;
secondly, the deduction of consequences ; and
thirdly, the verification of consequences by
comparison with what is observed actually to
occur. The final step has for its object not
merely to test the accuracy of the deductive
reasoning in itself, but also to determine the
relevancy of the premisses to the actual pheno-
mena upon which the reasoning is intended
to throw light.
It is at once clear that if the deductive
method is to be of practical utility in any science,
it must start from a basis of observation.
Thus in political economy its premisses must
not be chosen arbitrarily, but must correspond
broadly with the general characteristics actually
displayed by men in their economic dealings
with one another, and with the circumstances
in which they are placed. The premisses
are, therefore, partly psychological, and partly
obtained by an investigation of the physical
and social environment in which men's economic
activities are exercised. It is not necessary,
however, that the propositions assumed in
regard to men's motives or their material and
social surroundings should be true universally
or without qualification. To attempt any
exact correspondence with what has been called
the "full empirical actuality" would be to
sacrifice generality, and to involve ourselves
afresh in those complexities of actual economic
life from which it is the special object of the
deductive method temporarily to escape. The
requirements are, first, that the motives taken
into account shall be exceptionally powerful in
the economic sphere, and so far uniform in their
operation that the kind of conduct deduced from
them may correspond with what actually happens
in the great majority of cases ; and, secondly,
that the circumstances under which the motives
are supposed to operate shall be of a repre-
sentative character, either as regards economic
life in general, or, at any rate, as regards a
special aspect of it over a given range.
It follows tliat the deductive method involves
a process of abstraction. A condition of affairs
is assumed in which the operation of "disturb-
ing causes " — such as never fail to be present in
actual experience — is eliminated. The extent
of the abstraction admits of all degrees, and
what are to be regarded as ' ' disturbing causes "
will vary in different instances. In the most
abstract reasonings of economics, attention is
limited to general principles which are entirely,
or almost entirely, independent of social in-
stitutions and economic habits, as, for exam|)le,
the law of diminishing utility — namely, that
the additional satisfaction which a person derives
from an additional increment of any commodity
diminishes as the stock of the commodity already
in his possession increases. In other cases ac-
count may be taken of quite special conditions,
such as a monopoly conferred by government,
or temporarily established by effective combina-
tion. The abstraction frequently takes the
form of assuming a stationary condition of
affairs, in which the natural progress of econ-
omic life, with its multiplicity of changes and
infinitely complex interactions, is supposed to
be in certain respects arrested, so that some
particular agency may have free play to work
out its own proper effects unimpeded and under
known conditions. In order to express this
assumption, deductive political economy is some-
times said to study society statically, whereas
actual society is dynamic. The analogy implied
in the use of these terms is suggestive ; but it
must not be pushed too far.
Attempts have sometimes been made defini-
tively to enumerate the premisses of deductive
political economy ; and there are no doubt a
few premisses — such as the law of diminishing
utility, already referred to, and the hypothesis
of free and effective competition — which occupy
a central position in economic theory. Any
624
DEDUCTIVE METHOD
exhaustive enumeration is, however, impossible ;
since, in order to suit fresh cases, old premisses
may at any time be modified and new ones
introduced. And it is important not to lose
sight of the fact that in having recourse to the
deductive method the economist is not rigidly
tied down and limited in his choice of assump-
tions. Even Cairnes, who formulates somewhat
narrowly what he regards as the ultimate and
fundamental principles of economic reasoning,
also recognises subordinate causes influencing
human conduct in the pursuit of wealth, which
may at a later stage be incorporated amongst
the premisses of the science.
"When recourse is had to the deductive method,
the application of conclusions to actual economic
phenomena is of course dependent upon the
realisation of the conditions assumed in the
premisses. The conclusions, moreover, are al-
most always subject to the proviso that the
causes specially under consideration shall be
allowed to work out their effects undisturbed ;
and they must accordingly be regarded, not as
positive predictions of what will be found to
occur in every individual instance, but as state-
ments of tendencies which are not unlikely to
require a wide range of experience and the lapse
of a considerable interval of time in order that
their operation may be clearly manifested. For
these reasons deductive political economy is said
to be a hypothetical science ; but this must not
be considered to imply unreality or want of
correspondence with the actual order of economic
phenomena. For so long as the premisses are
not chosen arbitrarily, but take account of the
most uniform and powerful of the forces in
operation, the conclusions reached will be of
fundamental importance from the practical, no
less than from the scientific, point of view.
The description "hypothetical" should, there-
fore, not be applied to political economy with
any disparaging implication. In the same sense
in which it is applicable to political economy,
it is also applicable to such sciences as mechanics
and astronomy.
In order to avoid misunderstanding and error
in the use of the deductive method, it is neces-
sary that the assumptions which constitute the
basis of the argument should be clearly enunci-
ated ; and, further, that the conclusions reached
should not be applied to any given state of
society without a special investigation of the
relevancy of the assumptions to the actual con-
dition of affairs. It has been already pointed
out that deductive political economy obtains its
ultimate premisses from observation. But it
follows from what has just been said that this
is not the only function fulfilled by observation
in the employment of the deductive method.
Observation also determines the limits within
which given assumptions are approximately
realised, and indicates the kind of allowance
that should be made for the effects of "disturb-
ing causes." It, moreover, shows in what
directions premisses must be modified in order
that they may be adapted to special economic
conditions ; and, finally, it serves to illustrate,
test, and confirm the inferences that have been
deductively obtained. In the process of verifi-
cation, however, it is always necessary to bear
in mind the special character of these inferences.
In so far as they relate only to what will happen
in the long run, time must be allowed for effects
fairly to manifest themselves ; and in any case
it must be remembered that a general tendency
cannot be either established or refuted by an
individual instance.
In the application of the deductive method
to economic problems many recent economists
have availed themselves of the aid afforded by
diagrams and mathematical symbols ; and it
may be observed in passing that when this ia
the case the precautions essential to the right
use of the method are less likely to be over-
looked. For the employment of mathematical
methods necessitates a full analysis and clear
statement of the premisses upon which the
reasoning is based ; and no one is likely to
imagine that the results reached can be applied
offhand to the solution of practical problems.
(See Diagrams ; Graphical Method ; Mathe-
matical Method.)
The deductive method has been the tradi-
tional method of English economics, and the
part which it plays in building up economic
doctrines has been specially emphasised by Mill
in his Unsettled Questions of Political Economy
and in his Logic, and by Cairnes in his Logical
Method of Political Economy. Upon this point
Jevons also expresses his agreement with them.
" I think," he says, "that John Stuart MiU ia
substantially correct in considering our science
to be a case of what he calls the physical or
concrete deductive method ; he considers that
we may start from some obvious psychological
law as, for instance, that a greater gain is pre-
ferred to a smaller one, and we may then reason
downwards, and predict the phenomena which
wiU be produced in society by such a law. The
causes in action in any community are, indeed,
so complicated that we shall seldom be able to
discover the undisturbed effects of any one law,
but, so far as we can analyse the statistical
phenomena observed, we obtain a verification
of our reasoning. This view of the matter is
almost identical with that adopted by the late
Professor Cairnes" (^Theory of Political Economy,
1879, p. 18).
In opposition to this view, writers belonging
to the more advanced wing of the "historical
school," — for example, Knies and Schmoller in
Germany, and Cliffe Leslie and Ingram in
England, — either reject altogether the use of the
deductive method in economics, or hold that
the part which it has to play is unimportant
and soon exhausted. Thus .amongst the pre-
DEDUCTIVE METHOD
525
railing errors of economists, Professor Ingram
includes "that of exaggerating immensely the
ofl&ce of deduction in their investigations."
"We can," he allows, "sometimes follow the
method which Mill calls the d priori deductive,
that is, we can, from what we know of the
nature of man and the laws of the external
world, see beforehand what social phenomena
will result from their joint action ; but thougli
the economists of the so-called orthodox school
recognise no other method, we cannot really
proceed far in this way, which is available only
in simple cases." Hence it is argued that
"the d priori deductive method should be
changed for the historical " {Statistical Journal,
1878, pp. 617-626). SimQarly, Clitfe Leslie
lays it down that "the abstract and a priori
method yields no explanation of the laws de-
termining either the nature, the amount, or the
distribution of wealth." " On the other hand,"
he says, " the philosophical method must be
historical, and must trace the connection be-
tween the economical and the other phases of
national history" {Essays, 1888, p. 189).
It would occupy too much space to attempt
here a discussion of the various arguments by
which the assailants of the deductive method
attempt to make good their position. It may,
however, be observed that the problems which
they have mainly in view are apt to be diflerent
from those which the deductive economists have
mainly in view. They are, for example, not
unfrequently thinking of historical or semi-
historical problems, which no one would seri-
ously maintain to be capable of a deductive
solution, — as, for example, the changes in kind
which wealth undergoes in different states of
society. For further illustrations of this point
reference may be made to Cliffe Leslie's essay On
the Philosophical Method of Political Economy.
Critics of the deductive method are, more-
over, apt to misinterpret the nature of the con-
clusions to which alone it professes to lead.
"The deductive economist's theory of profits
and prices," says Cliffe Leslie, "will be found
to claim to be true, under all circumstances, in
the case of every individual in trade and of
every particular article, and to foretell the
exact rates at which goods will be sold. His
theory of taxation is an application of his theory
of profits and prices ; and it proceeds on the
assumption that prices will actually conform to
the cost of production, so nicely in every parti-
cular case, that every special tax on any com-
modity will be recovered by the producer from
the consumer, with a profit on the advance "
{Essays, p. 229). It is certain that no authori-
tative writer of the deductive school has ever
intended to lay down such doctrines as these.
The doctrine, for example, that taxes on com-
modities are, under ordinary conditions, paid
by consumers, relates solely to what will happen
in the long run. and writers like Mill and
Cairnes have never for a moment imagined that
every individual instance will afford a verifica-
tion of it. Cairnes is very emphatic upon this
point. Referring to the doctrine of cost of pro-
duction, he says — "Is it meant that freely-
produced commodities invariably and without
exception exchange for one anotlier in propor-
tion to their respective costs of production '
If this is what the doctrine means, the assertion
is clearly untrue. In what sense, then, is the
statement true, that cost of production regulates
the value of freely-produced commodities ? The
answer is, it is true hypothetically — in the
absence of disturbing causes ; or, to express the
same thing in a different form, the doctrine
expresses not a matter of fact, but a tendency "
{Logical Method, pp. 93-4).
Both friends and foes of the use of deduction
in economic inquiries have too often implied
that the use of one method excludes the use of
other methods. But this is far from being the
case. In political economy the inductive and
deductive methods are of varying relative im-
portance in different departments of inquiry.
But in every department the value of either is
increased in so far as it can be sujiplemented
by the valid employment of the other. In-
creased accuracy and abundance of observations
and improved opportunities for making valid
inductions will never render deduction superflu-
ous, but Avill, on the other hand, provide it
with a broader and better established basis,
extending the range of its applicability, leading
to its further developments, and increasing the
practical utility of its conclusions. The object
of the present article is to explain the nature
of the deductive method, and for a detailed
consideration of other methods reference must
be made to Historical Method, Inductive
Method, etc. But whatever method may be
immediately under consideration, it is most
important to point out that the recognition of
its utility does not imply the denial of the
utility of other methods in their proper place
and under proper conditions.
It will constantly be found that economists
are less narrow in their actual method of setting
about the solution of economic problems than
they are in what they write about method.
Mill, for example, while sometimes speaking of
the inductive method as if it were altogether
inefficacious in economics, himself gives a typical
example of its use in the discussion of the
economic aspects of peasant proprietorship,
which occupies so prominent a place in his
political economy. Cliffe Leslie, on the other
hand, continually has recourse in his own
economic reasonings to that deductive method
which he elsewhere so vehemently attacks.
Some striking instances of this will be found
cited in an article on " Economic ^Method " by
Professor Sidgwick in the Fortnightly Pevieu
for February 1879.
526
DEDUCTIVE METHOD— DEED
There are indications that in the future the
controversy as to the place of the deductive
method in political economy will be less
prominent than it has been in the past. A
compromise is being effected, and economists
are coming to substantial agreement, llius,
writers who carry on the tradition of the so-
called classical school fully recognise that
induction as well as deduction has an important
part to play in the building up of economic
doctrines. Professor Marshall, for example,
writes — " Induction and deduction go hand in
hand. The progress of economic reasoning
depends on the study of economic facts, and,
on the other hand, that study itself requires
to be guided and directed by the scientific
knowledge which is the outcome and abstract
of a previous study of facts. Every new study
of facts adds to our knowledge of the action
of economic causes, it enables us to form a
better judgment as to the effects which any
cause is likely to produce, whether acting
singly or in combination with others ; and it
puts us in a better position to detect the
hidden causes of results which come under our
notice. But the study, to be serviceable, must
be careful and thorough, and must be so
arranged as to isolate the action first of one
cause and then of another, and make a careful
examination of each " (^Principles of Economics,
1891, p. 88). On the other hand, economists
whose natural sympathies tend in the direction
of the historical school are emphatic in their
statements that the deductive method is very
far indeed from being superseded. ''These,
then," says Professor Wagner, *'are the two
methods : on the one hand, deduction from
psychological motives — first and foremost,
deduction from the motive of individual ad-
vantage, then from other motives ; on the
other hand, induction from history, from
statistics, and from the less exact and less
certain, yet indispensable, process of common
observation and experience. With both methods
we are to approach the various problems of
political economy, and to solve them so far
as we can. Which method is most to be used
depends on the nature of the particular
problems ; but it depends also on the turn of
mind, very likely on the accident of training
and education, of the individual investigator"
{Quarterly Journal of Economics, October
1886, p. 124). Professor Cohn, again, expresses
very clearly the view that deduction and in-
duction are to be regarded as supplementary,
not as antagonistic, methods. "Our general
consideration of the nature of induction," he
remarks, "has taught us that this method by
itself alone, without deduction, is blind. Any
historical or statistical collection of facts can
have a meaning, only when it is made from a
point of view suitable to the subject which is to
be considered. This material, collected from a
definite point of view, can again only be made
of use for the discovery of a causal connection
by being brought under the light of a previously-
prepared hypothesis. The hypothesis is tested
by this new material with regard to its re-
liability, while in its turn it throws new light
upon the material. Thus a tentative advance
from the most uncertain suppositions to ever
more firmly established assumptions, is brought
about by progressive observations " {System der
Nationalokonximie, vol. i. p. 33).
[On the subject of the present article, see also
Analytical Method, A Priori Reasoning, etc.
Some discussion of the deductive method and of
economic method in general will be found in most
systematic works on poUtical economy. Special
reference may, however, be made to the following :
Bagehot, Economic Studies, essays i. and ii. — Block,
Les Progres de la Science Economique, Introduc-
tion.— Bohm-Bawerk, " Historical versus Deductive
Political Economy " {Annals of the American
Academy of Political and Social Science, October
1890). — Cairnes, Character and Logical Method of
Political Economy. — Cherbuliez, Pr6cis de la
Science Economique, Introduction. — Cohn, System
der JVatio7ialokonomie,IntToduction. — Cossa, Guide
to the Study of Political Economy. — Cunningham,
The Use and Ahu^e of Money , ch. i. — Dunbar, "The
Reaction in Political Economy " {Quarterly Journal
of Economics, October 1886). — Ingram, History
of Political Economy, and Address as President
of Section F of the British Association, 1878. —
Jevons, Theory of Political Economy, ch. i. —
Keynes, Scope and Method of Political Economy. —
Clitfe Leslie, Essays in Political Economy, especi-
ally essays xiv. to xvii. — Lunt, Present Condition
of Economic A^czeTice.— Marshall, Present Position
of Economics, and Principles of Economics, bk. i.
ch. vi. — Menger, Die Methode der Politischen
Oekonomie. — Mill, Unsettled Questions of Political
Economy, essay v., and Logic, bk. vi. ch. ix. —
Roscher, Principles of Political Economy, Intro-
duction.— Sax, Das Wesen und die Aufgahen der
Nationalokonomie. — Von Scheel, "Die Politische
Oekonomie als Wissenschaft " (in Schonberg's
Handhuch der Politischen Oekonomie). — SchmoUer
Zur Litteraturgeschichte der Staats- und Sozial-
wissenschaften. — Science Economic Discussion
(essays by H. C. Adams, R. T. Ely, etc.)—
Sidgwick, Principles of Political Economy, Intro-
duction, ch. iii. , and Scope and Method of Eco-
nomic Science. — Senior, Political Economy. —
Wagner, "Present State of Political Economy"
{Quarterly Journal of Economics, October 1886).]
J. N. K.
DEED (Scot.) Any formal written instru-
ment, properly authenticated, stating the
terms of any agreement, contract, or obliga-
tion, which must be definite, possible, and
lawful. It may be unilateral or bilateral, etc. ;
it may be gratuitous, for no consideration is
necessary ; and "sealing" is entirely in desue-
tude, though anciently necessary in matters
above £100 Scots (£8:6: 8), and only dis-
pensed with by statute 1584 in the case of
deeds which were also to be registered. A. d.
DEED OF ARRANGEMENT
527
DEED OF ARRANGEMENT. A deed of
arrangement (under the 60 & 51 Vict. c. 57)
is an instrument in writing "made by, for, or
in respect of, the affairs of a debtor for the
benefit of his creditors generally (otherwise
than in pursuance of the law ior the time
being in force relating to bankru})tcy)."
The definition of a deed of arrangement given
by the act is very wide. It includes (1) an
assignment of property (to one or more trustees
for realisation and distribution among creditors) ;
(2) a deed or agreement for a composition ; (3)
and (where creditors obtain any control over
a debtor's property or business, a deed of
inspectorship or other instrument entered into
for the purpose of carrying on or winding up a
business ; (4) a letter of license given by credi-
tors authorising a debtor, or by a debtor
authorising some one else, to manage or dispose
of his business with a view to the payment of
his debts. The essential feature of the deed in
each case is that it must be for the benefit of
the debtor's creditors generally, and of the act
that such deeds must be registered and open
to public inspection. The object of the act,
therefore, is not to sanction deeds of arrange-
ment which would otherwise be illegal, or to
interfere with or control the administration
under such deeds, but simply to secure due
publicity. Prior to 1887 such deeds were
simple agreements governed by common law
and not by special statute. By the above-
mentioned act, whicli came into operation on
the 1st of January 1888, deeds of arrangement
became subject to certain statutory conditions,
the absence of which renders them absolutely
void. The act does not otherwise aff"ect their
status, or give any validity to them which they
would not otherwise possess. They are not
required to be in any particular form, and
remain voluntary agreements binding only on
such persons as accede to them, and enforceable
only in accordance with the provisions which
they contain. In this respect they are essen-
tially different from the deeds of arrangement
and schemes of arrangement which have been
legalised under former bankruptcy acts, and
more particularly under the acts of 1849, 1861,
and 1869. The latter enjoyed certain special
privileges, and were binding upon all the credi-
tors of a debtor when adopted by a certain
majority in the manner prescribed by law.
They also differ in the same manner from the
"schemes of arrangement" under the Bank-
ruptcy Acts of 1883 and 1890, which when
assented to by a certain majority become bind-
ing on dissenting creditors, subject to approval
by the court after an investigation into the
debtor's conduct (see Bankruptcy).
The chief condition imposed upon the validity
of deeds of arrangement by the act of 1887 is
that they shall be stamped and registered in
the bills of sale department of the central office
of the supreme court if in England, or in the
bills of sale office of the high court of justice if
in Ireland, within seven clear days after their
first execution either by the debtor or by any
creditor. Registration is effected by filing
with the registrar copies of the deed accom-
panied by affidavits verifying the same and
containing an estimate of the amount of pro-
perty and liabilities included thereunder, the
total amount of composition (if any), and the
names and addresses of the debtor and his
creditors. The leading particulars of the deed
are then entered in a register, and this register
together with the deed itself is open to inspec-
tion by any person, whether he be a creditor or
not, on payment of the prescribed fee of 2s. 6d.
While all deeds are thus registered in the central
office in London, separate registers are kept in
the county court of the district in which the
debtor's place of business or residence is situ-
ated, when such place of business or residence
is outside the London bankruptcy district. In
these cases the registrar at the central office
transmits a copy of the deed to the registrar of
the county court, who is required to file and to
permit inspection of the same in the like manner
and on the like terms as in the case of the
central register.
The publicity secured by the act has un-
doubtedly been of great benefit to the trading
community. Prior to its passing, an insolvent
trader, if he could induce all his creditors to
assent, was often in a position to effect a secret
arrangement of his affairs, which left him for
some months and even years full liberty to trade
and incur fresh obligations while he was still
under the burden of old ones which remained
undischarged, and which were ultimately paid
or compounded for out of the proceeds of assets
subsequently acquired on credit. Such arrange-
ments were often disastrous to the new creditors
who, when their debtor finally passed into the
bankruptcy court, had the mortification of find-
ing that the goods which they had thus parted
with to an apparently solvent trader had simply
been used for the purpose of paying off old
liabilities under a secret arrangement with the
old creditors. This practice is now rendered
more difficult owing to the necessity which the
Deeds of Arrangement Act imposes of register-
ing sueh deeds, and the facilities which it
provides for inspection. The publicity thus
given is readily utilised through the medium
of trade societies for the benefit of the trading
community.
An indirect benefit arises from the informa-
tion afiForded with respect to the condition of
trade throughout the country, and the total
amount of national losses by insolvency. Prior
to 1888 no means existed for estimating
the amount of these losses except in regard
to cases administered under the Bankruptcy
Act, although it was known by traders that
528
DEED OF ARRANGEMENT
a considerable number of such arrangements
annually took place, especially in certain trades
such as the grocery, drapery, etc. The follow-
ing statistics relating to the number and scope
of the deeds of arrangement registered u]ider
the act of 1887 during three recent years are
taken from the annual report of the inspector-
general in bankruptcy for the year ending 1912.
Year.
Number
of Cases.
Liabilities.
Assets.
Estimated
Loss to
Creditors.
1900
1907
1912
3354
3488
2770
£
4,263,610
5,214,504
3,139,900
£
2,480,913
3,100,784
1,654,553
£
2,771,462
3,354,034
2,147,258
Though these figures are not so large as the
corresponding figures under the Bankruptcy
Act, they show the considerable extent and
important character of the insolvency annually
dealt with under this head.
A deed of arrangement is only binding
upon the creditors who assent to it, and if it
comprises an assignment of a debtor's property
to a trustee for the benefit of his creditors
generally, it is an act of bankruptcy. Any
creditor who does not accede to it can there-
fore proceed against the debtor by ordinary
process, and may, if he establishes a debt of
upwards of £50, present a bankruptcy petition
against him ; and if an order of adjudication
is made in pursuance of a petition presented
within three months after the date of the deed,
the latter may be set aside and become void at
the instance of the trustee in the bankruptcy.
Any person who has dealt with the estate
included in the deed, whether as trustee or
otherwise, thereupon becomes personally liable
as a trespasser for any loss sustained by his
intervention. After this period of three months
the deed cannot be challenged under the Bank-
ruptcy Act, although it is still liable to be set
aside, under the statute of Elizabeth (13 Eliz.
c. 5),. if it can be established that it was entered
into for the purpose of defrauding creditors.
Although therefore no creditor is bound by the
deed unless he assents to it, he practically
loses his remedy as against the debtor's property,
unless he can prove fraud, or unless he takes
steps to preserve his rights by a bankruptcy
petition within three months from the date of
the deed ; and although he can after that
period make the debtor bankrupt, he is not
likely to derive much satisfaction from that
course, as the debtor will probably obtain his
discharge subject to a period of suspension,
while the creditor may lose any dividend
which he might have received under the deed
of arrangement.
There are several important differences be-
twixt a liquidation under a deed of arrange-
ment, and one under the Bankruptcy Act.
The following are the most important.
1. Under the Bankruptcy Act every debtoi
must undergo a public examination in court.
Under a deed of arrangement no examination
takes place, either in court or otherwise, except
such as individual creditors choose privately to
institute, and the debtor chooses to submit to,
prior to the execution of the deed.
2. The release of the debtor from his obliga-
tions is subject under the Bankruptcy Act to
certain statutory limitations, and to the ap-
proval of the court. Under a deed of arrange-
ment the release is generally the main con-
sideration received by the debtor for executing
the deed, and is effected either by the instrument
itself or in such method as the latter may pre-
scribe. A release, however, is not necessarily an
essential feature of the deed ; in fact the deed is
sometimes entered into merely for the purpose of :
giving the debtor time to pay his debts in full.
3. The trustee in bankruptcy can set aside
various preferences given by the debtor within
certain periods prior to the date of the bank-
ruptcy petition which would not be capable of
being impeached as fraudulent at common law.
Under a deed of arrangement the trustee has
no such power.
4. In bankruptcy, a trustee's accounts are
subject to regular audit by the board of trade ;
under a deed of arrangement there is no audit
except such as may be provided by the terms of
the deed.
5. A trustee in bankruptcy is not only bound
to file detailed copies of his accounts in court
and with the board of trade, but to send a
summary of his receipts and payments to every
creditor. Under a deed of arrangement the
trustee is under no obligation to send any •.
account to creditors (unless specially provided
for by the deed). By § 25 of the Bankruptcy
Act of 1890, however, trustees under deeds are
now required to send copies of their accounts
annually to the board of trade, where they
can be inspected by any creditor on payment
of a fee of one shilling.
While it is obvious that deeds of arrangement
thus lack many of the safeguards provided in
the interests of the creditors and of the public
in the case of bankruptcy proceedings, it is
sometimes easier under them to carry on the
business of a debtor who has become involved
in temporary difficulties with a view to payment
of a composition, than would be practicable
under the latter. The result may thus bo more
beneficial both for the debtor and for his
creditors.
(In the year 1890 the inspector - general in
bankruptcy wrote in his report for that year : —
" To give any majority of creditors the power to
condone the offences which the Bankruptcy Act
condemns and punishes would be to degrade
commercial morality into a question of barter and
to undo much of the benefit which the act has
conferred upon honest and prudent trade. What
DEED POLL — DEFENCE
529
appears to be required, therefore, is to give any
dissenting creditor the power to bring a deed of
arrangement which aifects his interest before the
court, and to give the court the power when
satisfied that it has been assented to by a certain
majority of the creditors, that no otfeuces under
the bankruptcy law have been committed, and
that no judicial investigation is necessary, to
make the deed binding upon all the creditors.
With a measure passed on these lines safeguard-
ing on the one hand the interests which the
bankruptcy law was designed to protect, and
providing on the other against obstructive tactics
on the part of an unreasonable minority, it might
be fairly hoped that the controversy between the
advocates of private arrangements on the one hand
and bankruptcy on the other would be closed,
and that the two systems might be regarded as
forming together a complete code of bankruptcy
procedure.") J. s.
The Bankruptcy Act 1913, which came into
force April 1, 1914, has improved the law with
regard to Deeds of Arrangement in so far as it
more certainly ensures that the trustee is an
honest man, and that the deed has the assent
of the majority of creditors. It prohibits
general assignments of book debts unless they
are registered in the same way as Bills of Sale,
and further makes failure to keep proper books
after any deed of arrangement has been etl'ected,
in the event of subsequent bankruptcy, a
punishable offence. Under a provision of this
act the trustee has to give security for the
due performance of his duties unless exonerated
by a special resolution of the creditors passed
for the purpose.
DEED POLL. A deed executed by one
party only. It is so called because the top of
the parchment was "polled" or shaved quite
even instead of being "indented."
[Stephen's Covimen taries on the Laws of England,
bk. ii. pt. i. ch. xvi.] J. e. c. m.
DEFALCATION. The term defalcation is
commonly used to describe the action of a clerk
or servant who wrongl'ully appropriates to his
own use money which he has received on account
of his employer. A defalcation in this sense,
although morally equivalent to theft, differs
from theft in the circumstance that the money
has never come into the possession of the person
entitled to it, and so has not been taken out
of his possession by the offender. Defalcation is,
however, a popular rather than a legal term, and
is often used with no very definite signification.
The legal equivalent of defalcation, as above
described, is Embezzlement {q.v.) f. c. m.
DEFENCE. Name of a pleading in an
action by which the defendant replies to the
plaintiff's claim as set out on the indorsement
on the writ or in the statement of claim. It
must, like every other pleading, * ' contain only
a statement in a summary form of the material
tacts " on which the defendant relies. If it
has been settled by counsel it must be signed
VOL. 1.
by him, and if it contains more than 720 words
it must be printed. The defence may consist
(1) in a denial of the facts alleged by the
plaintiff ; (2) in a denial of the legal conclusions
drawn by the plaintiff from the facts stated by
him ; (3) in an admission of the facts stated by
the plaintitT coupled with an allegation of other
facts Avhich take away the plaintiirs right {e.g.
a contract is admitted, but it is alleged that it
was obtained by fraud, or that it has been
performed before action brought, or that the
plaintiff has released his right). Allegations
of fact in the statement of claim, if not denied
specifically, or stated to be not admitted, are
taken tp be admitted by the defendant (except
in the case of an infant or lunatic defendant).
E. S.
DEFENCE, Cost of. The feudal system
distributed property and influence in proportion
to the obligation to take i^art in defence. Its
armies were essentially militias. The gi-owth
of monarchy, with the tendency to identify the
state with the personal ruler, threw the cost of
defence mainly on the revenues of the sovereign,
obtained by taxes in lieu of the ieudal dues.
War came to be regarded as the personal alfair
of the king, and the etibrts made in war were
limited by the size of the standing army which
he was able to maintain. In this period the
art of war became a distinct profession or trade,
and the superiority of a standing army over a
militia was soon recognised, nowhere more
clearly than in the Wealth of Nations, where
the two were well distinguished. ' ' The prac-
tice of military exercises," wrote Adam Smith,
' ' is the sole or principal occu] )ation of the
soldiers of a standing army, and tlie mainten-
ance or pay which the state affords them is the
principal and ordinary fund of their subsistence.
The practice of military exercises is only the
occasional occupation of the soldiers of a
militia, and they derive the principal and or-
dinary fund of their subsistence from some other
occupation." Adam Smith, however, clearly
perceived that ' ' a militia whicli has served foi
several successive campaigns in the field becomes
in every respect a standing army. " The French
revolution identifying the nation with the
sovereign, brought the whole nation into arms.
The force thus developed, though at first a mere
militia, fulfilled Adam Smith's prediction and
easily crushed the comparatively small armies
maintained by the neiglibouring monarchies,
and compelled them, too, to recognise that
defence is the business not merely of the
sovereign but of the nation. This view has
been revived by more recent events, and at the
present day defence is conducted as far as
possible by the emplo3nnent of the whole of the
national resources.
The loss of productive energy and of capital
caused by war far exceeds the pecuniary expen-
diture of the belligerents. It includes also
2 M
630
DEFENCE, COST OF
material destruction on a great scale, the inter-
ruption of trade, tlie cessation of industry, the
loss by death, or disablement from wounds or
disease, of a great number of workers. The
economic losses are usually great in proportion
to the duration of the war ; they are also as a
rule greater on the defeated side. Accordingly,
in order to avoid defeat, to shorten the duration
of a possible war, and to render attack improb-
able except for grave motives, preparations
are made during peace, which are amongst the
principal objects of government expenditure.
The modern continental system combines the
advantage of a militia — the soldier's sustenance
not being a lifelong burden to the state — with
that of a standing army, which consists in
superior professional skill. The leaders and
instructors (officers) and their assistants (non-
commissioned officers) are professional soldiers,
at all times paid and maintained by the state.
The rank and file are ordinary citizens, com-
pelled to devote to the exclusive practice of
military exercises the minimum time within
which skill in arms and perfect discipline can
be acquired. This period varies in the con-
tinental practice between two and three years,
with an exception in some cases in favour of
well-educated recruits, who serve one year only.
The object is to make a capable soldier of every
healthy adult male. But no state has yet been
willing to incur the expense of training the
whole of the men born in any one year — the
''annual contingent" — for the fuU period.
Complete or partial exemption is therefore
granted, usually to those whose productive
services have a special value. The performance
of military service is held to rest on a primary
obligation and not on contract, so that the
trifling money allowance made to the private
soldier is not properly described as pay. This
organisation produces for defence an army com-
prising the majority of able-bodied men between
the ages of twenty and forty, but it maintains
in time of peace only a fraction of this great
number at the public cost.
In Great Britain the obligation to military
service is in abeyance, and a standing army of
a modified 18th-century type is maintained side
by side with an old militia — the Special Keserve
— and a new militia — the Territorial Force, The
standing army is recruited by voluntary enlist-
ment on the basis of contract for pay. The
contract is for twelve years, of which, since
recent changes in the system, nine are usually
spent with the colours ; during the remainder
pay is received in return for the liability to be
recalled upon mobilisation. The Special Reserve
and Territorial Force are also voluntarily re-
cruited ; officers and men receive pay for each
day served. In both alike the instructors
(adjutants) and their assistants (non-commis-
sioned officers), assigned to them from the
regular army, receive continuously the full
pay of their respective ranks, with extra
allowances.
The relatively great cost of the English peace
force arises partly from the endeavour to attract
recruits by the off'er of pay — a shilling a day —
from a more expensive scale of clothing, feeding,
and living, and from the fact that in England
wages and salaries are on an average higher
than in Germany. Moreover, the British army
keeps garrisons in the West Indies, in the
Mediterranean, South Africa, Ceylon, the Straits
Settlements, and China, These garrisons absorb
about 45,000 men, costing nearly four millions,
while the receipts from the colonies and Egypt
amount to only £552,500. Then a whole
army corps is kept in Ireland. The frequent
movement of troops thus necessitated causes
some expense. In Germany the doctrine of
duty applied to defence enables the scale of
living and clothing to be kept down to what is
necessary. The private soldier practically re-
ceives no pay, his 4id, a day being hardly
enough to provide food necessary in addition to
what is supplied by the government. The
pension list is relieved by the practice of em-
ploying discharged non-commissioned officers in
the civil services, notably in the state railways
and the post and telegraph offices.
A peace army withdrawing from productive
labour five or six hundred thousand men, in-
volves, of course, a larger loss of productive
energy than one which keeps unproductive
only a hundred and seventy thousand men.
But it may be doubted whether the continental
system involves any other economic] loss differ-
ent in kind from that which accompanies the
British standing army. The soldier with the
colours is, while his service lasts, withdrawn
from production. The economical loss under
this head depends on the number so withdrawn.
If the number is small a selection can be made
of those who would be inefficent producers.
If it becomes considerable more efficient pro-
ducers must in any case be taken, whether the
enlistment is voluntary or the service a duty.
The soldier is not merely a non-producer, but
a consumer. It is evident from the figures
that he consumes in proportion to numbers
much more largely in England than in France
or Germany. In Germany, at least, he is to
some extent utilised as a producer, clothes and
shoes being in many cases made by the soldiers,
and thus the demand on the taxpayer reduced.
That the soldiers so employed as workmen are
not paid for their work is perhaps an injustice,
but hardly a loss to the nation. On the other
hand it is necessary to give due weight to the
fact that the continental system, taking recruits
at the age of twenty and dismissing them at
twenty-two or twenty-three, withdraws them
from industry before their services have become
very valuable, and returns them to it with their
industrial capacity unimpaired. It is widely
DEFENCE, COST OF
531
believed that the British soldier, on passing
into the reserve after seven years of military
life, has lost mneh of his industrial value. But
the evidence given to Lord Wantage's Com-
mittee showed that in 1891 the majority of
the reservists were in regular employment.
The German one-year "volunteers" serve at
their own expense, thereby escaping the rest of
the two years' term normal for other recruits.
They are required to give proof of superior
education. They correspond in attainments and
amount of personal expenditure with British
volunteer officers.
The aggregate annual expenditure of the
European States upon armies and navies in
time of peace exceeds at the present time
£300,000,000, of which a larger proportion
than at any previous period is devoted to naval
forces. The expenditure of the principal Euro-
pean Powers is approximately as follows : —
(Foreign coins converted as £1 = 20 Marks, 25 Francs
and Lire, 24 Crowns, 10 Roubles.)
Great Britain (1912-13) exclusive of India —
Navy .... £44,365,000
Ai'my .... 28,071,000
£72,436,000
India (1910-11) military services including
marine 19,706,500
Austria Hungary (1909) —
Army, including extra-
ordinary expenditure . £16,995,506
Navy .... 2,643,244
France (1910)—
Army
Navy
£32,913,905
13,659,826
German Empire (estimates 1910-11)—
Army .... £35,492,350
Navy .... 7,902,600
Italy (estimates 1909-10)—
Army ordinary and extra-
19,638,750
46,573,731
43,394,950
ordinary
£12,349,046
Navy ordinary and extra-
ordinary
6,785,441
19,134,48
sia (estimates 1910)—
Army . . . .
£48,071,639
Navy . . . .
8,924,743
56.996.38
Switzerland (estimates 1910)-
Military expenditure
1,619,953
The following tables give an account of the
forces maintained for the above expenditure : —
Navies (from Dilke return, 1910) ; ships huilt and building.
i
1
1
>,
I
05
1
Battleships . . .
Armoured coast defence
65
23
15
41
12
34
17
vessels .
8
2
r
10
Armoured cruisers .
41
22
6
12
10
15
13
Protected cruisers let CI.
IS
5
7
3
2
1 „ ., 2nd „
44
9
2
28
3
16
14
M 3rd „
16
8
2
12
11
2
6
Unprotected cruisers
2
10
..
6
6
Scouts ....
8
8
Torpedo vessels
23
10
c
1
5
2
2
Torpedo boat destroyers
187
77
97
98
23
40
59
Torpedo boats .
116
246
63
82
96
30
69
Submarines .
74
79
33
i+1
7
iff
12
[Germany liad in 1910 eight submarines built ; the
number building was not known. ]
Armies (approximate figures).
Peace
Strength.
Mobilised
Army.
Further
Reserves.
Great Britain (Jan. 1,
1910) .
France (1909) .
Russia
Germany (1909)
Austria Hungary
(1909) .
Italy (1909)
165,686
523,000
1,200,000
621,162
382,808
288,349
II llli
350,758
1,200,000
9
1,500,000
?
?
The expenditure of the United Kingdom for
defence according to the estimates for 1910-11
Navy—
Personnel (numbers borne, 131,000) . £10,763,600
Materiel and administration . . . 27,077,700
Non-efTective 2,762,400
Amounts borne in other than navy
estimates 373,358
Total naval expenditure .
(of which contributed by India and
Colonies, £494,900).
Army—
T. Personnel. Regular troops —
(a) 173,060 regular army £16,496,658
(h) 133,990 reserve . . 1,366,350
(c) Labour and educational
establishments . . 936,737
Total regular army . £18,799,745
Special Reserves and Territorial Force—
(a) 75,013 special reserve,
formerly militia . £1,938,332
(b) 274,712 territorial force,
formerly volunteers
and yeomanry . . 3,257,803
(c) 3010 Channel Islands
militia . . . 28,332
(d)2862 Malta and Ber-
muda militia and
volunteers
. £40,977,258
Total Personnel (662,647)
II. Stores and supplies .
III. Staff and administration
Total army estimates
32,738
£5,247,205
£24,046,950
3,953,089
1,106,061
£20,106,100
(towards which India, certain colonies, •*
and Egypt contribute together
£1,184,100).
The cost of maintaining armies and navies
during peace should be compared with the cost
of war. The following table (after JMr. Edgar
Crammond in Quarterly Review, Oct. 19 10) shows
approximately the outlay incurred in the princi-
pal wars of recent times : —
Date.
War.
Cost.
1853-1854
Crimean ....
£
340,000,000
1859
Italian ....
60,000,000
1864
Schleswig-Holstein .
7,000,000
1861-1865
American Civil War-
Northern States .
940,000,000
Southern States
460,000,000
1866
Prussia, Italy, and Austria
66,000,000
1870-1871
Franco-German War —
French expenditure
540,000,000
German „
77,500,000
1899-1902
South African War-
British expenditure
211,000,000
1904-1905
Russo-Japanese War-
Russian expenditure .
300,000,000
Japanese „
203,000,000
532
DEFERRED PAYMENTS— DEFERRED STOCK
The place of "tlie expense of defence" in
national economy was well considered by Adam
Smith, who accounted for its progressive in-
crease. In recent times this outlay has often
been regarded as analogous to the premiums
paid for insurance. But while an insurance
company undertakes, in the contingency con-
templated by the policy, to pay a sum by way
of compensation, there is no similar means of
repairing the damage done to a nation in war.
The money spent during peace on armies
and navies might better be compared to the
outlay of a municipal corporation for the
maintenance of a fire brigade, the purpose
being not to compensate for loss but to prevent
it. The protection, however, in the case of
expenditure on armaments is not against war,
but against defeat and its consequences.
The most important question concerning
the cost of defence is, Wherein consists true
economy ? in other words. Which portion of the
outlay brings in the largest relative return,
what are the essential matters on which money
must be spent during peace, and what prepara-
tions admit of postponement until the moment
has arrived for the employment of force ?
The table of the cost of recent wars shows
that the expenditure in actual war is less in
the case of a well-prepared than in that of
an unprepared State. In the American civil
war both sides were unprepared. ■ For the
South African war Great Britain was not
prepared. For the Franco-German war, Ger-
many was and France was not suitably prepared.
The elements of preparation for war are,
first, the planning and directing organism, which
consists of the organs of command and of
administration ; secondly, the training organism
or cadres of the army ; thirdly, the personnel of
the rank and file ; and, lastly, the materiel or the
implements of war. Of these the first, the organ
of forethought, costs proportionally little, but
is the determining factor of the efficacy of the
whole outlay. Thus the beginning of economy
is to have first-rate ministries for Army and
Navy, and within them the best obtainable
personnel and organisation in the offices that
deal with strategical and tactical problems.
Next in importance for ultimate success is the
quality, produced by training and selection, of
the cadres, the officers and non-commissioned
officers who educate the private soldiers, sailors
and marines. The discipline and technical skill
of the men are proportionate to the quality of
the cadres. They increase with the time which
the men spend in active training until the
maximum of condition has been reached, after
which successive increments of time fail to
produce corresponding increments of discipline
or skill. The materiel is of much the same
quality in all modern armies and navies, and its
cost proportionate to the size of the army or
navy, the only economy being that produced
by good judgment in the purchase or manufac-
ture, i.e. by the quality of the ministry which
buys or produces. From the consideration of
these factors it appears that for an army or
navy of a given size the cost will be lowest
when the ministry and the cadres are the best
in quality, and when the time during which the
common soldier or sailor remains in training is
not prolonged beyond the moment when further
practice produces no corresponding addition to
quality. In the case of an army this period
is perhaps two to three years. In the case of
navies it is probably longer, but the acces-
sible evidence does not enable the time to be
fixed.
From the point of view of Great Britain
there is a further question as to the most
economic method. It concerns the relative
amount of effort to be given to naval and to
military preparation respectively. For Great
Britain beyond doubt the vital matter is to
obtain victory at sea, which is the function of
naval force alone. But experience shows that
naval victory may be facilitated and that its
effects are enhanced by the co-operation of
military with naval force. Given a navy of
such quality and size as to have the probability
of decisive victory over the hostile navy, then
the chance of dictating peace on satisfactory
terms will be increased more by an efficient
mobile army able to operate in the enemy's
territory than by further naval force.
[See Giffen, ' ' Cost of Franco - German War, "
Essays on Finance, — Bastable, Public Finance,
bk. i. ch. ii. on "The Cost of Defence."] s.w.
DEFERRED PAYMENTS. The phrase
"standard for deferred payments" is applied
by Prof. Walker to the function of money
which Jevons describes in the following passage
and its context: "Every person making a
contract by which he will receive something at
a future day, will prefer to secure the receipt
of a commodity likely to be as valuable then
as now. This commodity will usually be the
current money, and it will thus come to perform
the function of a Standard of Value " (Walker,
Money, p. 10 ; Jevons, Money, p. 14).
The term "deferred payments," when used
in connection with "tabular standard" (or
similar phrases), as by Prof. Walker in his
Money, p. 159, refers specially to those "long-
enduring debts and transactions," those "con-
tracts extending over long series of years,"
which Jevons and others have proposed to
regulate by a standard more permanent than
money.
[Jevons's Money, p. 325 ; Currency and Finance,
pp. 122, 297 (see Index Number, Tabular
Standard).] f. t. e.
DEFERRED STOCK. On the stock ex-
change the securities which have been issued by
a government or corporation take different
ranks. Thus an English railway company is
DEFICIENCY ADVANCES— DEFICIT
638
liable first for tlie interest on its debenture
stock ; next, for that on preferred stock,- if
earned ; next, for dividend on the ordinary
stock, and finally for dividend on deferred
Stock should any exist. In America the shares
of railways usually represent the "deferred"
interest of the original constructors in the profits
of the railway ; mortgage bonds, and perhaps
preference interest, having first to be satisfied
out of net profits. Most of the American rail-
road shares known to the London stock exchange
represent nothing more solid than hope deferred
for a very long time, but these are not known
as what they really are, viz. deferred shares.
Of late years it has been largely the practice of
trust companies to issue preferred and deferred
stocks, the former being entitled to a given rate
of interest preferentially, while the deferred
section of the capital takes the residuary'' profit
in the shape of a dividend. Deferred stock is
usually created to meet the demand of specu-
lators who favour a security which is exposed
to violent fluctuations. If an English railway,
which has issued deferred stock, be responsible
for a serious accident, the holders of deferred
stock, who previously had a chance of a divi-
dend, may see the prospect of dividend entirely
blotted out for a time. The deferred stock of
an English railway company is peculiar. It is
the result of an option- given to the holders
of ordinary stock. For example, holders of
London, Brighton, and South-Coast Railway
ordinary stock have been allowed to divide each
£200 of ordinary capital into £100 of B or
preferred stock bearing 6 per cent, if sucli a
dividend be earned, and £100 of A or deferred
stock, which receives the surplus. Thus, when
a dividend of 7 per cent is announced on
Brighton Railway ordinary stock, a holder of
£200 stock gets £14 ; but, if he has divided
his stock, he gets £6 on £100 preferred capital
and the surplus £8 on £100 deferred capital.
There are investors who buy only the deferred
stock, regarding themselves as residuary legatees
of a fine estate ; others avoid such a stock as
being too speculative. The division was made
to meet different tastes and suit different tem-
peraments and deferred railway stock is simply
the result of that division. A. e.
DEFICIENCY ADVANCES. Under sect. 1 2
of the Exchequer and Audit Departments' Act,
1866, the treasury are required at the close of
each quarter to prepare an account of the in-
come and charge of the consolidated fund,
including under the latter head the charges for
the public debt due on the fifth day of the
succeeding quarter. This account is examined
by the comiDtroller and auditor-general, who
nmat, if the income of the consolidated fund in
Great Britain or in Ireland for the quarter is
insufficient to defray the charge upon it, cer-
tify the amount of the deficiency to the Bank
of England or to the Bank of Ireland as the case
may be, and those Banks are authorised to make
advances during the succeeding quarter, on the
application of the treasury, to an amount not
exceeding in the aggregate the amount of the
deficiency so certified. These advances are
secured on an I.O.U. of the government, and
are paid off out of accruing revenue as the state
of the exchequer balance admits. They bear
interest at a rate agreed upon, for each occasion,
between the cliancellor of the exchequer and
the Bank, principal and interest being payable
within the quarter in which the advance is made.
The formal correspondence between the chan-
cellor and the Bank respecting these advances
is annually presented to parliament. [See e.g.
Pari. Paper, No. 48 of 1910.]
Under sect. 5 of the Natioiuil Debt (Sinking
Fund) Act of 1875, the surplus of income above
expenditure in any year (called the old Sinking
Fund) may be applied by the National Debt
Commissioners in paying off" deficiency advances.
(See also Deficiency Bills.) g. h. h.
DEFICIENCY BILLS. A term used to
denote the exchequer bills formerly issued for
the special purpose of being given to the Banks
of England and Ireland as security for the
advances required to make good the deficiency
on the consolidated fund. The issue of these
bills was regulated by the Act 57 Geo. III.
c. 48, sect§. 6-14, which ])rovided that if upon
making up the accounts of the income and
charge of the consolidated fund for each quarter,
it appeared to the treasury that the produce of
that fund was not sufficient to defray the
charges thereon, it should be lawful for the
treasury to direct that exchequer bills should
be made out for such sum or sums as should
be sufficient to make up the deficiency. The
interest to be borne by the bills was not to
exceed the rate of "three pence halfpenny per
centum per diem" ; the Banks of England and
Ireland were empowered to advance moneys on
the credit of them ; and they were to be placed
as so much cash in the offices of the tellers of
the exchequer. The Act above referred to was
repealed by the Exchequer and Audit Depart-
ments Act, 18; 3, which substituted for them
a similar but simpler institution known as
Deficiency At>\"ances {q.v.) t. h. e.
DEFICIT. In public finance, an excess of
expenditure over income, either {a) actual or
(6) estimated. Unless, of course, the occurrence
of a deficit is deliberately contemplated — and
the practice of making provision annually for the
requirements of the coming year is opposed to
such a course — an actual deficit is ordinarily
due either to the failure of taxation to realise
as much as was anticipated, or to the necessity
for meeting extraordinary and unexpected ex-
penditure, as in the case of war and warlike
preparations. Where a deficit is only estimated,
it can be, and frequently is, made good by an
increase of taxation, unless an addition to the
534
DEFICIT— DEFINITIONS
public debt is deliberately sanctioned, or some
fund or available asset is appropriated to meet
the deficiency. Both descriptions of deficit are
usually referred to in the budget speech of the
chancellor of the exchequer, and it is essetitial
to discriminate between the two in considering
the finance of an administration.
The following table shows the estimated and
actual deficits shown in regard to the finance of
the United Kingdom since 1842-43.
Year.
Chancellor
of the
Deficits.
Exchequer.
Unrevised
Estimate.
Bevised
Estimate.
Actual.
£
£
£
1842-43
Goulburn
2,469,000
2,421,776
1847-48
Wood
3,092,285
1848-49
„
..
2,03i,256
209,378
1852-53
Disraeli
2,125,000
1854-55
Gladstone
2,840,000
3,543,000
6,19f;,808
1855-56
Lewis
16,560,519
18,895,000
22,723,854
1866-57
»
13,961,000
9,373,000
3,254,605
1857-58
..
247,346
] 858-59
Disraeli
3,990,000
1859-60
Gladstone
4,867,000
1860-61
»
9,400,000
1,286,000
2,558,385
1861-62
2,412,006
1867-68
Disraeli
955,000
1,636,024
1868-69
Hunt
2,078,000
278,000
2,380,824
1870-71
Lowe
1,852,000
1871-72
>)
2,713,000
..
7,000
1876-77
Northcote
774,000
,.
1877-73
,,
,.
2,640,197
1878-79
i>
4,559,676
1,155,676
2,291,817
1879-80
2,945,000
..
2,840,698
1882-83
Gladstone
200,000
1884-85
Childers
1,043,000
1,049,772
1885-86
,,
14,932,000
2,832,000
2,642,543
1S86-87
Harcourt
543,599
,,
^^
1889-90
Goschen
1,917,000
*„'
*.'
1893-94
Harcourt
1,574,00b
..
169,000
1894-95
J,
4,502,000
^,
1895-96
>>
319,000
1899-1900
Hicks
Beach
2,640,000
13,883,0001
1900-190]
II
38,814,000
22,541,000
53,207,0001
1901-2
55,347,000
48,87(5,000
52,524,000 1
1902-3
^. >j .
26,824,000
24,174,000
32,932,0001
1903-4
Ritchie
5,415,000
1904-5
A. Cham-
berlain
3,320,000
..
..
1908-9
Lloyd-
George
714,000
1909-10
>>
15,762,000
••
26,248,000 2
1 South African war period.
2 Budget of the year not passed until following year.
[For earlier years see Northcote, Twenty Years oj
Finaiicial Policy, 1862 ; Buxton, Finance and Politics,
1888. See also Budget.] t. h. e.
DEFINITIONS. Whately, in his ninth
"Introductory Lecture on Polxtical Economy"
(published 1832), observes that in a science in
which terms already in common use are em-
ployed there is greater danger of neglecting
questions of definition than in a case where the
technical terms are quite new to the student,
and, therefore, obviously demand explanation.
The need of any general maxims regarding the
definition of economic terms does not seem to
have been felt till after the appearance of
Ricardo's chief work. Adam Smith, who gave
few cut-and-dried definitions, had generally
used words in the sense which they bore in
ordinary language and had endeavoured to
explain and illustrate this sense. But Ricardo,
sometimes disregarded common usage alto-
gether, and attributed entirely new significa-
tions to economic terms. For instance, he
defined the rise and faU of wages, rent, and
profit in such a way that wages and rent
might "fall" when they had "increased one-
half" and " three -fourths " (Pri7iciples, ch. i.
§ 7, in Works, p. 31). Such latitude was
sure to offend. Malthus's conservative mind
revolted against it, and in his Principles (1820)
he protested that economists were not at liberty
to define their terms just as they pleased (j).
26). In 1827 he laid down in his Definitions
in Political Economy some "rules which ought
to guide political economists in the definition
and use of their terms." The object to be kept
in view, he says, is such a definition and appli-
cation of economic terms "as will enable us
most clearly and conveniently to explain the
nature and causes of the wealth of nations "
(p. 4). This object will be best attained, he
thinks, by using terms, whenever it is possible,
in the sense in which they are used in the
common conversation of educated persons.
When it is necessary to make distinctions
which are not made in common conversation,
the previous practice of economists, and especi-
ally of Adam Smith, should be followed, and
further changes only admitted when it can be
clearly proved that they would decidedly con-
tribute to the advancement of the science (p.
5). Cairnes, in his lecture "Of the place and
purpose of Definition in Political Economy"
(Lect. VI. in Logical Method of Pol. Econ.,
1857), repeats these rules in substance, but,
less conservative than Malthus, insists strongly
on the necessity of gradually improving the
definitions of economic terms as knowledge of
the science increases. In a frequently-quoted
part of his lecture he develops a proposition
laid down by Malthus (in Principles, p. 25) to
the effect that economic distinctions may pro-
perly resemble the distinction between animal
and vegetable in being founded on differences
of degree. Sidgwick {Pol. Econ., I. ii. § 1)
observes that the two questions what is com-
monly meant by a term and what meaning can
most conveniently be given to it must not be
confused He also urges powerfully that the
process of searching for a definition is extremely
useful altogether apart from the discovery of a
satisfactory one.
It must not be forgotten that the practical
usefulness of political economy depends chiefly
on its wide diff"usion, so that the formatiop
of an economic language understood only by
specialists is highly undesirable. For the
promotion of the material welfare of a people
few things can be more useful than patient
inquiry into the actual meaning of terms like
wealth, income, capital, rent, wages, profits,
when used in common language by ordinary
people. As soon as ambiguities and inconsist
DEFOE
535
eiicies are commonly perceived, language may
be trusted to find some way of ridding itself of
them without the assistance of formal defini-
tions.
Great confusion has often resulted from the
practice of defining mere words and neglecting
the phrases or terms of which the words con-
stantly form a part. For instance, many defini-
tions of "wealth" are far from deciding what
is meant by " the wealth of a nation " or " the
wealth of an individual. " E. 0.
DEFOE, Daniel (1660 or 1661-1731),
was the son of James Foe, a retired London
tradesman and a nonconformist. At the age
of fourteen, Daniel was sent to a school at
Newington Green, kept by Mr. Morton, an
ejected nonconforming minister. Having com-
pleted his education, he went into business.
Keenly interested in politics, he took up arms
during Monmouth's rebellion in 1685, and
joined the Prince of Orange's army in 1688.
In consequence, perhaps, of not giving all
his mind to business, he failed in 1692 for
£17,000. He compounded with his creditors,
but subsequently paid them in full. He had
already made one or two essays in litera-
ture, and about this time composed his essay
upon Projects, which displays his practical and
inventive turn, recommending the establish-
ment of a national bank, savings banks, friendly
societies, an amendment of the law of bank-
ruptcy, and improvements in education. His
first hit as a political writer was with a doggerel
poem, the True-horn Englishman, published in
1701, which ridiculed the exclusive national
pride of Englishmen, and their grudge against
the Dutch. It gained for Defoe the favourable
notice of William III. Thenceforward he
found constant employment as a journalist. In
1702 his ironical pamphlet, The Shortest Way
with the Dissenters, led to his conviction for
libel. Released from prison in 1704, he wrote
first for Harley, then for Godolphin, and for
Harley again on his return to power. But
Defoe was again committed to prison in 1713,
on account of certain writings directed against
the Jacobites. Soon afterwards he received a
pardon, and although convicted in 1715 for a
libel on Lord Annesley, he was not sentenced,
but was again taken into the service of the
government. Somewhat later he produced a
series of works of special economic interest. The
Tour through Grreat Britain, published 1724-26 ;
The Complete English Tradesman, published
1725-27 ; and the Plan of English Commerce,
published 1728. He had combined literature
with business, and was fairly prosperous in his
later years. But he seems to have met with
misfortune, now not clearly ascertainable, before
his death in 1731. He married at least once,
and left two sons and four daughters.
Defoe was one of the most versatile and
voluminous of Encflish writers. Exclusive of
his contributions to journals, 254 distinct worka
are ascribed to him by his biographer Mr. Lee,
who rejects as spurious many others which have
been ascribed to Defoe. Some of those enumer-
ated, however, appear to be reprints. Journal-
ist, pamphleteer, verse-maker, novelist, and
moralist, he ranged freely over the varied
interests of practical life. By virtue of his
lively interest in concrete things, his varied
information, and his vigorous style, he is an
important authority for economic history,
especially for the condition of the industrial
.and commercial classes in the first part of the
18th century. In no sense a scientific writer,
he has made no contribution to economic
theory. But his inventive genius occasionally
suggested improvements in the economic me-
chanism of the nation, and his lively imagina-
tion sometimes placed economic truths in a
singularly vivid light. As an instance, we
may take from Robinson Crusoe — incomparably
the ablest of his novels — Robinson Crusoe's
reflections on the inutility of the gold and
silver which he found on the wreck of the
Spanish ship and in the wreck of his own
ship, and which to him was not wealth at
all. " I smiled to myself at the sight of
this money : ' 0 drug ! ' said I aloud, ' what
art thou good for ? Thou art not worth to me,
no, not the taking off the ground : one of those
knives is worth all this heap : I have no manner
of use for thee.' "
[The life of Defoe has been written by Wilson
(publ. 1830), by Chadwick (publ. 1859), by
Lee (publ. 1869). — See also Professor Minto's
Life in English Men of Letters, and Mr. Leslie
Stephen's Life in the Dictionary of National
Biography.']
For a complete list of Defoe's writings so far as
ascertained, see Lee's Life. Those which possess
an economic interest are as follows : An Essay
upon Projects, 1697 (not in fact published until
March 1698), 2nd edition 1702.— The Villainy of
Stock-jobbers Detected and the Causes of the late
Run upon the Bank and Bankers Discovered and
Considered, 1701. — Giving Alms no Charity, and
Employing the Poor a Grievance to the Nation
(a criticism of Sir Humphrey Mackworth's Bill
for establishing in every parish a manufactory
for the employment of the poor), 1704. — Remarks
on the Bill to prevent Frauds committed by
Bankrupts, 1706. — An Essay upon Public Credit,
and An Essay upon Loans, 1710. — An Essay
on the South Sea Trade, 1711. — An Essay on
the Treaty of Commerce with France, 1713. —
Mercator, or Commerce Revived (a paper published
thrice a week, advocating the commercial policy of
Harley and St. John), of which the first number
appeared 26th May 1713 and the last 20th
July 1714. — Considerations upon the Eighth and
Ninth Articles of the Treaty of Commerce and
Navigation ; — Some Thoughts upon the Subject of
Comvierce with France ; and A General History of
Trade, all published in 1713. — Anatomy of Ex-
change Alley, 1719. — The Chimcera^ or the French
536
DEGREE OF UTILITY
Way of Paying National Debts Laid Open, 1720.
— A Tour thro' the whole Island of Great Britain,
vol. i. 1724, vol. ii. 1725, vol. iii. 1726, repub-
lished 1727 (subsequent editions being all more or
less altered). — The Complete English Tradesman,
vol. i. 1725, vol. ii, 1727. — Parochial Tyrcfinny,
1727. — A Plan of the English Commerce, 1728,
second edition 1730. — An Humble Proposal to
the People of England for the Encrease of their
Trade and Encouragement of their Manufactures,
1729. r. c, M.
DEGREE OF UTILITY. This phrase was
first made current by Jevons in his Theory of
Political Economy, 1871. Its precise signifi-
cance will be best elucidated by an analogy.
'* Degree of utility " stands in the same relation
to "total utility" as "velocity" to "space
traversed." Suppose we have a body pro-
jected vertically upwards from rest, at a given
speed. We may inquire first at what height
the body will be found at any moment after
its projection, and second at what rate it will
be moving at any point of its course, and
clearly the rate of its movement is the rate at
Avhich its height is increasing (whether posi-
tively as it rises, or negatively as it falls). This
rate may be measured in feet per second, or in
miles per hour, or in any other suitable unit,
but in any case it varies from po^nt to point
and does not continue the same during any
period, however short.
We must now extend the idea of measure-
ment to such economic conceptions as "satis-
faction" and "utility." Measurement consists
essentially in determining the ratio of the mag-
nitude investigated to some other magnitude
adopted as a standard; and a "satisfaction"
would accordingly be measured if we could
determine its ratio to some standard satisfac-
tion, or, which amounts to the same thing,
some standard dissatisfaction. Thus if I wish
to measure the satisfaction derived by a hungry
man from the consumption of a certain quantity
of bread, I may inquire how much labour he
Avould perform, under stated conditions, rather
than go without it ; or what he would pay for
it sooner than go without if an unscrupulous
monopolist exacted from him the extreme
famine price. Thus if we take any standard
we choose we can, ideally at least, conceive of
any concrete " utility " or " satisfaction " being
measured in it. But we must remember that
such measurements are based on the relative
magnitudes of different satisfactions, etc., to one
and the same person, and do not profess to give
us means of comparing a satisfaction experi-
enced by one mind with a satisfaction experi-
enced by another ; for no one can say that the
standard unit of satisfaction selected means the
same thing to two different men. Nor shall
we find that any such absolute measui'ement is
needed for the purpose in hand.
Having premised so much, we may now
work out the economic analogue of the pro-
jected body. Suppose we take such a com*
modity as bread supplied to a hungry man.
Firstly, we may inquire what amount of satis-
faction the man has derived from the consump-
tion of any given quantity of bread ; in which
case we shall be investigating the "total
utility" or "value in use" of that quantity of
bread, to that man, under those conditions.
Secondly, we may inquire at Avhat rate (per
ounce, per pound, etc. ) the consumption of the
bread is conferring satisfaction upon the man
at any point in the course of his meal ; and in
that case we shall be investigating the "degree
of utility" of the bread. This "degi-ee of
utility " will of course vary from point to point.
When the man was at his hungriest he would
be deriving relatively great satisfaction per
ounce of bread consumed, and towards the end
of his meal, when nearly satisfied, his satisfac-
tion per ounce would be relatively small ; and,
theoretically, it will not remain constant during
any period, however short. Now this * ' degree
of utility " is obviously the rate at which the
"total utility" is increasing; just as the
velocity of a rising or falling body is .the rate
at which "space traversed" or "height" is
increasing.
The precise relation of velocity to space
traversed, and of degree of utility to total
utility, is expressed mathematically by saying
that the former are the "differential coeffi-
cients," "first-derived functions," or "fluxions"
of the latter ; and, graphically, if the latter are
expressed by areas the former will be exj^ressed
by lines. In the figure, if we imagine the line
c d moving from 0 in the direction of the arrow
head, at a uniform rate, to represent the lapse
of time, and if we imagine the area aO cd to
represent the space traversed by the projected
body in the time 0 c, then the intercept c d will
be the differential coefficient of « 0 cd, and will
represent the velocity of the body, or the rate
at which it is rising, at the point of time repre-
sented by c. Perhaps this will be sufficiently
obvious to the non -mathematical reader if he
reflects that velocity represents the rate at
which height is increasing, as time lapses, and
observes that the length of the intercept c d
likewise determines the rate at which the area
DE LA COURT— DELFICO
637
aOcd increases as the vertical line moves in
the direction of the arrow-head.
Now let the movement of the vertical from
0 represent the consumption of the bread, so
that 0 c represents the amount consumed up
to any given point of the meal ; and let a 0 c ^
represent the total satisfaction derived from
the consumption up to the point reached, then
cd will still be the differential coefficient of
aO cd, and will represent the rate per unit
(ounce, etc.) at which the consumption of the
bread is now increasing the total satisfaction
reaped by the consumer. That is to say c d
represents the degree of utility of bread at the
point c, the amount represented by 0 c having
already been consumed.
It should be observed, however, that when
we are dealing with economic quantities, the
line a d will probably never be a straight line,
but always a curve of more or less complexity ;
and it will seldom or never be possible to
determine its actual form with any precision.
The main interest naturally attaches to the
degree of utility of that increment of a com-
modity which the consumer expects to obtain
next, or which he may have to relinquish, that
is to say the last increment he has secured or
the next he hopes to secure. This is called by
Jevons the "final degree of utility" (q.v.)
Under this heading, Final Degree of Utility,
references to the most important books on the
subject will be found. All that need be said
here is that the analogy of the moving body
insisted on above was developed by Professor
Leon AValras of Lausanne, and was first sug-
gested by his father, A. A. AValras (see Final
Degree of Utility). p. h. w.
DE LA COURT.. See Court, Pieter de la.
DE LAJONCHERE (beginning of the 18th
century), a French engineer, was one of the
numerous schemers who flourished in the times
of Law and the South Sea Company. After
having written on the fortification of large
towns, and on a Projet d'v/n, Canal de Bourgognc
pour la Communication des deux Mers (1718) he
published his SysUme d'un nouveau Gouvey-ne-
ment en Fran/ie (Amsterdam 1720). Although
De Lajonchere expressly denies having followed
Vauban's Dime Royale, he starts from the same
initial principle, only, as was aptly remarked
by Dupin {Oeconomiques, iii. 210), he urges it
in an extravagant manner. He advocates one
sole tax, to be paid without privilege or exemp-
tion, by all Frenchmen without distinction, to
consist of a percentage collected in money or
in kind, on the general produce of the ground,
mines, quarries, etc., by a "Compagnie du
Commerce," to be formed for the purpose.
This company was to have the monopoly of
foreign trade, its shares being given as re-
imbursement of the price of all the offices sold
by the king's predecessors and of the capital of
the rents due to towns or individuals. The
com collected by the company was to be sold
at a permanently fixed price. The comjjany
was also to be entrusted with the recoinage
and "diminutions" of the metallic currency,
which were to bring it down to what De
Lajonchere calls "its intrinsic value."
[See art. {Journal des ^conomistes, 9th Feb.
18(53) "Unj^mule de Law," by de Lavergiie.]
E. Ca.
DE LA MARE, Nicolas (1639-1723), ori-
ginally a ^nocureur-general, later on a conseiller
commissaire of the Chatelet in Paris, was not an
original thinker, but a most industrious, clear,
and conscientious compiler, and his Traill de la
Police (Paris, 1722-1735, 4 vols, in folio, 2nd
ed.) is a copious mine of information. The
second volume (book v.) deals with the
regulation of food in general, and of corn in
particular. In it will be found, "according
to their order, all the laws, ordinances, and
decrees, which have provided for this subject
with as much force as wisdom." This sentence,
taken from the preface, is completely character-
istic of the scope of De la Mare's work, and
of his commentaries. They were begun in
1677 at the request of the president of the
Parliament of Paris, M. de Lamoignon, and an
abridgement was made in 1758 and 1769 by
La Poix de Freminville in his Traill de la Police.
This, however, does not enable the reader to
dispense with consulting the original, e. Ca.
DEL CREDERE. A factor, broker, or
mercantile agent who undertakes to become
surety for the solvency of the customer with
whom he transacts a sale, receives for this an
extra commission called a del credere commis-
sion. A. D.
DELEGATION. Description used by con-
tinental bankers of a document drawn in the
form of a letter of credit but intended to pass
from hand to hand like a bill of exchange.
These documents are used on the continent for
the purpose of evading the stamp laws ;
English bankers are, however, in the habit of
treating them as ordinary bills of exchange.
They are generally sent out for acceptance pro-
vided with the bill stamp and presented after
the expiration of the days of grace. It is by
no means certain what effect would be given to
the acceptance of such a document in a court
of law, 'but as they are generally addressed to
banks and commercial houses of good standing,
and are drawn at very short dates, the question
is not likely to arise. e. s.
DELFICO, Melchiorre (born in the latter
half of the past century at Leognano, died
about 1835 at Teramo), is generally remembered
only for his Memoria sulla liberfA del Com-
mercio, which has been included by Custodi in
his Scrittori Glassici ; but this does not quite
do justice to Delfico, although undoubtedly his
pamphlet on free trade is his principal contribu-
tion to economic science. Delfico was not only
638
DELICTUM— DELI VERY
an absolute free trader, but also what would now
be called an "absolute individualist," believing
in the beneficial effects of unlimited liberty of
the individual in any sort of economical activity.
Landed proprietors, merchants, and evire-
prcTieurs in the interest of the community
ought to be left to themselves and allowed
to do with their property whatever they
pleased.
Delfico, in his Rifiessioni sulla vendita dei
feudi and in his Lettera al Duca di Cantalupo,
defends the abolition of feudal rights over landed
properties and their sale ; he sees in them an
impediment to the proper cultivation of the
land, which gives greater returns when the
proprietor is able to do with it what he likes.
For the same reason he insists on the abolition
of obnoxious rights like those consisting in the
right of the community to graze its cattle on
the lands of the proprietors, which renders all
sorts of plantations impossible {Memoria per
V aholizione delta servitii delpascolo and Discorso
sul Tavoliere di Fuglia). All Delfico's other writ-
ings are occupied principally with different as-
pects of the free-trade question. He argues that
a dearth of food would never happen if there
were free trade, and that the means to which
governments usually have recourse to avoid it,
or to abate it, aggravate famine by making
production unsafe and deterring merchants from
risking their capital.
Although these doctrines were not new,
coming ten and twenty years after Smith's
criticism of the protective system, Delfico merits
remembrance as a thoroughgoing follower of
liberal doctrines in a time when as yet they
were very rare.
The writings in which Delfico defends the
principle of liberty and absolute property are in
order of date the following : — Memoria sul Tri-
bunate della Qrascia e suite leggi economiche nelle
provincie confinanti del Regno, Napoli, 1785. —
Mernoria sulla necessitd di rendere uniformi i pesi
e le misure del Regno, Napoli, 1787. — Memoria
per V aholizione a moderazione della sermtH del
pascolo invernale, detto dei Regi stucchi, nelle
provincie marittime di Abruzzo, Napoli, 1787. —
Discorso sul Tavoliere di Fuglia e su la necessitd
di abolire il sistema doganale presente e non darsi
luogo ad alcuna temporanea riforma, Napoli,
1788. — Rifiessioni su la vendita dei Feudi, Napoli,
1790. — Lettera a Sua Fee. il sig. Buca di Can-
talupo, Napoli, 1795. — Memoria sulla libertd del
commercio, Accademia di Padova, 1797. — Ragio-
namento suite carestie, Accademia di Napoli,
1818. — Espressioni delta particolare riconoscenza
della provincia e cittd di Teramo, dovuta alia
memoria dell' immortale Ferdinando I., 1833. —
Annali civili del regno delle Due Sicilie, vol. i.
M. p.
DELICTUM. Expression of Roman law
denoting a wrongful act — not being a breach
of contract — which gave the aggrieved party
the right to claim damages. The term corre-
sponds in a certain measure to the expressioc
Tort {q.v.) used in English legal language.
E. S.
DELIVERY (of Bills of Exchange). Ac
cording to the law of the United Kingdom, a
contract on a bill of exchange is incomplete and
revocable until delivery of the instrument. The
drawer of a bill of exchange may, after having
accepted it, cancel the acceptance as long aa
the bill has not been returned to the holder, i
unless he has actually informed the holder that 1
the biU has been accepted (Bill of Exchange »
Act, § 21). This is not so according to
German law ; a German acceptor having once
affixed his signature to the bill is irrevocably
bound (German code, § 21). The delivery
required by English law need not consist of an
actual transfer of possession, but may be a con-
structive delivery (see Delivery of chattels).
As according to the regulations of the English
post-office a letter, after being posted, cannot
be recalled by the sender, the posting of the
letter constitutes a delivery. In some other
countries, the sender may stop the delivery of
a letter ; where this is permissible the delivery
would only be final when the letter has reached
the address to which it has been directed.
B. s.
DELIVERY (of Deeds). See Deed.
DELIVERY (of Chattels). In all systems
of ancient law legal results are attained by
solemn and overt acts only. To admit of the
possibility of altering rights of ownership or of
creating obligations enforceable by judicial pro-
cess without the use of recognised formalities
is a refinement which undoubtedly is familiar
in the later stages of Roman jurisprudence, but
which was slow to penetrate into Germanic
countries. The principle of allowing the law
to protect facts and relations created by the
mutual consent of the parties concerned — some-
times authenticated by written documents, but
in many cases without writing or formality of
any kind — is now thoroughly established in
all civilised countries ; but traces of the older
modes of thought are still conspicuously im-
pressed on modern law, and more particularly
on the systems of law administered in English-
speaking countries. The old common law rule
was that no change of ownership could be
effected without a formal delivery to the new
owner, called "livery of seisin," an expression
afterwards used in the case of land only. Land
is now transferred by deed, and "livery of
seisin " is a thing of the past, but delivery is
subject to the exceptions to be presently
mentioned, necessary in all cases where pro-
perty in chattels is to pass from one person to
another. Delivery, according to modern views
does not, however, necessarily involve a visible
change of possession. There may be a con-
structive delivery, as where a person holding
goods in one capacity (e.g. as agent for A)
DELIVERY— DEMAND
639
begins to hold them in another capacity (e.g.
as agent for B — this is a delivery from A to B) ;
or there may be a symbolical delivery (e.g. the
delivery of the keys of a warehouse where
certain goods are may operate as a delivery of
the goods). The delivery of documents of title
relating to goods {e.g. a bill of lading) has
generally the same effect as the delivery of the
goods. The exceptions to which reference has
been made above are the following : the pro-
perty in chattels can now be transferred without
delivery — (a) by Deed (q.v.) ; (b) by a sale,
where the parties expressly or by necessary
implication agree that the change of property
is to take place immediately on conclusion of
the bargain (a sale of this kind is known by
the technical name of bargain and sale). The
exceptions comprise a large class of transactions,
but modern legislation, in view of the dangers
resulting from secret changes of ownership —
which enable insolvent traders to make a show
of property not available for their general
creditors — has, by means of the Bill of Sale Acts
(see Bill of Sale) introduced new safeguards
(see the elaborate judgment of the court of
appeal in Cochrane v. Moore, Law Reports, 25
Queen's Bench Division, p. 57 ; also Benjamin
on Sales. E. s.
DELIVERY, Good. On the stock ex-
change stock is said to be delivered when it is
actually supplied to the buyer, and the delivery
is good or not according to the rules of the
stock exchange, and the nature of the contract
between the buyer and the seller. Contracts
are largely made in a manner too rough and
ready to permit attention to every stipulation.
That is understood, and when a dispute arises
the Committee of the London Stock Exchange
is appealed to, and the decision often turns
upon the question whether the stock or share
tendered by the seller constitutes a ' ' good de-
livery." If, for example, the numbers on the
shares delivered are not the numbers which
have obtained an official quotation on tlie stock
exchange, the delivery is bad and not good.
If, for another example, the shares in an
American railway do not bear the proper stamp
imposed in this country, the delivery again is
not good, but is not irremediably bad. The
term "good delivery" covers compliance with
the official rules and reasonable conditions on
which business is transacted in the stock ex-
change, but, in practice, the question only
arises in two cases — first, when the numbers of
the securities do not agree with those for which
an official quotation has been granted, and
second, when the bond has been tampered with
by the holder. This often happens through
coupons being carelessly cut off, or having the
name of the holder written on them in ink, or
through being torn or damaged. a. e.
DE LUCA, Giovanni Battista (1614-83),
was born at Venosa, became a lawyer in Naples,
and was made cardinal by the pope Innocent
XL De Luca is best known as a lawyer, but
he wrote also on economical and fiscal questions
in his two treatises : Theatrum veritatis et
justitice, Romae, 1669 ; and H Principe cristiano
pratico, Roma, 1679.
As an economist he is a " mercantilist " of the
very narrowest species. International commerce,
in his opinion, is only a means of getting
money from foreigners ; raw materials are to
be allowed to be imported, but their export is to
be prohibited, because only when they are trans-
formed by national industry will they procure a
favourable balance of commerce. ]\loney is not
to be falsified by the prince, but its export, and
also the export of bullion, is to be prohibited,
except for the acquisition of those wares which
cannot be produced by the country. Fanunes
are to be guarded against by a subtle system of
regulation.
In normal times agriculture is to be aided
and importation of foreign produce to be pro-
hibited. In case of famine all are to sell their
produce to a public office (UJicio annonario, a
sort of store for corn under government adminis-
tration), which is not to pay for it immediately,
because in similar calamities "men tend to be-
come communists." Supporting economical
doctrines such as these, De Luca shows himself
to have been inferior to a great many of his con-
temporaries, who had already seen through the
grossest eiTors of the mercantile system. In
financial questions he takes a better position.
First of all he has a clear idea of the historical
relativity of institutions, so that when he dis-
cusses the question, whether direct taxes are to
be imposed with the consent of parliaments, he
insists upon this being decided differently in
dififerent nations, and with due regard to the
different customs and political maturity of the
various nations.
Taxes in general, he considers, ought to be
levied in such a manner that people pay them
insensibly, that tax collectors cannot exact
more than the government receives, that all
citizens, without privilege and exemption, come
to bear a proportionately equal burden, and
that no tax be imposed when not absolutely
necessary for the existence of the state. De
Luca distinguishes correctly the revenue from
the private property of the sovereign, and
makes a most minute examination of all tlie
different descriptions of crown rights. He
defends the state monopoly of salt and tobacco.
M. p.
DEMAND. By "demand" in jwlitical
economy is meant what may be more distinc-
tively called effective demand, that is, not the
mere desire for anything, but desire accompanied
bv the offer of something valuable m exchange.
When, therefore, there is a demand Tor any
commodity or service, there must be a supply
of some other commodity or service, which is
540
DEMAND
proffered in exchange for it ; and when two
persons are engaged in exchange, what the one
demands the other supplies, and vice versd.
It follows that demand and supply considered
as aggregates are strictly interdependent, and
that neither can increase or diminish without
necessitating a corresponding increatse or diminu-
tion of the other. This simple consideration
disposes of the fallacy that there may be an
over-supply of commodities in general. At the
same time, the two different aspects of the
phenomenon of exchange are clearly to be
distinguished from one another. Demand
depends upon men's desires to satisfy their
wants by acquiring a command over new goods
or services, supply upon their willingness to
undergo efforts or part with goods already in
their possession. Some of the older economists,
e.g. Ricardo, tended to concentrate attention
upon the conditions determining the supply of
commodities, to the comparative neglect of the
analysis of demand. This aspect of the problem
has, however, been brought into special pro-
minence in recent years by the full discussions
of "utility" and ''subjective value," which
are characteristic of Jevons and the Austrian
school. The importance of a full consideration
of the side of demand as well as of supply also
receives ample recognition in Professor Marshall's
Frinciples of Economics.
Assuming the use of a medium of exchange
which represents general purchasing power,
the question has been raised whether the de-
mand for any commodity should be measured
by the quantity of the commodity demanded or
by the quantity of purchasing power offered
in exchange for it. Cairnes, criticising Mill,
considers that on scientific grounds we are
bound to select the latter of these alternatives.
There is not, however, any fundamental diflfer-
ence between the two when properly interpreted.
The quantity of any commodity which people
are willing to buy, and the amount of money
which they are willing to spend upon it, are,
generally speaking, equally indeterminate so
long as nothing is said as to the price at which
it is to be had. If, then, we measure demand
by quantity demanded, it can only be Avith
reference to some particular price or schedule of
prices ; and hence some specific quantity of
purchasing power offered is necessarily implied.
But the same is true, mutatis mutandis, if we
start from the quantity of purchasing power
offered. For example, to say that at half-a-
crown a pound you will buy six pounds of tea
is precisely equivalent to saying that at that
price you will spend fifteen shillings on tea.
It may sometimes be more convenient to adopt
the mode of expression preferred by Cairnes ;
but usually the other alternative is simpler and
less liable to lead to error, since supply and
demand can in this case be more directly com-
pared and equated. The demand for any
commodity at a given price may then be
measured by the amount that would be pur-
chased if obtainable at that price ; and the
supply at a given price may be con-espondingly
measured by the amount that would be offered
for sale at that price. If the amount instead
of the price is regarded as the independent
variable, then the demand -price for a given
amount of any commodity may be defined as
the price just required to attract purchasers for
that particular amount ; and correspondingly the
supply-price as the price just required to cause
that particular amount to be offered for' sale.
It is clear, however, that the circumstances
of demand will be very incompletely expressed,
if given with reference to some one particular
price only or some one particular amount only.
We need what Professor Marshall calls a
demand -schedule, in which the demand at
varying prices is recorded. For example, it
may be that in the early spring a person will
buy one basket of strawberries at ten shillings
a basket, two at seven shillings and sixpence,
three at six shillings, four at five shillings, and
so on. A statement of this kind is said to
constitute his demand-schedule for strawberries
at the time in question. If the requisite
knowledge were forthcoming it would be possible
to draw up a schedule of the same kind repre-
senting the total demand for any commodity
within a given range and over a given period.
The variation of demand with price may also be
expressed diagrammatically, and the exposition
of the general theory of supply and demand
may be much facilitated thereby (see Demand
Curves).
With improved statistics of consumption,
towards which valuable contributions might be
afforded by shopkeepers' books and the great
co-operative stores, it might be possible to
draw up empirical demand-schedules represent-
ing approximately the actual variation of
demand with price for certain commodities in
general use. As Cournot remarks: "If we
suppose the conditions of demand to remain the
same, but the conditions of production to
change, because the expenses of production are
raised or lowered, or monopolies put on or
suppressed, or taxes increased or diminished,
or import duties imposed or removed, then
price will vary, and the corresponding varia-
tions in demand will give us our empirical
tables " (Principes de la Theorie des Bichesses,
§ 56). But, as is also recognised by Cournot,
the conditions of demand rarely do remain the
same for any considerable length of time.
There are constantly in progress independent
changes, such as changes in fashions and habits,
in the purchasing power of money, in the
wealth and circumstances of consumers, and
the like, which cause the demand at a given
price itself to vary. Since, therefore, the
statistical calculation would have to cover a
I ^\ I
DEMAND
541
more or less prolonged period of time, it would
always be liable to be vitiated by the eilects of
such changes as the above, except in so far as
these effects could themselves be estimated and
allowed for.
For theoretical purposes, however, the inquiry
into the variation of demand with price is of
thegreatest value and importance, independently
of any exact empirical constructions. Without
elaborate statistics it is possible to determine a
law of demand to which all demand-schedules
will conform, namely, that — other things being
equal — a rise in price will be accompanied by a
diminished demand and a fall in price by an
increased demand. Looked at from tlie other
side, the law may also be expressed by saying
that the greater the amount of any commodity
offered for sale in a market the lower will be
the price at which it will find purchasers.
The above law of demand is a corollary from
the law of diminishing utility, namely, that
the additional satisfaction which a person
derives from an additional increment of any
commodity diminishes as the stocjc of the
commodity already in his possession increases.
For it clearly follows from this law of diminish-
ing utility that if the general purchasing power
of money remains unchanged, then, as tlie
amount of a thing which a person already has
increases, the price that he is just willing to
give for an additional increment will diminish.
It is an im])ortant question how far continuity
may be assumed in the variation of demand
with price, so that any alteration in the latter,
however slight, cannot fail to be accompanied
by some alteration in the former. Such an
assumption clearly cannot, in general, be justified
so far as the demand of individual consumers is
concemed. Individual changes in demand will
almost always be discontinuous ; in other
words, there will almost always be more or less
wide limits of price within which demand will
be constant. The price of coal, for example,
might go on rising for some time without lead-
ing any given householder to reduce his con-
sumption of coal, although he would probably
take steps to economise to a material extent
when the rise in price reached a certain point.
It is different, however, when we consider the
aggregate demand for a commodity in general
use. Individuals of all degrees of wealth and
all varieties of taste will now contribute towards
the result, and it becomes a fair assumption that
every change in price will affect the demand of
certain of them, even if it leaves the demand of
others unaffected. It may further be assumed
that, as Couniot puts it, "demand does not
pass suddenly from one amount to another with-
out passing through the intermediate amounts."
The assumption of continuity becomes, fof
obvious reasons, specially important in tlie
mathematical or diagi'ammatic treatment of the
law of demand.
In speaking of demand as varying with price,
it is not of course intended to imply that there
is any exact proportion in which the one rises
or falls as the other falls or rises. No two
commodities are likely exactly to resemble one
another in this respect, and even in the case of
the same commodity there will he dilierences at
different points. Thus, supposing price to fall
fifty per cent, demand might in some cases be
increased two or three hundred per cent ; it is
possible, for instance, that quite a new class of
consumers might now be induced to buy the
commodity, or it might be worth while to put
it to quite a new use. In other cases, the
increase in demand might not exceed ten or
fifteen per cent, the wants of old purchasers
being quickly satiated, and not many new
purchasers being attracted. In the former case,
demand is said to be very elastic ; and in the
latter case very inelastic. Professor Marshall
gives the following definition : "The elasticity
of demand in a market is great or small accord-
ing as the amount demanded increases much
or little for a given fall in price, and diminishes
much or little for a given rise in price "
(Principles of Economics, vol. i. 1891, p. 160) ;
and he afterwards lays down, as a general law of
variation of the elasticity of demand, the prin-
ciple that as a rule the elasticity of demand ot
any given class of consumers for a given com-
modity is great for medium prices, and small
for those which, relatively to the means of the
consumers in question, are very high or very
low. For so long as price remains very high
considerable elasticity is out of the question,
while it may, on the otlier hand, fall so low as
to reach what may be called satiety point,
consumers already buying as much as they
practically care to consume. It is important
to recognise that at any given point the demand
of one class of consumers may be elastic, while
that of other classes is inelastic. In tlie case
of game, for example, the demand of the upper
middle class at the present time in England is
probably very elastic, while it is much less so
on the part of the rich, whose consumption
would not appreciably be affected except in
the case of very great scarcity, and on the part
of the lower middle and working classes, for
whom any moderate fall would still leave the
price too high.
Unless we confine ourselves to very short
periods of time, demand-schedules are them-
selves liable to modification. For the condi-
tions of demand are constantly changing ; and
this, as we have already seen, is one of the
chief difficulties in the way of obtaining accurate
empirical data in regard to the variation of
demand with price. A change of fashion, for
example, might cause the demand for lace to
be gieater at every point throughout the list
of prices. A spread of teetotalism would.
ccetei-'is paribus, have a similar effect upon the
542
DEMAND— DEMAND CURVES
o>
^
p
demand-schedules for certain kinds of drink ;
and an increase of population upon the demand-
schedules for most kinds of food. In all these
cases there may be said to be a rise in the
demand-schedule.
In connection with this point, attention may
be called to an ambiguity generally attaching
to expressions that relate to variations in
demand. The law of demand above laid down
is the statement of a variation of demand with
price which is manifested in every demand-
schedule ; and it may perhaps be said to relate
to a static condition of things, in which there
is supposed to be no change in the number of
purchasers or in their circumstances or tastes.
But Ave may pass to the hypothesis of a dynamic
condition, in which such changes as these do
take place. We then have to recognise, as just
pointed out, that the amount of any commodity
demanded at a given price is itself subject to
variation, or that, in other words, demand-
schedules may themselves rise or fall. By an
" increase of demand," therefore, may be meant
either, first, the extension of demand which
results under static conditions from a fall in
price, or, secondl};-, an increase in the quantity
demanded at a given price which may occur
under dynamic conditions. Professor Sidgwick,
who explains this ambiguity very clearly, re-
marks that it will be convenient to have two
unambiguous terms to distinguish the two
different kinds of change in demand ; and he
accordingly proposes to speak of the former
kind of increase as an extension of demand, and
of the latter as a rise or intensification of
demand. For the opposites of "extension"
and "rise" respectively, he uses the terms
" reduction " and "fall" {Principles of Political
Economy, 1887, p. 179).
[The articles on Final Degree of Utility,
Supply, and Supply and Demand, Equilibrium
BETWEEN, should be read in connection with the
present article. The subject of demand is discussed
in all systematic works on political economy ; but
the reader may be specially referred to Marshall's
Principles of Economics, bk. iii.] j. n. K.
DEMAND CURVES represent the relation
between the effective demand for a commodity
and the terms on which it can be obtained.
The simplest form is where one axis, as OY in
the annexed figure, represents price, and the
other axis, OX, the quantity of a commodity
demanded by a certain individual at that price.
Thus at the price Oq the quantity Op is demanded.
The curve thus representing the dispositions of
a single person may be termed an "individual "
demand curve, as contrasted with the "collec-
tive " demand curve appertaining to a group of
persons such as a market or a nation. The
collective curve for a group may be derived
from the individual curves of the persons form-
ing the group by adding, for each price, the
amounts demanded by all the individuals at
that price, and taking this sum^s the abscissa
of the collective curve ; the ordinate as before
representing price. The collective curve may
be represented by Fig. 1, if the scale is altered
Fig. 1.
so that a unit of the abscissa should represent
a larger amount of commodity than when the
figure stood for an individual demand curve.
This method of representing demand by a curve
was introduced by Cournot in his Principes
MatMmatiques de la ThAorie des Richesses, 1838.
It is remarkable that he began and ended with
the collective demand curve, instead of deriving
it from the individual curve like many recent
writers. Another kind of demand curve is
formed by taking one axis as before to repre-
sent the quantity of the commodity demanded,
while the other axis represents, not as before,
the price of each unit of commodity, but the
total amount of money (or other article of
exchange) coiTesponding to each amount de-
manded. Thus in Fig. 2 the curve denotes that
O d^uXof Avvo^ f X
for the amount of money (or any other speci-
fied article, say x) Op, there is demanded the
amount Oq of the article y. This construction
was first introduced by Prof. Marshall in a paper
read before the Cambridge Philosophical Society,
1873 (to which reference is made in the preface
to the first edition of the author's Principles of
Economics.) The construction is specially suit-
able to the case where there is a certain symmetry
DEMAND CURVES
543
between the conditions of supply and demand,
as in international trade. It vsdll be observed
that the curve in Fig. 2, which has been
described as the demand curve with respect to
the article y, may also be regarded as the supply
curve with respect to the article x ; since it
represents the amount of the article x which
the party or parties under consideration are
willing to supply for each amount of y. This
kind of demand curve, like that which was first
described, may be divided into two species,
individual and collective. Another kind of
demand curve is used by Prof. Walras in his
Elements d'Uconomie Politique Pure.
The demand curve is a potent aid to abstract
theory. It expresses better than ordinary
language the relation between price and quan-
tity demanded ; of which in general we know
only that the quantity varies inversely with
the price, but are ignorant what is the law of
variation. This ignorance is sometimes not com-
plete ; we may know that for the same fall in
price the demand increases much more rapidly
in the case of one commodity than another ;
or for the same commodity at different prices.
This difference of Elasticity is elegantly
expressed by the shape of the curve. In the
case represented by Fig. 1 the demand is very
elastic in the neighbourhood of B, very inelastic
in the neighbourhood of A and C. The case
thus represented is a very general one. In
Prof. Marshall's words "the elasticity is small
when the price of a thing is very high relatively
to their means [those of the class of purchasers
under consideration], and again when it is very
low ; while the elasticity is much greater for
prices intermediate between what we may call
the high level and the low level." The use
of some such device as the demand curve is
required for the perfect apprehension of the
theory of value. The relation of " individual "
to "collective" demand curves best expresses
the dependence of the objective fact of price on
the subjective dispositions of individual persons.
The position of equilibrium towards which the
" higgling of the market" tends is best repre-
sented by the intersection of a demand with a
Supply Curve (g-. v.) Ordinary language does
not well discriminate the change in price due to
a change in the quantity of commodity supplied,
the dispositions of the parties remaining the
same, from that change which is due to altera-
tions in taste. The latter sort of change is
expressed by the shifting of the demand curve
from right to left (or conversely), so that to
every quantity of commodity there corresponds
a higher (or lower) price. The demand curve
is employed by Prof. Marshall in the proof
of several recondite, not to say paradoxical
theorems. " If a given aggregate taxation has
to be levied ruthlessly from any class, it will
cause less loss of Consumers' Rent {q.v.) if
levied on necessaries than if levied on comforts."
Principles of Economics, bk. v. ch. xii. § 4, note,
2nd ed., cp. ibid. § 6). The doctrine that
"the maximum satisfaction is generally to be
attained by encouraging each individual to spend
his own resources in that way which suits him
best " is seen by the aid of the demand curve
to be inaccurate.
The theory of the demand curve must be
received with the following cautions and reserva-
tions. First (1) it should be observed that there
are "many classes of things the need for which
on the part of any individual is inconstant,
fitful, and irregular," for instance "wedding
cakes, or the services of an expert surgeon "
(Marshall, Principles of Economics, bk, iii. ch.
iii., § 5, 2nd ed.) The individual demand curve
in such a case is discontinuous. But the corre-
sponding collective curve will be less irregular.
"The fickleness of the individual is merged
in the comparatively regular aggi'egate of the
action of a large number of people" (Ibid.)
Again (2) in comparing the elasticity of demand
curves for different commodities care must be
taken about the units both of money and com-
modity. The same dispositions on the part of
purchasers will appear more or less "elastic,"
according as they are expressed in hundred-
weights or tons, in pounds or shillings. An
ingenious method of avoiding this fallacy is
given by Prof. Marshall (Principles of Economics,
bk. iii. ch. iv. § 1). Again (3) demand curves
as usually understood involve a postulate
which is frequently not fulfilled ; namely, that
while the price of the article under considera-
tion is varied, the prices of all other articles
remain constant. This postulate fails in the
case of rival commodities such as beef and
mutton. The price of one of these cannot be
supposed to rise or fall considerably without
the price of the other being affected. The
same is true of commodities for which there is
a "joint demand" as for malt and hops.
And in the case of a necessary of life the price
cannot be supposed to increase indefinitely
without the prices of other articles falling,
owing to the retrenchment of expenditure on
articles other than necessaries. The price of
clothes has been known to fall during a famine
(F. NcAvman, Lectures on Political Economy).
It is true indeed that the postulate which has
been stated might be dispensed with. But this
can only be done at the sacrifice of two of the
characteristic advantages which demand curves
offer to the theorist. First, unless this postu-
late is granted, it is hardly conceivable that,
when the prices of several articles are disturbed
concurrently, the collective demand curve may
be predicted by ascertaining the disposition
of the individual — a conception which, as em-
ployed by Prof. Walras (Elements d' Economic
Politique, Art. 50), aids us to apprehend the
workings of a market. Secondly, when the
prices of all commodities but one are not
544
DEMESNE— DEMOGRAPHY
supposed fixed, there no longer exists that
exact cori'elation between the demand curve
and the interest of consumers in low prices
which Prof. Marshall has formulated as "con-
sumer's rent." In considering this rel§,tion
care must be taken to distinguish between
demand and desire. The effective demand of
the rich and poor man for oatmeal may be the
same. But tlie intensity of desire is not the
same, if the one uses the article to feed his horses,
the other for his own frugal meal. Again
(4) there is an artificial rigidity in demand
curves which imperfectly corresponds to the flux
character of human desires. One cause of change
is the formation of new habits ; the disturbance
of the demand curve thus caused is well repre-
sented by Messrs. Auspitz and Jjieben {Theorie
des Fi'eises). The increased use of petroleum is
not to be ascribed simply to the fall in price,
the demand curve being supposed constant,
but rather to the fact that "petroleum and
petroleum lamps have become familiar to all
classes of society " (Marshall). One important
cause of alteration in demand curves is the
increase of the consumer's purchasing power.
The case in which that increase is only appar-
ent, being due to a rise in prices (and the converse,
case), may be specially distinguished. Owing
to the variability, it may be doubted whether
Jevons's hope of constructing demand curves
by statistics is capable of realisation. In the
financial year 1890-91, after the reduction of the
tax on tea effected by Mr. Goschen, the quan-
tity of tea consumed per head was greater than
in the previous year. Is it possible to deter-
mine whether this change is due to the cheap-
ening of the article — the demand curve being
supposed the same — or to an alteration of the
demand curve caused partly by a change of
taste and partly by an increase in prosperity ?
Some suggestions for evading these and other
difficulties will be found in the third book of
Prof. Marshall's Frinciples of Economies.
For further considerations and fuller refer-
ences, see Mathematical Method, f. y. e.
DEMAND SCHEDULES. See Demand.
DEMESNE. Before the statute "Quia
Emptores" (1290), a person wishing to alien-
ate land did not entirely sever his connection
with the land ; he remained the feudal tenant
of the king or superior lord, and continued to
perform the duties which the tenure imposed
upon him, but was at the same time the feudal
lord (mesne lord), of the new tenant. That
portion of the manor which the lord did not
grant to freehold tenants in the way just de-
scribed was called his demesne ; it was either
under the immediate management of the lord
or it was let out to persons in a subordinate
position called " villani " who held at the lord's
will, but gradually acquired a customary right
to fixity of tenure. The successors of the
"villani" are the copyholders of the present
day (see Copyhold). That part of the crown
lands which was not granted to any feudal
tenants but remained under the management
of royal stewards is, in a similar way, called
the "royal demesne," and part of the heredit-
ary revenue of the crown was formerly derived
from it. Since the accession of George III.
this revenue has been appropriated by parlia-
ment, the sovereign receiving a fixed annual
sum (see Civil List) in exchange. e. s.
DE METZ-NOBLAT, Alexandre (1820-
1871), bom at Colmar, died at Nancy, His first
occupation was the law, and he was called to
the bar. But he preferred the profession of
literature, and soon displayed a predilection for
economic study. His principal work, published
first in 1863 (2 vols, in 8vo), was entitled
Analyse des pMnom^nes iconomiques. This, after
receiving some not very important alterations,
was republished as Les lois 6conomiques, the first
edition in 1867 (1 vol. in 8vo), the second in
1880 (1 vol. in 12mo). This work is, practically,
a complete treatise on political economy ; the
author was professor of this science from De-
cember 1864 at Nancy, a chair which still ex-
ists. Here De Metz-Noblat made the mistake
of failing to keep religion sufficiently apart from
economic science — but he was a man truly
liberal in spirit. He was a disciple of Mai thus,
and his works deserve to be read even at the
present day. a. c. f.
DEMISE. Used as a substantive noun and
as a verb in the same way as the word " lease,"
and denoting the letting of land or premises
for a number of years. e. s.
DEMOGRAPHY. This word, already
unanimously adopted of late years by con-
tinental nations, has only recently sought
naturalisation in England. It still remains
to be seen whether the attempt will only be
partially, instead of entirely, successful. The
word ^^ D6mographie" was invented by Dr.
Achille GuiUard, and occurs in the title of his
book M67nents de Statistique Hwniaine ou Demo-
graphie Gomparie, Paris, 1855, intended to be
" an exposition of this new science as illustrated
by the most authentic documents relating to
the condition, the general movement, and the
progress of population in civilised countries."
It should be observed that statistics are very
properly made the very soul of this so-caUed
new science by GuiUard, although he might
have found a more apposite epigraph to his
book than the somewhat crude one from
Proclus, "How sublime human understanding
has been in the creation of number."
GuiUard ventures further to define demo
graphy as the natural and social history of the
human species, or as the mathematical know-
ledge of populations, their general movements,
their physical, social, intellectual, and moral
condition. All this is, however, merely a new
name for something very old. Writera in
DEMOGRAPHY— DEMOIVRE
545
almost every country have, in the past three
centuries, foreshadowed the existence of normal,
or mathematical, laws of population. What
they failed in, as compared with writers of our
own times, was the want, for which they had
no help, of adequate or authentic illustrative
statistics. Thus our own Petty and Graunt,
in the 17th century, had to rely upon very
scanty parochial and other registration of
births and deaths, restricted also to the metro-
politan area, in their very ingenious general
inductions respecting the laws of population.
In certain instances such statistical observa-
tions, partial and few as they may have been,
sufficed to suggest to great minds the method
of deducing a mathematical law. Thus with
De Witt in constructing a table of annuities in
Holland in 1672, and with Halley later on in
doing the same in a more complete way from
the Breslau observations. In the 18th century
population statistics came to be more abund-
antly available, and stimulated the composition
of such works as those of Price, Malthus, etc.
in England, Siissmilch in Germany, Moreau in
France. In the present century we have had
abundance of laboiu-ers in the same (shall we
call it demographic ?) field — Milne, and Farr,
and numerous others, in England. The same
in France and Germany, etc. — for instance,
Quetelet, Legoyt, Block, Levasseur, Engel, and
Berg. All these have contributed so much to a
knowledge of the principles which regulate the
laws of the movements and increase of popula-
tion in its various aspects, that but little is left
to constitute demography a new science.
The word demography has, to a certain
extent, been familiarised to English ears by
the occurrence in 1891 of a Congress of
Hygiene and Demography in London. This is
a peripatetic body, and its previous sessions had
been held in continental capitals. Notwith-
standing some admissible advantages accruing
from such occasional meetings as these, it can
scarcely be pretended that much fresh know-
ledge as to statistical and mathematical deduc-
tions respecting population was added by them
to the general stock ; there was more room in
them for the general outside public than for
scientific experts. Hence arose a frequent
degeneracy into occupying time with hypotheses
regardless of statistical evidence, a repetition of
such eccentricities as contributed not a little to
the final collapse some years since of the Social
Science Association. A better organisation in
some respects, although still by no means a
perfect one, for discussing the population and
census statistics of gi*eat countries, or, in other
words, demography in its most important
aspects, exists, however, in the International
Statistical Institute, composed almost wholly of
representative experts, limited as to number,
from almost all European countries and from
the ITnited States, who meet biennially in difler-
VOL. I.
ent countries ; for example, in 1891 the session
was held in Vienna, in 1893 in Chicago, in 1905
in London, and in 1909 in Paris. F. H.
DEMOIVRE (or De Moivre), Abraham
(1667-1754), an eminent French mathe-
matician, born at Vitry, after the revocation
of the Edict of Nantes retired to London,
where he supported himself by giving private
lessons in mathematics. A life of privation, in
which mathematical discoveries were the princi-
pal events, terminated in London 1754. The
scientific eminence of Demoivre is evidenced by
Newton's habitual saying "Go to Mr. Demoivre,
he knows more than I about these matters."
Pope bears witness to his fame in a well-known
verse,
"Sure as De-moivre, without rule or line."
[Of the spider. Essay on Man, ep. iii. 1. 104.]
Demoivre not only improved the theory of
the calculus of probabilities by his Doctrine of
Chances, but also extended its ap])lication by
his Annuities upon Lives. Many of the methods
now employed by actuaries may be traced back
to this great mathematician (see Farren,
Historical Essay on . . . Life Contingencies, p.
46). Demoivi-e is, however, most remembered by
statisticians for his hypothesis that the proba-
bilities of living any number of years after the
age of twelve (see Annuities, 1st ed. Problem
XL) decrease in arithmetic progression up to
the age of eighty-six (taken as the extreme
limit of human life). The formula may be
thus simply written : Ix (the number alive at
any age x see Life Tables) is proportioned to
86-23 (cp. Assurance Magazine, vol. iii.)
This law, roughly corresponding to the
observations, long served as a good working
hypothesis, and even still affords useful
exercises (see Sutton, Life Contingencies). De-
moivre also entertained the hypothesis that
the probabilities of life decrease in a geometrical
progression {Annuities, 1st ed.. Problem III.),
an assumption which lends itself better to the
calculation of joint contingencies, but, being
less agreeable to the facts, has not found
currency.
The first edition of the Doctrine of Chances
(preceded by an earlier contribution to the
calculus of probabilities, De Mensurd Sortis)
appeared in 1718 ; the third, purporting to be
" fuller, clearer, and more correct than the
former," in 1756. The first edition of the
Annuities uj^on Lives appeared in 1724-25, the
fourth in 1752. The treatise appears with some
modifications, being the "most improved edition"
according to Baily, at the end of the third
edition of the Doctrine of Chances, with the
secondary title, the Doctrine of Chances applied
to the Valuation of Annuities.
[References to Demoivre will be found in most
of the leading works on Assurance and cognate
subjects. The following may be specially
mentioned : R. Price, Reversionary Payments,
2 N
546
DEMONETISATION— DENAKIUS
arranged and enlarged by W. Morgan (1812), ch.
iv. ; F. Baily, Doctrine of lAfe Annuities and
Assv/rances, preface ; W. Sutton, Life Con-
tingencies, ch. vi. et passim. See also the
Assurance Magazine, vols, iii., xii., xiii., xv.
This magazine, in the vol. for 1869, contains *an in-
teresting generalisation of Demoivre's hypothesis.
Some traits of Demoivre's personality are recorded
in the M4moire sur la vie et sur les Merits de M.
Abraham de Moivre, par M. Maty.] r. T. E.
DEMOLOGY. See Demography.
DEMONETISATION. The discontinuance
by a government of the use of a coin, and its
official withdrawal from circulation, are known
as its demonetisation. A recent instance of
such an operation was furnished in this country
by the complete withdrawal from circulation
of all pre- Victorian gold coins ; carried out
under the Coinage Act, 1889, and the royal
proclamation of the 22nd November 1890.
The coins received and exchanged at the
mint between 13th December 1889 and 28th
February 1891, were of the value of £2,334,573
in sovereigns, and £128,575 in half-sovereigns,
of which £12,776 in sovereigns and £712 in
half-sovereigns were received through the Sidney
Mint, and £30,168 in sovereigns and £2015 in
half-sovereigns through the Melbourne Mint.
1889-1891.
Sover-
eigns.
Half-
Bover-
eignB.
Total.
Deficiency in weight
Deficiency in standard
Total deficiency
£42,352
2,403
£6,353
129
£48,705
2,532
£44,755
£6,482
£51,237
The average deficiency of weight of the sover-
eigns was 2-236 grains, and that of the half-
sovereigns 3*046 grains ; while that due to the
incorrectness in standard fineness amounted to
an average of 0"246 penny per £ sterling.
Prior to the issue of the above-mentioned pro-
clamation, guineas and half-guineas were still
"legal tender" for payments, although none had
been coined since 1816, and they had long since
disappeared from circulation. These coins are
now, therefore, legally, as well as actually, re-
moved from the currency of the country. The
Order in Council of 16th March 1892 authorised
the withdrawal and exchange of light gold coins.
Since that date to the present time (1912), the
light gold withdrawn (United Kingdom) has
been of the value of £39,845.000 in sovereigns,
and £2^,855,000 in half-sovereigns.
1892-1912.
Sover-
eigns.
Half.
Bover-
elgas.
TotaL
Deficiency in weight
Deficiency in standard
£390,311
11,652
£521,281
8,210
£529,491
£911,592
19,862
Total deficiency
£401,963
£931,454
',. The average deficiency of weight of the
sovereigns was 1*19 grains, and that of the
half-sovereigns was 1-03 grains.
Coin to the value of about £1,537,000 has
been withdrawn from the Australian Mints
during the same period. The particulars of
the Australian light gold withdrawn in 1912
are as follows : —
Nominal
Value.
Deficiency
in
Weight.
Deficiency
in Weight
per Piece.
Sovereigns
Half-sovereigns
£18,084
8,294
£ S. d.
137 8 9
167 0 1
d.
2-521
2-416
21,378
304 8 10
The demonetisation of a coin must generally
involve loss. If the countries of the Latin
Union were to adopt a gold standard, instead
of the present 4talon boiteux, the demonetisation
of the standard silver five- franc piece would, at
the present price of silver (19 14), entail consider-
able loss. That coin contains 22-5 grammes of
fine silver which, with (English) standard silver
at the (gold) price of 26jd. per ounce, would
be worth 19-16d. only, whereas it is now rated
at 47-62d. (5 francs at 25-22 fc.=£l). The
loss therefore would amount to more than 28. 4d.
per piece. A similar result would accompany
the demonetisation of the standard silver dollar
of the United States ; a coin which when first
issued yields a considerable Seignorage (q.v.)
to the state. In connection with this subject
the fact should not be lost sight of that whereas
metal in the form of coin is of a known standard,
and is received without question as to its fine-
ness, ingots must be assayed in order to ascer-
tain their purity, and this operation, involving
expense and delay, tends to make the exchange
value of coin stand at a somewhat higher figure
than that of unstamped bullion. F. E. A.
[See also Alternative Standard.]
DEMONSTRATIVE LEGACY. A legacy
of a portion of a particular fund, as, for example,
where a testator bequeaths £1000 out of his
reduced three per cents. If the fund out of
which it is payable fail, the legatee is neverthe-
less entitled to have the legacy paid out of the
general assets, and even if the general assets are
insufficient to pay all the legacies, the legatee
is entitled to his legacy in fuU.
[Williams on Executors (pp. 11-65), London,
1879.] J. E. c. M.
DEMURRAGE. Compensation payable to a
shipowner for detention of a ship in a port be-
yond time stipulated in the Charter Party
(q.v.). E. s.
DENARIUS. Roman silver coin first struck
269 B.C., seventy-two being coined to the pound.
Design — obverse, the head of Roma and the
letter X indicating ten asses ; reverse, the ■
Dioscuri on horseback, charging. From 217
B.C. eighty denarii were struck to the pound.
In 100 B.C. a new type was introduced, and
from 93 B.C. many different kinds were in use.
DENARIUS— DENIERS DE CALAIS
647
[Wm. Till, An Essay on the Roman Denarius,
London, 1837. — J. Y. Akerman, A descriptive
Catalogue of rare and unedited Roman Coins,
London, 1834. — Also see Encydopcedia Britan-
nica, 9th ed., vol. xvii., art. Numismatics, § ii. —
Roman Coins, p. 652.] F. b. a.
DENARIUS DEI {God's penny). Earnest
money which passed at the making of a bar-
gain. This was regarded as a binding transac-
tion by the custom of the merchants {Carta
Mercator, 31 Ed. I. c. 4). It had several local
uses and names. Originally, perhaps, a penny
given to the church or to the poor at the con-
clusion of a bargain. Also mentioned as a
port-due, an exaction forbidden, however, by
statute. In this sense the term is usually
corrupted as Adieu — the customer's " farewell "
or "God-speed."
[Maitland in Selden Soc, ii. 130 ; Hall, Cus-
toms, ii. 166.] H. Ha.
DENIER (Coin). The word denier, originally
merely the French rendering of the Latin
denarius, was adopted by the early kings of
France as a name for a coin of pure silver, the
weight of which was originally about one penny-
weight (or denier). In the reign of Charlemagne
(768-814) it weighed about twenty-seven or
twenty-eight grains, in the reign of Charles le
Chauve (843-877) thirty- two grains, and in
that of Hugh Capet (987-996) about twenty-
four grains. A small amount of copper was
first added to the metal of which these coins
were made in the year 1103, and from that
time onwards the amount was continually
increased. In the year 1577 deniers were
struck which were composed of pure copper.
In the reign of Louis IX. (1226-1270) a coin
of fine gold, called a ^^ Denier d VAgn^l" was
struck, as well as two kinds of silver deniers
called respectively " i)e?w6r Tournois" and
"Denier Parisis." From this time the word
denier was used as the name for several coins,
the identity of which was determined by
qualifying words, such as, " de Vor d VEscu,"
" de I' or au Fleur de Lis," " Parisis," etc.
The following is a list of some of the more
important issues of coins bearing the name
Denier :
Gold Coins.
Reign.
Coin.
Weight.
Fineness.
Louis IX. (1226-
1270)
Philippe le Bel
Denier i I'Agnel
64 grains
Fine
Denier k I'Escu
71 grains
Fine
(1285-1314)
Philippe de Va-
11
71 grains
Fine
lois (1327-1350)
„
71 grains
23 carats
John (1350-1364)
»»
71 grains
22| carats
»
71 grains
21 carats
„
,,
71 grains
18 carats
II
Denier au Fleur
77 grains
Fine
deLis
Silver Coins.
Reign.
Coin.
Weight
Philippe le Ben
Louis Hutin I j« ^
Philippe le fll
Long j -^
Charles le Bel (1321-
1327)
Philippe de Valois
(1327-1350)
f Denier Tournois
( Denier Parisis
Denier Parisis
17i grains
17 grains
17 grains
13i grains
27i grains
The coinage of " Deniers ;V 1 'Escu
in the year 1854.
discontinued
F. E. A.
Denier (Tax). The Denier d Dieu (see
Denarius Dei) was originally a small extra
sum paid on the conclusion of a sale or bargain
and applied to a charitable purpose. It has
since come to mean a ready-money payment
handed over to bind a bargain, especially in
the engagement of labourers, servants, or lodg-
ings. R. L.
Denier (as denoting Price). The word
Denier is now obsolete in French as the name
of a coin, but it has survived in many phrases
of common use. The peasant, in France, who
borrows money stiU describes the rate of interest
as denier-vingt or denier-dix as the case may be
(one in twenty or one in ten), instead of saying
5 per cent or 10 per cent. M. Leroy-Beaulieu
among other economists sometimes employs the
same expression conversely, as when suggesting
that the valuation of land should be raised
from denier-vingt to denier-vingt-cinq or from
twenty to twenty- five times the rental. In his
Trait6 de la Science des Finances, referring to
Pitt's plan for the redemption of the land tax,
in 1798, he says: ''The price of 3 per cent
consols was 50, that is to say sixteen to
seventeen times the annual interest ; in other
words, they were negotiated at denier seize or
denier dix-sept,'hvit landed property sold at denier
trente or thirty times the revenue," etc.
Shares in mining companies founded before
the French Revolution are still called deniers,
the total capital being represented by 240 to
300 deniers according to the variations in the
value of the livre from twenty to twenty-five
sols, the sol being twelve deniers. If calculated
at twenty sols the part proprietor of a company
was said to possess one, two, or ten deniers,
meaning -g^-j-, ^-J-g-, or -^ of the total stock.
The capital of the great Anzin collieries, which
date from 1757, is formed of 288 deniers or full
shares, the value of one of which was a few
years back as high as £50,000. They are,
however, now divided for negotiation into hun-
dredth parts called centi^mes de deniers, which
are quoted under that name on the mining
exchange. The widow's mite is still Le denier
de la Veuve ; Peter's Pence, Le denier de St,
Pierre ; public money, les deniers publics, etc.
(see also Denarius.) t. l.
DENIERS DE CALAIS (or Devoirs de
Calais) — Calais dues or Calais toll ; a fine of
19d. per sack of wool paid to the crown by
548
DENIZEN— DENOMINATIONS OF BANK NOTES
merchants for license to export staple com-
modities elsewhere than to Calais.
[Hall, Customs, i. 87, 231-278 ; ii. 220-224.]
H. Ha.
DENIZEN. An alien who has been^made
a British subject by letters patent and not by
the usual certificate of a secretary of state. A
denizen has not the full rights of a subject.
He could always hold lands by purchase or
devise, but until the Naturalisation Act, 1870,
he could not inherit. Even now he cannot be
a privy councillor or a member of either House
of Parliament, nor can he hold any office of
trust, civil, naval, or military.
[Report of the Royal Commission on the Laws
of Naturalisation and Allegiance, 1869. — Nation-
ality, by Sir A. J. E. Cockburn, London, 1869.]
J. E. c. M.
DENNY, William (1847-1887), member of
a well-known firm of shipbuilders at Dumbar-
ton, on the Clyde, was not only eminent in the
skilled work of his profession, and as a model
"captain of industry," but full of promise as a
writer on social and economical questions. His
Life by Professor A. B. Brace (Hodder and
Stoughton, 1888) presents, mter alia, a multi-
tude of valuable notes from his various letters
and speeches, on such matters as the organisa-
tion of a workshop, the encouragement of inven-
tion, the uses of apprenticeship, the functions
of the board of trade, the character of working
men, and the prospects of the labouring classes.
He had a strong dislike of "absentee em-
ployers," and, having served as apprentice him-
self, had knowledge of the whole situation such
as few other employers could possess. From a
comparatively optimistic view of the relations
of employer and employed and the influence of
competition in industry, he passed gradually to
a more critical attitude and less sanguine con-
victions on these subjects. In his address on
"The Worth of Wages" (publ. Bennett, Dum-
barton, 1876), he stated the arguments for
piece-work so cogently and exhaustively that
his own conversion, ten years or so later, to
a different view was all the more remarkable.
He had believed that the wages of piece-work
are self-regulating, but he became convinced,
after a larger experience, that they are not so
— except in " cases where rates can be fixed and
made a matter of agreement between the whole
body of the men in any works and their em-
ployers"— but, on the contrary, they "are
liable, under the pressure of heavy competition,
to be depressed below a proper level " (Letter to
Mr. John Rae in Life, p. 1 1 3). In reading his ad-
dress on the " Industries of Scotland " delivered
at Dumbarton, December 1878, with special re-
ference to the competition of the Tyne with the
Clyde in the matter of shipbuilding, we need to
remember this change of opinion, though, like
a good reasoner, he always so states his argu-
ments that we can judge for ourselves, j. b.
DENOMINATIONAL CURRENCY. Se€
Currency in British Colonies.
DENOMINATIONS OF BANK NOTES.
The denominations in which bank notes are
issued appear to depend mainly, if not entirely,
on custom and convenience. The chief question
of policy is as to the issue of notes correspond-
ing in denomination to coins in circulation,
especially to the coin, whatever it may be,
which forms the unit of the currency. It is
obvious that to the extent to which such notes
circulate they must displace coin. It is pos
sible that some part of the coin thus withdrawn
may be hoarded, but it is more probable that
it will be made use of in some way out of the
country. The notes not being exportable, it is
probable that the coin will be used for the pm--
chase of commodities from abroad, and thus
the issue of such notes may lead directly to the
depletion of the stock of coin. On the question
of convenience the points of most importance
in regard to the issue of notes of small values,
are, on the one hand the convenience of porta-
bility, on the other the discomfort of a currency
frequently mutilated and dirty, with the pos-
sibility of infection, and of loss or destruction.
The prevalence of forgery depends largely on
the denominations of the notes issued. Greater
caution is shown in dealing with a £5 note than
in taking one for a fifth or tenth of that sum.
Besides, the chance of detecting a forgery is
greatly diminished when the note is dirty or
worn by use. The maintenance of a currency
of small notes, having extensive use, in a clean
and sightly condition, would involve an expense
exceeding any profit possible to be derived from
its issue, except where current rates of interest
are very high and where no important stock of
bullion is held to meet the notes. The expense
would also probably outweigh any economy
arising from diminished abrasion of the coin.
The actual loss from abrasion of the English
sovereign is about one-tenth of a penny per
annum, while the cost of printing a note has
never been estimated below one penny, and has
been found in practice to be frequently double
that sum (see Abrasion). The following table
gives the lowest denominations of notes issued
in some of the principal countries of the world,
though not now in all cases in active use.
£ s. d.
Italy
. 50 centesimi = about 0 0 5
Austro-Hungary
. 1 florin =
, 0 18
France
. 5 franca =
, 0 4 0
United States .
. 1 dollar = ,
, 0 4 2
Germany .
. 5 marks =
, 0 5 0
Norway ,
. 5 kronor = ,
, 0 5 7
Sweden .
. 5 rixdalers = ,
, 0 6 7
British India .
. 5 rupees = ,
, 0 6 8
Belgium .
. 20 francs = ,
, 0 16 0
Holland .
. 10 florins = ,
, 0 16 8
Scotland and IieUuiO
I . 1 pound = ,
, 1 0 0
England and Wales
. 5 pounds = ,
, 5 0 0
It does not appear from these figures that the
denominations of bank notes are dependent on
or indicative of the poverty or wealth of a
DENOMINATOR— DEPARCIEUX
549
country. But some closer connection in this
respect may be found in the extent to which
the smaller denominations preponderate, though
other local circumstances may have a share in
determining this matter. We may contrast the
note circulation of France and Belgium in 1913.
France.
Belgium.
Francs. Amount
Number
Francs Amount
Number
• per cent.
per cent.
Jfianca. percent.
perceut.
o^ ^^^K 1
20 (16/-) 23
64
20 (16s.) y -4
•4
50 (£2) 11
12-5
25 (£1) j
100 (4) 40
22
50 (2) 16
36-5
500 (20) 5
•5
100 (4) 52
59
]()00 (40) 21
1
500 (20) 5
1-1
1000 (40) 26-G
3
100
100
100 lOO I R. W. B.
DENOMINATOR, Common. The term
" common denominator " is applied by Jevons to
the function of money which he thus describes :
" In a state of barter the price-current list would
be a most complicated document, for each
commodity would have to be quoted in terms
of every other commodity. . . . Between 100
articles there must exist no less than 4950
possible ratios of exchange. . . . All such
trouble is avoided if any one commodity be
chosen, and its ratio of exchange with each
other commodity be quoted. The chosen
commodity becomes a common denominator or
common measure of value " {Money, p. 5).
Jevons here uses "denominator" as equivalent
to measure of value — the term which he more
frequently employs.
According to Prof. Walker a distinction
should be drawn between denominator and
measure of value. ' ' Curiously - coloured bits
of paper with a government stamp upon them,
which it is felony to imitate," and without
"intrinsic value," may serve the purpose of a
common denominator, but not that of a common
measure of value (Walker, Mo^iey, pp. 9, 280-
288). (See Standakd of Value.) f. y. e.
DEODAND. Any personal chattel which
was found to have been the immediate cause
of the death of any reasonable creature, was
anciently forfeited to the crown, to be given to
God, as by distribution in alms to the poor.
It seems to have been originally intended as an
expiation for the souls of such as were snatched
away by sudden death, just as the apparel of a
stranger found dead went to purchase masses
for his soul (Thorpe, Anglo-Saxon Laws and
Institutes). This may account for the rule of
law that no deodand was due when an infant
under the age of discretion was killed by a fall
from a cart or horse, or the like, not in motion ;
whereas if an adult person were so killed the
thing was forfeited. If, however, the horse,
cart or other thing in motion killed an infant
it was deodand, as the misfortune was then partly
owing to the negligence of the owner, who was^
thus rightly punished. If a thing not in motion
were the occasion of a man's death only that
part which was the immediate instrument was
forfeited ; but 11 it were in motion all that went
to make the wound more dangerous was forfeited.
Thus if a man, climbing up the wheel of a cart,
lell and was killed, only the wheel was deodand ;
but if the wheel ran over his body, not only
the wheel but the whole cart and load was
deodand. It mattered not whether the owner
of the thing was concerned in the killing or not,
for if a man were killed with a sword the sword
was deodand although not belonging to the
man who used it. For this reason we find in
old indictments for homicide the instrument of
death and its value presented by the grand jury
to enable the king to claim the deodand.
Deodands were not due for accidents happening
on the high seas out of the jurisdiction of the
common law, neither did any deodand accrue
in the case of felonious killing, but cases occur
in which ships were valued for deodand by
reason of accidents at sea. A Latin phrase
attributed to Braeton has, by mistranslation,
given rise to erroneous statements as to what
constituted a deodand. "Omnia quae ad
mortem movent, " evidently meaning all things
which tend to produce death, has been rendered
"move to death"; thus giving rise to t^e
theory that things in motion only were to be
forfeited. Deodands were finally abolished alto-
gether by statute 9 & 10 Vict, c. 62. h. Ha.
DEPARCIEUX (or De Parcieux), Antoine
(1703-1768), born near Nismes, raised himself
from the rank of a peasant by his mathematical
ability, Avhich was at first exerted in the con-
struction of sun-dials. A tranquil life devoted
to science — applied mathematics chiefly —
terminated at Paris, 1768.
Deparcieux's contributions to vital statistics
give him a place in this dictionary. He con-
structed life-tables based upon two sets of ob-
servations, relating respectively to persons who
had taken part in the French Tontines {q.v.\
and to the inhabitants of religious houses — monks
and nuns. It appeared that the religious celi-
bates had the advantage in respect of longevity
at the earlier, but not at the later periods of
life. It also appeared that the expectation of
life at every age was greater for nuns than for
monks. Deparcieux seems to have been the
first to define expectation of life (which he
termed vie moyenne), and to construct separate
life-tables for males and females. Dei)arcieux's
treatment of statistics commands the suffrage
both of the mathematician and the general
reader. "I do not see how he could have
made a better use of his data," says the speci-
alist Milne ; while the lively Voltaire is be-
lieved to have taken Deparcieux as the model
of "the geometer" who discourses so instruct-
ively in L'homme aux quarante 4cus.
Deparcieux is sometimes called the elder, to
distinguish him from his nephew, Deparcieux
the younger, who wrote on the same class of
subjects as his uncle, but with less effect.
550
DEPARTMENT
Essai sur les prohaUlitis de la duHe de la vie
humaine (1746). — Reponse aux objections . . .
{17 ^Q).— Addition d Vessai . . . (1760).— These
works are in the library of the British Museum,
entered in the catalogue under the head, Parcieux.
The Reponse is bound up with the Addition.
De Moivre, Doctrine of Chances^ 3rd ed. (1756),
penultimate page.
[Histoire de I'Academie Royale, Annee 1763,
p. 155. — tloge de M. De Parcieux. — Richard
Price, Observations on Reversionary Payments,
4th ed. (1783), vol. ii. p. 189.— Maseres, PHn-
dples of Life Annuities (1783), Preface. — Tetens,
Einleitung zur Berechnung der Leibrenten (1785),
p. 79. — F. Baily, Doctrine of Life Annuities, p.
13. — Milne, Valuation of Annuities (1815), vol.
ii. p. 555,, and p. 574. — Assurance Magazine,
vol. ii. p. 205, and vol. xv. p. 175. — Farr, Vital
Statistics, p. 439. — Deparcieux's celebrated tables
are given in some of the passages above referred
to. Other references, and a version of the tables,
will be found in the article on Deparcieux in
Walford's Insurance Cyclopcedia. ] f. y. e.
DE PARIETJ. See Parieu, Esquirol de.
DEPARTMENT. A separate branch or
division of the public administration.
The varying character and the great extent
of the administrative functions of the state
necessarily require for their efficient discharge
a similar division of labour and concentration
of specialised knowledge and skill to that which
is arranged in any well - organised industrial
undertaking. It is not too much to say that
without the most elaborate division and sub-
division of official duties, and their concentration
within appropriate areas, executive government
would be impossible. In addition to the ad-
vantages which ordinarily follow the specialisa-
tion of function, an esprit de corps, or desire
to look with a single eye to the efficiency of a
particular department, is fostered amongst the
more responsible members of its staff. Such a
result is of the greatest possible value to the
public at large, although it is probable that in
our own country it has been gained at the
expense of the necessary "integration," and
that too little regard has been paid to the
necessity for that "intimacy and firmness of
the connections between the separate parts "
upon \v^hich the well-being of organisms, physi-
cal, industrial, or social, must depend. In the
desire to avoid increase of expenditure, or the
undertaking of duties not quite in line with its
own special functions, a department will at times
be unwilling to perform services which would be
of advantage to the community, and apart from
the cabinet or the treasury — the one too much
pressed with business of the first importance, the
other looking at all questions mainly from the
financial side — no means of rectifying the separ-
atist tendency exists.
As may be supposed from the varying re-
quirements of the public service, the actual
division of the administration into departments
varies from time to time. Some of them, as in
the case of the treasury, the privy council
office, the home office, and the foreign office,
are of old standing, whilst others, as the office
of the secretary for Scotland and the board of
agriculture and fisheries, have been more recently
constituted. A reference to the particulars
given in the annual estimates for civil services
will afford interesting evidence of the extension
of the functions of government in this country
in a comparatively recent period.
The statement as to the "accounting depart-
ments and services" prefixed to the estimates
shows that, leaving out of account the war
office, the admiralty, and the three revenue
departments — customs, inland revenue, and
post office — the main divisions of the public
service were sixty-five in number, of which
nine were exclusively Scotch and seventeen
Irish. Some of these may be said to exist for
the control and service of the remainder, e.g.
the treasury, office of works, civil service com-
mission, exchequer and audit department, and
the stationery office. The amount voted to be
accounted for by these departments for the year
1909-10. and by some of the other principal de-
partments, is shown in the following table :
Accounting Department.
Treasury (16 votes, including Old Age
Pensions)
Office of Works (12 votes)
Board of Public Works, Ireland (3 votes)
Civil Service Commission
Exchequer and Audit Department .
Stationery Office ....
Treasury Solicitor ....
Treasury Remembrancer in Ireland (for
County Court Officers, Ireland) .
Home Office (3 votes)
Foreign Office (2 votes)
Colonial OflBce (3 votes) .
Board of Trade (4 votes) .
Secretary for Scotland
Chief Secretary, Ireland (S votes) .
Paymaster- General (for Supei-annuations,
etc.)
Paymaster of the Supreme Court (2 votes)
King's and Lord Treasurer's Remem-
brancer (3 votes) ....
Accountant-General of the Supreme Court,
Ireland
Board of Agriculture and Fisheries
Department of Agriculture, etc., Ireland
Ordnance Survey ....
Local Government Board .
Registrar-General's Office
Local Government Board, Ireland .
Prisons Department (England and the
Colonies)
Prisons Department (Scotland)
,, ,, (Ireland) .
Land Commission, Ireland
Dublin Metropolitan Police
Constabulary, Ireland
Education Department (England and
Wales) . . ...
British Museum ....
Public Education (Scotland) .
„ ,, (Ireland)
Sundry other Departments
Total .
Amount
voted for
1909-10.
£10,301,050
2,089,676
363,504
38,403
64,400
762,960
99,897
110,875
538,250
667,877
1,342,421
527,220
36,016
459,574
691,139
366,825
129,668
104,919
173,169
267,501
£00,076
254,294
44,315
77,731
753,737
97,390
112,695
303,677
96,963
1,380,918
13,648,792
179,228
2,147,541
1,621,921
695,521
£40,750,143
DEPARTMENT— DEPOPULATION
651
[The estimates for Civil Services, 1892-93 (P.P.
No. 48 of 1892) may be referred to. See also
Bureaucracy.] t. h. e.
DEPARTMENT (France). A term applied
to the principal territorial and administrative
area existing in France. The division of that
country into departments w^as first effected by the
decree of the 22nd December 1789, the arrange-
ment being embodied in Art. I. of the Consti-
tution of 1791. There are at the present time
eighty-six departments, or eighty-seven if 'the
"territory of Belfort," the remnant of one of
the departments ceded to Germany in 1871, be
regarded as a separate department. Since 1889,
the three departments of Algeria have also been
treated, for most purposes, as part of France
proper. The area of a department ranges from
184 square miles in the case of the Seine to
3597 square miles in the case of the Landes, the
average being about 2300 square miles, or more
than one-third the area of Wales. A department
is administered by a prefect appointed by and
representative of the central authority. He is
assisted by a conseil geniral, elected by universal
suffrage, and a council of prefecture, nominated
by the central authority, for the purpose of de-
ciding legal questions and advising the prefect
when asked to do so. Each department is divided
into "arrondissements," these again into "can-
tons," and the "cantons" into "communes."
[See Block's Dictionnaire de V administration
frangaise, and Dictionnaire General de la Poli-
tique.— "Local Government in France," by M.
Waddington, Nineteenth Century, July 1888.]
T. H. E.
DEPOPULATION (Term). The laying waste,
destroying, and unpeopling of a place (Co. 12
Rep. p. 30), stated to be "now the apparent
effect of enclosing lordships and manors, where-
by several good old villages have been reduced
from a great number of sufficient farms to a
few cottages," by Cowel {Interpreter, ed. 1637),
in whose time an extensive inquiry into the de-
population of the rural districts was carried out.
The same writer states that Depopulatores agro-
rum "were so called because, by prostrating
and ruining houses, they seemed to depopulate
towns " ; and depopulatio agrorum was a great
offence at common law for which benefit of clergy
was denied. The pulling down of farm-houses
and conversion of arable into pasture was checked
by 4 Henry VII., and other well-known acts
throughout the Tudor period (Cunningham, I.
468). Depopulation might also ensue from
excessive taxation or purveyance {Dialogus, i.
8). The unit of prosperity in the earlier and
^ later inquisitions alike was the plough itself —
the extent of depopulation being ascertained
by the reduced number of ploughs in each
village. H. Ha.
DEPOPULATION, in Relation to Econo-
mic History, has hitherto been chiefly con-
sidered as a remarkable but disconnected pheno-
menon. Thus, while it is usual to dilate upon
the alarming proportions of this social move-
ment at several distinct periods of our history,
it has not always occurred to the general his-
torian to regard it as a visitation, possible
under the political environments of every age.
The truth is that the same causes — the visi-
tation of God and the inhumanity of man —
have not infrequently operated to produce the
same results throughout successive centuries.
At uncertain, though constantly recurring inter-
vals, this social scourge has hindered the fairest
prospects of industrial progress. Though in
recent years less known as a factor in economic
life, in earlier days depopulation saddened the
reigns of powerful monarchs — causing alike the
exultation of foreign enemies or trade rivals and
the lament of successive generations of social
reformers.
The depopulation of Saxon and Norman
England was rather general than local, and of
historical rather than economic interest, except
for the insight that is afforded by it into the
industrial resources of the country. The re-
curring pestilences and famines, and the partial
invasions of the next three centuries left an
equally indelible mark upon the page of history ;
but it is with individual enterprise and the
public policy which governed its ceaseless
workings from the 14th to the 17th century
that we are especially concerned.
The "peace of the plough" is perhaps a
fanciful term applied to a very real force in the
national polity. It denotes a predominant
interest in the pursuit of agriculture, as form-
ing the very basis of the industrial life of the
nation. Herein its chief wealth was invested,
hereby its entire finances were adjusted, and the
ploughshare and the reaping-hook continued to
be idealised as the symbols of native industry
for centuries after they had been practically
replaced by the shepherd's crook and the
weaver's shuttle. Therefore, from Saxon times
onwards we find the peace of the plough pre-
served by a succession of remedial measures in-
tended to foster a frequently declining industry.
It is to be remembered that down to the
close of the 13th century not only the main
resources of the country but the chief part of
the royal revenue were derived from this source.
This is tjie period of the great prcedial surveys,
and of agi-icultural treatises ; the period of
Carucage and Scutage (q.v.), and of royal
commissions of inquiry into the grievances of
the rural community. The Dialogus de Scac-
cario alludes to one of these inquisitions in the
well-known story of the king on his progress
being waylaid by husbandmen bearing their
idle ploughshares aloft "as a symbol of agricul-
tural depression." A few original fragments
of another inquisition of the 12th century have
sm'vived, which almost anticipate the com-
plaints of the English peasant insurgents of the
552
DEPOPULATION
16tli century. The Saxon Chronicle gives
ample instances of agricultural distress and de-
population over a wide period, but it is not till
we reach the middle of the 14th century that
the evil assumes the characteristic type which
so long prevailed. Before the reign of Edward
III. the interest of the crown in the distribu-
tion of wealth had undergone a change. The
sheriffs farms no longer enabled the king "to
live of his own"; great escheats brought with
them greater waste ; the last desperate attempt
to exact the full feudal liabilities of the military
tenants by new-fangled inquisitions, Nevill's
taxation — as odious and as fruitless as Noy's
ship-money — had failed. The crown, therefore,
was compelled to drift with the flowing tide.
It spread its nets there and drew in an ample
revenue from customs and subsidies and farms
of the Lombard and Flemish publicans in place
of feudal levies and the plunder of the Jewish
mortgagees. The staple articles of the export
trade of England became wool and fells, and
leather and fats. Corn was henceforth exported
only under the sliding scale. Then followed
the plague, and in its wake inclosures and con-
vertible husbandry. Then the prsedial insurrec-
tion, and the industrial revolution had begun.
From the close of the 14th to the beginning of
the 17 th century we can trace the depopulation
of the English rural districts in the complaints
and remonstrances of the oppressed, backed by
a long string of useless remedial measures, not
wholly inspired as might be supposed by the good-
will of visionary churchmen, benevolent despots,
and alarmist legislators, but by the far-seeing
policy of the great ministers of the crown, the
obvious meaning of which is apparent in most
of the economic tracts of the 16th century as a
preparation for the deadly struggle between the
landed and the moneyed interests.
In one aspect the Statute of Labourers itself
was devised for the encouragement of tillage.
It was so expressed in its later editions, and
alniost simultaneously the act of depopulating
is mentioned as a felony. All through the
15th century the evil grew while the feudal
system dwindled. The feudal surveys of Henry
VI. are an instructive conmientary upon the
Testa de Nevill on the one hand and the
Statute of Fines on the other. It was in the
reign of Henry VII. that the suffering conse-
quent on inclosures was first brought promin-
ently forward in a well-known statute. This,
however, and the similar measures of the next
four reigns seem to have given no real relief to
the congested districts. Even the partial migra-
tion of labour to the towns was insufficient to
cope with this distress. The real solution was
the increased employment of labour made pos-
sible by the success of convertible husbandry.
There are many valuable materials extant to
enable us to estimate both the causes and the
extent of this depopulation in the 16th century.
but few perhaps as complete as the curious
returns made in the year 1517 {Lansd. MSS., i.
60) and the still more extensive returns made
in pursuance of letters-patent dated 20th August
1608, which have hitherto been little known
{Charuiery Records, Petty Bag, Depopulations).
This latter instrument recites that the crown
being given to understand that there are in many
parts of England, and notably in the county oi
Bedford, *' many houses pulled downe, lett tc
decay, standinge voide and uninhabited, or the
ground that of former tymes belonged to
dweUinge-houses dismembered and taken from
them and greate quantities of ground hereto-
fore used for arrable converted to pasture, by
which and by many other sinyster and corrupt
practises and devises our Realme is in many
partes wasted and depopulated to the grievance
of our people the damage of our estate and
against the ancient common lawes and statutes
of our Realme, and which we are determined to
remeadie and redresse," the lord-lieutenants and
certain knights and esquires of several of the
home counties, to which this inquisition seems
to have been confined, are hereby empowered
to inquire by a sworn jury and examination of
witnesses as to the facts alleged in the schedule.
The articles of the inquiry are to the
following effect: — (1) How many towns,
villages, churches, hamlets, boroughs, parishes,
dwelling-houses, farms or farmhouses, families,
ploughs, or tenancies in the county of Bedford
have since the twenty-fourth year of Elizabeth
been depopulated, and by whose fault and by
what means ; and the population maintained
before and after such depopulation ; (2) what
grounds have been converted from tillage into
pasture ; (3) what lands have been severed from
the farm -buildings ; (4) what farm buildings
have been pulled down ; (5) who hold more
than one farm ; (6) who have evicted their
tenants ; (7) what inclosures have been made.
The returns to this inquiry, which were
ordered to be made into the Chancery before the
October following, give us a complete picture
of the agrarian revolution during a given
period within a given district They are as
complete in their way as the Hundred Rolls of
the 13th century, and they may be regarded
as the summary of the agrarian question before
it disappeared from public view for another two
centuries. It was upon the evidence of this
commission that the lawyers of the 17th cen-
tury based their definitions of depopulation,
and it is in this connection that it has descended
to us as an economic term.
[Cunningham, vol. ii. Appendix.— ^The Inquisi-
tion of 1517, edited by I. S. Leadam. — Transac-
tions of R. Hist. Soc. (N.S.) vol. vi. pp. 167-314.]
H. Ha.
DEPOPULATION (Causes). The term de-
population is now used in a sense very different
from that originally assigned to it. Such a trufl
DEPOPULATION
55a
depopulation, or stripping a country of its in-
habitants, as has occurred in the past in
Mesopotamia, Syria, and parts of central Asia,
is scarcely known in these days, but the term
depopulation is now applied to the case of any
country, or part of a country, in which the
population as measured from time to time is
found to be diminishing.
The causes of depopulation are numerous ; for
convenience they may be grouped under three
headings, physical, political, and economic, but
usually several causes contribute to the result.
A. Physical Causes. — (1) Volcanic erup-
tions, within the usually restricted limits of
their action, produce more considerable effects
than might be supposed, both in direct destruc-
tion of life and in rendering large tracts of
country incapable of cultivation. Among the
more notable outbursts of volcanic force which
have thus caused depopulation may be men-
tioned the eruptions of Vesuvius in 79 a.d. and
again in 1822 ; of Etna in 1669, which destroyed
fourteen villages ; of Papandayang in Java in
1772, which is said to have buried 40 villages
with 3000 persons ; of Galungung, also in
Java, in 1822, which killed 4000 people ; of
the Volcan de Agua in Guatemala in 1541 ; of
Skaptar Jokull in 1783, which destroyed one-
sixth of the inhabitants and one-half of the
live stock of Iceland, and rendered great part
of the island permanently sterile ; of the "king
of volcanoes," Mauna Loa, in Hawaii, in the
years 1855, 1868, and 1881 ; of the oil wells
at Baku in 1887 ; and of Tomboro, in the
island of Sumbawa in 1815, said to have de-
stroyed 12,000 people. Again in 1883 one of
the most remarkable outbursts of which we
have records occurred in Krakatoa, causing a
loss of life estimated at the time to amount to
75,000 ; while lastly, Tarawera in 1886 covered
a large tract of the north island (New Zealand)
with mud and ashes. (See, for volcanic pheno-
mena generally, Humboldt's Cosmos).
(2) Floods. — The Ho-ang Ho affords the most
striking instances, — in 1851-53 it changed its
course and buried whole villages in mud ; in
1888, breaking down its banks once more, it
gave rise to an appalling catastrophe, over-
whelming it is said at least one million of people
and causing subsequently widespread famine.
(3) Changes of climate, more especially
drought, due to the neglect of irrigation works,
or the destruction of forests, may cause the land
to be incapable of sustaining as large a popula-
tion as formerly. The condition of Mesopo-
tamia since its conquest by the Turks in 1515
is a conspicuous example of the former. North
China of the latter, case. Mr. J. A. Baines,
census commissioner of India, says {Times of
India, 18th April 1891) that the census proved
that a local malarial fever had caused consider-
able emigration from Rajshahye and Nuddea
in Bengal.
(4) Pestilence was formerly in Europe, as it
is still in Asia, both a potent and a frequent
cause of depopulation (see Black Death). In
modern times the epidemics of cholera in 1849,
1853, 1854, 1857, and 1866, of smallpox in
1871, and of influenza in 1890, 1891, and
1892 decidedly checked the natural increase of
the population in several countries of Europe
(see Statistical Chronology of Plagues and Pesti-
lence as affecting Human Life, etc., by C. Wal-
ford, 1884).
(5) Famines resulting from failure of crops
due to exceptional seasons or plagues of locuste,
or to great disasters such as the bursting of
their banks by rivers, have often been greatly
aggravated by pestilence or war ; in fact, these
three causes are frequently inseparably bound
together. The most notable instance in recent
times of famine causing considerable depopula-
tion in Europe occurred in Ireland in 1847,
but in India famines still from time to time
greatly check the growth of population. Great
famines occurred in 1770, 1781-83, 1790-92,
and even so recently as 1860-61 half a million
of people perished from famine in North -
West India, while in 1865-66 it is believed
that one and a half million perished in Orissa.
However, in 1874 and 1876 the efforts of the
Government were so far effectual as to prevent
any great loss of life except in a few districts.
Mr. Baines {Times of India, 18th April 1891)
says that the famine tracts of Madras, which
showed considerable depletion in 1881, filled
up rapidly by 1891 owing to the return of
emigrants or to actual immigration from other
districts. There was an awful famine in North
China in 1877-78 in which millions are reported
to have perished (see Famines of the World,
etc., by C. Walford, Journal of the Statistical
Society, vol. xli. 433, vol. xlii. 79).
B. Political Causes. — (6) War, involving
as it once did the massacre of women and
children, and the carrying off of w^hole nations
into slavery, has been a most powerful cause of
depopulation, especially in Asia and Africa.
The extinction of aboriginal races in recent
times has often been a result of increasing
population, the stronger race displacing the
weaker, but the conquests of such nations of
warriors as the Matabele have caused gi'eat
diminution of more civilised races like the
Mashonas. Modern wars are comparatively
short in duration, while owing to sanitary
precautions pestilences do not so often follow
in their train. Thus it has been said that the
war between Prussia and Austria in 1866 was
the first in which more men were killed in
action than died of sickness. In France in
1854 and 1855 the deaths exceeded the births
by 69,318 and 35,606 respectively, and in
Austria inl866by57,831;in both this result
was the combined effect of cholera and war.
In France again in 1870 and 1871 there was an
554
DEPOPULATION
excess of deaths over births of 103,394 and
444,889 respectively, a disastrous result of the
war, the commune, and an epidemic of small-
pox.
(7) Actual deportation of the people, as in the
familiar instances of the Jews in the Babyldhian
captivity, the Jews expelled from Spain (1492),
and the Moors also from that country (1609).
This heading connects itself with the next one
to be considered.
(8) Religious persecution drove the Huguenots
from France, the Pilgrim Fathers from England,
and is now driving the Jews from Russia, to the
great economic disadvantage of the persecuting
country in each case.
(9) Bad government is not perhaps directly a
great cause of depopulation, but indirectly it
assists. Restrictions on trade, oppressive taxa-
tion, bad land laws, capricious interference with
the liberty of the subject, as well as social and
political agitation, all discourage the growth of
population ; but of aU acts of government
probably compulsory military service has most
effect in stimulating emigration.
C. Economic Causes. — Though the action
of these is often not so obvious as in the case of
natural and political causes, and is often diffi-
cult to unravel satisfactorily, yet they are really
far more powerful than all the other causes put
together.
(10) The repeal of the Poor Law. — The old
law of settlement in England was intended to
prevent men from leaving their native parishes ;
it was a protective measure which tended to
keep up artificially the number of the rural
population ; its repeal naturally facilitated
migration and to that extent contributed to
local depopulation. The same is true of the
abolition of out-door relief to able-bodied men.
The poor law has, however, in some cases pro-
duced the same result in an opposite way : i.e.
some landlords, to prevent the poor from becom-
ing chargeable upon the land, cleared their
estates of cottages and so caused a veritable de-
population within a limited area.
(11) The formation of deer forests. — Some
Scotch landowners, finding they could obtain
better rents by devoting their land to sporting
purposes, have followed the classical example
of William the Conqueror, and removed all
agricultural tenants with a view to making
deer forests. Naturally this has taken place
only in those parts of the Highlands where the
land was poor and ill adapted to agriculture.
To some extent the inhabitants have found
compensating employment in meeting the per-
sonal wants of the sportsmen. The real objec-
tion to such afforesting seems rather to be to
its selfish character than to the withdrawal of
a small quantity of land from cultivation.
A return to the House of Commons dated
4th August 1891 gives certain "particulars of
all deer forests and lands exclusively devoted
to sport in Scotland. " From this we learn that
the total amount of such lands was in 1883 no
less than 2,292,153 acres, and that 274,980
acres have been afforested since, the recent
additions being in the counties of Argyll, In-
verness, Ross and Cromarty, and Sutherland.
The number of persons displaced is not given,
but there are various indications that at any
rate the greater part of the land devoted to
sport can be of but slight agricultural value,
thus : — (1) Two-thirds of the estates comprised
land having an altitude exceeding 2500 feet
above the sea, while in only four estates was
the highest land under 1000 feet. (2) In
about half the estates the rent before and after
afiForestation is given ; in the very great majority
of cases the sporting rent is greater than the
old rents, often several times as great, in only
three cases is the new rent 25 per cent below
the old. (3) The rent before afforestation
averaged in more than one-fourth of the acreage
for which the facts are available from nil to
under 2^d. an acre ; in nearly half the acreage
between 3d. and 8d., and in less than one-fourth
between 9d. and Is. 8d., the last being the
highest rent recorded. Land commanding such
average rents could sustain but a trifling pas-
toral or agricultural population.
(12) The repeal of the com laws, by bringing
down the artificial price of wheat, caused the
tiQage of land ill adapted for the growth of
cereals to be no longer profitable ; hence some
lands either went out of cultivation altogether
or were devoted to pastm-age, in either case
there was less employment for labour on the
farms affected.
(13) The application of machinery to agri-
culture enables the same amount of land to be
cultivated by the labour of a smaller number of
men. The cause has operated widely in different
parts of the world.
(14) The centralisation of manufactures, duo
to the adoption of the factory system, has
caused the decay of village industries such as
hand -loom weaving, and has lessened the
importance of the village craftsmen.
(15) T?ie direct attraction of large towns, not
merely as offering higher wages to labour, but
as affording more interests, more amusements,
in short, more " life," is a potent factor in
promoting depopulation in rural districts.
(16) Improved education and a cheap press
make men more ambitious and more restless,
while by familiarising them with new ideas
they make them less fearful of change. More-
over in rural districts compulsory education
tends to prevent children from being early
apprenticed to the soil, and learning the
manifold duties connected with agricultural
labour.
(17) The rise in the standard of living is a
very potent and widespread cause of migi-ation,
and hence of rural depopulation. Men are no
DEPOPULATION
555
longer content to live under the old conditions
which satisfied the few wants of their grand-
parents ; they want better food, better clothes,
better houses, and shorter hours of labour ; to
obtain these things they must earn better wages;
hence they are stimulated to leave their homes
in search of more remunerative employment than
their native villages afford. This cause has no
doubt been largely operative in keeping up the
great stream of emigration from Ireland, a
stream which commenced to flow long before
the potato famine brought it into notoriety.
(18) Improved communications, railways and
steamships, co-operate powerfully with many
of the above causes to accelerate the depopula-
tion of the rural districts ; they bring com from
distant countries where it can be grown more
cheaply, and so bring down prices ; conversely
they make more fertile soils readily accessible
to settlers ; they bring manufactured articles to
remote country places and so injure village
industries ; they facilitate the removal of
labourers to factories and mines ; they even, as
in the case of Cornwall, transport miners to
richer and more easily worked lodes in distant
lands ; in a few cases they lead to local de-
population by diverting old lines of traffic.
(19) Improvements in large towns lead to the
depopulation of their central areas, dwelling
houses are turned into places of business or
removed to make room for public buildings,
while large clearances are made for railways
and new streets. This has long been an
obvious fact in London, but a like movement
is also in progress not only in such towns as
Manchester, Liverpool, and Birmingham, but
even, as shown by the last census, in Sydney
and in Adelaide ; no doubt the same is true of
most large towns throughout the world.
(20) An abnormal age and sex constitution of
the population, the result of war or emigration,
lowers the marriage rate and consequently the
rate of natural increase. In England there is
a marked excess of women, in many of her
colonies an even more marked deficiency ; in
Ireland and in many rural districts of England
there is a great excess of old people.
(21) Deferred marriage and the artificial
limitation of children both contribute to de-
population by lowering the rate of natural
increase. The first is a powerful cause in the
upper and middle classes in England, the
second is a still more powerful cause in France,
and is said to be in some portions of the United
States. To what extent families are thus
restricted in England is uncertain, but the
practice has many able advocates and the
subject is now widely and openly discussed in a
manner that would not have been believed to
be possible a few years ago. In France the
peculiar land system which compels the division
of real estate equally among the children tends
to make small families specially desired.
The economic question arises whether pro-
tection, in whatever form applied, can succeed
in achieving the result aimed at. In the case of
France, which restricts its birth-rate to such a de-
gree that it increases more slowly than any other
nation, does France produce as many labourers
as she requires ? If so, why are there more
foreigners in France than in any other country ?
Does she have to import Belgians, Swiss, and
Italians because she has not enough French-
men for her needs ? The foreign born in France
increased from 380,831, or I'l per cent of the
population, in 1851, to 1,126,531, or 2-9 per
cent of the population, in 1886, numbers and
proportions not approached in any other country
of Europe. Between the censuses of 1872 and
1886 the increase in the population of Franco
was 2,116,082, of which 385,863 persons, or
18 per cent, were foreign born. The census of
1891 showed a diminution of the number of
foreigners by 13,416, probably the effect of the
alien law of 1888. In 1911 the foreigners
were over 2 -7 per cent of the population.
Rural Depopulation in England and Wales. — -
The division of a population into urban and
rural is a matter of considerable difficulty, and
strict comparisons at successive periods are
scarcely practicable. In the Census of England
and Wales 1881 it is shown that whereas " the
town population, i.e. inhabitants of the districts
and sub-districts which include the chief towns,"
increased in the census intervals since 1851 by
19-41, 18-09, and 19-63 per cent respectively,
" the country population, i.e. the inhabitants
of the smaller towns and the country parishes,"
increased by 4-12, 7-32, and 7-42 percent. The
Preliminary Report of the Census of England and
Wales 1891 shows that in the ten years 1881-
91 the "urban sanitary districts " increased by
15-3 per cent, the "rural sanitary districts " by
only 3-4 per cent. A similar increase for both
urban and rural districts is recorded for the
decade 1891-1901. Our rural population in-
creased, but so slowly as to be almost stationary.
But the census of 1911 shows an improvement,
an important factor being the diminished loss
of the rural districts by migration.
Dr. A. L. Bowley in a paper read before the
Statistical Society, Rural Populations in Ejigland
and Wales (see Journal, 1914), discusses rural
population '* from consideration of its density "
as being more satisfactory than definitions based
on occupations or "on the administrative dis-
tinction between urban and rural districts, "
which latter he regards as misleading, since, as
he points out, the population of many rural
districts may be raised by the inclusion of an
industrial, mining, or suburban population. The
method of selection has been to include all
districts in which the density (1911) was not
over 30 per 100 acres, and such districts in
which it was 30 to 50 per 100 acres where it
could be ascertained that there were no mines,
556
DEPOPULATION
factories, industries, no residential district for
persons working in large towns, no disturbing
causes such as military camps, large schools,
asylums, temporary works on railways, etc. An
examination of Dr. Bowley's tables shows that
out of 53 administrative counties the strictly
rural population had decreased in 33 since 1891 ;
of these, 9, Cornwall, Hereford, Westmoreland,
Denbigh, Anglesey, Merioneth, Cards, Mont-
gomery, Pembroke, lost continuously ; 4, North-
ants, Cumberland, Radnor, Carmarthen, dropped
in 1901 and have not altered since ; 16, Devon,
Somerset, Dorset, Wilts, Berks, Bucks, Norfolk,
Suffolk, Cambridge, Lines, Beds, Oxford, Glou-
cester, Shropshire, E. and N. Ridings of Yorks,
dropped in 1901 and rose slightly in 1911 ; 4
remained stationary, Hunts and Northumber-
land throughout the period, Rutland and Breck-
nock dropped and rose again. Of the 20 counties
in which the rural districts have improved, 6 im-
proved continuously, Hants (with L of Wight),
Surrey, Staffs, W. Riding of Yorks, Lanes, Flint ;
9, Kent, Herts, Essex, Monmouth, Worcester,
Warwick, Derby, Notts, Cheshire, though higher
in 1911 than in 1891, had dropped in 1901 ;
3, Sussex, Leicester, Glamorgan, were stationary
in 1901 and rose in 1911. Durham rose in 1901
and has not altered since. Carnarvon rose in
1901 and dropped slightly in 1911.
PopulatioB.
iii
Mining, Indus-
trial. Suburban
•s£:?
Percentage Growth.
Areas deducted.
Counties.
000 omitted.
^i^
1891.
1901.
1911.
1911.
1891-
1901.3
1901-
1911.
1891-
1911.3
Cornwall
154
149
145
19
- 3-2
- 2.6
- 5-8
S.Westerni
688
642
648
17
- 6-7
+ I
- 5-8
Hants 1
155
159
176
21
-1- 2-6
-fll.l
+11-4
Surrey
53
59
67
S2
+ 11-3
+ 14
+ 26-4
Home
623
609
639
2h
- 2-2
+ 6
+ 2-6
Counties 2
Eastern
1002
959
988
19
- 4
+ 3
- 1
S. Midland
522
492
503
n
- 5-7
+ 2
- 3-6
Western
240
234
237
ih
- 2-5
+ 1.3
- 1-2
W. Midland
281
280
290
- -3
+ >7
+ 3-3
N. Midland
604
509
628
19
+ 1
+ 4
+ 4-8
and N.W.
Northern
478
463
465
10
- 31
+ -5
- 2-7
N. Wales
176
177
177
18
+ -5
0
+ -6
Mid-Wales
157
147
145
8
- 6-4
~ i'5
- 7-4
S. Wales
109
105
103
12
- 3-7
- 2
- 5-5
Glamorgan
18
18
23
19
0
+28
+28
1 Excluding Cornwall. 2 Excluding Hants and Surrey.
3 Not from Dr. Bowley's table.
The rural population of England dropped
- 7 per cent in the last 50 years (see below),
and only 5 out of the 14 districts considered
showed an increase. Of the individual counties
only 10 showed an increase in the 50 years,
Hants, Surrey, Kent, Sussex, Worcester, Staffs,
Cheshire, W. Riding of Yorks, Flint, Car-
narvon, while Derby remained unaltered. Dr.
Bowley further shows that the rural popula-
tion increased 50 per cent in the period 1801-
51, was stationary between 1851-71, fell 10 per
cent by 1901, and recovered 3 per cent by 1911.
Increase or Decrease per cent in Eegistration
Counties, Industrial, etc. Regions deducted,
for the last 60 years.
1861-
1871-
1881-
1891-
1901-
1891-
71.
81.
91.
1901.
11.
1911.3
Cornwall .
-3
-IS
-8
- 4-7
- 1-6
-27
S. Western 1 .
-2
- 7
-4
- 7
+ 1
-17
Hants
+2
- 1-h
+2
+ -7
+ 9
-M2-8
Surrey . • .
+7
+ 1*
+9
+11
-I-10-9
+48
Home Counties 2
+4
=
=
- S
+ 5
+58
Eastern .
-1
- 5
-4
- 5
+ 3
-11
S. Midland
-1
- 5
-4-5
- 6
+ 2
-14
Western .
+ 1
- 5
-4
- 3
+ 1
- -9
W. Midland .
+4
=
-2
=
+ 3-5
+ 5-7
North Midland
-1
+ 1
-2
r=
+ 4
+ 1-5
and N.W.
Northern .
-4
- 2
-U
- u
+ 1
- 9-9i
N. Wales . .
+2
+ 3
-7
+ 1
- 1-3
Mid-Wales
- 4
-8
- 6
- 2
-19
S. Wales . .
-5
- 2
-2
- 8
+ 4
-13
Rural England .
=
- 3-5
-2.9
- 3-7
+ 2.9
- 7
1 Excluding Cornwall. 2 Excluding Hants and Surrey.
8 Not from Dr. Bowley's table.
He next investigates land occupations, and
points out that the variations in rural popula-
tion are not parallel with those of persons en-
gaged in agriculture. These showed a decrease
from 1861 to 1901, but a slight increase in 1911.
Rural Depopulation in Scotland. — Although
the population of Scotland has increased in
every decade since 1801, the phenomenon of so-
called depopulation has been exhibited in certain
areas. Three counties, Perth, Kinross, and Argyll,
reached their maximum in 1831 (Perth and
Kinross are now slightly rising) ; one, Inverness,
in 1841 ; five, Sutherland, Ross and Cromarty.
Dumfries, Kirkcudbright", and Wigtown, in 1851
(Ross and Cromarty and Dumfries are rising
slightly) ; five, Shetland, Orkney, Caithness,
Berwick, Roxburgh, in 1861 ; two, Elgin and
Nairn, in 1881 (Nairn improved slightly in
1911); two, Banff and Selkirk, in 1891 (Sel-
kirk improved slightly in 1911). In Shetland,
Orkney, Caithness, Sutherland, Berwick, and
Wigtown the loss has been continuous. Forfar,
Clackmannan, and Bute, which had steadily pro-
gressed since 1801, dropped in 1911. On the
other hand an increase has been steadily main-
tained at each census in Aberdeen, Fife, Stirling,
Dumbarton, Renfrew (a slight exceptioninl901),
Ayr, Lanark, Linlithgow, and Edinburgh ; these
counties contain some of the largest towns in
Scotland. Eighteen declining counties had a
collective population numbering nearly 130,000
less than the sum of their several maxima.
Argyll has lost over 30,000, Inverness 10,500.
The percentage decline was nearly 30 in Argyll,
nearly 26 in Wigtown, nearly 22 in Sutherland,
17 in Caithness. Although the depopulation is
most evident in the Highlands, and more especi-
ally in the extreme north and west, yet five of
the lowland counties have altogether diminished
by over 30,000 persons during the last fifty
3^ears. The most active cause of this is prob-
ably the attracting force of the labour markets
of Glasgow and the north of England. The
DEPOPULATION
66?
diminution in the north and west may probably
be attributed to a rise in the standard of living
and consequent emigration, since the poor soil
did not afford employment for more labourers ;
but no doubt the concurrent extension of sheep
farming, and in a few cases the formation of
deer forests, have contributed to the result.
Where the barrier of the sea has tended to check
the beneficial operation of migration, as in Lewis,
the population has continued to increase, with
the disastrous results that are too familiar.
Depopulation in Ireland. — The case of Ireland
is at once so important and so instructive as to
merit especial attention. A century ago Ireland
was a by-word for poverty ; the people had few
other resources than tilling the soil, and this
they did in a careless manner, demoralised as
they were by long dependence almost solely upon
the potato, a crop which in fair seasons gives
food for forty persons by the labour of one. The
Irish lived under almost the lowest standard
conceivable, miserably clothed and fed and even
more miserably housed, and were almost chron-
ically on the verge of starvation. Famines
occurred in 1814, 1816, 1822, and 1831. Under
these distressing circumstances the population
continued to increase till at the census of 1841
it numbered 8,196,597. Even at that time the
pressure of population upon the means of sub-
sistence had begun to seek relief by emigration,
and the census of 1841 showed the population
to be considerably less than liad been anticipated
(see Census of Ireland ISJ^l, vol. i. p. ix.) ; in fact
no less than 428,471 emigrants are recorded as
having left Ireland for the colonies, and 104,814
for Great Britain, during the decade 1831-41.
Nevertheless the population continued to in-
crease, and is believed to have reached about
8,295,061 by the middle of the year 1845, which
would give a density of 525 to the square mile.
It is true that the density of the population of
England and Wales in 1911 was 618 to the
square mile, in Belgium (1911) 652, in large
districts of Bengal from 292 to about 438 ; but
the first-named countries have great wealth in
minerals and manufactures with which to buy
food from other countries, the latter has a very
fertile soil and a tropical climate. The potato
rot appeai'ed in 1845 and again in 1846, the
main food -supply of the people failed, and
famine was inevitable. It reached its height
in 1847 and was, as a direct result, accompanied
by severe epidemics of typhus and relapsing
fevers. It is believed that starvation and fever
between them claimed from 200,000 to 300,000
victims, and when the people were again num-
bered in 1851 the population had shrunk to
6,574,278, or 1,622,319 less than in 1841, but
1,720,783 less than the supposed maximum of
1845. The population thus diminished by 20
per cent in six years. The greater part of this
startling depopulation was due to the great
exodus in 1847 and the following years, when
the Irish poured into Liverpool and Glasgow
and spread themselves over England and Scot-
land, and every ship sailing for North America
was filled with Irish emigrants.
The decrease affected every county in Ireland
except Dublin (it was least in Leinster, greatest
in Connaught), but while this unexampled de-
pletion of the rural districts was taking place,
there was an increase in nine town districts
amounting in the aggregate to 77,519. Belfast
and Dublin each added some 25,000 to their
numbers, and the increase amounted to 6 per
cent in Cork, 10^ per cent in Limerick, 11 per
cent in Dublin, and 33 per cent in Belfast. The
census of 1851 showed that the extent of land
under tillage increased by 2091 square miles,
and the value of agricultural stock and crops
was greater than any previously recorded. No
fewer than 355,689 " fourth - class houses,"
mostly mud cabins, disappeared, houses of the
first class increased by 10,084, those of the
second class by 54,574. In short the depopu-
lation was accompanied by a very notable rise
in the standard of living.
Subsequent enumerations show the same
thing, — a steady, though less rapid, diminu-
tion of population accompanied by a rise in the
standard of living. The census of 1861 showed
a loss of population of 775,311 or 11*8 per cent;
that of 1871 a loss of 6-7 ; that of 1881, 4-4 :
that of 1891, 9-1 ; that of 1901, 5-2 per cent.
The census of 1911 shows a decline of 1*7 per
cent, the smallest on record ; a decrease in the
number of emigrants, an increase in the number
of houses, general improvement in house ac-
commodation (the mud cabins have nearly dis-
appeared), a decrease in poverty, a decrease in
the death-rate. (See Sir W. J. Thompson, ' ' The
Census of Ireland 1^11," Journ. Stat, and Social
Inquiry Socy. of Ireland, Dec. 1913.) The
total diminution of the population of Ireland
since 1841 amounts to 3,814,646, or 46*5 per
cent, distributed as follows : Leinster, 41*5 per
cent; Munster, 57 per cent; Ulster, 33*9 per
cent ; Connaught, 57*1 per cent. Except
Dublin and Antrim, every county is smaller in
1911 in numbers than in 1841.
In the seventy years during which this great
and real depopulation has been going on, the
inhabitants of Galway and Lei trim had dimin-
ished by over 68 per cent ; those of Kilkenny
by over 65 per cent ; but, on the other hand,
some of the towns have largely increased,
Londonderry has considerably more than
doubled and Belfast more than quadrupled its
population, rivalling in their rapid progress
the most prosperous English towns. Dublin
city increased between 1841 and 1901 by over
7 per cent, but ''greater Dublin," including the
suburbs, by over 24 per cent. The alteration
of the city boundaries renders further com-
parison difficult.
Rural Depopulation in France. — It is we.ll
658
DEPOPULATION
known that the excej)tionally low birth-rate of
France involves a correspondingly small rate of
natural increase ; it is perhaps not as well known
that depopulation of country districts is a no
less striking phenomenon in France than in
England ; while it need scarcely be mentioned
that the conditions of land tenure are as dif-
ferent as can well be imagined. The population
of thewhole country continues to increase slowly,
a large proportion (about a fourth) of this in-
crease being due to the immigration of foreigners;
at the same time in sixty out of the eighty-
seven departments the population of 1911 is
less than that of 1886. The absolute decrease
amounts to 60,000 for the fifty years (1861-
1911) in Lot et Garonne, Haute-Saone, and
Sarthe ; it is between 70,000 and 90,000 in
Gers, Lot, Eure, and Mayenne ; it is no less
than 83,524 in Calvados, 115,017 in Orne, and
113,086 in Manche. As a rule the densely
populated departments have increased in dens-
ity, while the sparsely populated have lost
population. After Paris and its suburbs, in
which the largest increase was to be found, the
Mediterranean departments show the highest
and most equally distributed growth. Next
conies the industrial district in the north, and
then the group surrounding the western sea-
port towns. These districts showed an increase
of nearly 3,000,000 for the twenty-five years
1886-1911, thus leaving a decrease of over
1,600,000 spread over the remainder of the
country. Ten departments in which the de-
crease was over 45,000 accounted for about
520,000, or nearly one-third of the deficit.
A comparison of the census of 1911 with
that of 1906 continues the same story. In no
less than 63 out of the 87 departments there
was a decrease of population, amounting to
over 378,000. The decrease was most marked
in Ardeche, where it exceeded 15,000 ; in Allier,
Haute-Loire, Manche, Somme, and Yonne,
where it was over 11,000. The net increase
of the whole country was 349,000, against
290,000 in 1906, 445,000 in 1901, 175,000 in
1896, and 124,045 in 1891 (the smallest re-
corded). The decrease in the rural population
was 487,000 in 1901, 290,000 in 1906, while
the urban population increased by 901,000 in
1901 and 610,000 in 1906, a probable migra-
tion from country to town of about 450,000
persons in 1901 and 320,000 in 1906.
Other European Countries. — The tendency of
people to flock into cities, which has been shown
to be closely related to rural depopulation, is
found in most European States (see Ravenstein,
Journ. Stat. Socy. lii. 1889, p. 241) ; for Ger-
many (Rovrie de Beaucaire, Bull, du Ministh-e
de V Agriculture de France, 1886). The per-
centage of population living in towns rose in
Prussia from 7-3 in 1816 to 30 in 1890, in
Belgium from 13-5 in 1800 to 34-8 in 1890, in
Austria from 4*4 to 15*8, in Norway from 3-3
to 16-7. See A. F. Weber, Growth of Cities
(New York), 1899.
The United States. — Perhaps the last place
where we should expect to meet with this phe-
nomenon is the United States, yet it is to be
found there. The census of 1900 showed that
the state of Nevada had lost in twenty years
21,525 persons, or more than one-third of its
population ; this is attributed to the failure of
the Comstock and other mines. The state
more than recovered by the census of 1910. A
comparison of the censuses of 1890 and 1910
shows that while every state except Iowa had
increased in numbers in the twenty years,
yet this was concurrent with a considerable
rural depopulation in every state but Nevada,
Nebraska, and Wyoming. It has been par-
ticularly acute in Vermont, New York, Ohio,
Indiana, Illinois, Arizona, California, New
Jersey, Pennsylvania, Michigan, Missouri, Okla-
homa, Idaho, Utah, Washington, and Oregon.
In the first seven of these, as well as in Maine,
Maryland, Virginia, North and South Carolina,
Iowa, Kentucky, Tennessee, Mississippi, and
Colorado, it had set in some years before 1890,
in some cases since 1860. Regarding the
United States as a whole, the rural population,
which was 64 per cent of the total in 1890,
dropped to 54 per cent in 1910, while the actual
numbers rose from 40,227,000 to 49,349, OOC.
The urban population rose from 36 to 46 per
cent of the total, the actual numbers being
22,720,000 and 42,623,000. In addition to
many of the causes that have operated in Europe,
the state returns show that large numbers of
New England farms have been abandoned
either because the soil was poor, or exhausted
by an improvident system of farming, or be-
cause the farms were inconveniently situated.
Thus much of the soil of New England has
passed out of cultivation, the cultivators having
gone into the great cities or migrated to the
fertile soils of the western prairies. One thing
is certain, the movement cannot be attributed
to an aristocratic or exclusive land system.
Economic Results. — With regard to these we
shall consider the British Isles only.
There is no doubt that the present tendency
is for the rural population to be reduced to the
lowest point consistent with the due cultivation
of the land, and for all subsidiary industries to
move into larger centres, with the well-known
result that the proportion of modern civilised
populations living under town conditions is a
gradually increasing one. In spite of sani-
tary progress a population reared in a town can
scarcely hope to be as hardy and vigorous as
one born and bred in the country, so that some
amocintof racial degeneration appears inevitable.
Remedies. — All deplore the decline in our
rural population, and many seek by legislative
or other means to check it. Bad government
may of course be improved, bad laws may be
DEPOPULATION— DEPOSIT
559
repealed, oppressive taxation may be removed
or its burthens equalised, but it is obvious that
the causes of the depopulation of rural districts
are too deep-seated to admit of eradication.
The great fundamental economic law of supply
and demand will not admit of denial. The
provision of allotments for labourers, if judici-
ously carried out, might be very beneficial ; an
amendment of the land laws, especially by
making public all mortgages and charges on
land by a system of registration, and so facili-
tating and stimulating the transfer of land,
would make our land system healthier. An
extension of market gardening would of course
pro tanto employ more hands ; something may
possibly be devised to foster the growth of
village industries ; more businesses may be
transferred from London to small country
towns, as has already been done in the printing
trade ; country life may be made less dull, — still
the countryman will wend his way to London,
Glasgow, or Belfast, to New York or Montreal,
to Sydney or Melbourne. The remarkable
uniformity of the growth of large towns, not
only in every country of Europe, but in
America and Australia, proves conclusively that
it is no question of land laws that regulates
the matter. Do not let us deceive ourselves
by expecting that results will in this country
follow land-law reforms which have not appeared
in other countries where a diametrically opposite
system has been established. The modern man
prefers to live in an urban or suburban district ;
improved means of communication enable him
to accomplish the object of his desires, and no
effort will prevent him from doing so, or will
succeed in attaching to the soil a greater num-
ber of labourers than is absolutely required to
produce sufficient supplies of food under the
easiest conditions attainable.
The following extracts from the History of New
South Wales from the Records, G. B. Barton (1889),
voL i. 1783-1789 show the apprehensions once
felt that the establishment of the new colonies
would deplete the parent country.
Page 8. — Sir George Young sketched the pro-
spective advantages of the settlement in the fol-
lowing form. ... 4. The settlement of the
country would not tend to "depopulate" the
parent state, as the settlers would be principally
collected from the Friendly Islands and China ;
the only men required from England being a few
skilled workmen, who might be drawn from the
ships sent out on the service.
Page 430. — Sir G. Young's proposal —
At a time when men are alarmed at every idea
of emigration, I wish not to add to their fears by
any attempt to depopulate the parent state ; the
settlers of New South Wales are principally to be
collected from the Friendly Islands and China ;
all the people required from England are only a
few that are possessed of the useful arts, and those
comprised among the crews of the ships sent out
on that service. G. B. L.
DEPOSIT (Sales of Land). It is usual,
on the sale of land or houses, for the purchaser
to deposit a sum (generally £10 per cent of the
purchase- money) as soon as the bargain is
concluded, which on completion is considered
as a payment on account of the purchase-money,
and in case of non- completion through the
purchaser's default is forfeited to the vendor.
When the sale takes place by auction the
de])osit is generally paid to the auctioneer, who
holds it as stakeholder for both parties, but in
the case of a private contract the deposit is
usually paid to the vendor. In cases where
the vendor is not entitled to receive the
purchase-money, or is only entitled to a part
of it (as in the case of a sale by a tenant foi
life under the Settled Land Act, or by a
mortgagor), it is safer for the purchaser to pay
the deposit to the vendor's solicitor as stake-
holder, or to pay it into a bank to the joini;
account of his and the vendor's respective
solicitors [cp. Earnest Money]. e. s.
DEPOSIT (Deposits). The term "deposits"
is used in banking in a technical sense. In
considering this it must be remembered that
banks may be divided into three classes — banks
of issue, of discount, and of deposit. In the
first the banker trades with the capital of the
public, in the second with his own capital, and
in the third, by far the most important at the
present day, with that of his customers. Al-
though in its present development deposit
banking is entirely modern, as an institution
it is of ancient origin. The Trapczitce of Athens
received deposits at least as early as the sixth
century B.C. They held money at interest, and
also took deposits specially for the purpose of
payment to a third party, but it is not certain
that they kept running accounts. In Rome,
both the Argentarii {q.v.) or private money
lenders, and the Mensarii (q.v.), who were
appointed by the state, received money on
deposit, in addition to money -changing and
money-lending. They kept two classes of
accounts. On the one interest was paid, the
account was then called creditum. On the other,
called depositum, no interest was paid, the
lodgment being for safety or for convenience of
payment to a third party, upon verbal request,
or written authority of the depositor, but it is
not certain whether this assignment or cheque
(attributio, perscriptio) was transferable. In the
middle ages the banks of Venice and Genoa, al-
though primarily incorporations of public credi-
tors, also took deposits, although it does not ap-
pear whether they paid interest upon them, or
lent out the moneys held. The chief function of
these banks as well as those of Amsterdam and
Hamburg (see Banks, Early European) was
to remedy the deficiencies of the circulating
medium, which consisted of coins of different
countries and kinds, all more or less clipped or
defaced. Owing to the difficulty of dealing with
660
DEPOSITION— DEPOtS ET CONSIGNATIONS
such a currency it became the practice to deposit
it in the bank, and to make transactions in bank
money. These deposits could not generally be
withdrawn, but might be transferred to the
credit of other persons. Banks of this class
did not lend out any part of their deports,
and therefore did not increase the circulating
capital of the country. Out of them arose the
banks of issue, dating from the 1 7th century,
which have now, among English-speaking races
at least, very largely given place to the modern
banks of deposit. In these the cheque has
taken the place of the bank note, and by the
convenience of this instrument banking has
reached a degree of development of which it
had not previously been supposed capable (see
Banks and Cheques, Law of).
The term "deposit" is noviusedhoth. generally
and specially. Generally, it denotes the whole
amounts lodged in a bank under whatever
conditions held. Specially, it denotes money
lodged at interest, usually in round sums, and
not subject to cheque at sight, a deposit receipt
being given against every sum paid in, which
receipt must be given up on repayment. In
its special application the use of the term is the
reverse of that which obtained among Roman
bankers as quoted above. Connected with the
special use of the term is the subject of deposits
in Savings Banks (see Banks). Circulating
capital deposited in these banks is not available
for the daily needs of business, as their funds
are invariably employed in fixed investments,
but they are more useful than if hoarded.
Banking deposits are frequently taken as an
index of prosperity. In comparing returns of
deposits held in different countries, or at
different times, regard should be had to the
following considerations among others. (1) The
proportion of the whole banking institutions
comprised in the returns under discussion. In
comparisons as to time, important alterations
may have taken place, so that returns at one
date may show deposits previously existing but
then concealed. This may be due to (a) greater
perfection in returns, or (h) change in character
of banking institutions, e.g. gradual adoption
by private banks of practice of publishing
accounts, or their absorption by banks already
publishing. (2) Character of banking institu-
tions. A number of single banks will show
large amounts of deposits with each other,
which would not appear at all in the case of a
few large banks with many branches, e.g. some
300,000,000 of dollars (say £60,000,000
sterling) of such cross deposits are held by the
national banks of the United States. (3)
Peculiarities in making up balance sheets or
returns, e.g. in the United States clearing
exchanges are always made in the morning,
therefore the whole clearing appears among the
assets of the previous day, and the deposits are
larger by a corresponding amount. Thus in
returns of national banks at different selected
dates we find — ,o«c
Deposits
Clearing Exchanges
1869. 1880. 1890.
mlns. $ mlns. $ mlns. $
678 1280 1925
154 244 84
Net Deposits 524 1036 1841
In sterling, converting the % as 6 = £1.
1869. 1880. 1890.
Deposits £135,600,000 £256,000,000 £385,000,000
Clearing Ex. 30,800,000 48,800,000 16,800,000
Net Deposits £104,800,000 £207,200,000 £368,200,000
Between the first and last dates the increase in
gross deposits is 184 per cent, in net deposits
251 per cent. (4) Characteristics of business
in different countries, e.g. as between France
and the United States, where totally different
financial methods prevail. (5) Characteristics
of banking in different countries, e.g. Austral-
asian banking, where probably one-fourth of the
deposits shown at the present date are drawn from
the United Kingdom, and therefore should be
deducted in estimating the wealth of those
colonies. R. w. b.
DEPOSITION. In the wider sense deposi-
tion means the act of giving evidence in a
judicial proceeding. In its narrower sense it
means evidence so given which has been
recorded in writing. It is a fundamental
principle of the English law of evidence that
wherever it is possible a witness must be pro-
duced in court to be personally examined and
cross-examined ; and, if this can be done, no
record of evidence formerly given by him will
be accepted as a substitute for appearance. If
the witness cannot be produced either because
he is dead or too ill to travel, or insane, or kept
out of the way by the person against whom his
evidence is used, then his deposition is admis-
sible. But in this case the person against
whom the evidence is used in a criminal case
must have had the opportunity by himself or
his legal adviser of cross-examining thedeponent.
When any person has been arrested upon the
charge of committing an indictable offence, the
magistrate before whom he is brought should
cause all the evidence given to be taken down
in writing. Magistrates are also empowered to
take the depositions of persons who are so Ul
that they are not likely to be alive at the time
of the trial.
[See Stephen, Digest of the Law of Evidence,
art. 32 and 140-142]. f. c. m.
DEPOSITUM. Expression of Roman law
for the contract which arises when goods are
left in some person's custody, no reward being
given to that person for keeping them. E. s.
DEPOTS ET CONSIGNATIONS (Caisse
DEs). A public establishment in France charged
to receive and manage under the respon-
sibility of the state all obligatory deposits of
money or securities, comprising the funds of
benefit societies and savings banks, guarantee
money, judicial consignations pending judg-
DEPRECIATION
561
ment, unclaimed successions, endowments of
public institutions, pension funds, etc. The
Caisse was charged with the sinking fund of
the public debt until its suppression. It also
receives voluntary deposits ; but the amount is
unimportant since the interest has been reduced
to 1 per cent. The total liabilities of the
Caisse, on the 31st December 1909, amounted
to £207,760,000, nearly three- fourths of which
were to the savings banks. The funds are
employed in rentes, treasury bills, and advances
to public bodies ; the revenue being credited to
the different classes of deposit accounts at
variable rates of interest. T. l.
DEPRECIATION. Depreciation is a term
used by accountants to describe the reduction
in value that takes place in the machinery and
plant of a factory or other undertaking in
which industrial operations are carried on, which
reduction in value must be provided for in the
account of profit and loss, before arriving at a
present value. Manufacturers, shipowners, or
others who treat the annual earnings of their pro-
perty as income, deducting only the actual out-
goings for repairs will soon find themselves with
a diminished capital. But, while repairs alone
^vill not maintain a full value or balance the
inevitable effects of time and use, the necessity
for depreciation may be reduced or avoided by
an expenditure out of current earnings for
renewals and extensions. Depreciation arises
from various causes, but among manufacturers
it is generally confined to the loss by "wear
and tear. " Thus in the statutes under which
the inland revenue is collected the commis-
sioners who make the assessments for income tax
are authorised " to allow such deductions as they
may think just and reasonable as representing
the diminished value by reason of wear and
tear during the year of any machinery or plant
used for the pm-poses of the concern." But
a reduction in value may arise from other
causes. For in arriving at the present capital
value of machinery or plant it must also be
considered whether any of it has become obsolete
or has, owing to changes in trade, a less earning
power than formerly. Alterations in value
may be dealt with in various ways. The most
usual is, to write off in each annual account a
percentage from the capital value of the pre-
ceding year, this percentage either differing for
the various classes of plant such as buildings,
boilers, machinery, and horses, or being an
average rate over the whole. This system of
dealing with a constantly reducing value
spreads the depreciation over a long period.
Far 5 per cent so applied would, in 20 years,
still leave 36 per cent of the original value.
The rate of depreciation may have to be varied.
Thus if owing to active trade a manufactory
has been working longer hours than usual, or
the machinery has been forced to meet an
exceptional demand, it is proper and prudent
VOL. I.
to write off more than usual for wear and tear.
On the other hand dull times and short hours
may justify a lower rate than usual, though it
must be remembered that buildings and plant
deteriorate even when idle. Notwithstanding
this annual depreciation the tendency of most
concerns is to grow in value owing to the
expenditure for extensions, which may under
such a system be properly added to the capital
value. But whatever the methods adopted for
estimating and stating the depreciation, it may
be said in regard to any of them that the object
in view is so to treat the nominal capital in the
books of account that it shall always repre-
sent as nearly as possible the real value.
Occasional valuations may serve as a useful
check in the correctness of a depreciation system,
and it is frequently from the inconvenience
and cost of making them that they are not
made every year. An error may be in either
direction. Where there is only one proprietor
or few partners, an excess of caution may do
no harm, the real value remaining even if too
much is written off for depreciation in the books
of account. But such an excess is unfair in the
case of shareholders who may have only a fleet-
ing interest in the undertaking, and who, not
being made acquainted with the details of the
annual " profit and loss " accounts, may suffer
a diminution of income and a reduced value in
their shares for the sake of those who will be
shareholders hereafter. Where the nature of
the property may render it difficult to estimate
correctly the rate of depreciation, the case is
sometimes met by establishing a Reserve
(g. v.) which, standing separately in the accounts,
shows to all concerned a fund available for
division in the future. Sometimes depreciation
in value is met by the establishment of a
Sinking Fund {q.v.) Thus the tenure of
land or buildings may be shortening ; the
exclusive patent rights of valuable machines or
processes may have only a short time to run ;
or the minerals in a mine may be consuming.
In each of these cases a fund is necessary to
give back the capital that has been originally
embarked in the undertaking. In some cases
the gross earnings are divided each year as income
among the shareholders, each of whom is left
to provide his own sinking fund. So long as
the facts are clearly known to all concerned one
system may be as good as the other. In large
permanent undertakings like railways there is
generally no separate system of depreciation, it
being deemed that the value of the property
is shown to be maintained by the continual
working and by taking care that expenditure
for renewals is all defrayed out of current
earnings.
But while, in a large undertaking like a
railway, the annual expenditure for repairs and
renewals may fairly balance the deterioration
that is continually going on, smaller concerns
2 o
562
DEPRECIATION OF MONETARY STANDARD
not having so extensive a plant may be
subjected to irregular outgoings that will disturb
the annual average rate of profit. In some
such cases instead of providing beforehand for
exceptional renewals by a depreciation rate or
reserve fund, the necessary money is borrowed
and charged to a Suspense Account (q.v.)
which is paid off by instalments in future years.
This is obviously unsound where the expenditure
has merely maintained or restored the earning
power of the concern, and has not increased it.
E. M.
DEPRECIATION OF MONETARY STAND-
ARD may be defined as the lowering of the
value of money in relation to goods. The con-
ception of a change in the value of the thing
in relation to things in general is not quite
clear ; and has been pronounced invalid by
high authorities. Thus J. S. Mill speaks of
the "necessary indefiniteness of the idea of
general exchange value — value in relation not
to some one commodity, but to commodities at
large " {Political JSconomy, bk. iii. ch. xv. § 1).
" We cannot even suppose any state of circum-
stances " in which the idea would be definite.
Yet, as Dr. Sidgwick has observed (Political
Economy, bk. i. ch. ii.), the same MOl, in the
chapter next but one preceding, says that
" during the last five years of our long struggle
with Napoleon . . . the value of the stand-
ard itself was considerably raised " ; meaning
"an enhancement in the value of gold" in
relation to commodities. With a like appear-
ance of inconsistency Ricardo has some passages
like the following :
" It has indeed been said that we might
judge of its value [the value of a currency] by
its relation not to one but to the mass of com-
modities. . . . Such a test would be of no
nse whatever. ... To determine the value of
a currency by the test proposed ... is evi-
dently impossible " (Proposals for an Economical
and Secure Currency, § 2).
"When we speak of the high or low value
of gold, silver, or any other commodity in
different countries, we should always mention
some medium in which we are estimating them.
Thus, when gold is said to be dearer in Eng-
land than in Spain, if no commodity is men-
tioned, what notion does the assertion convey ?
. . . Gold appears dearer or cheaper in Spain
as the fancy of the observer may fix on the
medium by which he estimates its value"
(Political Economy, ch. xxviii.) But elsewhere
Ricardo implies the conception which is in
question : "In saying that gold is at a high
price we are mistaken ; it is not gold, it is
paper which has changed its value. Compare
an ounce of gold, or £3 : 17 : 10^, to commod-
ities, it bears the same proportion to them
which it has before done" (High Price of
Bullion; Works ... by M'CuUoch, p. 279, ed.
1888). The difficulties urged by Ricardo and
J. S. Mill show that variations in general
prices cannot be precisely determined. That
it is not wholly indeterminate their admissions
show — backed by the reasoning of other
theorists, especially Malthus and Jevons
(q.v.), and the evidence of ordinary language.
That there was a depreciation of money in
relation to things in general, after the influx of
gold from California in this century, few deny ;
that there was such a depreciation after the in-
flux of silver from America in the 16th century,
all admit.
Depreciation as here defined is theoretically
ascertainable by observing the variation of the
price of each of a number of articles, and
taking the average of those variations. For
discussion of the different methods of taking
such an average see Index Numbers.
A summary method of ascertaining deprecia-
tion is afforded by the use of some one typical
article as a measure of value — "a measure of
the power of purchasing generally, or of com-
manding such important commodities as the
necessaries and conveniences of life " (Malthus,
Measure of Valu£, p. 2). As the article best
fitted for this purpose Malthus selects Labour
(Pol. Econ., 2nd ed. ch. 2. — J. Bonar, Mal-
thus and his Work, bk. iii. ch. 2). According to
this view the depreciation of money is measured
by the diminution in the quantity of labour
which can be purchased for the same amount
of money. Corn also has been proposed as a
measure of value when the comparison is
between distant periods (Adam Smith, Wealth
of Nations, bk. i. ch. v.) An average between
com and labour is proposed by Malthus in the
first edition of his Political Economy. In this
connection should be mentioned MiU's state-
ment : "To obtain an approximate measure by
which to estimate value in use, perhaps nothing
better could be chosen than one day's subsist-
ence of an average man, reckoned in the
ordinary food consumed by the class of un-
skilled labourers" (Pol. Econ., bk. iii. ch. xv.
§2).
A measure proper for thus determining the
depreciation of a debased coinage or an incon-
vertible paper money is bullion. A means of
applying this measure is afforded by the
Exchanges (g. v.) As Ricardo says : "While
the circulating medium consists ... of coin
undebased, or of paper -money immediately
exchangeable for undebased coin, the exchange
can never be more above or more below par
than the expenses attending the transportation
of the precious metals. But when it consists
of a depreciated paper-money [or of a clipped
coinage] it necessarily will fall according to the
degi-ee of depreciation. The exchange will
therefore be a tolerably accurate criterion by
which we may judge of the debasement of the
currency " (High Price of Bullion ; Works, p.
274). It was thus that the depreciation of the
DEPRECIATION— DEPRESSION, AGRICULTURAL
563
paper-money in England during the latter part
of the Napoleonic war was shown to be from 15
to 20 per cent. The accuracy of such deter-
minations countenances Ricardo's dictum that
"it can only be by a comparison to this stand-
ard that . . . depreciation may be estimated. "
Depi-eciation proper perhaps the lowering of value
thus measured might be called ; it is not neces-
sarily coincident with depreciation in the general
sense above defined. Thus Mill in a passage
above cited {Pol. Econ., iii. 13, 6) states that
in the Napoleonic war "paper, though depreci-
ated relatively to the then value of gold, did
not sink below the ordinary value at other
times either of gold or of a convertible paper."
Professor Walker adduces evidence that the
premium on gold, the depreciation of the
paper currency in Ricardo's sense, "does not
measure the advance of general prices," the
depreciation in the other sense of the term.
The propriety of the definition here adopted
is that from it flow the chief consequences for
good or evil which are attributed to deprecia-
tion. (1) A first approximation to an estimate
of those consequences is that they are insigni-
ficant. Money being regarded as consisting of
counters, it is indifferent whether there are more
or fewer such. " Let us suppose that to every
pound or shilling or penny in the possession of
any one another pound, shilling, or penny were
suddenly added . . . this increased value
would do no good to any one ; would make no
difference, except that of having to reckon in
higher numbers" (Mill, Pol. Econ., bk. iii. ch.
viii. § 2, and cp. ch. xiii. § 4). (2) A less
abstract view takes into account the disturb-
ance of contracts for deferred payments ; the
gain to debtors and loss to creditors, and
persons with fixed incomes. As producers
often belong to the former class, it has been
held that, when prices are rising, "everything
takes a new face ; labour and industry gain
life " (Hume, Essay on Money). On the other
hand Adam Smith says of a debased coinage in
a passage which, according to Ricardo, is
"equally applicable to a depreciated paper
currency" {High Price of Bullion; Works, p.
289), " it occasions a general and most perni-
cious subversion of the fortunes of private
people ; enriching in most cases the idle and
profuse debtor at the expense of the industrious
and frugal creditor" {Wealth of Nations, bk.
V. ch. iii. p. 423, ed. M'C.) Diff"erent effects
doubtless attend different species of deprecia-
tion. That which is due to government tamper-
ing with the currency is probably the most
deleterious. (3) A nearer approximation to an
estimate of the disturbance caused by the de-
preciation of a currency is obtained by taking
into account the different degrees in which the
prices of different articles are raised. Incon-
vertible paper-money issued by the government
of a country at war is apt to swell first the prices
of war-materials. Again a change in the agio
of gold in relation to inconvertible paper may
make itself felt in articles of export and import
sooner than in the inland ti'ade (see Adolph
Wagner, Russische Papierwdhrung, and Kramer,
Papiergeld in Oesterreich, 1885). The following
seems to be the order in which diff'erent classes
of articles are in general reached by a course
of depreciation : first, wholesale commodities ;
second, retail commodities ; third, labour. (4)
A peculiar evil of a depreciated paper-currency
is that its value is usually fluctuating. The
evils of such fluctuation are well stated by
Professor Walker ( Wages Question). There is
reason to think that a fluctuating currency
favours the large capitalist, who is best able
to weather such disturbances. In the case
of clipped coinage ill eff"ects are produced
by the diff'erence in the value of the coins
according as they are more or less worn
(Walker).
[For the general principles of the subject see the
leading authorities which have been cited. Ad-
ditional particulars relating to the consequences
of depreciation may be found among tlie follow-
ing : — W. Bela Foldes, Ursachen und Wirkungen
des Agios, Konrad's Jahrbuch, 1882. — H. S.
Foxwell, Irregularity of Employment and Fluctu-
ation of Prices, 1886. — W. S. Jevons, Investiga-
tions on Currency and Finance, p. 77 et seq.—
K. Knies, "Geldentheurund," Zeitschrift fiir die
Gesammte Staatswissenschaft, 1858. — Kramer,
Papiergeld in Oesterreich, 1885. — Marshall, Third
Report on Industrial Remuneration, Appendix
C, vol. ii. p. 422. — Scharling, " Detailpreise,"
Konrad's Jahrbuch, 1886. — Vita di Marco,
Moneta e Mezzi, 1885. ] f. t. e.
DEPRESSION, AGRICULTURAL. Indus-
trial enterprises are so inextricably interlaced
that agricultural depression cannot be dissevered
from commercial depression. A glance over the
last fifty years reveals one prime factor in
existing financial and social disturbances and
many concun-ent causes. The prime factor is
the substitution of machines for men and the
consequent increase in the facilities for the pro-
duction and rapid distribution of produce. One
tendency of this development of labour-saving
agencies, sea and land carriage, and telegraphic
communication, has been to extend uniformity
of prices, to increase the stress of foreign com-
petition, to render depression not local but
almost universal. Subject to differences pro
duced by commercial policy, the civilised world
has now but one market, and suffers or prospers
together. Another tendency, which has little
direct bearing on agricultural depression, has
been to supply the world so completely with .
manufactured articles that a danger of a glut
arises. A third has been to disturb the parts
played by capital and labour respectively.
First, handicrafts and domestic manufactures
were swallowed up by the machinery of indi-
vidual capitalists ; then, the last was in turn
564
DEPRESSION, AGRICULTURAL
displaced by associated capital, combined in
increasing masses till little is left but the largest
establishments. Small shops, small factories,
small banks, small sailing ships for ocean trans-
port, are replaced by stores, gigantic syndicates,
joint-stock companies, huge ocean steamers.
A fourth result has been the destruction of
great quantities of what once was accounted
wealth. To take one illustration only. The
opening of the Suez Canal extinguished the
sailing tonnage constructed to make the voyage
round the Cape, and the new ships that were
built to take the place of the old sailing vessels
were displaced five years later by steamships.
A fifth result has been temporary or permanent
diminution of employment. For instance, the
application of steam and machinery on farms,
wharves and docks, on shipboard, and in fac-
tories, has thrown enormous numbers out of
work. The saving efi'ected in different depart-
ments of industrial effort by this displacement
of muscular labour, this substitution of machines
for men, varies from 80 per cent in the shoe
trade to 40 per cent in the manufacture of
machinery {United States Bureau of Labour
Report, 1886). Agricultural labourers are least
affected by this effect of the development of
labour-saving agencies, because in many farming
operations, and especially in the care of stock,
men are needed. On the other hand, agricul-
turists have felt more severely than manufac-
turers the pressure of foreign competition which
has resulted from the increased facilities of sea
and land carriage. The values of agricultural
imports rose between 1866 and 1883 from
£77-,069,431 (average of five years 1866-70) to
£157,520,797.
So vast a change necessarily produced distress.
Other causes intensified the crisis. Prices were
disturbed by appreciation of gold in relation to
commodities and depreciation of silver rela-
tively to gold. An exceptional demand for
gold and a falling off in the supply {Report of
the Silver Commission, 1876 ; evidence of Sir
Hector Hay) increased the purchasing power of
the metal and lowered prices. At the same
time the depreciation of silver, absolutely
in relation to commodities in general, owing to
the increased yield of silver mines, and rela-
tively to gold, owing to the enhanced value of
that metal, disturbed the trade with countries
which employ silver or silver and gold as their
standards of value. A series of commercial
disasters further aggravated the depression.
The prosperity of the country reached its height
in 1866. Since that date, in spite of temporary
inflations, it has never reached its former level.
The opening of the Suez Canal (1869) not only
brought Indian producers into competition with
English, but broke down the system of ware-
housing and distribution of produce by which
England had hitherto benefited. With the
year 1870 began an inflation of prices. The
sudden withdrawal of France and Germany from
industrial competition enabled England to in-
crease her exports by 10 millions ; the require-
ments of the Suez Canal gave extraordinary
stimulus to the shipbuilding trade ; the railway
development in Germany and America created
exceptional demand for coal and iron. In 1874
the reaction began from inflated prices. The
decline of the coal and iron trade, the stoppage,
partial or absolute, of cotton mills, disputes be-
tween masters and men, bad harvests, compli-
cations arising out of the Eastern question, the
default on the Turkish debt, depressed every
industry. But the extent of the weakness
existing in some parts of our commercial system
was not revealed till the failures of the city of
Glasgow, Caledonian, and West of England
Banks in 1878. Various causes combined to
prolong the reaction against the inflated prices
of 1871-73 and the abnormal demand then
made for labour and shipping. Of these causes
some were foreign, some domestic, some tem-
porary, and some permanent. Fluctuations in
the standards of value, hostile tariffs, stagnant
trade, keenness of competition, unsettled politics,
are the principal causes that come from abroad.
At home the prolongation of the depression is
attributed to the slow adjustment of supply and
demand, owing to the accumulation, between
1870 and 1873, of savings not invested, to
over-trading, trade imions, deterioration in
quality of production, commercial failures,
mutual distrust, wet or sunless seasons. Of
these causes only one, foreign competition, with
low prices as its consequence, must necessarily
be permanent.
In the first part of the period under review
the collapse of agriculture was primarily due to
bad seasons ; in the second to low prices. An
inclement autumn in 1872, and an unfavourable
spring, neutralised the fine harvest weather of
1873. 1874 was the last of a cycle of prosper-
ous seasons. Yet rents continued to rise for at
least two years longer. From 1875 to 1877
there was a succession of bleak springs and
rainy summers, producing short cereal crops of
inferior quality, mildew in wheat, mould in
hops, blight in other crops, rot in sheep, disease
in cattle, deteriorating the finer grasses of pas-
tures, throwing heavy lands into foul condition.
Upon British farmers, thus enfeebled by three
bad seasons in succession, fell the gi'owing force
of foreign competition, which was suddenly
quadrupled by the extension of wheat areas in
America and India, and the new facilities of sea
and land transport, and the low freightage rates
of commercial depression. The sunless ungenial
1879 produced the worst harvest of the century.
Since 1882 seasons have proved less uniformly
inclement, and trade has shown signs of revival.
But farmers have lost their capital, and are
confronted by the problem of low prices and the
difiiculty of holding their own against the pro
DEPRESSION, AGRICULTURAL— DEPRESSION OF TRADE
565
duce of rich unexhausted soils. It is probable
tliat for many years to come this competition
in com and provisions will rather increase than
decrease.
The results of this collapse of agriculture
have been disastrous to the landed interests.
The increase in the value of land for the last
half century has been lost. The annual income
of landlords, tenants, and labourers was less in
1886 (see Sir James Caird's evidence before the
commission on the depression of trade) than in
1876 by £42,800,000 ; of this sum it has been
calculated that landlords and tenants lost
£20,000,000 each, and labourers £2,800,000.
Landlords have reduced their rentals to the
point at which they stood in 1836 ; farmers
have lost 30 to 50 per cent of their capital (Sir
James Caird's Victorian Agriculture); the money
wages of labourers have fallen and many have
been dismissed from employment. The land
has been injured by bad seasons and weak
farming ; the live stock of the country has been
diminished ; quantities of crops have been ruined
or deteriorated by the weather.
The loss to the agricultural classes is enor-
mous. It is more difficult to estimate the ab-
solute loss to the nation, or the general effect
of agricultural depression upon commercial pros-
perity. The nation suffers by the diminution
in the purchasing power of a class, by the de-
struction of capital through bad harvests, by
the restriction in the demand for labour, and
by the removal of capital from one industry to
another, especially if it be a removal from within
to without its boundaries. It does not at once
suffer as a nation from the low prices of agri-
cultural produce. Thus in 1851 the supply of
meat per head was 91 lbs., and 317 lbs. of wheat
were supplied to a population of 27 millions at
a cost of £53,500,000. In 1885 115 lbs. of
meat were supplied per head at a greatly reduced
cost, and 400 lbs. of wheat to 36 millions of
people at a cost of £43,700,000. Hare then,
so long as the money in payment for this food
is earned in other industries, the nation profits
by the low prices which ruin agriculturists.
l>ut there is a point at which the wider interests
of the nation suli'er from cheapness of food, if
the price becomes so unremunerative as to drive
land out of cultivation. As to the general effect
upon commercial prosperity, the depression of
agriculture destroys a considerable portion of the
capital engaged in land, and locks up another
in unrealisable investments ; tends to congest
the labour market by disturbance of the relations
of supply and demand for agricultural labour ;
drives capital from land into other investments,
and, by restricting the field, adds to the over-
production of manufactured articles.
[The following books and pamphlets treat of the
practical side of the subject : Sir J. Caird, The
Landed Interest and the Supply of Food; and
" Victorian Agriculture " (in the Reign of Queen
Victoria, voL ii.). — R. E. Prothero, The Pioneers
and Progress of English Agriculture. Agricul-
tural Depression (Shrewsbury, 1879). — F. Blood,
ETiquiry into the Causes of the Depression of Trade
and Agriculture. — H. Chaytor, Agricultv/ral De-
pression.— J. L. Cowland, Agricultural Depression
in Devon and Cornwall. — E. G. Man, Comnerce
and Prospects of England. — A. J. Burrows, Agri-
cultural Depression and how to meet it. — S. Mason,
Agricultural Depression. — A. A. Walton, Agricul-
tural Depression. — Sir J. B. Lawes, Fertility. —
R. G. Webster, England's Colonial Granaries. —
C. Whitehead, Fruit- Oroudng in Kent. — Sir R. H.L
Palgrave, " Estimates of Agricultural Losses in the
United Kingdom during the last thirty years"
{Journ. of Royal Statistical Soc, vol. Ixviii. 1905).
See also Agriculture m England. On the
politico-economical side of the subject, A Mon-
gredieu, History of the Free Trade Movement. —
F. J. B. Hooper, Free Trade and English Commerce
hy Mr. Mongredien ans^oered. — F. Bastiat, Popular
Fallacies regarding Trade and Foreign Duties. —
R. Gill, History of Free Trade.— V^. F. Ecroyd, M.P.,
A Speech in Reply to the Attack upon Fair Trade by
Mr. Gladsto7ie.— Sir E. R. Sullivan, Bart., Free
Trade Bubbles. — Sir T. H. Farrer, Bart,, Free
Trade and Fair Trade (3rd ed. 1886).] r. e. p.
DEPRESSION OF TRADE. The royal
commission appointed in Great Britain in the
year 1885, to inquire into this subject, thus
defined depression of trade, in the report
adopted by the majority of its members : — '*A
diminution, and in some cases an absence, of
profit, with a corresponding diminution of
employment for the labouring classes." The
particular instance of this depression into which
the commission made inquiry was that dating
from the year 1875, which was so conspicuously
marked in agriculture ; but the statement
quoted from the report may be taken as a
description of what is commonly meant and
understood by depression of trade. The
phrase, however, is used very freely and very
loosely ; and it is therefore best to anticipate
more particular discussion of the subject by a
few considerations which ought to be kept in
mind, and which the above definition helps to
explain. (1) All classes are not affected by
depression of trade. It is to be observed that,
in the first instance at least, profit, and
profit alone, is by hypothesis curtailed. If
wages suffer, they suffer through the lack of
employment which results from the withdrawal
of capital found to be invested unprofitably.
But it is possible that profit might fall simply
through the exertions of the labourers to obtain
a larger share of the product as wages ; and
where the labourers are united enough to
accomplish this, it follows of necessity that if
by Trade Unions they have to maintain the
"out of works," they must be able to check
competition among themselves. It might be,
therefore, that although fewer labourers were
employed in a case of depression, those in em-
ployment might not sufler but gain. Again,
566
DEPEESSION OF TRADE
all persons who are in receipt of fixed salaries
or incomes do not suffer from depression of
trade ; but, inasmuch as one significant phase
of depression is a general reduction in prices,
they are gainers and not losers. (2) Although
the interdependence of industries is such that
a diminution of profit in all may be expected
to be simultaneous, or nearly so, yet it must be
remembered that one industry, or class of in-
dustries, may be for a time subject to severe
depression while others are flourishing. The
retail and carrying trades are in a different
position with regard to the earning of profits
from the producing trades ; for their percent-
age of profit depends, not on the ratio between
cost of production and price, but on the
quantity of custom and the number of trans-
actions they engage in. (3) Depression may
affect certain traders in one industry, and
may not affect others. During the series of
bad years, which, like Pharaoh's lean kine,
followed and devoured the years of prosperity
in which our trade went up by leaps and
bounds, there were plenty of people, even in
England, who were amassing fortunes in busi-
ness all the time. Those who are unsuccessful
are apt to lament the falling- off" of business as
the cause of their misfortunes ; while the more
lucky make no noise about their prosperity.
It would be easy, in any trade or profession,
to collect a multitude of evidence from people
who could truly say their business was de-
pressed, in the sense applied to the word by the
commission. (4) We must be careful to dis-
criminate between a genuine depression and
that gi-adual process of thinning down profit
which arises from the natural tendencies of our
civilisation, and which is not temporary, but
permanent. The slow but certain fall in the
rate of interest, the larger share demanded and
gained by labour, the increased competition,
through the spread of education, for the earn-
ings of business management, and the conse-
quent reduction of these earnings, all combine
to efl'ect a chronic decline in profit.
The existence of a genuine depression at
times, apart from all the above considerations,
is imdoubted. In Great Britain there have
been numerous instances of such depression
during this century, the last of which began
about the year 1875, and was the subject of
the investigations of the royal commission of
1885 mentioned above. But the earlier phases
of depression of trade off"er in one respect a
distinct contrast to the most recent — a contrast
which seems to be symbolic of the modern
conditions of commerce. While in former
times trade was depressed after a period of
great inflation followed by a crisis, the depres-
sion of late years was preceded by no crisis ;
and while former stages of depression passed
away with some rapidity and gave place in turn
to a period of inflation, the revival of trade
which ultimately occurred after 1885 took a
long time to become apparent, and was very
gradual. This fact would seem to bear out the
contention that trade is on a sounder footing
than it used to be, however hardly depression
may bear on traders ; and also that the ten-
yearly cycle through which British commerce
has been wont to pass has given way to a more
equable form of progress. (For an account of
the earlier cycles in the present century, see
art. Ceises. Also Leoni Levi, History of
British Commerce. — Tooke's History of Prices.)
The evidence taken by the royal commission
was voluminous, and was derived from repre-
sentatives of all classes of the community ; and
from it we can gather the leading features of
the depression, as it aff'ected the more import-
ant industries, (For the effects on agriculture,
see Depression, Agricultural.) As to trade
in general, there was a concurrence of opinion
that profits had been lowered, while wages as a
rule had remained firm ; but this latter pro-
position must be qualified by the fact that to
a certain extent the employment of labour,
particularly in some industries, had been less
regular, and the real wages of labour therefore
below the nominal rate. The rate of interest
had also fallen. It was found that competi-
tion fi'om abroad, both in our own and in
foreign markets, had of recent years become
keener. It was also shown in the evidence
that the volume of foreign trade had increased
largely even during the depression, but that in
the matter of values the increase was small in
comparison with that of earlier periods. It
was shown that the income-tax assessments
under schedule D (trades and professions) had
increased very considerably since the beginning
of the depression ; but that the actual number
of persons with large incomes had decreased by
about 5 per cent, and of those with moderately
large incomes in much the same proportion,
while incomes between £200 and £1000 a year
had increased 33 per cent. It was given in
evidence by a number of witnesses that there
was a great and apparently a permanent tend-
ency in the supply of commodities to outrun
the demand, and that this had given rise to a
very general feeling that over-production, as it
is called, was the chief cause of the depression.
And with regard to labour, it was discovered
that while the agricultural labouring popula-
tion had largely diminished in numbers, by
reason of their employers' losses and the throw-
ing of land out of cultivation, neither the
shipping nor the textile industries showed any
sign that the surplus labour-population had
found a place in these large fields of employ-
ment.
From these data, supplemented by many
minor and incidental points disclosed in the
course of the evidence, it is possible to arrive
at the most diverse conclusions as to the causes
DEPRESSION OF TRADE
567
of the depression, and, it follows, as to the
remedies which ought to be applied, if any.
"What may be called the most pessimistic side
of the discussion, which was supported by
numerous witnesses, was embodied in a separate
report signed by a minority of the commissioners.
It is curious that in one important matter the
view taken by this minority coincides with the
most extreme optimistic opinion ; for according
to both, the so-called depression is not a passing
phase of commerce, but a permanent change in
the economy of the state. Those who hold
the pessimistic view were able to point to the
fact that an immense quantity of evidence had
been given before the commission which pointed
to a diminished employment of productive
machinery, especially in the textile industries ;
also to the increase in the value of imports of
textile manufactures and the decrease in the
value of exports of the same article. The loss
— partial or total — of certain foreign markets
for British goods is another point which was
urged with much force ; the inference being
that foreign governments, having found that
high tariffs were successful in shutting English
goods out of these markets, would increase
rather than diminish them : — a view which the
so-called McKinley Act, passed in the United
States since the commission finally reported,
would undoubtedly have been used to strengthen,
had it existed at the time. It was pointed out
by those who held the opinion referred to that
increase even in the value of trade in certain
commodities is no proof of the flourishing con-
dition of such industries. It was shown, for
example, that in the ten years preceding 1883
the value of the yearly export of coal and iron
had increased by more than £17, 000, 000 ; while
it was notorious that the coal and iron trades
had been suff'ering greatly during that period.
The remedies proposed are generally in the
direction of import duties of one kind or
another. Tariff duties on manufactures coming
from abroad are the most extreme form of this
proposal ; but countervailing duties in order to
balance the effect of bounties when they are
given, and a fiscal union with India and the
colonies, on the basis of a protective tariff levied
against goods coming from other countries, are
more frequently recommended. The extreme
view on the other side was not represented on
the commission ; but this may possibly have
resulted from the fact that a number of the
originally-appointed commissioners did not see
their way to accept nomination. That view is
well expressed in a work entitled La Crise, by
M. Pirmez. According to this opinion the
depression of trade is merely a temporary
accentuation of an economic movement which
has been slowly going on for years, and which
is destined to go on until the relations between
capital and labour are completely changed.
The fall in profits is admitted, and also the fall
in interest ; but it is pointed out that these
events happen not in one country alone, but in
all countries ; and that therefore the fear of
the desertion of any country by capital and
consequent diminution of wealth and employ-
ment is merely illusory. The wages of labour,
it is maintained, do not fall, but rise ; and it
is asserted that the whole tendency of the
process of which the depression is a phase is to
reduce the interest on capital merely lent or
invested, to reduce the profits of capital employed
in business, and to reduce the wages or earn-
ings of business management. This means the
wider and more equal distribution of wealth,
and is therefore regarded as a matter not of
apprehension, but of congratulation. It may
be observed that one of the proofs largely relied
on by those of this opinion, — founded on an
analysis of the income-tax returns, — is by no
means conclusive. These returns show a
gradual decline in the number of people with
large revenues, and an increase in the number
whose incomes are moderate. This does not
in any way prove that wealth is more widely
distributed, unless that conclusion is borne out
by independent evidence. If at one time
twenty men in one trade make £5000 a year,
and four hundred under £5000, and if in ten
years' time the figures are one above £5000 and
419 below it, it is impossible to say, without
more proof, whether that result is due to a
more even distribution of profit, or an accumula-
tion of business and capital in a single hand, to
the detriment of other traders.
Intermediate between these two extremes a
great variety of views prevail. The most
general is that the depression of 1874-85 was a
genuine misfortune, shared no doubt by Eng-
land with many other countries, but bearing
with particular harshness on England, because
of the great strides made by foreign competi-
tion in many branches of industry which were
contemporaneous with it. Those who held
this opinion did not regard the depression as
permanent ; and the events of the years which
have followed the publication of the commis-
sion's report go far to bear out their views.
The great demand for goods consequent on the
Franco-German war is not unnaturally held to
be the original cause of what is called over-
production, but is truly production of the
wrong things. So greatly do modern modes of
manufacture stereotype industry, and so curi-
ously do the laws relating to joint -stock
companies tempt to enterprise which offers a
great temporary advantage but no permanent
benefit, that we constantly see capital invested
so that it cannot be withdrawn without ruin in
some industry where it is equally unable to
produce a fair return. The demonetisation of
silver by Germany at the time of the suspension
of the Latin league also contributed, by disturb-
ance in prices to the difficulties of traders. Those
668
DEPUTY— DE QUINCEY
who hold the moderate view do not believe
that what is injurious to capital is necessarily
of advantage to the labourers, and they believe
that some kinds of labour suffered severely
during the recent depression. They do not
believe that violent remedies, such as large
import duties, would be serviceable, but rather
look for such measures as amendment of the
Limited Liability Companies' Acts for safety
in the future, coupled with improved technical
education and the spread of knowledge of the
world's markets. In regard to the matter of
countervailing duties a considerable difference
of opinion prevails, many who are adverse to
any form of protection being favourable to such
an impost where an important industry is
threatened with grievous loss or extinction.
[The report of the above-named commission con-
tains an immense amount of information, both from
English and foreign sources, bearing on this subject,
and is by far the best compendium from which the
question may be studied. Sir R. Giffen's Growth
of Capital, published since the report, forms an
excellent statistical commentary, ] M. G. D.
DEPUTY. In law, one who exercises an
office or other function in another's right, whose
forfeiture or misdemeanour shall cause him
whose deputy he is to lose his office. A man
cannot appoint his deputy in all cases, but only
when his own grant of the office justifies him
in so doing (Cowel ed. 1727). In another
sense the term is used of offices of state, and
most anciently of the exchequer and mint.
Thus in the absence of the king's treasurer
on foreign service a deputy was appointed by
commission, and in later times this practice
was extended to many other fiscal offices. In
certain cases, such as the hereditary offices
of the king's court and exchequer, the holder
in fee could appoint a deputy (Dialogtjs de
SoACCARio, i. 3 ; Madox, Hist, of the Exchequer,
ch. xxiiij.) H. Ha.
DE QUINCEY, Thomas, the son of a
prosperous merchant, was born 1785, and, after
a brilliant literary career, died 1859. That a
genius of so high an order of imagination found
the abstract reasoning of political economy "Not
harsh and crabbed as dull fools suppose" is
instructive. The fascination which the severer
aspect of the science had for De Quincey is
expressed in that passage of the Confessions of
an Opium Eater where the writer describes how
he was aroused from lethargy by the study of
Ricardo's Political Economy (1818). The fruit
of that study appeared in the DialogiLes of
three Templars (1824), a brilliant exposition
and defence of the Ricardian theory of value.
The paradox, for so De Quincey admits it to be
in a good sense, that real value is measured by
quantity of labour, that "a million men may
produce double or treble the amount of riches,
of 'necessaries, conveniences, and amusements, '
in one state of society that they could in
another, but will not on that account add any.
thing to value" (Ricardo, Political Economy;
chapter on "Value and Riches"), is expounded
b}- the disciple even more fearlessly than by
the master. " My thesis," says X, the Socrates
of the dialogues, who represents the author's
views, " is that no such connection subsists
between the two [the quantity obtained and
the value obtaining] as warrants any inference
that the real value is great because the quantity
it buys is great, or small because the quantity
it buys is small." ** I have a barouche," says
the objector, "which is worth about 600
guineas at this moment. Now, if I should
keep this barouche unused in my coach-house
for five years, and at the end of this term it
should happen from any cause that carriages
had doubled in value, my understanding would
lead me to expect double the quantity of any
commodity for which I might then exchange it,
whether that were money, sugar, besoms, or
anything whatsoever. But you tell me no."
. . . "You are in the right," replies X, "I do
tell you so .... If A double its value, it
will not therefore command double the former
quantity of B " [B representing any assignable
thing] (Fourth Dialogue). The intelligent
Bailey (q.v.) might well be stirred by these
startling deductions to attempt a reply (preface
to Critical Dissertation). In the later dialogues
Ricardo's theory of value is defended against
Malthus. This controversy had been com-
menced in the "Measure of Value," published
in the London Magazine for December 1823.
An article on " Malthus" in an earlier number of
the same journal contains a mild attack on the
theory of population. Some of the points are
elucidated in a letter to Hazlitt which appeared
in the London Magazine, December 1823. To
the same period belongs a sort of eloge of
Ricardo, which De Quincey, shortly after the
death of his revered master, contributed to the
London Magazine, March 1824.
De Quincey's latest and greatest economical
work is the Logic of Political Economy (1844).
The more original portion of this book may be
described as a vindication of the part played
by utility in the determination of value. The
cause is just and the reasoning ingenious ; yet
the censure with which J. S. Mill tempers his
copious citation from this discourse seems de-
served (PoZ. Econ., hk. in. ch. ii. § 1, and § 3 end).
Certainly De Quincey's illustrations are perfect.
The rhinoceros which in the reign of Charles II.
was sold for a figure far above the cost of
importation, the Valdarfer copy of Boccaccio
which Lord Blandford bought for £2240 and
afterwards, when in pecuniary embarrassments,
was sold by auction and purchased for £750
by Lord Spencer, whom he outbid at the first
sale ; Popish reliques which had a high
value, but no cost of production (p. 60 et
seq., ed. 1844); — these and other "shining
DE QunsrcEY
569
instauces " throw light upon an obscure subject.
The "dry light" of logic is intensified by a
coruscation of wit. Sometimes, however, the
doubt occurs whether the writer was as com-
petent to point a moral as to adorn a tale.
Thus, in the case of the pearl-market, and the
vividly-pictured slave-market (tftio?. p. 77 etseq.)
is it correctly stated that for * ' the plebs amongst
the slaves," and the "ordinary pearls," value
is determined by cost of production, while " the
natural aristocracy amongst the slaves, like the
rarer pearls, will be valued on other principles " ?
(see Difficulty of Attainment). Even the
famous parable of the musical snuff-box (cited
by Mill, Fol. Bern., bk. iii. ch. ii. § 1) is not
rightly interpreted hj its author. It is not in
general true of a bargain between two isolated
individuals (see Competition) that the price
will be "racked up to U" (ibid. pp. 25-27)—
the measure of the "intrinsic worth of the
article in your individual estimate for your
individual purposes " ; in other words its Total
Utility (q.v.) to the purchaser (cp. Mill, loc.
dt. § 1 end). The following passage seems
more correct. " The purpose which any article
answers and the cost which it imposes must
eternally form the two limits within which
the tennis-ball of price flies backwards and
forwards. Five guineas being, upon the particu-
lar article X, the maximwn of teleologic price,
the utmost sacrifice to which you would ever
submit, under the fullest appreciation of the
natural purposes which X can fulfil, and then
only under the known alternative of losing it
if you refuse the five guineas, this constitutes
the one pole, the aphelion, or remotest point to
which the price for you could ever ascend."
The other limit is fixed by the cost of reproduc-
tion. These are "the two limits between
which the price must always he held potenti-
ally to oscillate" {ih. pp. 105, 106). But
even here it is not clearly stated that, in the
absence of competition, the terms are inde-
terminate ; the "tennis-ball" may fall anywhere
between the extreme limits. It is nowhere
stated that in the presence of competition
the upper limit is formed, not by total, but
Final Degree of Utility. De Quincey is far
removed from the recent theorists to whom he
bears a superficial resemblance by his not having
attended to final utility and cognate concep-
tions. The connection between demand and
value is denied by him on the strength of
exceptional though striking instances {ibid. p.
231, quoted by Mill, bk. iii. ch. iii. § 2). "A
crazy maxim," he says, "has got possession of
the whole world : viz. that price is, or can be,
determined by the relation between supply
and demand." This imperfect conception of
supply and demand is the special object of
Mill's severe remarks on De Quincey. Mill's
censure is endorsed by Mr. Leslie Stephen in his
article on De Quincey in the Fortnightly Review
(1871). Mr. Shadworth Hodgson in one of his
Outcast Essays has traversed this unfavourable
verdict.
Whatever be the fate of De Quincey 's cardinal
tenets, it is certain that his occasional sugges-
tions, the minor pearls of his discourse, enhanced
as they are by a setting of consummate literary
perfection, will preserve a lasting worth. Some
important corrections of Ricardo's expressions
deserve particular notice. De Quincey perceived,
just as clearly as more recent critics, that " the
current rate of profits, as a tiling settled and
defined, must be a chimera." He exposes " the
puerility of that little receipt current among
economists, viz. unlimited competition for keep-
ing down profits to one uniform level. . . .
Everybody must see that it is a very elaborate
problem to ascertain even for one year, still
more for a fair average of years, what has been
the rate of profits upon the capital employed
in any one trade" {ibid. p. 237 et seq.) What
more could Cliff"e Leslie say ? De Quincey
complains much that Ricardo, while insisting
on the tendency towards the degradation of soils
(the Law of Diminishing Returns, q.v.), has
not sufficiently emphasised the counter-tendency
towards improvement in the arts of cultivation.
"The land is travelling downwards, but always
the productive management of land is travelling
upwards" (ibid. p. 239). De Quincey discerns
what a handle is afforded by Ricardo's partial
statement to " the systematic enemies of
property" . . . "the policy of gloomy dis-
organising Jacobinism." Rent is referred by De
Quincey not to the "indestructible," but the
differential powers of the soil. Rent is defined
as ''that portion of the -pi'oduce froni the soil (or
from any agency of production) which is paid
to the landlord for the iise of its differential
powers as nuasured by comparison with those of
similar agencies operating on the same market."
The parenthesis exemplifies the pregnancy of
De Quincey's occasional suggestions. In pre-
senting the theory of rent, De Quincey employs
an admirable geometrical construction. As in
the construction which Prof. A. Marshall has
mside famHisiT (Economics of Indtcstry, bk. ii. ch.
iii.), the ordinate in De Quincey's diagram
represents produce. But the abscissa represents
not doses of capital but qualities of soil. The
two constructions have been combined by the
present writer in an illustration of the abstract
theory of reni, contributed to the British
Association (Report, 1886). Referring to the
Tise of diagrams, De Quincey well says : —
"A construction (i.e. a geometrical exhibition)
of any elaborate truth is not often practicable ;
but, wherever it is so, prudence will not allow
it to be neglected. What is called evidentia,
that sort of demonstration which shows out . . .
is by a natural necessity more convincing to the
learner. And, had Ricardo relied on this con-
stmctive mode of illustrating his chapters upon
i70
DERELICT— DESCENT OF PROPJERTY
rent and upon wages, they would not hare tried
the patience of his students in the way they
have done." Had De Quincey pursued his
mathematical studies further, and applied the
conceptions of the infinitesimal calcuius to .the
theory of value, he would have escaped his
capital error of having confused integral (or
Total, q.v.), with differential (or final) utility.
If he had worked with c?U, instead of U, he
might have anticipated Jevons.
All the works which have been referred to will
presumably be included in The Collected Writings
of De Quincey, by Professor Masson, 1890. In
the American edition of 1877, called the Riverside
edition, all are to be found except the letter in
reply to Hazlitt [London Magazine, December
1823), and the iloge of Ricardo (ibid. March 1824).
These are reprinted in De Quincey's Uncollected
Writings by J. Hogg, 1890. The Edinburgh edi-
tion of De Quincey's works in sixteen vols., com-
pleted 1871, omits also the Logic of Political
Economy. Earlier collections are still more in-
complete. V. Y. B.
DERELICT. The legal quality of derelict
was recognised by the Roman Law (Dig. i. xlvij.
Tit. ij. De Furtis). Anything wilfully cast
away either on sea or land. Goods thrown out
of a ship, to lighten the same in case of distress,
are not derelict for want of intention (Just.
Inst. II. 1. 48). Ifa ship made jettison without
hope of recovering the goods they were derelict
to the finder (Rolle of Olayron, 32, 34). Derelict
lands suddenly left by the sea belong to the
crown, except in case of an arm of the sea
belonging to a subject, but if the sea recede
slowly, by imperceptible degrees, the land thus
gained goes to the owner of the adjacent soil.
This was ascertained by commission, and is a
subject for a jury. Boats or other vessels
forsaken or found on the seas without any person
in them are called derelict. Of these the
admiralty has the custody and the owner can
recover within a year and a day.
[Moore on Foreshore. — Black Book of Admiralty
{Rolls).— Fleta, III. 2. — Hale, Dejure Maris.]
H. Ha.
DERELICTIO. Expression of Roman law
for the abandonment of any object of property
with the intention of renouncing all rights of
ownership over it. e. s.
DE SANCTIS, Marco Antonio, lived in the
16th century and the beginning of the 17th.
Toppi (Biblioteca napoletanu, Napoli, 1678,
p. 204) says he was born at Nocera dei Pagani,
but gives no other biographical indications.
Two dissertations of De Sanctis are extant ;
their scientific value is less than their historical
importance, because Antonio Serra would
probably never have written his famous Breve
trattato delle cause che possono fare abbondare i
regni d'oro e d'argento (1613), if it had not been
for the writings of De Sanctis, which he under-
took to refute. The two pamphlets of De
Sanctis bear the titles : Discorso di Marc' Antonio
De Sanctis intorno alii effetti che fa il cambio in
Regno, in Napoli, appresso Costantino Vitale.
1605 ; and Secondo discorso di Marc' Antonio
De Sanctis, intorno alii effetti che fa il cambio
in Regno sopra una risposta che ^ staia fatta
adverso del primo ; in Napoli, nella stamperia
di Felice Stigliola, a Porta Reale, 1605. De
Sanctis endeavours to prove, in the first Discorso,
that the only remedy against the scarcity of
money which was felt in his days in the realm
of Naples, would be an act of the government
called Prammatica, by which the value of
foreign coin should be fixed in the money of
the country, and heavy penalties prescribed to
enforce the established ratio in the payment of
all bills of exchange and to prevent any other
attempt to give money a value different from that
which the prammatica prescribed. His advice
was followed, but given up two years later,
when the effects of the prammatica had made
people wiser. The first pamphlet of De Sanctis
was answered by an anonymous Genoese author
to whom he replies in the second one.
[Sir T. Twiss, View of the Progress of Pol.
Econ. in Europe, 1847, Lect. I.] m. p.
DESCENT OF PROPERTY. Sir Henry
Maine {Early Law and Custom, London, 1883)
points out the connection between ancestor
worship and the descent of property in the
Eastern and the Roman Empires. '* Almost all
the English law on the subject of the descent of
personalty, a great deal of continental law on the
same subject, and some part of our law of realty
has for its foundation the 118th Novella Consti-
tutio of Justinian. This novella is the last re-
vision of the older Roman law of succession after
death, which was formed by the fusion of the
rules of inheritance contained in the venerable
Twelve Tables with the equity of the Praetor's
Edict : two streams of law profoundly influenced
at their source as no reader of M. Fustel de
Coulanges can doubt by the worship of ances-
tors " (Maine). In the Principles of the Law of
Succession to Deceased Persons, by T. R. Potts,
London, 1888, will be found a brief sketch of
the history of the law of descent in England.
Kenny and Laurence, in their Essays on the
Law of Prim/)geniture, Cambridge, 1878, trace
the history of primogeniture in England. The
Succession Laws of Christian Countries, by Eyre
Lloyd, London, 1877, contains a summary of
the law of descent in the principal European
countries. In France, Belgium, Prussia,
Austria, and other continental states, on an
intestacy all children take equally, no distinc-
tion being drawn between males and females
or between real and personal property. In
England, and in countries that have adopted
English common law as the basis of their
legislation, the eldest son as a rule succeeds
to real property to the exclusion of all other
children, whilst the personalty is divided
between the widow and the children. Two
DESIGNS— DESMARETS
57]
important changes were introduced in the 19th
century in England and Ireland. By the 53
& 54 Vict. c. 29, if there is no issue, and the
net value of the realty and the personalty does
not exceed £500, then the Avhole estate goes
to the widow : if the net value exceeds £500
then the widow is to have £500, whilst by the
54 & 55 Vict. c. 66, § 84, any real estate
registered under the act is on the death of
the owner intestate to devolve on the personal
representatives as if it were personal property.
[For economic eifects of English as compared
with continental law, see G. C. Brodrick, English
Land and English Landlords, 1881.— Systems of
Land Tenure in Various Countries, Cobden Club
Essays, 1870 (see Bequest, Power of ; Land,
Law relating to).] j. e, c. m.
DESIGN'S, Copyright in. By laws passed
in 1737 and 1744 France recognised a right of
property in designs applied to silks. In 1787
England by the 29 Geo. III. c. 38 gave protection
to the first inventor of a design for linen or cotton
cloth. Subsequent acts extended protection to
mixtures of flax and cotton, and to animal sub-
stances. By the Patents, Designs and Trade
Marks Act, 1883, a new or original design may
be registered by its proprietor for a particular
class or classes of goods, and by such regis-
tration the proprietor obtains copyright in
the design, i.e. the exclusive right to apply
the design to any article of manu'acture or
substance for five years. This act has been
amended at different dates up to the Patents
and Designs Acts of 1905 and 1907.
[W. N. Lawson, Patents, Designs, and Trade
Marks, 1889. — Edmunds and l^ertwick. Law of
Copyright in Designs (1909). — W. M. Freeman,
The Patents and Designs Act, 1907 (1908).— R.
Frost, Patents and Designs Act, 1907 (1908).—
D. Fulton, Law and Practice relating to Patents,
Trademarks, and Designs (1905). — J. W. Gordon,
Statute Law relating to Patents of Inventions and
Registration of Designs (1908). — G. C. Marks,
Inventions, Patents, and Designs, with text of Act
(1907). — S. G. Pirani, Index of Patent, Design, and
Trade Mark Cases, 1884-1909 ( 1 910).— Roberts and
Moulton, Patents and Designs Act, 1907 (1907).
(See Copyright. )] j. e. c. m.
DESMARETS, Nicolas (1648-1721), con-
troller-general of finance under Louis XIV.
(1708-1715), was a nephew of Colbert, who gave
him a post in his bureau. He rose to be maitre
des requites, and on the death of his uncle in
1 6 8 3 was made intendant des finances. In 1 7 0 3
the king nominated him a director of finance
(Saint Simon, Mimoires, iv. 183), and in 1708
gave him the controllership of the finances.
" II ^tait tout h, fait I'homme de la situation,"
says Viihrer, who describes him as possessing
"une remarquable sagacity, une intelligence
vive et profonde h, la fois, beaucoup de justice
et de rectitude dans les id^es . . . une f<5con-
dite, une abondance d'imagination in^puisable "
{La Dette Fublique, i. 128). The condition of
affairs was most alarming, with an increased
expenditure and a diminished revenue. The
income from taxation had fallen from 112 to
75 millions of livres, the yearly expenses had
risen from 119 to 220 millions. The debt was
2 milliards. Arrears of 36 millions were due
to the army, and the revenue of five years had
been spent in anticipation. Desmarets com-
menced by repealing a decree which permitted
payments in specie or paper. He allowed the
capitation tax to be commuted by a payment
of six years in advance. He doubled toll-
duties and contracted with Samuel Bernard
and others loans extending to 230 millions.
These expedients enabled him to get through
1708, but the troubles of the next year began
with a winter of unusual severity. To meet
the famine which followed he brought wheat
from all parts of Europe, enforced a sj)ecial
tax on the rich, sold the undergrowth of the
state forests, and effected a recoinage. He
received the dignity of minister from Louis.
The king did not accept the onerous condi-
tions offered by the allies in 1709. To meet the
enormous charges of the campaign Desmarets
proposed a war tax of a dixieme on all property
and incomes. Even the clergy and nobility
were not exempted. The new tax produced
25 millions. He also borrowed 15 millions
from some merchants. In 1711 he commenced
a more regular system and converted into 5 per
cent rentes all the various state loans. The
energy and ability of Desmarets in putting tn
order the financial embarrassments of the king-
dom were of great help to Louis XIV. "Si
nos gens de guerre avaient le courage et le genie
de Desmarets nous gagnerions toutes les
batailles, " said Madame de Maintenon. In the
seven years of his administration the net pro-
duce of the ordinary revenues did not exceed
269 millions, and during this time he was
obliged to find 1300 millions of extraordinary
resources, and even then he left over 300
millions impaid (A. Vuitry, Le disordre des
Finances, p. 25). He hoped in 1715 to pro-
duce a properly-balanced budget if the king
lived to bestow his favour for two years. Louis
died, however, 1st September 1715, and Des-
marets was dismissed by the regent. He retired
to MaUlebois, where he died 4th May 1721.
Saint Simon, who was Ul- disposed towards
Desmarets, draws his character as that of a
man "qui avoit plus de sens que d'esprit, et
qui montroit plus de sens qu'il n'en avoit en
effet ; quelque chose de lourd et de lent,
parlant bien et avec agrement, dur, emporte"
Mimoires, xviii. 157). His son, the Marquis
Desmarets de Maillebois, marshal of France, is
famous for his Italian campaigns.
Desmarets presented to the Regent Mimoire su7
V administration des finances depuis le 20 Fevrier
1708 jusquau ler Septemhre 1715 [Paris, 1716]
Svo, (also reprinted about 1789, and in the An-
572
DESTUTT DE TRACY— DEVELOPMENT
notes Politiques (1757) of the Abbe Castel de St.
Pierre) " Tres-curieux," says Lenglet du Fresnoy,
•' il vient de main de maitre, mais il n'a pas tout
dit " {Methode pour Hudier VHistoire, xii. 337).
In the opinion of Voltaire "ce memoire prouve
qu'il avait des talens, une grande modestie et'des
intentions droites " {Siecle de Louis XIV., 1819, 1.
38 ; see also ii. 31).
[Saint Simon, Mimoires, 1856, etc., tomes ii.,
iv,, vi., vii., ix., xi., xiii., xviii. — Nouveau Dic-
tionnaire d'J^conomie Politique, 1890, i. 669-701.
— F. V. de Forhonn&is, Recherches et considerations
sur les Finances de France, Basle, 1758, 2 vols.
4to. — A. Vuitry, Le desordre des Finances d la
fin du regne de Louis XIV., Paris, 1885, 8vo. —
R. Stourm, Les Finances de VAnden Regime,
Paris, 1885, 2 vols. 8vo. — A. Vuhrer, Histoire de
la Dette Puhlique en France, Paris, 1886, 2 vols.
8vo. — Month yon, Particularity sur les Minis tres
des Finances, Paris, 1812, 8vo.] H. E.T.
DESTUTT DE TRACY, Antoine Louis
Claude, Comte (1754-1836), born in the
Bourbonnais, died at Paris. He was a member
of the constituent assembly, and was arrested
and imprisoned during the Reign of Terror.
He was set at liberty after the 9th Thermidor,
27th July 1794. Although he became a senator
under the empire, and subsequently a peer of
France under the Bourbon restoration, he re-
tained throughout his early sympathies with
liberty. From the year 1808 he had been a
member of the French Academy. When, in
1832, the Academy of Moral and Political
Science was re-established, he was invited to
join the section of moral science. As a philo-
sopher he was one of the last survivors of the
icole sensualiste, a school whose method of
thought may best be defined in the words of
one of their members, " Penser c'est sentir, rien
que cela," and he was also an economist of great
distmction. As early as 1798 he wrote, at
the request of the well-known Jefferson, his
Oommentaires sur I' Esprit des Lois de Montes-
quieu (1 vol. 8vo, 1819). In this work he
corrected some of the economic errors into
which that able thinker had fallen. In 1804
he published his Traite de la volonte, part of
his EUments d'Ideologie, the larger part of
which formed a treatise on political economy.
This work was reprinted, without any modifi-
cation, under the title of a Traite d'dconomie
politique, in 1823 (1 vol. in 18mo). In these
two works, the commentary and the treatise,
Destutt de Tracy shows that he had attained a
higher level than the majority of his contem-
poraries. He has obtained a popularity equal
to his deserts, notwithstanding the somewhat
metaphysical form with which he had invested
his subjects. Bonaparte had him in view when
he inveighed against the " Ideologues."
A. c. f.
Destutt de Tracy and Ricardo. A refer-
ence to M. de Tracy will be found in Ricardo's
Principles of Political Economy and Taxation
ed. 1852, note p. 171. He says with respect
to the Elements d'Idiologie, ** In this work M.
de Tracy has given a useful and an able treatise
on the general principles of political economy,
and I am sorry to be obliged to add, that he
supports, by his authority the definitions which
M. Say has given of the words 'value,'
'riches,' and 'utility.'" In the text Ricardo
observes, " I cannot agree with M. Say in
estimating the value of a commodity by the
abundance of other commodities for which it
will exchange ; I am of the opinion of a very
distinguished writer, M. Destutt de Tracy, who
says, that ' To measure any other thing is to
compare it with a determinate quantity of that
same thing which we take for a standard of
comparison for unity. To measure, then, to
ascertain a length, a weight, a value, is to find
how many times they contain metres, grammes,
francs, in a word, unities of the same descrip-
tion. * " An interesting account of Ricardo's
meeting with De Tracy is given in the Letters
of Ricardo to Malthus, No. Ixxxii., edited by
J. Bonar, p. 211, ed. 1887.
DETRACTION, Droit de. In France,
before the Revolution, the right of aliens to
inherit property was limited by the droit de
detraction, which enabled the state to confiscate
part of any bequest or inheritance falling to an
alien. For the history of its abolition see
AuBAiNE, Droit d'. It need only be remarked
here that at the present time, should the laws
of another country impose any tax of this kind
on a share of an inheritance left to a French-
man, the French law will, where possible,
compensate the person so damnified out of any
share of the inheritance falling to an alien
resident in France. In England and other
countries, especially Russia, the right of aliens
to inherit land is either entirely denied or
severely restricted ; but these rules, though
analogous to the droit de detraction, have a
political not a financial aim.
[Les Codes annotees de Sirey, Edition entiere-
ment refondue, par P. Gilbert, 1847. — Littre's
French Dictionary, s.v. — Dictionnavre general de
la Politique, par Maiirice Block, 1873, s.v,
"Stranger."] c. g. o.
DEVELOPMENT, or evolution, as distin-
guished from mere change, means a growth, or
the unfolding of qualities present, but at first
latent, in the subject concerned. Darwinism
{q.v.) is therefore not a doctrine of develop-
ment or evolution unless we regard animated
nature collectively as one subject which remains
the same throughout its changes. The idea of
development applies to man and human societies,
and especially to their science and culture, for
there is present an identity of the subject
(humanity) with continuity through the changes
— e.g. from Greece, through Rome and the
middle ages to modem civilisation — and pre-
servation of the results of the past
DE VIO— DEW
573
Economic evolution has been used in two
senses (a) the growth of new forms of industrial
organisation, keeping pace with new wants,
new powers of science over nature, and new
political relations, and (&) the growth of
economic theories, which may or may not be in
correspondence with (a). The name is best
kept for the first of the two phenomena ;
and the latter may be called the evolution of
economics. In both cases the use of the name
evolution instead of change seems to imply that
both the outward changes, say in European
industry during the last hundred years, and
the changes in theory, say from Adam Smith
to J. S. Mill, have followed a course for which
it is possible to discover some logical necessity.
The term evolution was not unknown in the
last century, and the idea became the ruling
thought of Fichte and especially of Hegel and
his followers. In England, the idea has gained
currency through the \vritings of Spencer and
Darwin ; and evolution in the sense conceived
by biology appears to be the essence of the
popular philosophy of our day. Marx has
applied the notion to economics, and the rela-
tion of the two is already a topic of controversy.
The extreme left of the school of historical
economists hold that there are as many forms
of economics, all relatively true, as there are
separate peoples and separate epochs ; and they
would not distinguish the development of
economics from the general progress of historical
change. The conception of economics as a
body of doctrines of universal validity or
absolute truth is no doubt discredited ; but the
conception of "economic categories" as a per-
manent basis of further development has gained
ground ; and seems indeed to be required by
the very notion of development.
[For distinction of historical and economic
categories, see A. Wagner, Lehrhuch der joolitischen
Oekonoinie, Grundlage, pp. 352 seq. and the refer-
ences there given to Rodbertus and Schaflle. — For
distinction of development from Darwinism see E.
Caird, Philosophy of Kant, (2nd ed. 1889) vol. ii.
pp. 539 seq. and S. Alexander, Moral Order and
Progress (1889), pp. 139, 309, 382, etc.] J. b.
DE VIO, F. ToMMASO (1470-1534), born at
Gaeta, and sometimes called Thomas de Vio
Cajetan, was famous for his learning ; at
Ferrara, where he held disputations with Pico
della Mirandola, he was made a Doctor honoris
causa ; he taught philosophy in the Ginnasio
Romano, and Avas made Cardinal of S. Sisto by
Leo X. He was consulted in all the weighty
theological questions of his time. Amongst
these was the question of Henry VIII. 's first
marriage, which he declared valid. He was sent
to Germany to controvert the opinions of Luther.
He wi'ote a great many works of which a list
can be found in A. Ciaconii : Vitoi et res
gestcB Pontificum romanorum et Cardinalium.
Romse. 1677, voL iii. p. 390-394. Here only
the more important concerning economical
topics are mentioned :
De Usura, written in Milan, 1500 ; De
Cambiis, written also in MOan, 1499 ; and De
Monte Pietatis, written at Pavia, 1498, all
published 1596 in Venice ; F. Thomse de Vio
Caietani, ordinisPraedicatorum, Opuscula omnia.
Venetiis, 1596, p. 168 et seq. In his pamphlet
De Usura, De Vio does not discuss the argument
ab ovo and exhaustively, intending rather to
solve some special cases in which he thinks the
current opinions of canonists wrong or exagger-
ated. In his pamphlet De Cambiis, he declares
himself opposed to the profession of what then
was called a cambist, recognising only the
legitimacy and utility of the change of money
against money. In his pamphlet De Monte
Pietatis, he proves that these establishments for
pawnbroking served simply to cover a species
of usury. De Vio's pamphlets must, therefore,
be considered as one single tract in which he
discusses the same subject, viz. usury, under
three different aspects, and in which he follows
the opinions current in his time, although
sometimes showing views somewhat broader
than those of the canonists. M. P.
DEVISE. A gift of land or other real
property by will. The person to whom the
gift is made is called the devisee. e. s.
DEW, Thomas Roderick (1802-1846), was
born in Virginia and was educated at the College
of William and Mary ; in 1827 he was appointed
professor of history, metaphysics, and political
economy in the same institution, and in 1836
president ; he died at Paris while travelling.
Dew was a most thorough and earnest teacher
of history, and exercised great influence
throughout the south in upholding public
opinion in the support of free trade and negro
slavery. On strictly economic subjects he
wrote : Lectures on the Restrictive System, Rich-
mond, 1829 (pp. 195). In this Dew questioned
the general advantage to be gained from manu-
factures, since they are liable to great fluctua-
tions ; and a factory population is not only
unfavourable to liberty, but turbulent and of
necessity dependent. He wrote an Essay on
the Interest of Money and the Policy of Law
against Usury, Shellbank, Va,, 1834 (pp. 24);
in which iTsury laws are regarded as influencing
unfavojirably the distribution and circulation
of capital, and checking the natural division
of employments and treating the question with
special reference to the farming interest. He
also wrote a Letter on the Financial Policy of
the Administration and the Laws of Credit and
Trade, Washington, 1840 (pp. 16), attributing
the crisis of 1837 not to banks but to the com-se
of trade ; banks are the effect and not the
cause of speculation. Dew opposed the sub-
treasury system inasmuch as it tended to
unsound banking operations. For an interest-
ing statement of his educational work and for
574
DIAGRAMS
bibliographical references, see Circ. of Informa-
tion of U.S. Bureau of Educ, No. 1, 1887.
College of William and Mary, by Professor H.
B. Adams, pp. 54-56. d. r. d.
DIAGRAMS. For the purpose of conveying
readily to the mind the general facts contaifted
in a table of figures, nothing seems better suited
than some form of diagrammatic representation.
When the relative magnitudes of a number
of disconnected quantities are simply concerned,
a series of geometrical figures, circles, squares,
or oblongs whose areas are proportional to those
magnitudes, is commonly employed.
The delineation of the varying circumstances
of the different parts of a country in respect to
such matters as density of population, degree
of poverty, etc., by colouring a map in different
tints, which has been frequently employed
(recently by Mr. Chas. Booth in Labour and
Life of the People), is a method which is very
readily understood.
The curves which record the readings of a
barometer or thermometer are illustrations of
another class of diagrams which are very largely
used for economic purposes.
It requires a very special training to be pre-
pared to grasp readily the salient points of
complicated schedules of figures, which can,
however, be exhibited very readily even to the
untrained by means of such diagrams. This
renders them of gi'eat service to the teacher of
economics. But curves of similar construction
are invaluable adjuncts in the study of economic
theory, possessing all the general advantages of
arithmetical illustrations, while they are less
liable than these to admit the unwary assump-
tion, in the data of illustrations, of the result
which it is desired to establish by their help.
If we wish to draw a curve showing the
variations in the price of some commodity (say
iron) in the course of a number of years we
proceed as follows. Along a line Ox (Fig. 1)
Fig. 1. .
a number of equal distances On^, n^n^, etc., are
measured. We may take each of these distances
to represent some convenient interval of time,
an hour, day, year, or any other suitable interval.
From the points 0, Wj, n^,, etc. lines OP, n^.^, n^V^
etc. , are drawn perpendicular to Ox and of such
lengths as to be proportional to the price of
iron at the epoch represented by the point
from which the line is drawn. We might
for example draw them on the scale of one-
twentieth of an inch for each shilling of the
price of a ton of iron, or on any other convenient
scale. The points 'P2J^^...\)QivLg connected by
a broken or curved line, such a line will exhibit
the variations of the price of iron with the pro-
gress of time, in a manner which is quite as
accurate as the table of figures from which the
curve is derived, and which is far more striking
to the eye of even the most skilled statisticiaa
The manner in which the connection between
time and price is thus shown may be employed
to show the concm*rent variations of any two
connected quantities in economics.
If the abscissae (the distances along Ox) re-
present the amounts produced in a given time,
such as a month or year, the ordinates {n^^
etc.) denoting the corresponding prices at which
the goods could be profitably produced, the
curve becomes the ordinary supply curve.
If the abscissae denote the quantities which
could find purchasers at the prices denoted by
the ordinates, we obtained the demand curve
(cp. Demand Curves).
These curves cannot be drawn completely
from records of experience, because actual ex-
perience covers in general but a small range
of prices for any one commodity. No un-
certainty is, however, owing to this cause, intro-
duced into the arguments based on them, since
the really important parts of them are those of
which we have experience, and, in addition to
this, the arguments commonly depend not so
much on actual lengths of lines as on the general
direction of the curve, whether upwards or
downwardSj and whether the slope of the curve
be gradual or rapid.
It is the result of experience that — except in
such a case as that of a collector of rare speci-
mens of some kind, when his collection may
be doubled in value by the addition of a single
specimen which renders it complete — people are
not willing to pay so much for a given small
addition to their store of any commodity when
they already have a large amount of it, as when
they have but little ; this enables us to say at
once that the demand curve must slope down-
wards throughout, whatever be its shape in
other respects.
With regard to the supply curve, it is quite
possible that its slope should be sometimes up-
wards, sometimes downwards, or that it may
be horizontal throughout or for a portion of its
length. If, however, we are considering only
small changes in production, not involving a
reorganisation of the industry concerned, an
DIAGRAMS
575
increase of product means, in general, an increase
in the total cost out of proportion to the addi-
tion to the amount of produce, i.e. in the
neighbourhood of the actual price the curve
slopes upward as we proceed outwards along it,
though there are, doubtless, cases in which the
contrary is true, and it is drawn sloping down-
wards in Fig. 5.
For the problem of the equilibrium of supply
and demand, the use of diagi-ams enables us to
grasp more clearly than any other method the
relations between the quantities involved.
liTid and sS (Fig. 2) be portions of the curves
of demand and supply intersecting at P and
Fig. 2.
O N ^
PN be perpendicular to Ox, then PN denotes
a price which will equate demand and supply.
At a price less than PN" it would not be profit-
able to produce so much, at a greater price
there would be more than the ordinary profit,
which would lead producers to endeavour to
increase their businesses. At a price gi-eater
than PN consumers would not be found for the
whole amount ON, at a less price consumers
would be tempted to increase their consum[)-
tion, and Avould be desirous of using more than
the amount ON.
Small variations from the conditions indicated
will upset the balance struck at the price PN.
We see that the price, which may be taken to
measure the exchange- value of the commodity,
is equal on the one hand to the expenses of
production at the margin, and also to the
marginal demand price, i.e. to the estimate in
money- equivalent made by purchasers, of the
utility to them of those portions which they
consider only just worth their outlay.
If the curves be supposed traced back to
meet Oy (see Fig. 3) we have a representation of
the total utility to consumers of the quantity
of commodity ON in the area between the
curve Dd and the lines OD, ON and NP.
The actual outlay being measured by OMPN
(if PM be p9,rallel to Ox), the area DMP is what
is called by Prof. Marshall the Consumer's Rent,
being the excess of the money measure of the
total utility over the money cost.
Under certain conditions the area MsP de-
notes the Producer's Rent measured in money.
y
Fig. 3.
The relations expressed by these curves are
represented in a diff"erent manner by Auspitz
and Lieben in their v/ork on the Theoric des
Preises. The curves they draAV have for
ordinates the prices, not of a unit, or given
quantity, but of the total quantities rejDresented
by the corresponding abscissse.
The price, in the ordinary sense of the term,
is represented by the trigonometrical tangent of
the angle between the line touching the curve
at any point and the line Ox, for it is the rate
at which the total price increases as the amount
increases.
Lines being drawn from 0 parallel to the
tangents at every point to the total cost curve
OS to intersect the corresponding ordinates, a
second curve is deduced (the dotted curves in
Fig. 4). A similar construction applied to the
total demand curve gives a second derived
(dotted) curve, whose intersection with the
former at p gives the position of equilibrium
of supply and demand and the normal exchange
value. ON is the amount produced and con-
sumed, and the price at which a unit of it is
saleable is represented by the ratio of PN to ON.
Among the many diagrams expressing the
576
DIALOGUS DE SCACCARIO— DICKINSON
relations between different economic quantities,
one of the most instinictive is that which deals
with the case of Monopolies.
Assuming the ordinary supply and demand
curves for a commodity the sources of supply
of which are monopolised, we deduce from these
a third by measuring along each ordinate
NPQ to the supply and demand curves a portion
NR equal to the part PQ between the two
curves. Where the demand curve lies above
the supply curve the distance NR is measured
Fig. 6.
upwards and vice versa. This curve (Fig. 5)
represents the possible profit obtainable with
different amounts of the given commodity
produced. The aim of the monopolist being
supposed to be to make the total gain as great
as possible, the scale of production suitable is
that denoted by OM when, MT being drawn
parallel to Oy to meet the curve at T, the part
of the tangent at T to the third curve, which is
cut off by Ox and 0^, is just divided equally
at T. In this case the product of OM and MT,
which expresses the total profit, is greater than
for any other position of T upon the curve RT,
and thus the condition laid down is satisfied.
For any other scale of production, either the
lessened rate of profit out-balances the increased
sales, or the decrease of sales out-balances the
increased rate of profit. Many developments of
the diagi-ams here referred to may be found in
the footnotes in bks. iii. iv. and v. of Marshall's
Principles of Economics, and the examples given
will, it is hoped, be sufficient to illustrate
the general ideas which underlie most of the
diagrams in general use. A. w. f.
DIALOGUS DE SCACCARIO. This notable
treatise was written about 1176 by Richard
Fitz- Nigel, Bishop of London, at one time
treasurer of the exchequer. It is in the foinn
of a dialogue between a master and a disciple,
and consists of two books. The first book
describes the exchequer, and its two parts :
the lower, or receipt, to which money is actu-
ally paid hj the sheriffs and other officials, and
the upper, in which the accounts are formally
audited. It also describes the functions of the
justiciar, chancellor, treasurer, and other officers
of the exchequer. The second book describes
the summonses to the exchequer, and the various
sources from which the revenue is derived.
Besides the direct information about the finan-
cial administration of the Angevin period, the
treatise also throws a flood of light on the
history of constitutional and social organisation
from the Norman conquest to Henry II.
The Dialogus was " translated into English by
a gentleman of the Inner Temple," 1758, also in
Historical Documents of the Middle Ages (Bohn).
It is printed in Madox, History of tlie Exchequer.
Stubbs, Select Charters gives the complete Latin
text. See also Hubert Hall, Court Life under the
Plantagenets, chs. viii. and ix., and F. Liebei-mann,
Einleitung in den Dialogus. e, l.
DICA. A kind of tally used for checking
the receipt or issue, not of money, but of
household provisions, farm produce, and even
merchandise. In the statutes of the order of
Sempringham it is provided that all seed issued
out of the grange shall be checked by a dica, to
be divided into two halves, of which one shall
be kept by the warden and the other by the
granger. In the Constitution of the King's
House, a treatise probably as old as the reign
of Henry I., the master marshal of the king's
house was to have diem against all the king's
officers. From this it appears that the use of
tallies for public accounts originated with this
regulation for the king's Chamber, and we
know that the early name of the Exchequer or
treasury sessions was " the Tallies," the revenue
being at that time rendered in farm produce
{Dial. i. 8). The same meaning is probably
contained in the term "diker" of leather,
namely ten hides in every bale, these being
tallied by the packer and owner by a notch, cut
at the counting of every tenth hide. In the
present day coals are still "tallied" in a pre-
cisely similar way on board ship.
{Stat. Ord. de Sempringham, p. 478. — Pipe
Roll Society, vol. iii. — Red and Black Books of
Exchequer.'] H. Ha.
DICKINSON John (1732-1808), a native
of Maryland, came to London to study law,
and was called to the bar at the Middle
Temple. After his return to America he dis-
tinguished himself by a pamphlet (1765)
entitled The Late Megulations respecting the
British Colonies on the Continent of America
considered, in which he showed the economic
unwisdom of the Sugar Act and the proposed
Stamp Act. His Letters from a Farw.er in
Pennsylvania to the Inhabitants of the Bi'itish
Colonies, 1768, deny the assumed authority of
the British parliament to tax the colonies.
They examine the claim upon historical, con-
stitutional, and legal grounds ; and the argu-
ment, though studiously moderate in tone and
closely reasoned, is stated in such a lucid and
captivating manner that the Letters obtained a
DICKSON— DIDEROT
577
very wide circulation. Dickinson was an intel-
lectual factor of the first importance in founding
the Independence of the United States, and
drafted some of the principal state papers of
the time. He was elected president of Dela-
ware in 1781, and of Pennsylvania in 1782.
"The Historical Society of Pennsylvania pro-
poses to print a more complete edition of his
political writings than that which was published
under his own supervision at Wilmington in
1801." The Life and Times of John Dickinson,
by Charles J. Stille, LL.D., Philadelphia, 1891.
II. H.
DICKSON, Rev. Adam (1721-1776), was
born at Aberlady, East Lothian. He graduated
at Edinburgh University and was appointed
minister at Dunse, Berwickshire, in 1750. He
was transferred to Whittinghame in East Lothian
in 1769, and died in consequence of a fall while
riding.
Dickson gave much attention to agriculture,
and published in 1762 a Treatise on Agriculture
(new ed. 1770, 2 vols. 8vo), with special refer-
ence to the soil and climate of Scotland. One
section, On Manures, directed against Tull, was
reprinted in A. Hunter's Georgical Essays
(vol. iii., 1770). He also wrote Small Farms
destructive to the Country in its Present Situation,
1764, and An Essay on the Causes of the Prese^it
High Price of Provisions, etc., 1773, 4to. In
this pamphlet he contended that high prices
were not due to had crops but that they were
connected with luxury, currency, taxes, and the
national debt. Among other remedies he
proposed road-making, ox-labour, a tax on stock-
holders, and an export duty on corn. Dickson
is best known for his Husbandry of the Ancients
(1788, 2 vols. 8vo, French translation by
P^ris, 1802), derived from the " Scriptores rei
rusticse " and other writers, and compared with
the modem system. His practical knowledge
enabled him to clear up many difficulties, but
his scholarship was imperfect (Smith, Diet, of
Antiquities, 1890, i. 83).
[Biography prefixed to Husbandry of Ancients,
1788, vol. i. — Dictionary of Nat. Biography, xv.
38.] H. R. T.
DIDEROT, Denis (1713-1784), m ins
RELATION TO ECONOMICS. There is hardly a
single branch of science which does not owe
some kind of gratitude to the universal genius
of this very able and characteristic French
writer. His suggestive mind, his common
sense, and his power of concentrating the
best thoughts of his contemporaries into one
focus, naturally extended themselves to the
narrow ground, as it was in his day, of political
and economic science. It is almost impossible
to state how far in this respect Diderot could
lay claim to originality. He is known to have
written many passages in the most celebrated
works of his time. Rousseau confessedly studied
his style, and some striking pages in his
Diseours sur VIn4galit6 and in Holbach's
Systdm^ de la Nature are written by Diderot ;
his keen wit in conjunction with that of Galiani
produced the Dialogues sur le commerce des
hleds. It was, however, his connection with
the great Encyclop6die (1751-1771) which
brought him into closer contact with students
of economic phenomena, and which also led
him to promote and animate their work. The
principles of mercantilism, like Forbonnais'
l^Uvunts du Commerce, as well as the first
drafts of the economic system of the physio-
crats, Quesnay, Morellet, St. Lambert, Leroy,
and in part those of Turgot, are embodied in this
vast enterprise. Diderot, who perhaps became
acquainted with Quesnay's studies through a
mutual friend, Leroy, and had publicly, in
1748, paid homage to Quesnay as a first-rate
surgeon {GEumes, t. ix. p. 214), did not blindly
follow the track of his school. Perhaps on
account of the withdrawal of Quesnay's co-
operation in 1757, when the Encyclop6die was
suppressed, their relations grew colder. Diderot
preserved an independent attitude, declaring
for instance in 1769 that he "did not approve
the opinions of the Quesnelistes, but on account
of their sincerity held them to be good fellows
who did their best" {(Euvres, t. iv. pp. 80-85).
Similar opinions may be found in the Refutation
suivie de Vouvrage d'Helv6tius intituU L'HomTne,
{(Euvres, t. ii. p. 352), and in Diderot's recom-
mendation of economic instruction in the
Russian universities, made to Catherine II. in
1775-1776 {(Euvres, t. iii. p. 491). We even
owe to him the knowledge of a humble outsider
of the physiocratic school — ^Boesnier de I'Orme,
whose anonymous book Du Ritablissement de
rimpdt dans son Ordre Naturel (Yverdun, 1769)
has been ably criticised by Diderot {(Euvres,
t. iv. p. 39) ; see on this book also EpMmeridcs
du Citoyen, 1769, t. vi. jip. 255-256, t. viii. pp.
136-163.
Diderot's own contributions towards the Ency-
clopedic bear the features of the different influences
of his time, and sometimes of a slight trace of
mercantilist views ; he often, with a keen instinct,
adopts the attitude of his physiocratic friends,
without participating in their extravagances ; not
seldom one might be inclined to ascribe him an
anticipation of modern social thought. His articles,
moreover,' are interesting as exhibiting the vast
diflFerence between economic ideas and even terras
used nowadays and at the time of their formation.
This may be illustrated by the following extracts :
Agriculture {(Euvres, t. xiii. pp. 243-265) con-
tains a history of ancient and mediosval agricul-
ture, instructions for husbandmen for each month in
the year, and describes the new English agri .altural
system of Jethro Tull, as interpreted by Duhamel
DU MoNCEAU (q.v.) Artisan (p. 373), a man who is
engaged in the mechanical work that needs the least
intelligence. Balanciers (p. 408), gives a descrip-
tion of the rules of the corporation of makers of
weights and scales, and their supervision by the
2 P
578
DIDEROT
Cow des monnaies. Tlie dififerent meanings of
the terms, Benefice, Gain, Profit, Lucre, Emolu-
ment (p. 425), of Besoin, Necessiti, Indigence,
Paumete, Disette (p. 478) are explained. Besoin
(p. 427) is described as comprising the appetites
of the body and the desires of the mind'^ its
tendency is to lead primitive man on the one
hand to a system of associated life, on the other
by the development of artificial wants to bring
about the dissolution of society. The articles
Boucher (p. 489) and Boulanger {p. 498) contain
an account of the regulations, apprenticeships, etc.
of the butchers' and bakers' corporations. In Brut
(p. 513) raw-produce is distinguished from the
finished article. Change (t. xiv. p. 85) is said to
relate to the barter of movables, ichange to an
estate, etc., permutation to ecclesiastical dignities.
"There are few exchanges, in which absolutely
good faith is preserved ; generally the two parties
seek to deceive each other." Chemins (p. 116) is
a history of highway administration in Europe.
Co-op^raieur (p. 225) : " this term is much more
frequently used in theological matters than in any
other." Almost the same moral significance is
attached to the word Credit (p. 240), in which
reference is only made to the work of Duclos,
Considerations sur les Mceurs. A vindication of
the natural rights of mankind is contained in
Droit Natwrd (p. 296). The study of the rules
of husbandry is recommended in an article on
ilconomie Rustique ( p. 3 7 8 ) . (Fondation, although
inserted in CEuvres, t. xv. p. 12, is by Turgot, see
the Encyclopedie, 1757, t. vii. p. 14). Hoinme
{Politique, t. xv. p. 139) the pith of this article is
derived from an article by Quesnay, which the
latter had suppressed. The existence of this was
recently discovered by Dr. S. Bauer. "The wealth
of a nation is the produce of the sum total of its
labours, after the cost of labour has been deducted.
The greater the net produce and the more equal
its distribution, the better the administration.
As long as there is land lying waste, a man is
employed to disadvantage in manufacture. The
number of domestic servants, and of producers of
luxuries, should be diminished. The maxim that
an increase of comfort among the agricultural
classes would remove a spur to industry is the
saying of an ignorant and malignant man. The
hope of living the life that a man longs for, urges
him to his particular occupation," etc. Honoraire
(p. 140) a term used for the remuneration of
liberal professions, appointements for all posts,
gage for servants, gage for soldiers, salaire for
working men. Htpital {ibid.), deals with the ad-
ministration of almshouses and hospitals. In this
article, to quote Mr. Morley, " Diderot struck a
keynote of diff'erence between the old Catholic
spirit and the new social spirit." "It would be
far more important to work at the prevention of
misery than to multiply places of refuge for the
miserable." The spirit of Rousseau seems to
have inspired the following article : Indigent (p.
204), "a man who, wanting the necessaries of
life, exists in the midst of his fellow-citizens, who
exult over him with insolent luxury, rioting in the
enjoyment of all possible superfluities. Indigence
is not a vice, it is worse than that. There are
none indigent among savages." A modem line of
thought pervades the notice oi Joumalier {p. 314),
* ' This class of man forms the greater part of a
nation ; a good government ought to keep his lot
principally in view. Whenever the day labourer
is miserable, the nation is miserable." The eulogy
of competition is contained in Lahorieux (p. 406),
" Name a price, and competition will ensue ; taxes
and despotic government annihilate industry by
rendering their fruits uncertain." Lahowreur
{Economie Rustique, p. 407) again brings back
reminiscences of Quesnay : " Unhappy the nation
in which the farmers are poor, for agriculture
greatly needs improvement. Wherever the
corn trade is restricted, the reduction of price
falls heavily upon the cultivators of the soil ;
arbitrary taxes, moreover, reduce their earnings
and obstruct the flow of national revenue." Like
Rousseau, in the article Legislateur (p. 427) he
admonishes princes to visit the houses of the
labouring poor, and pleads in Legislation (p. 436),
for the simplest legislation and the system the
most consonant to nature, by which the passions
of men should not only be curbed, but directed to
advancing both private and public interest. The
legislator must take care that the expenses of
associated life shall fall upon the rich, who enjoy
the corresponding advantages (see Mr. Morley's
Diderot, vol. i. p. 243-246). In the article, L/uxe
{Morale et Philosophic, vol. rvi. p. 5), Diderot
displays his utmost ingenuity. After having
refuted by historical examples all sweeping pro-
positions for and against luxury, he explains it to
be a natural outcome of civilisation and not a
necessary cause of the decline of empires. Luxury
must be in proportion to the general production.
" There was more luxury in the years of magni-
ficence of Louis XIV.'s reign than in 1720, and in
1720 this luxury was more excessive." Luxury
turns away attention from agriculture, and the
privileges granted to the producers of luxuries
create an artificial irregularity of distribution ;
luxury easily escapes taxation, and the " nouveaux
riches," indulging in it, demoralise society. The
remedies against luxury consist in its gradual
diffusion, and in the abolition of its privileges.
The article closes with the admirable sentence :
"Jeprie les lecteurs de se depouiller egalement
des prejuges de Sparte et de Sybaris ; et dans
I'application qu'ils pourraient faire, a leur si^cle
ou k leur nation, de quelques traits repandus dans
cet ouvrage, je les prie de vouloir bien, ainsi que
moi, voir leur nation et leur siecle sans des pre-
ventions trop ou trop peu favorables, et sans
enthousiasme, comme sans humeur" (p. 30).
Modem ideas and Rousseauism are intermingled
in Misere (p. 119), "The poor common people are
incredibly stupid. I know not what false pre-
possession closes 1;Jieir eyes to their present
wretchedness, and to the still deeper wretchedness
that awaits their years of old age. Misery is the
mother of crime. It is rulers who make men
miserable, and it is they who shall answer in this
world and the next for the crimes that misery has
caused." He remarks in the same spirit on Opu-
lence (p. 171), " It is but seldom that this does not
augment the natural malignity of mankind, and
that it increases happiness." Propriety {p. 439)
is shown to be a condition of security — security
DIETERICI— DIFFICULTY OF ATTAINMENT
579
was the aim of men in forming societies ; taxes
the means to uphold them. Where a king pre-
tends to be the sole proprietor of the goods of his
subjects, anybody may become king by force,
ProstituSe (p. 440) is explained almost only in the
figurative sense as applied to mercenary writers.
In Representants the usefulness of representatives
of the "nation" in the vfa.y of advising the king
are explained. All " citoyens " ought to choose
men as representatives, who are qualified to be so
by reason of their property or their knowledge of
the interests of the people. Members from the
ranks of the clergy, the nobility, the magistracy,
merchants and cultivators of the soil, should be
chosen for these assemblies. Diderot's opinions,
one sees, are on this point more akin to the
doctrines of the physiocrats, and to those of
continental liberalism, than to those of modern
democracy. The article on Souverains (p. 166)
does not go beyond the current theory of social
contract and renunciation of natural rights. In
Societe (p. 130) Diderot proclaims the principle of
seeking the common good of all, not only as the
supreme, but as the universal rule of conduct.
After the completion of the Encydopedie,
Diderot wrote some pamphlets which evince his
unceasing interest in free enterprise. In the
Lettre historique et politique adressee d un
Magistral sur le Commerce de la Librairie, 1767
{(Euwes, t. xviii. p. 7) he admits that "he would
consider the entire and absolute abolition of
corporations as a step towards a wiser govern-
ment." Three are many strikingly characteristic
remarks on commercial and economic life in his
Voyage de Ifollande, 1774 [CEuvres, t. xvii. pp.
406-468). There are besides in his Fragments
politiques scattered ideas about the dangers of a
sudden influx of the precious metals {ibid. t. iv.
pp. 41-50). His work Man per e et moi concludes
with an idea of statistics of the distribution of in-
come, and the postulate of exempting the physical
necessary from taxation (pp. 481-482). A highly
curious anticipation of the modern labour question,
as exemplified by the condition of the miners of
Saxony, is contained in the Refutation suivie de
Vouvrage d'HdvHius intituU V Homme, 1774-1775
{(Euvres, t. ii. pp. 430-431).
[The passages above referred to are quoted from
the (Euvres completes de Diderot, edited by J.
Assezat et M. Tourneux, 1875-77, 20 vols. ; also
Rosenkranz, Diderot (1866) — Morley, Diderot
and the Encyclopaedists, 2 vols., 1878, 1891,
especially vol. i. pp. 177-247. — Du Bois-Reymond,
Zu Diderot's Qedachtniss, 1884.] s. b.
DIETERICI, Karl Friedrich Wilhelm
(1790-1859), a gi-eat name in statistics, was
bom in Berlin, served under Bliicher in the
Napoleonic war, held several public appoint-
ments— the post of professor of political
economy (fiir Staatswissenschaft) from 1834,
that of director of the statistical bureau in Berlin
from 1844 — and died in his native city. His
virtues and amiable character are attested by
his successor Engel {Report of the International
Statistical Congress at London, 1860, p. 43) and
others who speak from personal knowledge.
Both in the spheres of political economy and
statistics, especially the latter, Dieterici was
eminent. In his inaugural professorial letter
De vid et ratione osconomiam politicam docendi
he distinguishes the different methods of culti-
vating the science — the philosophical, the
juristical, the historical ("Est historica via
oeconomiam politicam docendi," written in
1835) ; the political or statistical method, of
which Humboldt is given as an instance qui
quantum auri et argcnti ex America in Europam
allatum sit, quantum them consumatur, aliaque
similia accurate . . . explicavit ; the techno-
logical method, which J. G. Biiscli and Ricardo
have followed, both praised for their attention
to facts and experience. The true method is
compound : et mere pMlosophando et mere
experiendo erratur. Dieterici promises to unite
theory and experience. The facts are perhaps
more interesting than the theory in his most
ambitious contribution to economics, On Over-
population ( Uber den Begriff der Uhervdlkerung,
Akademie dei- Wissenschaften in Berlin ; Marz,
1849). True to facts, experientid maxime
fretus as he promised, Dieterici enriched many
departments of statistics. His memoir on
the Mean Duration of Life (Uber den Begi'iff
der mittleren Lebensdauer iind deren Bcrcchnung .
fiir den preussischen Staat, Akademie der
Wissenschaften in Berlin, December 1858)
may be noticed among many other valuable
contributions to vital statistics, which will be
found among the following references.
Die Waldenser und ihre Verhilltnisse zum
Brandenburgisch - preussischen Staate (1831). —
Geschichtliche und statistische Uebersicht der Uni-
versitaten im preicssischen Staate (1836). — Statis-
tische Uebersicht der Wichiigsten Gegenstiinde des
Verkehrs und Verbrauchs im preussischen Staate
und im deutschen Zollverbande . . . (1838-1857).
— Statistischen Tabellen des preussischen Staats
nach der amtlichen Aufnahme des Jahres 1843.
— Uebersicht der Bodenfache der Bevolkerung
und des Viehstandes der einzelnen Kreise des
preussischen Staats (1845). — Die Bevolkerung des
preussischen Staats nach der amtlichen Aufnahme
des Jahres 1846 (1848). — Der Volkswohlstand im
preussischen Staate . . . (1846). — Ueber Auswan-
derungen und Einwanderungen (1847). — Ueber
preussische Zustdnde uber Arbeit und Kapital
(1848). — Oeddchtnissrede (in honour of Fred.
William III.), 1852. — Ilandbuchder Statistik des
preussischen Staats (1858-61). — Much of Dieterici's
work is contained in the periodical which he edited
from 1848 till his death — Mittheilungen des
Statistischen Bureau's in Berlin. The fourth
volume for 1851 contains the valuable essay
Ueber den Begriff der Statistik. [Allgemeine
Deutsche Biographic. — Reports of the first four
international statistical congresses, passim.]
F. T. B.
DIFFERENTIAL DUTIES. See Dis-
criminating Duties.
DIFFICULTY OF ATTAINMENT is a
phrase used by De Quincey, Mill, and others,
to denote a condition which must be superadded
580
DIFFICULTY OF ATTAINMENT
to utility in order that there should exist value
in exchange. ** Any article whatever, to obtain
that artificial sort of value which is meant by
exchange value, must begin by offering itself
as a means to some desirable purpose ; and
secondly, even though possessing incontestably
this preliminary advantage, it will never ascend
to an exchange value in cases where it can be
obtained gratuitously and without effort " (De
Quincey, Logic of Political Economy , p. 13;
quoted by Mill, Pol. JEcon., bk. iii. ch. ii. § 1).
The difficulty of attainment here indicated is
primarily that which is experienced by the
purchaser. But it is usual to extend the term
to the diffi:culty experienced by the producer.
Thus De Quincey continues : "Walk into almost
any possible shop, buy the first article you see ;
what will determine its price ? In the ninety-
nine cases out of a hundred simply . . . diffi-
culty of attainment. ... If the difficulty of
producing it be only worth one guinea, one
guinea is the price which it will bear." So
Mill, of what he considers the general case,
"the obstacle to attainment consists only in
the labour and expense necessary to produce
the commodity " (loe. cit, § 2). And by others
difficulty of attainment is used as equivalent to
cost of production. Thus Walker (First Lesson
in Political Economy, Art. 67), "Cost of pro-
duction is only another name for difficulty of
attainment." This transition from the sense in
which the difficulty, like the other factor
utility, is experienced by the individual pur-
chaser is legitimate, where there exists such
perfect "industrial" Competition that it is
free to any one to enter any occupation. In
that case the sacrifice made to attain a com-
modity by purchase tends to be equivalent
to the efforts and sacrifices made in attain-
ing it by production. If the value in ex-
change were higher, the commodity would
not be purchased ; if lower, it would not be
produced.
The wider conception is particularly appro-
priate to the case which Mill, dividing the
different kinds of difficulty, places second ;
where, "without a certain labour and expense
it [the commodity] cannot be had ; but, when
any one is willing to incur this, there needs be
no limit to the multiplication of the product "
... up to a point which there is no need, for
practical purposes, to contemplate {Pol. Econ.,
bk. iii. ch. ii. § 1). In this case difficulty of
production has a certain pre-eminence over the
co-factor utility, both as (a) a cause, and (&) a
measure of value, (a) The cause of a phe-
nomenon being usually -a. somewhat arbitrarily
selected portion of its total antecedent (Mill,
Logic, bk. iii. ch. v. § 3; Venn, Empirical Logic,
p. 57 et seq.), it is not paradoxical that some-
times utility, sometimes cost, should be regarded
as the cause of value. Utility indeed is
invariably an antecedent. But the scale of
utility (see Demand Curves), may, in the case
supposed, be varied without any variation of
value. "If the demand for hats should be
doubled, the price would immediately rise ;
but that rise would be only temporary, unless
the cost of production of hats . . . were raised"
(Ricardo, Pol. Econ., ch. xxx.) Whereas, if
the cost of production of an article is varied, j
its value varies concomitantly. "Diminish I
the cost of production of hats, and their price i
will ultimately fall to their new natural price, |
although the demand should be doubled,
trebled, or quadrupled" (Ricardo, ibid.) Pre-
diction, the prerogative of causation, is
attached to cost rather than utility. (b)
Accordingly, in the case supposed, the compara-
tive difficulty of producing two commodities
affords a simple measure of their relative value.
It is true also that value is proportioned to
final utility. But this measure cannot be read
until the measurement is ah-eady given. We
cannot tell what the final utilities will be till
we know the values. In some cases indeed
(see below (4) and (5)) it is conceivable that,
given the dispositions, the Demand -Curves
of all the dealers in a market, we could deduce
the rate of exchange which will be set up. The
calculation is indicated by Professor Walras
in his Aliments d'l^conomie Politique Pure, Art.
50. Still difficulty of production, in the case
most favourable to its operation, measures
value directly, as a clock measures time ;
whereas utility at best is a measure like the
shadow cast by the sun, which can only be
interpreted by a difficult calculation.
This theory is subject to several reservations
and exceptions. (1) The pre-eminence of diffi-
culty of production as a regulator of value
depends largely on the assumption that labour is
perfectly homogeneous. If all labour consisted
of raising weights in precisely similar circum-
stances, the theory might be literally true.
" If ... it usually cost twice the labour to kiU
a beaver which it does to kill a deer, one beaver
should naturally exchange for or be worth two
deer " (Adam Smith, quoted by Ricardo), there
being only one mode of labour, work being as
homogeneous as, say, gold. But suppose,
besides effort of exertion, the sacrifice of waiting
is required. Then, as between commodities in-
volving these elements in different proportions
(cp. Ricardo, ch. i. § 4), it would no longer be
possible to assign the rate of exchange between
the commodities without being given the com-
parative remuneration for the two kinds of
sacrifice. But this datum could not in general
be obtained a priori, but only as a result of
the higgling of the market. ^ Now, in fact, there
1 This reservation holds even upon the imaginary
supposition that there existed a competition so perfect
that it is free to any one to choose whether he will
labour or abstain, a fortiori, when, as in reality the
abstainers form a "non-competing group"; and so fall
under head (8).
DlFb'ICULTY OF ATTAINMENT
581
are not only two, but many, kinds of sacrifice.
The general principle is that the "net advan-
tages " (Marshall, Principles of Ecmiortiics, vol. i.
2nd ed. p. 136) in occupations between which
there is "industrial competition" (Caimes), tend
to be equal. Accordingly the statement that the
"quantity of labour realised in commodities"
(Ricardo) regulates their exchangeable value,
can be true only on an average with wide devia-
tions. Take the case put by De Quincey of a
pearl-diver who sometimes obtains, along with
' * ordinary, " superior pearls. The true principle
is that the net advantages of pearl-diving are
the same as those of any other occupations be-
tween which there is industrial competition.
How much truth is there in the proposition
that the value of any pearl is proportioned to
the "quantity of labour realised" in it? The
instance taken is a mild case of plural occupa-
tions, or joint production (see By-Pkoduct),
The application of the general principle of net
advantages here affords little light as to the
value of particular articles (cp. Sidgwick, Pol.
Econ., bk. ii. ch. ii. § 10).
(2) The pre-eminence of difficulty over
utility, as a regulator of value, disappears alto-
gether when we pass from Mill's second case to
a category comprising both Mill's third case
(Pol. Econ., bk. iii. ch. ii. § 2), in which the
cost of production increases with the quantity
produced, according to the law of Diminishing
Returns {q.v.), and the converse case, in which
the cost of production diminishes with the
quantity produced according to the law of
Increasing Returns {q.v.) In this case the
two factors, utility and value, become co-
ordinate. As Professor Marsliall says {Eco-
nomics of Lidustry, Isted. p. 148), "the amount
produced and its normal value are to be re-
garded as determined simultaneously under the
action of economic laws. It is then incorrect
to say, as Ricardo did, that cost of production
alone determines values ; but it is no less in-
correct to make utility alone, as others have
done, the basis of value." With reference to
what Jevons calls the "mechanics of industry"
it seems trifling to inquire whether the force
or the resistance conti'ibutes more to the deter-
mination of equilibrium. The simuUaneoiisiiess
of the two conditions is indicated by Jevons in
his discussion of cost of production {Theory,
ch. V.) Jevons there entertains the unreal
conception that it is free to the producer to
apply his efforts in "doses" to different kinds of
production. This at most is true of the mere
inventor as distinguished from the entrepreneur
and operative. Still the conception may be
usefully employed as symbolical of the actual
working of competition in a regime of division
of labour (Pantaleoni, Principii. Theorema di
liicardo ed Marshall). The simultaneousness
of the two conditions may best be shown by
imagining the disutility, as well as the utility,
to be of the sort called * ' final " (see Mathb-
MATiCAL Method).
(3) The co-ordinateness of difficulty of pro-
duction with utility disappears when industrial
competition is no longer supposed. In this
case the assumed equation between the pur-
chaser's and the producer's difficulty of attain-
ment fails. The typical instance is inter-
national trade. There is no correspondence
between the efforts of the Chinese producer of
tea and the sacrifices which the English pur-
chaser incurs to obtain it. It is pointed out
by Cairues that the principle of international
trade governs domestic industry where "non-
competing groups" exist. With reference to
this case, as well as the preceding, Dr. Sidg-
wick justly says: "It is not merely incon-
sistent with facts but with other parts of Mill's
teaching, to say broadly that * the value of
things which can be increased at pleasm-e does
not depend . . . upon demand'" {Pol. Econ.,
bk. ii. ch. ii. § 9). In this case the value of an
article is proportioned to its final utility for the
purchaser in the same sense as in the preceding
cases. But it is not proportioned to the diffi-
culty of attainment in the same sense.
(4) The co-ordinateness of difficulty of pro-
duction with utility is not even supposable,
when we pass to another category. Mill's first :
"things of which it is i)hysically impossible to
increase the quantity beyond certain narrow
limits;" such as "ancient sculptures" . . .
"rare books or coins" . . . "houses and
building- ground in a town of definite extent,"
and "potentially all land whatever" {Pol.
Econ., bk. iii. ch. ii. § 2).
(5) With MlLI's first class go those com-
modities which are temporarily ' ' unsusceptible
of increase of supply " {ibid. § 5) ; in short all
cases of ]\Iarket as distinguished from Normal
Value (see Value).
(6) Lastly, all cases of monopoly must be
excepted from the sphere Avithin which the
difticulty of attainment experienced by the
purchaser is equateable with the difficulty of
production. Outside this sphere the difficulty
experienced by the purchaser is due to the
niggardliness of his fellow-man, ratlier than the
stubbornness of nature ; and is measured only
by his own reluctance to part with some useful
commodity, and not also by his (potential)
effort in producing the article pm'chased.
It is easier to refine upon these logical dis-
tinctions than to prove what is the relative
extent and importance of the categories defined ;
which conception, if any, may be taken as
typical of the facts. This is a matter of judg-
ment rather than demonstration ; about which
there is much disagreement between economists
of the last and the present generation. The
case which one treats as the general rule,
another treats as exceptional or non-existent.
Mill speaks of his second category as "embrao-
582
DIFFUSION THEORY OF TAXATION— DIME
ing the majority of all things that are bought
and sold" {P. K, bk. iii. ch. ii. § 2). To the
same effect Ricardo on the very first page of his
Principles. The reservations which are here in-
dicated under heading (1) are waived by Ricdrdo.
Of the effect of the rate of profits on value he
says, *' the reader " however should remark that
this cause of the variation of commodities is com-
paratively slight in its effects " (ibid. ch. i. § iv.)
The difficulties caused by the difierence in the
qualities of labour he dismisses in a few sen-
tences (ch. i.) The extreme recoil from Ricardo's
position is marked by the Austrian School
(q.v.), who emphasise utility as the determining
principle of value, and assign quite a secondary
place to Cost. See especially Professor Wieser,
Ueber den Ursprung . . . des wirthschaftlichen
Werths; and Dr. Bohm-Bawerk, Kapital und
Kapitalzins, interpreted by Mr. James Bonar in
the Quarterly Journal of Economics, October
1888, January 1889. In this attitude they had
been anticipated by Jevons. But Jevons, as has
been shown, admitted cost of production as a
simultaneous factor. The simultaneousness of
the two conditions in a regime of industrial
competition has been defended by the present
writer in the Eevue d'^conomie Politique for
October 1890. In fine there are those who re-
gard all abstract theory as futile (see the His-
torical School). Cliffe Leslie and Held
(q.v.), Brentano and others, harp on the un-
reality of the Ricardian assumptions. Neumann's
article on prices in Schonberg's Handbuch
teems with cases which it is difficult to recon-
cile with any theory of the relation between
value and difficulty of attainment. f. y. e.
DIFFUSION THEORY OF TAXATION.
This is the name given {e.g. by Mr. F. A.
Walker, Pol. Econ., § 485) to the theory that
the individuals from whom a tax on a particular
kind of commodity, exchange, or occupation,
is actually levied do not ultimately bear the
burden, but shift it on to other classes, so that
the tax is "diffused" or spread over a large
area (see Taxation). e. c.
DIGGES, Sir Dudley (1583-1639), director
of the East India Company, was one of the
ablest defenders of that society. The loss,
near Bantam, in 1613, of the Trades Increase,
gave rise to an anonymous pamphlet (the
Trades Increase, by J. R, Lond., 1615) in
which the author, while strongly objecting to
all the then existing trading companies (see
Foreign Trade, Regulation of), made an
especially violent attack on the East India
Company, to whom that vessel belonged. He
accused them of restricting the supply of East
India commodities and of other objectionable
practices, and maintained that their trade led
to the diminution of the naval strength of the
kingdom. The Company wished to prosecute
the author in the Star Chamber, as some parts
of the book were held to be "very near to
treason and all the rest very dangerous."
(Court Minutes, 22nd Feb. 1616). Sir Dudley
Digges, however, was of opinion that a book
should be put forth refuting the charges brought
against the Company. He accordingly pub-
lished The Defence of Trade : in a letter to Sir
Thomas Smith, Knight, Governor of the Hast
India Company, From one of that Society,
Lond., 1615. In this pamphlet he replied to
the objections to the Company which were based
upon the risks of the trade, the frequent loss
of ships and men, and the consequent decrease
of the naval strength of the country. He also
maintained that the East India trade "in-
creased the stock of the kingdom " (p. 43), and
pointed out the fall in the prices of East India
goods since the formation of the Company.
[State Papers Colonial (East Indies) 1610-15
passim. For full details of the life of Sir Dudley
Digges, vide Diet. Nat. Biog.] w. a. s. H.
DILIGENCE (Scot.) (1) Care in regard
to the subject-matter of a contract ; (2) the
procedure of the court whereby witnesses are
made to attend or documents caused to be pro-
duced ; (3) attachment of person or property
at the instance of creditors to enforce satisfac-
tion of a debt or obligation. A. D.
In English business phraseology due dilig-
ence is an expression denoting the care which
persons who have undertaken certain duties
with reference to the performance of work
or the custody of goods must bestow on such
work or sucli custody. The amount of care
to be given depends on the nature of the con-
tract. When a reward is given or promised,
such "care and diligence are expected as are
exercised in the ordinary and proper course of
similar business, and such skill " as the person
who undertook the work or the custody " ought
to have, namely, the skill usual and requisite
in the business for which he receives payment."
When no reward is given or promised, the care
usually given to one's own afiairs is sufficient.
e. s.
DILIGENTIA. Expression of Roman law
for the care which was required in certain
relations created by contract or otherwise. The
degree of diligence required varied according to
the circumstances of the case. Sometimes it
was sufficient to give the care which the person
concerned gives to his own affairs (" dU. quam
suis rebus adhibere solet ") ; sometimes the
diligence of a careful householder ("dil. boni
patrisfamilias ") was necessary. e. s.
DIME. United States silver token coin :
nominal value ten cents. First struck in 1796,
weight 41-6 grains, fineness 892*4. Altered
in 1837 to weight 41*25 grains, fineness 900.
Weight again reduced in 1853 to 38*4 grains,
and fixed in 1873 at 38*58 grains. English
standard value (silver 925 fine at 5s. 6d. an
ounce) 5*16d. Value in silver francs, 900 fine,
*5 franc. F. E. A.
DIME KOYALE— DIMENSIONS OF ECONOMIC QUANTITIES 583
DiME ROYALE. In 1707, at the most
disastrous period of the war of the Spanish
Succession, the famous Marshal Vauban pub-
lished his Projet d'une dime royale, which
remains the most memorable contemporary
impeachment of the French financial system
under the monarchy. In his engineering tours
about France, Vauban had carefully studied the
condition of the agricultural classes, and had
arrived at the most gloomy conclusions. " One-
tenth of the people has fallen in recent years
into beggary ; five other tenths cannot afford
an alms to the paupers, because they are on
the verge of beggary themselves ; of the
remaining four -tenths, three are in a bad
condition, overwhelmed with debts and litiga-
tion ; while of the remaining tenth barely
10,000 families can be called really rich."
For this deplorable state of things the financial
system is mainly responsible, and of this
system the most glaring defects are the
innumerable exemptions from payment and the
practice of farming out the taxes, by which
the great capitalists make a fortune at the
expense of the people. Vauban reckoned no
less than eighteen classes of persons who were
exempt from the taille and other taxes. The
exemptions were due in great measure to the
practice of selling offices, which had grown up
in the 15th century. To make them valuable,
the monarchy had parted with the right of
removal, thus losing control over its own
servants. When they could no longer be
trusted, their functions were given to a new
set of officials : these in their turn bought their
places, became useless, and were superseded by
new agents. The result was the existence in
France of an enormous number of useless
officials, while the real work was done by the
intendants and their agents. An office without
functions was worth buying, because it freed its
holder from direct taxation. Thus the sale of
offices created a vast disguised public debt, the
amount of which was as difficult to estimate as
were the ruinous terms on which it was con-
tracted. It resulted that the contributors to
direct taxation were those who could not afi'ord
to purchase exemption. The indirect taxes,
the aides (see Aides, Cour des), and the gabelle,
were as ruinous to industry, if not so glaringly
unfair in their incidence, as the taille.
Vauban's remedy for the evils which he
depicts was to abolish the existing taxes, and
to substitute one single impost, levied directly
upon real and personal property, from which
no class was to be exempt. This dime royale,
etc., was to be graduated, varying from a
twentieth to a tenth of income, and was to be
collected directly by agents of the government.
The suggestion of a reform which attached so
many vested interests, and the masterly
exposure of profitable abuses, were enough to
obliterate in the minds of Louis XIV. and his
ministers the services of the veteran marshal,
now in his seventy- fourth year. The council
issued a decree ordering the book to be con-
fiscated, and prohibiting its sale under a fine of
1000 francs. On 24th March 1707, Vauban
received the news of the confiscation of his
book ; on the 30th he died, broken-hearted at
the ingratitude of a sovereign whom he had
served only too weU.
The Projet d'une dime royale which has fre-
quently been published separately, may also be
found in Daire, J^conomistes financiers du
XVllP^" Steele, vol. i. p. 33. r. l.
DIMENSIONS OF ECONOMIC QUANTI-
TIES. A unit is a concrete magnitude selected
as a standard by reference to which other
magnitudes of the same kind may be compared.
A derived unit is a unit determined with refer-
ence to some other unit. Thus the unit of area
may be derived from the unit of length by being
defined as the area of the square, erected on
the unit of length. The unit of speed may be
derived from the unit of length and the unit
of time, by being defined as that speed at which
the unit of length is traversed in the unit of
time. In relation to the derived units of area
and speed, the units of length and time would
then be fundamental, — "fundamental" being a
term correlative to "derived."
The theory of dimensions is concerned with
"the laws according to which derived units
vary when fundamental units are changed"
(Everett). A fundamental unit, together with
the magnitudes of like kind referred to it, is
regarded as having one dimension. Thus a
length has the dimension L. The unit of length
enters twice into the unit of area, first deter-
mining the base and then the altitude of the
unit rectangle, and therefore the dimensions of
an area are LL, usually written \?. If we alter
the unit of length, say from a foot to an inch
(1:12) the unit of area wiU be reduced in the
same ratio twice successively (1 : 144 in all).
The variations of the unit of area, therefore,
are directly as the squares of the variations in
the unit of length. The units of length and
of time enter once each into the unit of speed,
but they do not enter on the same footing. If
the unit of time be the minute, and the unit of
length the foot, the unit of speed wiU be a foot
per mihute. This unit will become smaller if
we make the unit of length smaller, since an
inch per minute is a smaller speed than a foot per
minute ; but it will become larger if we make
the unit of time smaller, a foot a second being
a greater speed than a foot a minute. This is
expressed by saying that the dimension of time
T enters negatively into speed. The dimensions
of speed, then, are expressed as LT~\ A unit
into which a dimension enters negatively is
always a unit of rate, and measures amount of
x'per unit of y, — y being the quantity the dimen-
sion of which enters negatively.
584
DIMENSIONS OF ECONOMIC QUANTITIES
We have now examined simple cases of the
variations of derived units, but it is obvious
that the numerical values of concrete magnitudes
vary inversely as the units by reference to which
they are estimated. The smaller the unit, the
greater the numerical value of any given magni-
tude. The numerical value of a magnitude,
therefore, will vary inversely as the unit whose
dimension enters into it positively, and directly
as the unit whose dimension enters into it
negatively. Thus, let the unit of speed
(dimensions LT~^) be a foot per minute, and
let the numerical value of a certain concrete
speed be 10, i.e. let the speed be ten feet per
minute. Then change the unit of length to
an inch (1 : 12) and the unit of time to a second
(1 : 60) ; the derived unit will now be an inch
per second, and its relation to the former derived
unit is obtained by altering directly in the ratio
of 1:12 (dividing by 12) and inversely in the
ratio of 1 : 60 (multiplying by 60), so that the
new unit is five times as gi^eat as the old one,
an inch per second being five times as great a
speed as a foot per minute ; but the numerical
value of the concrete speed we had to express
must be altered inversely as 1:12 and directly
as 1 : 60, and is now only 2 — i.e. the speed is
two inches per second — or one-fifth of what it
was before.
If we are measuring such a magnitude as feet
of vertical motion per foot of horizontal motion
in the path of a projectile, the dimensions will
be LL~^ and will cancel each other. No change
in the unit of length, then, will in any way
affect the numerical value of this magnitude, and
as no other dimension enters into it at all, it may
be said to have no dimensions. Angular magni-
tudes, defined as ratios between arcs and radii,
trigonometrical functions, and ratios generally
are of this nature. They have no selected
units, and their numerical values are absolute.
When the elements of the theory of dimen-
sions have been thoroughly grasped it will be
easy to apply it to economic questions ; and it
will be found an invaluable check in the more
intricate problems of co-ordination and analysis.
Thus, if the unit of value-in-use or utility be
taken as fundamental, and regarded as having
the dimension U, and if the commodity we are
considering be taken as having the dimension
Q, then Degree of Utility (q.v.) of the com-
modity, being the rate at which satisfaction is
secured per unit of commodity consumed, will
have dimensions UQ~^, and, will be readily dis-
tinguished from rate of enjoyment, accruing to
the consumer, per unit of tiTne, with dimensions
UT~^. Frice, determined by marginal, or final.
Degree of Utility {q.v. ), will have dimensions
UQ-^ or P ; and hire, being price per unit of
time, will obviously have dimensions PT~^ or
UQ-^ T~^. When the thing hired is money and
is used commercially, the utility derived from
it is a commodity of like nature with itself.
The dimension U then becomes Q, and the dimen-
sions of interest (as a rate) are QQ~^ T~^ or T~^
which will be found on reflection and experi-
ment to be correct.
The theory of dimensions should be applied
to economics in close connection with the
diagrammatic method. But of course the
connection between dimensions, as now ex-
plained, and the geometrical dimensions of the
diagrams is purely arbitrary. The physicist
may, according to his convenience, represent
the height of a projectile — a magnitude of one
dimension — by a line, or by an area, and speed
by a line or an inclination. So the economist
may represent a magnitude measured by a
complicated derived unit by a line, or a magni-
tude measured by a fundamental unit by an
area or a solid ; and if he keeps the theory of
dimensions well before him he may vary his
methods indefinitely without any danger of
confusion. In all cases, however, the dimensions
of those quantities represented by areas or solids
will be compounded of the dimensions of those
represented by the lines which determine them.
Again, those who have any acquaintance with
the elements of the calculus will see that if the
equation of a curve be differentiated to x then
the area of the derived curve will have the same
dimensions as the ordinate of the fundamental
curve ; the ordinate of the derived curve will
have the dimensions of the ordinates of the
fundamental curve positively, and those of its
abscissae negatively ; and the abscissae of the two
curves will have the same dimensions. In other
words, differentiation introduces the dimensions
of the variable to which we differentiate nega-
tively, and integration introduces the dimen-
sions of the variable to which we integrate
positively.
By way of illustration take a figure, on the
ordinate of which intensity of desire, or degree
of utility, is represented, while supply of com-
modity per unit of time is measured on the
abscissae. Now imagine a third axis (of Z)
perpendicular to the page, along which time is
measured. Such a figure will enable us to
represent all the quantities we have to deal
with in an ordinary problem of consumption.
Rate of supply is represented on axis of X,
Y
dimensions QT~^ ; degree of utility on axis of
Y, dimensions UQ~^ ; time on axis of Z, dimen-
sion T ; rate of enjoyment on areas parallel to
plane of axes of X and Y, dimensions UQ~^ QT"^
DIMINISHING KETUENS
685
or UT"-^ ; total enjoyment on solid figure, dimen-
sions UQ~-^QT~^T, or U ; total supply on areas
parallel to plane of axes of X and Z, dimensions
QT~^T, or Q, and in like manner price, hire,
total sum paid, etc., may be read, and their
dimensional relations seen at a glance.
[The theory of dimension was (according to
Jevons, Principles of Science, 1887, pp. 325)iirst
clearly stated by Joseph Fourier. He expounded
it with great lucidity in his Th^orie Analytique
de la Chaleur, 1822, §§159-162. An excellent
popular statement of the theory, as it has since
been elaborated, will be found in the beginning
of Prof. J. D. Everett's C.G.8. System of Units,
1891. Jevons was the first to suggest the
application of the theory to economics {Theory
of Political Economy, 1888, pp. 232-252), but he
unfortunately fell into some apparent errors and
confusions which made the suggestion barren
in his hands. A criticism of his treatment of
the subject and an independent working-out of
his suggestion, by the writer of the present
article will be found in the American Quarterly
Journal of Economics for April 1889, pp. 297-
314.] p. H. w.
DIMINISHING RETURNS. The law of
diminishing returns is the name given to the
proposition that increase of the population of a
country, or, more strictly speaking, increase of
the labour expended on a given area, tends to
be acconi})auied by a diminution of the returns
to a given amount of agricultiu-al industry.
The law, it is added, is only true after popula-
tion has reached a certain degree of density,
and even then improvements in the methods of
production have a counteracting tendency. Its
origin is to be found in the corn-law discussions
of ]814 and 1815. During the great war cul-
tivation had been extended over lands of a
worse quality than those previously occupied,
and the conclusion of peace threatened, unless
more stringent restrictions on importation were
enacted, to throw these lands out of cultivation.
It was generally assumed that this would be an
evil to the whole nation, and not only to the
owners and cultivators of the lands in question,
as it was supposed that every increase of cul-
tivation must ultimately lower the price of corn
by making it more abundant. But Mai thus,
in his Observations on the Com Laws (1814),
attributed "no inconsiderable part" of the
difference between the English and the foreign
price of corn to the "necessity" of cultivating
the poorer lauds, from which a given amount
of produce is obtained by the expenditure of a
larger quantity of labour than is required in
raising an equal amount of produce on the
better lands (p. 40). In the Nature and Progress
of P^nt (January 1815) he worked out this idea,
and mentioned the opposing force of agricul-
tural improvements, which he considered to be
rarely sufficient to balance the necessity of
applying to poorer land, so that "the quantity
of labour and capital necessary to procure the
last addition that has been made to the raw
produce of a rich and advancing country is
almost constantly increasing" (p. 45). Sir
Edward "West, in his Essay on the Application
of Capital to Land (January or February 1815),
put forward the same idea of an actual diminu-
tion of the returns to agricultural industry in
order to show that the price of corn would not
be lower than the price at which importation
was allowed (see Corn Laws). Ricardo, in his
Essay on the Influence of a Low Price of Corn
on the Profits of Stock (February 1815), used
the theory. that with the increase of [lopulation
the returns to agriculture diminish "independ-
ently of all improvements," — i.e. supposing
improvements not to take place, — as an argu-
ment against any restriction on the importation
of com. For this purpose it was not necessary
to follow West and Malthus in holding that
returns have generally diminished in spite of
all improvements, but there can be no doubt
that Ricardo did believe that improvements
have only a temporary effect in retarding the
diminution of returns {Low Price, Works, p.
377 n. ; Pi-inciples, Works, p. QQ). James
Mill, in Elements of Political Economy (1821),
insisted on an actual diminution of returns, and
paid no attention to the effect of improvements
in production. M'CuUoch, in Principles of
Political Economy (1825), expressed unhesi-
tating belief in the actual diminution of
retm-ns with only temporary interruptions due
to improvements (pp. 205, 277, 278, 383).
This became for the time the received doctrine
(see Longfield, Lectures, 1834-35, p. 181).
But Dr. T. Chalmers in 1832 denied it, and
showed, what was not then generally under-
stood, that the bringing of new land into cul-
tivation does not prove that an actual diminu-
tion of returns has taken place, as, owing to
"improvements" or changes in human know-
ledge, the labour on the new land may be now
as productive as the labour on the old land was
before the change {Political Economy, in Works, *
vol. xix. pp. 17-24). H. C. Carey, in his Poli-
tical Economy (1837-40), brought forward facts
to show that the returns to agricultural in-
dustry, so far from diminishing, have actually
increased enormously (vol. i. p. 58, iii. pp. 69,
70). J.' S. MiU's teaching on the subject is
not altogether consistent ; sometimes he speaks
as if there were no doubt that returns had
increased {e.g. in the " Introduction " to Pol.
Econ.) at other times as if they had with occa-
sional interruptions steadily decreased {PoL
Econ., bk. i. ch. xii. §§ 2 and 3, esp. in 1st ed.,
ch. xiii. § 2, bk. iv. ch. ii. § 3, ch. iii. § 5).
To meet Carey's objection, advanced in Past,
Present, and Future (1848), and in Principles
of Social Science (1858), that, as a matter of
fact, the least fertile lands are cultivated first,
Mill confined the operation of the "law" to
680
DIMINISHING UTILITY— DIRECT TAXATION
old countries. Caimes is probably the last
writer of importance wbo expressed a strong
belief in an actual diminution of returns {Lead-
ing Principles, 2nd ed. p. 119).
By the law as it is now taught (Sidgwick,
Principles, bk. i. ch. vi. ; Marshall, Principles
of Economics, bk. iv. ch. iii.) no suggestion of
any actual diminution of the returns to agri-
cultural industry is intended. It is merely
equivalent to the proposition that in each
stage of progress there is a limit beyond which
the labour expended upon a given area cannot
be increased without causing a diminution of
returns. The position of the limit is constantly
being changed by the progress of knowledge,
and to say whether it has been passed in any
particular case is a very difficult practical ques-
tion. And even in a case where the produc-
tiveness of agricultural industry had actually
diminished, it would not necessarily follow that
the productiveness of all industry taken together
had diminished. Diminishing returns in agri-
culture niight be counterbalanced by increasing
returns in other industries. On this point see
Increasing Returns.
In the older statements of the law the
"diminishing return" was the return to "a
given amount of labour and capital." But a
given amount of labour is not always aided by
the same amount of capital, and when a given
amount of labour is assisted by a greater amount
of capital the returns to capital may diminish
without any diminution of the produce of a
given amount of labour. (See J. B. Clark,
"Law of Wages and Interest" in Annuls of
the American Academy of Political and Social
Science, July 1890.) e. c.
[For a fuller account of the discussions of 1813
to 1815, see E. Cannan,«"The Origin of the Law
of Diminishing Returns " in the Economic Journal,
March 1892.]
DIMINISHING UTILITY. See Utility.
DINAR {ancient). An Arabian gold coin
weighing about sixty-six grains. It formed*
the cii'culating medium of a great part of both
Asia and Africa for about twelve hundred years.
Dinar (modem). The equivalent of the
franc in Servia (see Franc). f. e. a.
DIODATI, Domenico, a Neapolitan, lived
in the second half of the 18 th century. He was
the author of Illustrazione delle monete che si
nominano n^lle Costituzioni delle Due Sicilie,
Napoli, presso Donate Campo, 1788 a book which
describes the coins of Frederick II., Emperor of
Germany and King of the Two Sicilies, and
expresses their value in terms of money current
at the author's date. It does not deal with
theory, except by discussing the "three dif-
ferent values of money, extrinsic value, intrinsic
value, and commercial value." According to
Diodati the extrinsic value of a coin is the one
declared by the state ; the intrinsic value, the
value of the metal in it ; the commercial value.
the purchasing power of a coin in terms of com-
mercial commodities. m. p.
DIODATI, LuiGi, the younger brother ol
Domenico Diodati, also wrote on coins, from a
wish to continue his brother's work. His
competence in questions concerning coins was
recognised by the government, which made
him director of the Neapolitan mint. He
was a great admirer of Broggia, and sent
Broggia's works to the Russian court to be trans-
lated into Russian.
In his book Dello staio presente della fnoneta
net Pegno di Napoli e della necessity di un
alzamento, con Prefazion^ ; Napoli, stamperia
Migliaccio, 1790, and in a sequel to it : Risposta
ad alcune critiche fatte all' opera intitolata . . .
ut supra ; Napoli, 1794, Diodati discusses an
abstruse point in the history of money, which
he says neither De Sanctis, Serra, Turbolo,
Locke, Melon, Spinelli, Galiani, nor Beccaria
had explained completely, viz. the true cause
why gold had disappeared in 1587 from the
kingdom of Naples. The usual explanation
of this fact v/as an excess of imports over
exports, whilst it was due, according to Diodati,
to the monetary reform undertaken by the other
states of Italy, each of which had raised the
nominal value of their coins. In conformity
with this central idea of his, Diodati advises
his government to raise the nominal value of
money in the kingdom of Naples, so as to
make it equal to that of other Italian states,
and explains at great length how this alteration
should be carried out — changing the money
into a species of token money. The reason
which Diodati gives for the elevation of the nom-
inal value of coins in other states, and therefore
for doing the same in the kingdom of Naples,
consists in the rise of prices and the fall in the
value of money, consequent on the discoveries
of silver in America, and the impulse these
supplies of metal gave to enterprise and business,
whilst reducing all fixed incomes. M. P.
DIRECT TAXATION. As defined by Mill
(Principles, bk. v. ch. ii. § 1), taxation "which
is demanded from the very persons who it is
intended or desired should pay it."
Mill's definition has been generally adopted
(see Prof. J. S. Nicholson's Art. "Taxation,"
Encyclopcedia Britannica, 9th ed.), e.g. by
Wagner (Handbuch, vol. ii. p. 152), and by
Fawcett (Manual, 5th ed., bk. iv. ch. iii.)
The latter \vriter abbreviates the definition by
the statement that ' * a direct tax is really paid
by the person from whom it is levied."
Practical financiers, as Prof. Bastable states
(Public Finance, bk. iii. ch. i.), "regard those
taxes as direct which are levied on permanent
and recurrent occasions."
M'CuUoch defined a direct tax as one which
is taken directly from income or capital, and
Dr. Ely (Taxation in American States and
Cities, New York, 1888, p. 69) observes thar
DIEECTORS, LEGAL DUTY OF— DISABILITIES OF INFANTS 587
"direct taxes are taxes on trades, including
any branch of business, on permits, on property
consisting of other economic goods than articles
of consumption, and on income." Both these
definitions would include taxes on articles of
luxury such as dogs, horses, carriages, and also
on successions and gifts.
In this connection Prof. Sidgwick's remark
maybe noted, "The common classification of
taxes as direct and indirect appears . . . liable
to mislead the student, by ignoring the com-
plexity and diflBculty of the problem of deter-
mining the incidence of taxation." See also
Taxation. t. h. e.
DmECTORS, Legal Duty of. The duties
and responsibilities of directors of joint-stock
companies and other associations have frequently
been discussed in the com-ts, and their position
is now well defined. In the first place, a
director must act strictly within the powers of
the company as defined by the memorandum of
association, and also within the powers en-
trusted to the directors by the articles, and if
he expends any money or incurs any loss in
consequence of transgressing such powers, he
is liable to refund the amount. As regards
transactions within such powers it has some-
times been said that directors are in the position
of trustees, and attempts have been made to
make their duties as stringent as those of the
trustees of wills and settlements, but the courts
have consistently opposed that view, and it is
now well established that " if the directors apply
the money of the company or exercise any of
its powers in a manner which is not ultra vires,
then a strong and clear case of misfeasance
must be made out to render them liable " (see
the present Lord -Justice Kay's judgment In
re Faure Electric Accumulator Company, 40
Ch. D. 141, 152) ; in other words, unless it
can be proved that the directors have been
guilty of fraud or reckless negligence, they can-
not be made responsible for losses arising through
any of their acts or omissions as long as they
have not transgressed the boundary lines laid
do^vn by the memorandum and articles.
A special liability is imposed upon directors
with regard to prospectuses. In the first place,
it is provided by Companies Act 1867, § 38, that
every prospectus issued by a company must
contain certain particulars respecting contracts
entered into by the company or its promoters,
and that the absence of such particulars renders
the directors liable in the same way as if the
prospectus in question had contained a fraudulent
statement. In the second place, directors are
liable in respect of fraudulent statements in
prospectuses, and to a certain extent also for
untrue statements made negligently, but in
good faith. Before the Directors' Liability Act
of 1890 proof of fraud was always necessary,
but fraud was held to be proved if a false
representation had been made — (1) knowingly,
2) without belief in its truth, (3) recklessly
see Lord HerscheU's judgment in Derry v.
Peek, 14 Appeal Cases, 337, 359). The new
act imposes a more stringent liability, inasmuch
as it entitles persons who take shares or de-
bentures on the strength of an untrue statement
made in a prospectus to claim compensation,
notwithstanding the absence of fraud, unless
it can be shown that the person from whom
compensation is claimed had reasonable cause
to believe, and did in fact believe, that the
statement was true. Before the act of 1890
a director who had not authorised or connived at
the issue of a prospectus containing a false state-
ment was not liable ; but now a director is not
absolved from his liability by showing that the
prospectus was issued without his knowledge or
consent ; he must further show that "on becom-
ing aware of its issue he forthwith gave reason-
able public notice that it was so issued without
his knowledge or consent " (see art. under this
heading in Appendix). e. s.
DIPtOM, Major Alexandee, of Muiresk
(end of 18th century), wrote Inquiry into the
Corn Trade and Corn Laws of Great Britain,
and their Influence on the Frosperity of the
Kingdom, 1796, with appendix by W. Mackie
of Ormiston. The increase of foreign imports
of corn is due to alteration of the old corn laws.
In consequence of these alterations, Dirom says,
' ' Our agriculture, which had reached its highest
prosperity between 1730 and 1750, has ever
since been rapidly declining, as is shown by the
fact that 137,000 more people were employed in
the cultivation of land between 1741 and 1750
than between 1773 and 1784." This pamphlet
was answered in 1798 by Rev. J. Howlett
(q.v.), Dispersion of the Gloomy Apprcl tensions
of late repeatedly suggested from the Decline of
our Corn Trade. Mr. Howlett thinks that the
increased consumption of a greater population,
the demand for finer grain than formerly, and
the greater numbers of live stock, especially
horses — sufficiently account for the increased
foreign importation (Dugald Stewart, Political
Economy, vol. i. 247 seq.) J. b.
DISABILITIES OF ALIENS. The only
disability to which aliens now remain subject
is that they cannot hold any shares in British
ships (see Aliens ; and Appendix). e. s.
DISABILITIES OF INFANTS. An infant
{i.e. a person not having attained the age of
21 years) cannot, as a general rule, enter into
any binding contracts or make any valid dis-
positions of property. To this rule there are
several exceptions. An infant may (1) if a
male, marry after having attained the age of 14 ;
if a female, after having attained the age of 12 ;
(2) with the consent of the court (a) mak<»
a valid marriage settlement (18 & 19 Vict. o.
43) (h) make leases and grant renewals of
leases (11 Geo. IV. and 1 Will. IV. c. 66,
§§16 and 17) ; (3) enter into binding contracts
B88 DISABILITIES OF LUNATICS AND DRUNKARDS— DISCHARGE
relating to the supply of necessaries — the term
necessaries not being confined to the bare
means of sustaining life, but including all such
things as are considered appropriate to the
station of life of the person concerned ; (4^ an
infant after attaining the age of 21 cannot
retain property subject to liabilities acquired
during his infancy without satisfying the liabili-
ties incurred during that time, e.g. arrears of
rent, calls on shares. On the same principle
an infant partner who on attaining 21 retains
his share of the profits, must allow himself to
be debited with his share of the losses incurred
during his minority. (5) Infant holders of
gavelkind land may alienate such land subject
to the performance of certain formalities, and
there are other local customs giving infants an
exceptional capacity to contract. (6) Infants
holding themselves out to be of full age are
liable to restore any advantage they have
obtained by their misrepresentation to a person
who acted on the faith of it. e. s.
DISABILITIES OF LUNATICS AND
DRUNKARDS. In this case it is not quite
correct to speak of a disability. Infants and
married women are under permanent restric-
tions imposed on them as a general consequence
of their status. Mental derangement, on the
other hand, does not in itself create a new
status. No transaction could be invalidated by
the simple fact that a party to the transaction
is a lunatic or a drunkard ; on the other hand,
a person generally sane or sober may under
certain circumstances avail himself of the plea
of mental incapacity. The rule is, that a
contract or a disposition of property — which
term includes testamentary dispositions — is
generally not binding on a person who at the
time of making the contract or disposition is
not of sufficient mental capacity to imderstand
the nature of the transaction. Whether the in-
capacity is due to insanity in the proper sense
of the word, to mere temporary derangement
or illness, or to drunkenness, is quite immaterial.
As a general rule the party, or representative
of the party, who wishes to escape an obliga-
tion on the ground of mental incapacity must
bring evidence to show that at the essential
moment such incapacity existed, but where a
person has, after a judicial investigation (inqui-
sition), been formally declared a lunatic, the
presumption is reversed, and the party wishing
to uphold a transaction to which the lunatic
was a party must prove that the contract or
disposition was made during a lucid interval.
There is one exception to the above-mentioned
rule. When a party to a contract, otherwise
voidable on the ground of the mental incapacity
of the other party, did not, as a matter of fact,
know of such incapacity and had no reasonable
ground for knowing it, and where it is impos-
sible to restore the parties to their former
position, the incapable party or his representa-
tive must abide by the consequences of the
contract. Thus the personal representative of
a deceased lunatic who, while in a state of
mental incapacity not known to the other side,
had purchased an annuity from an insurance
office, cannot recover the purchase money.
(See Drunkards.) e. s.
DISABILITIES OF MARRIED WOMEN.
It is generally believed that the Married
Women's Property Act of 1882 has removed
all the disabilities of married women, but this
is not the case. A married woman having
separate property, not subject to a restraint on
anticipation, may now make contracts binding
not only the property of which she is possessed
at the time, but also property acquired subse-
quently, during the continuation of the marriage,
and she may by will dispose of her separate
property ; but great anomalies remain, of which
the following may be quoted as instances. A
married woman, not being possessed of separate
property, who purchases goods on credit and
disposes of the goods, cannot be compelled to
pay for the same although she subsequently
acquires separate property of great value. A
married woman not having any separate
property, but knowing that her husband has
made a will under which she wiU be entitled
to a considerable legacy, makes a wiU, with the
intention of securing the benefit of the legacy
to some friend or relative, and dies after her
husband. The legacy, will go to her next-of-
kin, as her will can only dispose of " separate
property," and property acquired after her
husband's death is not separate property. A
married woman entitled to a life interest in
property subject to the usual restraint on
anticipation, but not possessed of other separate
property, incurs large debts. Her creditors are
absolutely without any remedy. This state of
things is most unsatisfactory. The old common
law rule was based on the assumption that
husband and wife were one person ; the wife's
proprietary existence ceased on the day of her
marriage, and became absorbed into that of her
husband, who took all her personal property,
and possessed extensive rights of control and
enjoyment with respect to her real property.
This view, which at any rate had the advantage
of clearness and consistency, has now been
definitely abandoned ; a wife now retains all
her property and has extensive rights of dis-
position ; the remaining restrictions have no
social or economical reason, and their practical
inconvenience is obvious. (See Marriage
Settlement.) e. s.
DISCHARGE (Scotland). Extinction of a
debt or obligation, which may be by — (1) pay-
ment or performance ; (2) abandonment of claim
by creditor ; (3) compensation or set-off ; (4)
novation or replacement of the original obliga-
tion by another obligation ; (5) delegation, or
replacement of the original debtor by anotb er
DISCHARGE IN BANKRUPTCY— DISCOUNT
589
debtor ; (6) confusion, the debt and the credit,
in a condition immediately and finally to
extinguish one another, coming to coincide in
the same person. Also (Scotland) the docu-
ment whereby the creditor discharges the
debtor. A. D.
DISCHARGE IN BANKRUPTCY. The
effect of a discharge in bankruptcy under the
Bankruptcy Act 1883, is to free the debtor
from all debts and liabilities provable in the
bankruptcy, except crown debts, and debts
incurred by fraud or through a fraudulent breach
of trust. Crown debts can be released by a
certificate from the treasury. By the amending
act of 1890, it is further provided that, unless
the court otherwise orders, the discharge shall
not release the debtor from any liability under
a judgment in an action for seduction, or under
an affiliation order, or under a judgment against
him as a co-respondent.
Under the act of 1869, the discharge of a
bankrupt was a matter practically in the hands
of his creditors unless he had paid a dividend
of 10s. in the pound. Under the acts
of 1883 and 1890, it is in all cases a matter
for the judicial discretion of the court.
At any time after being adjudged bankrupt,
the bankrupt may apply to the court for an
order of discharge, but the application cannot
be heard until after his public examination is
concluded. Notice of the day fixed for the
hearing must be gazetted, and sent to the
creditors. On the hearing, any creditors who
desire it, must be heard, and the court must
take into consideration a report of the official
receiver as to the bankrupt's conduct and afi'airs.
If it is shoAvn that the debtor has been con-
victed of a misdemeanour under the Debtors'
Act 1869, the court is directed to refuse the
discharge. If, on the other hand, the debtor is
shown to have been guilty of certain minor acts
of misconduct specified by the act, such as the
assets, without reasonable excuse, not amount-
ing to 1 Os. in the pound, or not keeping proper
trade books, or trading with knowledge of
insolvency, or having been guilty of fraudulent
conduct, the court must either refuse or qualify
the discharge. A discharge may be qualified
either by suspending it for a specified time,
usually not less than two years, or by imposing
conditions as to after-acquired property, as, for
instance, by directing judgment to be entered
up against the debtor for a certain sum. If the
debtor's conduct has been blameless he is entitled
to an unconditional discharge, and may also
obtain a certificate from the court removing any
civil disabilities consequent on bankruptcy (§ 8
of the Act of 1890). An undischarged bankrupt
who obtains credit from any person to the extent
of £20 or upwards without informing such person
of his status is guilty of a misdemeanour. A new
Bankruptcy Act was passed in 1 9 1 3. M. d. c.
DISCLAIMER. A person appointed as trustee
of a will or settlement who does not wish to
accept the trust will find it safer as a general
rule to execute a deed by which his non-accept-
ance is stated. A deed of this nature is called
a deed of disclaimer. The word disclaimer is
also generally used for any act of renunciation.
E. S.
DISCOMMODITY. The terms disutility
and discommodity have been introduced into
the nomenclature of political economy by
Jevons {Theory of Political Economy, 1879, pp.
62, 63) as the opposites or contraries of the
terms utility and commodity. Thus, by disu-
tility he means, not the mere absence of utility,
but the quality of causing positive inconvenience
or discomfort. Similarly, by discommodity he
means any action or material thing which
possesses disutility. The term discommodity
is used in much the same sense by Professor
Marshall. " While demand is based on the
desire to obtain commodities, supply depends
on the overcoming of the unwillingness to under-
go 'discommodities.' These fall generally under
one of two classes, labour and the abstinence
involved in putting off consumption " {Prin-
ciples of Economics, vol. i. ed. 2, 1891, p. 193).
J. N. K.
DISCOUNT. The term ' ' discount " signifies
an abatement, or deduction, and is in practice
applied in several ways : (1) stocks or shares
are said to be at a discount when their market
value shows an abatement from par value ; (2)
the stock of a trader is sometimes, from bank-
ruptcy or other cause, sold at a discount from
cost price ; (3) a quoted or publislied price
may be by custom subject to an abatement or
discount, to purchasers for the trade, or for
export ; (4) an account for goods delivered
may be paid at a date earlier than is usual upon
receiving a discount therefrom ; or (5) a bill of ex-
change, due at a future date, may be discounted,
i.e. sold for cash at an agreed abatement.
Excepting in the first case, the discount is
usually expressed at a rate per cent, and in
cases 2, 3, 4, the formula for calculation is
P X K
simply D = -- . In the discount of a bill
of exchange, the time it has to run is taken into
P X R X T
account, and the formula is D = — — - — ; T
representing, in theory, fractions or multiples
of a year, but, in the practice of a banker, a
fraction only.
In law, and in fact, the operation of dis-
counting a bill is a purchase, and the property
therein passes to the purchaser, who acquires
all the usual rights of a holder (see Bill of
Exchange, Endorser, etc.) In practice, a
banker always places the amount of the bill to
the credit of his customer, debiting him at the
same time with the discount. In most dis-
count operations the effective rate of interest
590
DISCOUNT
upon the capital employed is greater than the
nominal rate of discount. In the first three
cases referred to above, time is an uncertain
factor, and the effective rate will be increased
according to the shortness of the time that
elapses before the investment is realised ;* or
will be diminished if that time should exceed
one year. In obtaining discount upon the
])repayment of an account the effective rate is
dependent upon the time when payment would
otherwise become obligatory. In discounting
a bill of exchange, the time it has to run is
taken into account in deciding the amowni of
discount, and the only advantage in the effect-
ive rate over the nominal rate is that — com-
mon also to all the other cases — arising from
the fact that the discount is received at once.
Having regard to this fact, it is taught in
the schools that true, discount is the difference
between the whole sum and its ** present value,"
this latter being defined as the sum which, if
put out at interest at the rate named, would
amount, at the end of the given term, to the
sum due. It is also further laid down that the
current method of charging discount produces
less to the holder than he should equitably
receive, and examples are usually given only
in what is termed the "more correct rule" of
* * true discount. " But this teaching is altogether
wrong, and appears to be based upon the
erroneous notion that the operation of dis-
counting is an advance, whereas it is a purchase.
Moreover, as the word signifies an abatement,
or "reckoning from," it is clear that such
abatement must be calculated upon the gross
sum, and not upon the net result of its own
deduction. The theory of " tru^ discount," also
connotes the idea, which is equally unsound,
that there is an "equity" in rates other than
that obtained by free sale in a free market.
As a matter of fact it is always found that the
discount rate on bills is lower than the rate of
interest on advances, which though chiefly due
to the more liquid character of an investment
in bills, is also, no doubt, in part due to the
advantage under discussion.
The extent of this advantage varies directly
with the nominal rate, but in greater degree.
Thus:
With discount at 1% the effective rate is I'Oi % p. ann.
„ » 3% „ „ „ 3-0927-1-% „
„ 5% „ „ „ 5-2631 +% „
» » 10% „ „ „ iri % „
From these instances it appears that the extra
profit increases almost as the square of the rate.
But this advantage is derived in the way of
compound interest, and is therefore dependent
upon the frequency with which the profit is
received. The operation of the rule is, how-
ever reversed, and the shorter the term the
less is the profit. The rates quoted above are
based upon a supposed discount of twelve
months' bills, and as bankers very rarely dis-
count bills with more than six months to run,
and in by far the greater number of cases take
bills of three months, or less, the advantage
they obtain is very much less than is generally
supposed. The effective rate derived from a
year's full employment of capital in discount-
ing at 5 per cent is as follows :
In 6 months' bills 5-19375%
„ 3 „ „ 5-16 %
„ 2 „ „ 5-14875%
As this presupposes an immediate re-employ-
ment of the full amount obtained by the pay-
ment of each bill as it falls due, and a constant
rate of 6 per cent, it is considerably above the
probable experience. R. w. B.
DISCOUNT, French Stock Exchange
(Fr. Escompte). The privilege accorded to
buyers for the account on French bourses,
to demand immediate delivery. The right
is based on the fiction that sellers always
possess the stock or shares they have sold, and
is reaffirmed in Art. 63 of the decree of the 7th
October 1890, relative to the office of agent de
change: — "The purchaser may at all times
call for the delivery, by anticipation, of the
securities negotiated, whether firm or at option."
Sellers may, however, stipulate that the opera
tion is not discountable. The privilege is not
frequently exercised, and, unless the market
has been prepared by a corner, the manoeuvre
may turn against those who employ it, for if
the seller has no difficulty in procuring the
stock, the effect produced may be the reverse of
that intended. Notice of " discount" must be
given before business hours by the buying ag&nt
de change to the selling one with particulars
which are posted in the private room of the cor-
poration in the bourse building, and the purchase
money must be deposited. The seller is allowed
five days to pass the stock or shares, and two ad-
ditional if the ti'ansfer requires the acceptation of
the buyer, after which the usual measures against
defaulters may be applied. T. l.
DISCOUNT, London Stock Exchange
The word is used in two senses, the one legiti-
mate, the other being a piece of slang. First the
scrip of a new issue is usually quoted at a
discount, or at a premium, as the market price
falls below or exceeds the amount of the instal-
ment so far paid up. Thus, were a new govern-
ment bond to be on the market, on which only
£25 per cent had been paid up, the price —
supposing it to be £26, would be quoted £1
premium. If, for another example, the shares
in the Manchester Canal, on which £10 had
been paid, were purchaseable at £8, the market
price would be £2 discount. When new scrip
has been fuUy paid up, the necessity of quoting
at a premium or discount ceases, and the plair
price is then customarily quoted. The second
sense in which the word discount is used on the
stock exchange is to imply a preliminary effect
on the market of news, or some other influence
DISCOVERIES— DISCRIMINATING OR DIFFERENTIAL DUTIES 59i
which tends to raise or depress prices. There
have, again and again, been rumours of coming
war between Russia and England, and a fall in
prices of government stocks was produced merely
by the " discount " of the effect which an actual
outbreak of hostilities would have upon the
market. Similarly, the shares of this or that
joint -stock company sometimes fall in the
market, or rise, as the case may be, dealers and
speculators being anxious to discount the effect
of a good or bad dividend. Occasionally the
effect of this discounting process is excessive,
and the actual occurrence of what is anticipated
or discounted, and the confirmation of rumours,
is often followed by reaction.
On the stock exchange the word is used
rather as a piece of slang to convey the impres-
sion that an expected event — say the death of
the late Emperor Frederick of Germany — has
been acted upon in advance by dealers and
others, who by putting down or raising the
quotations of the stocks in which they deal,
"discount" the probable effect of that event
on the market. Thus we hear of news being
discounted, i.e. anticipated in a similar way as
the value of a bill is anticipated under Discount.
A. E.
DISCOUNT HOUSES. See Bill Broking.
DISCOVERIES, Geographical (Influence
ON Trade of). The effect of discovery is to
modify or recast the conditions under which
trade and industry are carried on. But such
effect almost invariable though it be, may and
does manifest itself in certain different directions,
and thus, though it would be hard to describe
within reasonable limits the results produced
in the economic world by the discoveries which
have been made, it is possible to suggest the
directions in which these may be sought.
Geogi-aphical discoveries may affect trade in
the following ways —
a. By providing new sources for the supply
of raw material.
h. By opening up new markets.
c. By the ultimate evolution of new trade
rivals or competitors.
It is hardly necessary to point out that
newly-discovered countries may pass through all
the phases described above with regard to other
and older-established countries. North America,
for example, is the great source of cotton supply,
it is a trade rival, and for some time it offered
a large opening for the import of goods of
European manufacture. As a rule, however,
discovery tends to promote the greater differ-
entiation of trade and industry. Each country
attains to a distinct and separate position in
regard to either supply or manufacture.
There is, however, another mode in which
trade is affected by discovery.
d. By opening up new sources for the supply
of the precious metals. These may be
discovered in an old country ; or a new country
possessing gold or silver mines may be
suddenly discovered. The discovery of the
Americas in the 1 5th century was of this latter
character (see Geography, Commercial ;
Precious Metals, Discoveries of), e. c. k. g.
DISCOVERIES OF PRECIOUS METALS.
See Precious Metals, Discoveries of.
DISCOVERY IN ACTIONS. Discovery in
its widest sense means the procedure by which
a party in an action may obtain sworn informa-
tion from his opponent with reference to matters
affecting the questions in dispute. Such in-
formation may be obtained (1) by administering
interrogatories (written questions relating to
relevant matters which must be answered by
affidavit) ; (2) by requiring an affidavit of
documents (a list of documents, verified by
affidavit, relating to the matters in question in
the action, being in the possession or power of
the party from whom discovery is sought) ; (3)
by giving notice to produce for inspection any
documents referred to in the pleadings or in the
affidavit of documents. A party may refuse to
answer interrogatories or to produce documents
for inspection on certain grounds, as for instance
because the answer or the production of the
document would subject him to criminal pro-
ceedings, or that the required disclosure would
violate professional confidence or be detrimental
to the public interest. Non-obedience to an
order of the court directing discovery may
subject the disobedient party to imprisonment.
E. s.
DISCRIMINATING OR DIFFERENTIAL
DUTIES. Duties imposed upon commodities,
and differing in amount according to the par-
ticular source from or mode in which those
commodities are obtained.
When discriminating or differential duties
have been imposed, the circumstances most fre-
quently taken into account have been {a) the
process of producujou employed, as in the case
of a manufactured article produced either by
hand or by steam power ; (h) the material used,
as in the case of sugar made from cane or from
beetroot ; and (c) the country or place of origin,
as in the case of what are termed Corn Laws
{q.v.) *
In cases in which regard has been had to the
country or place of origin, the object has been
either to protect the home product, or to favour
importation from one particular place or in one
particular manner, as, for example, where lower
duties have been charged on the produce of a
colony or of a country with which special treaty
obligations are in force, or where higher duties
are imposed on goods imported in shipping
carrying a particular flag.
In an interesting note to his edition of the
Wealth of Nations (new edition, 1863, p. 599)
M'CuUoch discusses the effects of the differential
duties imposed on foreign timber to favour our
North American colonies, and Sir Thomas Farrer,
592 DISCUSSION— DISTANCE IN TIME AS AN ELEMENT OF VALUE
in Ids Free Trade versus Fair Trade, refers some-
what fully to the proposals of the fair traders
for differential duties in favour of the colonies.
The latter writer remarks that such duties are
"open to the fatal objection which makes aU
protection odious to free traders — viz. that they
liinder people from buying and selling where
they find it to their interest to buy and sell ;
that they limit production by preventing people
from using their natural capacity to the utmost
in making and selling the things which they
can make better than others."
J. S. Mill arrives at somewhat similar con-
clusions. "Whatever else maybe alleged in
favour of such distinctions, whenever they are
not nugatory they are economically wasteful.
They induce a resort to a more costly method
of obtaining a commodity, in lieu of one less
costly, and thus cause a portion of the labour
which the country employs in providing itself
with foreign commodities, to be sacrificed with-
out return " {Principles, bk. v. chap. iv. § 5).
The considerations affecting discriminating
or differential duties are very closely connected
with those relating to the general subject of
free trade and protection (see also Most
Favoured Nation Clause). t. h. b.
DISCUSSION (Scotland). (1) A cautioner or
surety, if not bound jointly and severally with
the principal debtor, was formerly entitled to
demand that the principal debtor should be
"discussed" — i.e. that the creditor should
employ his means of recourse against him,
before he himself was interfered with. This
privilege is, since 19 & 20 Vict., c. 60, § 8,
now only possessed by cautioners who have
expressly stipulated for it. (2) Heirs who re-
present the ancestor are liable for all his debts ;
but only in a certain order, which depends on
the character in which they succeed ; and
those who come later in this order are entitled
to insist that before they themselves are called
upon, those who come earlier should be "dis-
cussed," i.e. made to choose between paying the
debts and renouncing the succession. In Eng-
lish law choice is described as being "put to
Election " (see Election).
[Lord M'Laren on Wills, § 2269.] A. D.
DISHONOUR OF A BILL. Refusal to
accept ; or non-payment when due (see Bill
OF Exchange ; Diligence ; Noting of
Bills ; Protest of Bills). a. d.
DISPOSITION (Scotland). Generally a uni-
lateral deed of conveyance. The "disponer"
"sells and dispones" or "gives, grants, and
dispones" to the "disponee," the thing con-
veyed. A "disposition and settlement," or
" trust disposition and settlement," a disposi-
tion, reserving liferent and dispensing with the
necessity of actual delivery of the deed, to
trustees with powers and under directions speci-
fied, is a common form of making one's will.
"Dispositions in security," or "bonvl and
disposition in security," are forms of mortgage.
A. D.
DISTANCE IN TIME AS AN ELEMENT
OF VALUE. Distance does not "lend enchant-
ment to the view" of a future pleasure com-
pared with the same pleasure regarded as
present. "There is no man perhaps to whom
a good to be enjoyed to-day would not seem of
very different importance from one exactly
similar to be enjoyed twelve years hence, even
though the arrival of both were equally certain "
(John Rae, Statement of soTne new Principles of J
Political Fconomy, Boston, 1834, a work referred t!
to by Mill in terms of high encomium, Pol.
Econ., bk. i. ch, xi.) This incident of our moral
nature has often engaged the attention of
philosophers. Thus Locke {Essay concerning
Hwman Understanding, bk. ii. ch. xxi. § 63) :
"When we compare present pleasure or pain
with future, we often make wrong judgments
of them, taking our measures of them in
different positions of distance. Objects near
our view are apt to be thought greater than
those of a larger size that are more remote ;
and so it is with pleasures and pains, the
present is apt to carry it, and those at a distance
have a disadvantage in the comparison."
Hume gives a more refined explanation of the
influence of distance on the will {Treatise
on Human Nature, bk. ii. pt. iii. § 7 ;
compare the remarks, bk. i. pt. iii. § 9, with
respect to a future state). Jevons expresses
the depreciation of future pleasures by a
fractional factor (a function of the distance in
time). Multiplying the future pleasure by this
factor we have its value relatively to present
pleasure ^ {Theory of Political Economy, 3rd ed.
p. 72, cp. p. 34). The factor expressing the
effect of remoteness should be unity, if
human nature were perfect. As Professor
Sidgwick says {Methods of Ethics, bk. ii. ch. ii.
p. 1, note), the "equal and impartial concern
for aU parts of one conscious life is perhaps the
most prominent element in the common notion
of the rational — as opposed to the merely
impulsive — pursuit of pleasure." But in fact
human nature always falls short of this ideal ;
and according to the degree of such imperfection
nations and classes differ in the desire of
accumulating the means of future pleasure
(see examples quoted from Rae by Mill, Pol.
Econ., bk. i. ch. xi.) The "extent of the in-
tellectual powers " is assigned by Rae as one of
1 Jevons's equations between pleasures Qoe. cit.) at
different distances of time relate primarily to firud
utilities. But it deserves attention that the equations
hold for utilities not qualified as final, upon certain
not violent assumptions, which are stated by Professor
Marshall in his Principles of EcoTiomics, p. 179. It is
impossible to resist the conclusion, however paradoxical
at first sight, that the depreciation of future pleasures,
the rate at which they are "discounted," is measured
by the rate of discount in the loan market (Pri'tciples,
loc cit., and Mathematical Appendix, note 6).
DISTANCE IN TIME AS AN ELEMENT OF VALUE
593
the circumstances which determine the ''effective
desire of accumulation. "
A wiser ground for preferring present goods
is their comparative certainty.^ The "bird in
the bush" may never come to hand. The
uncertainty of the future is gi'eater, the lower
the state of civilisation. "Stability, . . .
the reign of law and order," is assigned by
Rae as another condition of the effective desire
of accumulation.
Again some pleasures are more "urgent"
than others. Tastes may change, the sense
of pleasure will be dulled in some cases and
intensified in others by advancing age. The
young man who looks forward to indulging
himself in Alpine tours when he has made his
fortune "would much rather have them now,
partly because they would give him much
greater pleasure now " (Marshall, Principles of
Economics, bk. iii. ch. v.) On the other hand
it may be foreseen that certain wants will be
more pressing at a future time than at present.
Ice will be wanted more next summer than
now in winter (Bohm - Bawerk). Age will
require more comforts than youth. Prudence
dictates spreading out the consumption of a
given store of wealth according to the law
indicated by Jevons (loc. cit. )
The distance in time over which con-
sumption is thus distributed is extended beyond
the lifetime of the individual by his interest
in posterity. As Mill says {loc. cit): "If
mankind were generally in the state of mind
to which some approach was seen in the
declining [Roman] empire — caring nothing for
their heirs as well as nothing for friends, the
public, or any object which survived them —
they would seldom deny themselves any in-
dulgence for the sake of saving beyond what
was necessary for their own future years." Rae
places the prevalence of the "social and
benevolent affections" first among the con-
ditions of the effective desire of accumulation.
The play of the various motives which have
been indicated determines the value of future
with respect to present wealth on the loan
market, in other words the rate of interest. The
spendthrift borrower prefers present to future
satisfactions. The borrower of capital to be
employed in business is moved by the prospect
of future profits. The lender is deterred by
providence from grasping all the immediate
pleasure which is in liis power. Also invest-
ment in the "personal capital" of skill and
knowledge is governed by motives acting at a
great distance in time. The remuneration of
the skilled artisan and entrepreneur may be ex-
pected to compensate the sacrifices made by
parents for the education of their children
1 It is not easy to distinguish the influence in the
will of mere remoteness from that of the uncertainty
which attends future events. Is it possible to evaluate
separately the Jevonian factors p and q'i (See Theory,
loc. cit. : and cp. Pantaleoni, Principij).
VOL. I.
(Cp. Adam Smith, Wealth of Natums, bk. 1.
ch. X., and Marshall, Principles of Economics,
bk vi. ch. v., 2nd edition).
Thus distance in time is an element in the
value of two important agents of production^
borrowed capital and trained labour. It is
accordingly also an element in the value of
products (so far at least as the agents of pro-
duction enter in different proportions into the
products — Ricardo, Pol. Econ., ch. i. §§ 4 and 5,
cp. Mill, Pol. Econ., bk. iii. ch. iv. §§ 3-5).
Also the demand for commodities, as well as
the supply of them, is affected by the distance
in time over which motives range. Where
providence prevails, there will be a demand
for durable clothing and articles of furniture
rather than drinks and other objects of im-
mediate gratification (Rae, op. cit. ch. vii.)
Now in the case of articles of which the cost
of production varies with the quantity produced
— that is in the case of most articles — the
extent of demand is apt to affect value (Sidgwick,
Pol. Econ., bk. ii. ch. ii. and Marshall,
passim). In this way then, also distance in
time is an element of value.
[Leading authorities on this subject are John
Rae, M.D., Statement of some new Principles of
Political Economy, especially ch. vi. and vii.
Bdhm-Bawerk, Positive Theory of Capital (trans-
lated by Wm. Smart) ; especially bk. v. and parts
of bk. i. — Marshall, Principles of Econoviics, 2nd
edition, bk. iii. ch. v., and other passages relating
to discounted pleasures. Other authorities are
cited in Pantaleoni's Princij)ij. The subject is
referred to in most recent treatises on political
economy under the head of Capital. Among the
earliest of such references are Senior's Observations
on Abstinence in his Political Economy, pp. 58-
59 ; and the following remarkable passage which
occurs in S. Bailey's Critical Dissertation on
Value, p. 218.
" The time necessary to produce a commodity
may, equally with the requisite quantity of labour
be a consideration which influences the mind in
the interchange of useful or agreeable articles.
We generally prefer a present pleasure or enjoy-
ment to a distant one, not superior to it in other
respects. We are willing, even at some sacrifice of
property, to possess om'selves of what would other-
wise require time to procure it, without waiting
during the operation, of what would require labour
without personally bestowing the labour. If any
article wete offered to us, not otherwise attainable
except after the expiration of a year, we should be
willing to give something to enter upon present
enjoyment. On the part of the capitalist who
produces and prepares these articles, the time
required for the purpose is evidently a considera-
tion which acts upon his mind. If the article is
wine, he knows that the quality is improved by
keeping ; he is aware that the same excellence
cannot be imparted to any wine without the
employment of capital for an equal period ; and
that people will be found to give him the usual
compensation rather than employ their owb
capital in producing a similar article. "] f. y. b.
2q
594
DISTRESS
DISTRESS. The different kinds of distress
may be distinguished according to (a) duration
or (&) cause, (a) may be temporary or chronic.
The cotton famine, as it is called, during the
years of the American civil war, produced
temporary distress in Lancashire, which came
to an end with the resumption of business at
the close of the war ; change of fashion often
does the same in towns which depend upon a
single industry, as Nottingham. On the other
hand we speak of the distress in certain parts
of London as chronic, meaning that the standard
of living is habitually low. So too (6) the cause
may vary. Distress may be due to disturb-
ances of the market, a collapse of credit, a fall-
ing off in demand, or a change in its direction.
Again, it may be due to the failure of a crop,
as of the potato in the west of Ireland, or the
famines in various parts of India. The treatment
of distress will vary with the kind of distress,
and will aim either at the alleviation of it, when
actually existing, or the removal of its causes,
and so the prevention of its recurrence. In the
case of widespread temporary distress, temporary
measures of relief are often tried. The poor-
law is often stretched to allow of relief to able-
bodied labourers after a labour-test, instead of
limiting it to the workhouse, and in the same
spirit charity is often in such cases admini-
stered with the help of a labour-test, works of
public improvement being set on foot, and
wages paid out of charitable funds. If care-
fully managed, with strict inquiry and personal
supervision, these remedies are sometimes effect-
ive, but they are attended with great dangers.
They are often demoralising to the employed,
for the work done is quite disproportionate to
the wages paid ; they are largely resorted to
by persons whose distress is chronic and due to
causes within their own control ; they attract
applicants from other districts, and so swell
the evil ; they divert employment rather than
increase it ; they come to be regarded as a
permanent source of relief. All these evils are
intensified when temporary distress is met by
indiscriminate almsgiving. The object of
remedies should be to remove the causes from
which distress comes, but this is no easy task.
When it arises from speculation, or change of
fashion, the cure can be found only in a higher
sense of responsibility on the part of both pro-
ducers and consumers. "When it is due to
overcrowding of a locality or an industry, the
cure must be sought in organised effort directed
towards an increased mobility of labour from
place to place and employment to emplojrment,
an increased efficiency, a higher standard of
living, a truer knowledge of self-interest. The
state can do much, by insisting upon the
minimum at least of sanitary progress, the
provision of an elementary and perhaps a
technical education ; but the individual, by
example and by influence, can do far more.
The mistakes so commonly made, with the
best intentions, in attempts to relieve distress,
arise from the scale on which such attempts
are made more than from any other single
cause. Before relief can be undertaken the
mass must be broken up into its constituent
units, for every individual differs in history,
in circumstances, and in prospects from every
other, and to attempt to apply the same remedy
to aU cases is as dangerous as it would be in
medicine. But the power of discriminating
between different kinds of need is itself the
result of long experience, and even when a
judgment has been formed on this point, the
remedy is often far to seek. It would be
impossible to lay down any rule which would
cover all cases of distress, but perhaps the
following principles apply to a large majority
of them. 1. The help given should be deter-
mined far more by the future than the past or
even the present, the two latter being valuable
chiefly as a guide to the former. Many a
remedy which is effective for the moment is
disastrous in its after effects, and it will be so
in proportion as it fails to make the recipient
independent of further help. 2. All relief
should be adequate to effect its purpose. 3.
Help in money and kind, though often inevit-
able, should be sparingly given, for it tempts
the recipient to have recourse to it on every
emergency. 4. The results of the help given
should be felt after the need for it is past, a
man, e.g. who has been assisted by a loan should
be taught, when the loan is repaid, to continue
the economies required to pay the instalments,
and put an equivalent amount weekly in the
savings-bank. 5. The responsibility of the
members of a family, one to another, should be
enforced and developed. 6. Lastly, the know-
ledge and the judgment necessary to put these
principles in practice can rarely be attained
unless men act in some sort of combination.
[The relief of distress is the subject of the publi-
cations of the Charity Organisation Society, 15
Buckingham Street, W.C., especially the Charity
Organisation Review, and the preface to the
Charities Register. — Moggridge, Method in
Almsgiving. — Booth, Life and Labour. — Prety-
man, Dispauperisation. — Mackay, The English
Po(yr.'\ L. R. P.
DISTRESS (Legal Term). The legal remedy
known as distress consists in the taking of a
chattel of the wrongdoer by the injured party as
a means either of compelling the wrongdoer to
give redress or of obtaining satisfaction out of
the thing seized. Generally speaking, the party
who has suffered by a breach of contract, or by
a tort, must bring his action for damages, and,
if the wrongdoer fails to pay the damages
awarded, must have the goods of the wrongdoer
taken in execution by legal process. He cannot
of his own motion seize chattels of the wrong- jJ
doer. The remedy by distress is available prin- ^
DISTRESS— DISTRIBUTION
596
cipally in the following cases : (a) where a
tenant has made default in paying his rent ; (b)
where a person liable to tithe rent charge has
made default in paying ; (c) where a person
liable to pay certain rates and taxes, e.g. poor
rate or highway rate, has made default in pay-
ing. Also when cattle stray and do damage
they may be distrained upon by the party
injured.
Of the above cases the first is the most im-
portant. Subject to certain exceptions, the
landlord may distrain upon the tenant as soon
as the tenant has made default. A distress
may not be made by night. In making a
distress it is not lawful to break open the outer
door of a house, but when the liouse has once
been entered, any inner door may be forced in
search of goods. All goods found on the pre-
mises, wliether belonging to the tenant or to a
third party, may be taken subject to certain
exceptions, of which the chief are as follows :
(a) in favour of the goods of a guest at an inn ;
(b) in favour of goods received by the debtor to
be worked up in the way of his trade ; (c) in
favour of the bedding, the apparel, and the
tools of the debtor and his family. The goods
distrained must be kept five days, — or fifteen
days if the owner so request in writing and give
security for any additional cost incurred, — after
which they may be sold. The surplus left,
after satisfying the debt and costs, must be paid
to the debtor. If the proceeds of sale do not
satisfy the debt and costs, a second distress can
be levied. The person distrained upon has legal
remedies for irregular, excessive, or wrongful
distress.
Historically the remedy of distress appears to
be a relic of the period when legislators sought
rather to regulate than to suppress the use of
self-help by injured parties. It occupies a far
more important place in the early Celtic and
German codes than in modern law. It has been
retained only in cases where the claim of the
creditor was regarded as particularly strong.
It has been criticised as exceptional, as harsh,
and as unnecessary ; but whether it should be
altogether abolished is an open question.
[For the outline of the law of distress, consult
Stephen's Commentaries, vol. iii. pp. 261-274. —
For its details see Oldham and Parker, Law of
Distress. — For an historical investigation of the
remedy see Maine On the Early History of Institu-
tions, lectures 9 and 10.] f. c. m.
DISTRIBUTION (or in full The Distribu-
tion OF Wealth), serves in most economic
text books as the heading of that part of politi-
cal economy which deals with difierent classes
of income such as rent, profit, interest, wages,
and their subdivisions. The use of the phrase
in this way is of modern origin.
The system of the Physiocrats {q.v.) in-
volved the conception of the annual produce of
a country being divided between the productive
class, the sterile class, and the landlord clasa
The process of payments and exchanges, inter
mediate between production and consumption, by
which the division (^''partage" (Euvres de Ques-
nay, ed. Oncken, 1888, p. 315) was effected,
was called *'the distribution of the expenses of
a nation" ("la distribution des depenses d'une
nation," ibid. p. 320). The Tableau li'conomique
(see Physiocrats) was an arithmetical represen-
tation of ' ' the regular order " (" Vordre rdgidier, "
ibid. p. 319)ofthisdistributiou. If AdamSmith's
accoimt of the economical table {W. of N., bk.
iv. ch. ix.) be compared with Quesnay's Analyse
du Tableau {CEuvres, ed. Oncken, pp. 305-328),
no doubt can be felt that the latter part of the
title of book i. of the Wealth of Nations, "of
the order according to which its [labour's] pro-
duce is naturally distributed among the differ-
ent ranks of the people," was like the title of
Turgot's Reflexions sur la formation et la
distribution des richesses, suggested by the
physiocratic system. But in adopting the
physiocratic phrase, Adam Smith slightly
altered its meaning. Though he followed the
physiocrats in attaching great importance to the
division of the produce between the productive
and the unproductive class ( JF. of N., bk. i.
ch. vi. ad fin., and bk. ii. passim), what he
understood by the distribution of the produce
seems to have been, chiefly at any rate, its
division into wages, profits, and rent ; ' ' The
price ... of all the commodities which com-
pose the whole annual produce of the labour of
every country, taken complexly, must ... be
parcelled out among difierent inhabitants of the
country, either as the wages of their labour, the
profits of their stock, or the rent of their land ;
the whole of what is annually either collected
or produced by the labour of every society, or,
what comes to the same thing, the whole price
of it, is in this manner originally distributed
among some of its different members" (ibid.
bk. i. ch. vi.)
Having thus stated that the produce is
divided or distributed into the three great por-
tions of wages, profit, and rent, Adam Smith
might have been expected to proceed to discuss
the circumstances which determine the propor-
tions in which it is divided between the three,
to explain what determines the relative magni-
tude of the whole of wages, the whole of profit,
and the whole of rent. He does not do so,
however, but "endeavours to explain what are
the circumstances which determine" (see ch.
vii. ad fin.), the absolute magnitude of per capita
wages, the rate of profit or ratio between profit
and capital, and the absolute magnitude of rent
per acre. There is therefore considerable justice
in J. B. Say's remark that the Wealth of
Nations contains "no complete and well-con-
nected account of the manner in which riches
are distributed among the community " (Traits,
8vo, ed. 1876, p. 37). Say did not supply
696
DISTRIBUTION
much of the deficiency himself, but his plan of
making "production" and "distribution" the
lieadings of separate parts of political economy
lias been generally followed by later economists.
It was introduced into England by James Mill
in his Elements (1821). Ricardo was fed by
the course of his argument against the corn
laws (see his Essay on the Infiuence of a Low Price
of Com, 1815) to attach great importance to
the proportions in which the whole produce of
the earth is divided between rent, profit, and
wages. "To determine the laws which regulate
this distribution is," he declares, "the prin-
cipal problem in political economy " (Principles
of Pol. Econ., pref.) But this problem did not
supersede the older question as to the cir-
cumstances which determine the ratio between
interest and capital, and the absolute magnitude
of rent and per capita wages.
As regards the distribution of profits and
rent among individual capitalists and landlords,
economists have usually been silent, taking it
for granted that every one knows why some
individuals possess much property and others
little or none. As regards the distribution of
wages among individual labourers, it has in a
similar manner been assumed that the reasons
why some individuals earn more than others
working in the same occupation are too obvious
to require explanation, but it has been usual to
follow Adam Smith (IF. of N., bk. i. ch. x.),
in an endeavour to explain why the earnings of
the average workman in some trades are greater
than those of the average workman in other
trades.
The distribution of wealth or income into
rent, profit, and wages, and the distribution of
these three shares among individuals, under
present conditions, is the result of Exchange
\q.y.) Without exchange there could not,
private property being understood to be estab-
lished, be any conception of a joint income to
be distributed. The value of the joint income
reckoned in pounds sterling is merely the sum
of the values of all the separate incomes, and
without exchange these separate incomes could
have no values to add together (see Value).
The proportion of the whole income which falls
to any man's share is determined by the value
of his contribution to the production of that
income, whether his contribution be work
licrformed or the use of land and capital.
ITiis fact was so little recognised until recently,'
that James Mill and his son both thought it
desirable to ])ut distribution before exchau^e
in their treatises (see Sidgwick, Pol. Econ. bk
ii. ch. i. § 1).
For an account of the various theories which
have been held respecting Profit, Rent, and
Wages, see these headings. For an explanation
of the "wealth" the distribution of which is
discussed in political economy, see Wealth.
The word distribution is sometimes used by
economists not in the technical sense dealt with
above, but as equivalent to the process of con-
veying commodities from the producers to the
consumers, and of dividing large quantities of
a commodity into small quantities. See for
example the long discussion on distribution in
Malthus (Pol. Econ., 1820, ch. vii. §§ 6, 7, 8,
9). This use of the word and kindred expres-
sions is older than the technical usage. Lewis
Roberts, in his Treasure of Traffike, 1641, speaks
of "Commerce or Traflftke which distributeth "
the produce of a country "into forraigne parts."
Adam Smith says that money "circulates and
distributes" produce "to its proper consumers "
(W. of H., bk. ii. ch. ii.), and we still
sometimes speak of merchants and retailers as
"distributors," and of co-operative shopkeeping
as "distributive co-operation." The kind of
distribution contemplated in these modes of ex-
pression is a part of the process of Peoduction
DISTRIBUTION, Ethics of. The prim-
ary fact of economics is the production of
wealth. The division of the product among
those who create it is secondary in logical order ]
and, in a sense, in importance. Yet the most
important subject of thought connected with
social economy is distribution. If the term be
used broadly enough it designates all of the
economic process that presents moral problems
for solution. On the settlement of the ethical
questions concerning the division of the social
income depends not only the peace of society
but the fruitfulness of industry. It is a strik-
ing fact that Ricardo, whose studies carried
economic science forward in the direction of the j
truth concerning distribution, but stopped short
of that goal, and so strengthened the hands of
social agitators, realised the paramount im-
portance of the subject on which his thought
was chiefly concentrated : "To determine the
laws which regulate this distribution," he says
in his preface, "is the principal problem in^
political economy."
Scientific errors concerning the law of dis-
tribution react more harmfully on production
than do errors of doctrine concerning production
itself. Among self-asserting people, industry
loses fruitfulness whenever the belief is widely '
diffused that products are shared according to
an unjust principle. If it were a general con-
viction that social evolution is in the direction
of iniquity, — that distribution abeady robs the :
workers and will rob them more hereafter, — no <
force could prevent a violent overturning of
the social order.
Industry has its fruits and its sacrifices ; it'i
creates useful things at the cost of working;
and waiting. Where production is carried on;'
in a collective way, both the products andj
the burdens of the process have to be shared j
by different classes of men according to some]
principle. The apportionment that has to bf j
DISTRIBUTION, ETHICS OF
697
made is not only of products, which represent
positive values, but of sacrifices, which may be
treated as negative values of a "subjective"
kind. While the term distribution, as cur-
rently used, designates only the apportionment
of the positive values, or products, it is
capable of being used in a more complete sense,
and made to include the apportionment of the
negative ones also. It would then include all of
economic science that involves moral problems.
Both parts of this twofold distributive
process must in any case be studied if the
ethical questions connected with industry are
to be solved. There is no independent standard
of justice in the distribution of products only.
What a man ought to get out of the collective
income of mankind depends on how much he
or some one who represents him has sacrificed
in helping to create it. The apj)ortionment of
the positive values referred to is inseparably
connected with that of the negative values.
Political economy must tell us how both
products and biu'dens are actually shared, and
ethics must tell us how both of them ought to
be shared, if the existing plan of social industry
is to be morally tested.
Political ecoiioiny has not as yet furnished
a theory of the actual distribution of positive
values, or products of industry, that has met
with general acceptance. It has scarcely
attempted to furnish a theory of the distribution
of the negative values. Ethical science has
not furnished a clear standard of justice in the
double apportionment.
Every producer experiences in his own person
the double elfect of industry ; he is first
burdened and then rewarded. The net elfect
of the two influences on the man's well-being
may be termed the subjective resultant of
production. A complete science of distribution
must study the economic resultants in the case
of difl'erent classes of men. How is a labourer
on the whole afiected by industry ? What is
the measure of the net benefit that comes to
him from this source ? How is a capitalist
affected ? How do the net efiects compare with
each other ? What tendencies are at work to
change the two, both absolutely and relatively ?
These are economic questions ; while the ethical
question is what the resultants in the two
cases ought to be.
The jjersonal resultant of industry is always
a positive quantity. Work yields a net gain ;
the fruits of it are worth more than they cost.
For the most hardly-used classes an industrial
life is, by economic tests, more than worth
living. The hours of labour in a day are
increasingly burdensome as the period of work
is prolonged. A man might labour three hours
a day with little weariness and no injury.
The eighth hour is wearying, and the tenth is
more so. There comes a time at which work
uatmally stops, if the man is free, because
working longer would cost more in the way of
pain than it would secure in the way of pleasure.
Final or marginal labour is that which just
pays for the weariness that it costs. The gain
that comes through labour oflsets the burden
that it entails at the point in the working day
at which the burden is greatest. The less
onerous labour of the earlier hours affords a net
personal gain. If the man is paid by the hour
he earns a part of his wages very easily. Intra-
marginal labour, as we may term it, a fiords a
net subjective gain, what some would call
PiiODUCERs' Rent (q.i\)
Though the wages of all hours may be equal
by money standards, they are of unequal utility
to the man who gets them. His first earnings
are spent on necessities, later ones on comforts,
and final or marginal ones on things that figure
in his estimate as luxuries. The last hour of
his labour may ensure to him only the least
important thing that he gets at all. It is the
minimum benefit secured by an hour's labour
that offsets the maximum sacrifice caused by it.
There is therefore a second net gain coming to
the worker in the spending of his money.
As the sixpence or dime that is spent for a
luxury benefits the man enough to oli'set the
weariness of final or most fatiguing labour, those
that are spent for food, clothing, etc., aff'ord
an additional benefit. The man enriches him-
self whenever he buys a loaf of bread. In
general the sacrifices and the benefits of pro-
duction just oflTset each other at the point at
which the sacrifices are the greatest and the
gains are tlie least. Everywliere except at the
margin the gains are greater and the sacrifices
are less.
Again the positive resultant of industry is
increased by social organisation. Anarcliy, even
if it were peaceful, would increase sacrifices and
diminish rewards. Whatever might be true of
a sparsely settled world, a crowded world is
dependent on the multiplying of productive
power that combination brings. All classes
are debtors to society. No serious case can be
made against the existing social order on the
ground that it lessens the gain that labour
naturally brings.
The indictments brought against the social
order are based on the comparative treatment
that society, accords to men of different classes.
Are the benefits conferred on different ones
what they ought to be relatively ? Does society
proceed capriciously in the allotment of rewards
and sacrifices ? Do some classes fail to get the
proportionate benefit that is properly theirs ?
Are social tendencies in the direction of equity
or away from it ? These are the ethical questions
to be solved by a comparison of the ideally just
disti'ibution with the actual one.
Of the ideals of distribution that have been
advanced none has been crude enough to pro-
vide for the apportionment of the products oJ
598
DISTRIBUTION, ETHICS OF
industry and take no account of the burdens.
A rule of equal rewards for unequal sacrifices
would have no moral support. Ethical studies
in this held really have as their object the at-
tainment of a rule for adjusting what we have
termed the personal resultants of industiy, or a
rule that, if followed in practice, would make
the net effect of industry on the welfare of
different classes equitable. Communistic theories
make equality nearly synonymous with equity ;
but the thing that is to be equalised is seldom
mere property or income. If the principle of
equality be carried into refinements, so as to
bring to one level the net benefits that society
confers on all its members, the rule approaches,
though it is still far from reaching, the ultimate
moral ideal of distribution.
The better socialistic ideals are refinements of
the rule of equality. In applying the rule to
individuals, inheritance is the first disturbing
influence encountered. The law of inheritance
is based on a certain solidarity of families.
Where it is iu force the sacrifices of a parent
may accrue to the benefit of a child. What we
have termed the resultant of industry in the case
of the heir to an estate is not to be measured
by adding together positive values, represented
by the enjoyments that the property brings,
with negative values, represented by the in-
heritor's own sacrifices. If he be considered
apart from his family the values in the case
are nearly all positive. A crude levelling of
individuals' net gains accruing from industry
demands the abolition not only of inheritance,
but of gifts from parents to children. Where
it is advocated it is in the interest of purely in-
dividualistic equality.
The handing over of aU capital to the state
sweeps away even more completely inequalities
of wealth in permanent possession. In theory
it might avoid the evil connected with the
abolition of inheritance, that, namely of reduc-
ing the capital that is necessary if wages are to
be sustained at a high rate ; since it is conceiv-
able that the state itself might accumulate
capital with needed rapidity. This measure
also would, in effect, disregard the solidarity of
families and tend to put men on a footing of
individualistic equality.
Economic difficulties do not need to be con-
sidered in the shaping of a moral ideal. The
vesting of all capital in the state would save the
student of applied ethics one serious difficulty,
that, namely, of determining whether the sacri-
fice of abstinence is unduly rewarded as com-
pared with that of labour, or, in other words,
whether interest is too high as compared with
wages. A socialistic state has its moral duty
simplified, since it has only to reward different
kmds of labour equitably.
A scheme that is too crude to have much
support makes the wages and the working hours
equal for aU. Estimate the wages iu money or
its equivalent, gauge labour by time only, and
bring both to an equality in the case of the
whole adult population. Even the rewards are
not thus in reality equalised, and the sacrifices
are very unequal. In real rewards unmarried
men would be favoured and large families would
suffer. The real sacrifices incurred would vary
according to the nature of the work performed.
An improvement on this scheme provides a
stipend for each dependent member of a family,
and tries to equalise sacrifices by so reducing
the number of hours of labour per day in occu-
pations that are disagreeable or hurtful, as to
bring all employments to a certain uniformity
of burdensomeness. In the case of very dis-
agreeable work the hours would be reduced to a
minimum, while in occupations that are less
and less repellent they would be shortened
proportionately less. Production would of
course suffer by this arrangement, and the ideal
that the plan of division presents is that of
small but equal pay, with easy work, for all.
Another scheme does not content itself with
equalising what we have termed the personal
resultants of industry, but aims to level in-
equalities of condition that lie at the back of
industry itself. Society should do more for the
lame and the blind than for those who have all
faculties in possession, in order that the ulti-
mate condition of all may be made as nearly
equal as is possible. Here is the levelling policy
in perhaps its most ambitious mood. It is not
the treatment of men by society that is to be
equalised, but the treatment of them both by
nature and society. The industrial organism
is to deal with its members unequally in order
that it may somewhat neutralise the partiality
of nature.
A rule of division that is often regarded as
ethically lower than either of those above
specified is that of compensation according to
actual production. Give to a man the wealth
that he creates, neither more nor less. Every
one owns what he brings into existence ; let not
society wrest or filch from him any part of it.
Let it keep itself clear from robbery and fraud.
If workers lived side by side in peaceful
anarchy, with no division of labour and no ex-
changes, each man would get what he created.
He would get little, but he would get aU that
would be his own. Introduce now a social
union that multiplies products ten-fold but in-
creases some men's returns only five-fold, and you
seem to benefit these men and to rob them at
the same time. If in organised industry some
of the product that is distinctly attributable
to labour itself finds its way into the hands of
men who do not create it, the labourer suffers a
^v^ong, even though the share that he still keeps
may be larger by reason of the fact of his con-
nection with the men who rob him. Such is
the conception of industrial society that exists
in many minds. The socialistic indictment
DISTRIBUTION, LAW OF
59e
against society is that it filches from workers a
part of their share of the extra product of
industry due to organisation. Does society,
under natural law, take from labour a product
that is distinctly attributable to it ? This is one
of the most important questions in economics.
A successful analysis of social production
answers it. "What needs to be known is what
part of the composite result of industry is dis-
tinctly due to labour itself. In a land peopled
by isolated producers and managing to live in
peice, each man would get his own ; does ex-
change vitiate this result ? If so, organisation
proceeds here on an unusual principle ; since
the complications of society as a rule disguise
essential facts of primitive industry, but do not
annul them. The presumption is that the man
who got his own when he worked alone gets it
when he trades with his neighbour on terms of
genuine freedom, and that a true analysis of
social relations will show the fact. If so,
society tends actually to conform to the rule
"to every man the product that is distinctly
attributable to the sacrifices that he or others
in his interest have made. " There is common
honesty in the distribution that takes place
under natural law.
[The literature of the subject of economic ethics
is not as scanty as it is one-sided. The basis of
the socialistic movement is ethical, and much of
its literature is designed to prove that society is
organised on a plan that systematically wrongs
workers in the apportionment of the social income,
A defence would naturally aim to show that the
law of distribution is not itself iniquitous, however
many particular cases of injustice might arise
under it. A weak point in the defence is the lack
of a clear demonstration of the complete nature of
the actual law of distribution, a lack that, as is
hoped, may soon be supplied. In the meanwhile
statistics are appealed to on both sides to prove,
on the one hand, that the actual apportionment of
wealth is departing more and more from the ideal
standard, and, on the other, that it is tending
towards it. For important socialistic arguments
see Rodbertus's Zur Erkenntniss unserer Staats-
wirthscho/tlichen Zustande ; Marx's Kapital ; and
Louis Blanc's Organisation du Travail. For an
argument aiming to prove that the private owner-
ship of land involves progressive injustice in dis-
tribution see Henry George's Progress and Poverty.
Of the numerous replies to this work, that contained
in F. A. Walker's Land and its Rent may be
specially mentioned. An historical treatment of
this subject is found in Thorold Rogers's Six
Centuries of Work and Wages. A theory of a
law of utilitarian morality in economic evolution
is presented in G. de Molinari's La Morale Econo-
miciue. See also M. Minghetti, Des Rapports de
VEconomie Publique avec la Morale et le Droit
(Guillaumin et Cie). Many of the best studies of
the favourable features of the existing mode of
apportioning the social income are to be sought
in the standard treatises on political economy men-
tioned in connection with article Distribution,
ItAVf OF {q.v.)] J.B. C.
DISTRIBUTION, Law of. The most im-
portant share of the income of society is the
one falling to labour. The so-called "wage
fund " theory accounted for the rate at which
labourers are paid on the ground that wages
come from a fund of capital devoted to
this purpose, and that the rate per man de-
pends on the size of the fund and the number
of the claimants. The discovery of the fact
that wages come from the product of industry,
and not from capital, has made a new theory
necessary, and has opened the way to the
discovery of a general law of distribution.
The parties in the division of the general
product of industry are — (1) those who con-
tribute to production the element labour ; (2)
those who contribute instruments, or wealth
in productive forms ; and (3) those who bring
labour and productive wealth into co-ordination
by hiring both of these agents, and receiving
and selling their products. The labour furnished
includes the work of management, as well as
other kinds of industrial effort ; and the pro-
ductive wealth, as the term is here used,
includes land as well as other instruments.
The co-ordinating function is, in this enumera-
tion, kept distinct from the other two ; the
man who performs it is not to be treated in
this connection as a labourer or as a capitalist,
but as the employer of both labour and capital.
The shares to be accounted for are thus
wages, interest, and pure profit, and these shares
will include the rent of land and the wages of
superintendence. The generic varieties of gain
come from putting forth productive effort of
some kind, from furnishing productive wealth
in some form, and from bringing the effort and
the wealth into co-ordination.
The scientific law of distribution determines
what reward shall attach to the performing of
one of these functions. It does not gauge the
income of a particular man, since a man nearly
always performs more than one function. A
capitalist usually works, a labourer usually
has capital, and an entrepreneur, or co-ordinator
of labour and capital, almost invariably owns
some productive wealth, and does some directive
work. A scientific study aims to discover
what determines the gain that attaches to the
working, to the saving, and to the co-ordinat-
ing. As a man is a composite functionary, it
tells us how much he naturally gets in each
of his various capacities.
The Nature of the Distributive Process. — Social
production is a synthesis of distinguishable
elements. Distribution is an analysis ; and it
reverses the synthetic operation step by step.
In organised production one worker does not
complete a product from the liegini
if he
-applies his energy to crude nature and begins
"the making of something that the wants of
society require, he ] asses the product in an
incomplete state to a successor. This man
600
DISTRIBUTION, LAW OF
in turn advances the article nearer to completion
and hands it over to a third man. The product,
when ready for final use, has passed through
the hands of a series of workers each of whom
has put his touch on it and passed it to his
The process may be represented by the
following diagi-am : —
SyrUheds resulting in the completed product,
clothing.
Ist Sub-Product.
Elementary Utility.
Wool.
2ncl Sub-P.
Place U.
Transport-
ing.
Resulting from the
joint action of Ca-
pital and Labour.
Joint re-
sult of C.
and L'.
3rd Sub-P.
Form U.
Manufac-
turing.
Joint re-
sult of C",
audL".
4th Sub-P.
Form U.
Tailoring.
Joint re-
sult of C".
and L'".
The garment, when completed, is an aggre-
gate of distinct utilities, and we use the term
sub-product to denote the quality imparted to
it by each specific group of producers. The
sharing of the value that a coat represents
among the groups that have performed the
specific operations of production is an analytical
operation, that follows, in a reverse direction,
the steps of the productive synthesis.
The first sub-product in the series is wool.
It embodies an "elementary utility," or one
that results from calling a raw material into
existence. The merchant's sub-product is only
the special utility imparted to the wool by
conveying it to his warehouse, assorting it,
and dividing it into quantities convenient for
purchasers. It is mainly a "place utility,"
which is the service -rendering quality that a
thing acquires by being taken to the place
where it can be used ; though in a complete
statement it would be necessary to recognise
a "form-utility" due to assorting and dividing.
The manufacturer's sub -product is not the
cloth, but the "form-utility" imparted to the
wool by transmuting it into cloth. The tailor's
sub-product is the further "form-utility" im-
parted to the cloth by making a coat of it. Each
specific utility is created by the joint action
of labour and capital ; and each of these agents
must have its share of the value embodied in
its sub-product.
In order that the action of labour and capital
within the sub-groups may be a joint -action
at all, it is necessary that a certain co-ordinat-
ing act be done. Some one must hire labour
of the right kind, borrow capital and invest
it in the proper forms, and cause the two to
co-operate. This is the work of the entre-
preneur, in an unusually limited sense of the
term. This functionary, in his capacity as
entrepreneur, is not a capitalist and not a
labourer, however frequently it may happen
that the man who performs the co-ordinating
function may perform others as well. The
uo-ordiuator, as such, is not a business manager
or superintendent. The performing of this
function does not require salaried labour ;
indeed, after the process is begun, it scarcely
requires efibrt at all.
Bargaining operations first divide the total
product of industry among the general groups
of which society as a whole is composed. How
much wealth shall come to the entke group
of workers, capitalists, and entrepreneurs who
are engaged in the creating of the finished
products, woollen garments ? That depends on
the price for which the garments seU. A
myriad of finished products from other groups
in the world at large must come, by way of
exchange, to minister to the wants of the men in
this one group ; and the quantity and quality
of those products is fixed by the sale of the
clothing. This sale, and others like it, perform
the first and most generic dividing act that
takes place in the process of distribution. It
determines the total income of those who con-
tribute to the production of clothing.
What fixes the part of the income of this
general group that goes to each of the sub-groups
that compose it ? Bargains again. Each group
must buy the utilities made by those that come
earlier in the series, and seU them, with the
addition of its own utility, to the group that
succeeds it. The manufacturing group buys
wool and sells cloth ; and what it receives, less
what it pays, constitutes the reward of the
manufacturing operation. As the first division
of the income of society resolves it into rewards
of general producing groups, the first sub-
division resolves the portion falling to one
general group into shares for the sub-groups
that constitute it.
A further division is to be effected : it is
that of the shares falling to labourers, to
capitalists, and to entrepreneurs in each sub-
group. Here is the test operation of dis-
tribution ; in this smallest of fields is created
and divided the wealth that rewards each class
in industrial society.
The productive operation from the fruit of
which labour and capital get their pay is
intra-groupal ; it goes on within the specific
industry in which a particular force of men and
their quota of capital are engaged. The value
that rewards woollen weavers and spinners and
the men who furnish them capital is created
wholly within the mill, and the sum that is
divided between these classes is a sum on which
no others have any claim. Yet the fact that
labour and capital both migrate freely from
group to group, so that workers from any
group are able to share in the special gains
that may come to the earners in any other,
creates a certain solidarity of labour on the one
hand, and capital on the other. Give to the
wool spinners an advance of w?iges, and move-
ments of labour will in the end distribute the
gain among the whole working class. On the
DISTEIBUTION, LAW OF
601
other hand, change the cardinal relations of
labour and capital as a whole, and you change
them in the end within every sub-group.
Labour is in reality t7'ans-groupal, and capital
is the same. Each is a productive agent, the
field of which extends directly across the sub-
groups of the diagram. It is the relation of
all capital to all labour that determines wages
and interest. The law of wages is nothing if
not general, and the same is true of the cor-
relative law of interest.
It is a familiar fact that interest and wages
tend toward uniformity in different occupations.
Men of different productive powers may earn
different rewards, even within a single trade ;
and the labour of management regularly
receives more than work of the ordinary kinds.
Men difier in the amount of working force
that they possess, but men of like power tend
to receive uniform wages throughout the series
of industrial groups. If wages are high in the
woollen mill the young men and women who
are about entering the field seek out this part
of it, and by their competition reduce the
wages there prevalent to the rate that prevails
elsewhere. Interest tends to a similar uni-
formity ; under free competition it tends to
keep the same rate in all industries.
With interest has often been vaguely grouped
what we have termed pure profit itself; the
gross gains loosely attributed to capital tend
toward equality. It is, however, in a special
way that the element that we have distinguished
as pure profit tends toward equality in different
industries. Wherever it comes into existence
it sets at work forces that tend to sweep it
again out of existence. In a way this gain is
self- annihilating. The uniform rate toward
which pure profit tends, — though it never
reaches it in all groups at once, — is a zero rate.
Here, indeed, we reach controverted ground,
and can claim only to present one theory, not
a view that has universal support ; but the
evidence in favour of the correctness of the
view is simple and conclusive. Competition
tends to annihilate pure profit. The existence
in one sub-gi'oup of a gain that is in excess
both of interest on all the productive wealth
that is there used, and of pay for all labour, is
an inducement to the entrepreneurs of the
group to hire in the market both capital and
labour, and secure the pure profit that their
joint industry creates. Let w^oollen mills pay
wages, including salaries, and a double interest
on the capital that they use, and the mills will
speedily enlarge their capacity. The increase
in the product will then reduce the price of it,
and ultimately bring the enlargement to an
end. Under natural law the sub-groups are in
stable equilibrium when, aside from insurance
and taxes, each earns wages on all labour^
including the labour of management, interest
on all capital employed, and nothing more.
On this point the testimony of experience
confirms the conclusions of theory.
The equilibrium is never in practice perfect.
Causes that cannot here be analysed in any
fulness cause the element pure profit to con-
tinually reappear. Inventions, as applied in
particular industries, give to one and another
of the sub-groups a gain that is in excess of
that which perfectly stable conditions would
afford. The occupation of new land creates,
in a local way, a pure profit for the earlier
comers. Continually appearing in particular
parts -of the field, and slowly disappearing by
reason of competition, — such is this element of
the social income. If we watch a single sub-
group we find the profit at intervals appearing
and disappearing; if we watch the industrial
field as a whole we find it everywhere present,
though not long at the same points.
Pure profit depends on a relation between
industrial groups. What the manufacturer
pays to the earlier groups in the series above
represented, and what he receives from the
tailoring gi'oup, determine this part of his gain.
The actual position of the entrepreneur himself,
in the diagram that describes the sub-groups,
is on the line that separates his own industry
from the following one. He is a purchaser of
everything that is produced on the left of that
line. In the buying of materials he purchases-
the products of the earlier sub-groups, and in
the paying of wages and interest he virtually
buys the sub-product created in the group to
which he himself belongs. The entrepreneur
of the woollen mill buys wool, and so pays for
the sub-products created by wool growers and
merchants ; and he buys the form-utility created
in the woollen mill itself by making bargains
with workmen and capitalists, giving them
fixed sums, and inducing them to relinquish
their claims on the cloth. As the place of a
particular workman and of a particular amount
of capital is, in the diagi-am, intra-groupal, so
that of a particular entrepreneur is inter -groupal.
Workers and capitalists get their pay from
results secured wholly within their own in-
dustries, while entrepreneurs get theirs from
the fruits of mercantile transactions between
earlier groups and later ones. Pure profit does
not depend on the relation between capital and
labour. Moreover, where this profit exists it
is localj it depends on the relations between
adjacent groups.
We have shown that there is no law of wages
that is merely local. There is no force that
gauges the pay of wool-spinning independently
of the wages paid in other employments.
There is a level toAvard Avhich all wages tend.
There is likewise a level toward which interest
in every group tends. What is the law that
fixes these levels ? What is the general law of
wages and interest ? Here again we are on
ground that is actively contested, and we
602
DISTEIBUTION
therefore only indicate the nature of a certain
theory without claiming for it a position of
general acceptance, and without arguing any
points in controversy.
In presenting it we may utilise a Ricardian
formula for determining the rent. of land. If
we apply to a fixed area of land an increasing
amount of labour, we get returns that diminish
-per capita. The first man set working on
100 acres creates a certain amount of wealth
as the result of the tillage. Adding a second
man does not double the crop. Adding a
third does not increase by a half the product
due to the former two. Each man, as he
comes into the field, adds less to the total
output of the industry than did any of his
predecessors.
This hypothesis makes the men enter the
field in a certain order of time, and the one
who is the final man is so in a literal sense — he
is the last to arrive. Actually putting the
men into the field one at a time is not necessary
in order to reveal the principle that governs the
final productivity of labour. Let the full
complement of men occupy the field at once,
and there wUl still be what may be treated as
the final increment of labour. Take any man
away from the force that tills the field, and the
remaining men will gain in per capita pro-
ductivity by reason of his absence. The
departure of one man out of a force numbering
twenty does not reduce the crop by a twentieth,
since the nineteen men remaining work at
better advantage by reason of the withdrawal
of one. The final productivity of labour is
gauged by what would be lost if one man out
of the force were to stop working. We may,
by way of illustration, actually set the men
working one at a time, and find what the last
comer creates ; or we may set them all working
at once and see wliat would be lost by the
departure of one. The conclusion is the same
in either case : the final unit of labour is the
least productive.
If, now, land were the only form of pro-
ductive wealth that figured in the case, wages
would equal the amount created by this final or
twentieth man. That would gauge the amount
that the employer would lose through the
departure of any one man in the force. It
would determine what he could afford to pay
to any one. Each man tends to get what he is
separately worth.
•What would be true in the case of labour
applied to land, and using no other capital
worth considering, is actually true of labour
applied to a fixed amount of general capital,
or to a fixed quantum of wealth in all pro-
ductive forms, including both land and other
instruments. For the field of limited extent
in the Ricardian illusti-ation substitute a fixed
value, expressible in i)0unds or dollars, and
invested in such appliances of every kind as
the needs of the working community require.
If there are a hundred men in the force, the
departure of one of them will not reduce the
product by 1 per cent. His departure will add
somewhat to the productivity of the remaining
workers. After he is gone the capital will
adapt itself in form to the needs of the ninety-
nine, and it will be in a slight degree more
ample in quantity per man. Wages are gauged,
as in the former case, by the final productivity
of labour. What on the whole is lost by the
departure of one man fixes the importance to
employers of every man. If each man gets
what employers would lose by his absence, he
gets what he is eli'ectively worth.
This principle in a reversed application fixes
the rate of interest. It is the productivity of
the final increment of capital, as employed by
a fixed labour force, that gauges the pay of
each increment. Let there be 100 men using
100 units of capital. Take, now, one unit of
capital away, and you will not reduce the
product by 1 per cent. The 99 units of
capital will have gained in productivity per
unit in consequence of the departure of the
hundredth. The loss inflicted on the entre-
preneur by the withdrawal of the one unit of
capital gauges the importance of any single
unit. Each unit of capital gets as its com-
pensation what would be lost if one unit of
capital were withdrawn. This diminution of
the total product due to the departure of the
final unit of capital gauges the importance to
the entrepreneur of each separate iinit. It
determines what he will pay for the use of each
one. Interest is therefore gauged by the final
productivity of capital. Each pound or doUar
tends, under natural law, to secure for its
owner what, in production, it is separately
worth.
[For statements in harmony with this theory see
J. B. Clark's Philosophy of Wealth and Capital
and its Earnings, and Clark and Gidding's Modei-n
Distribviive Process. See also Quarterly Journal
of Economics for April 1891.
For other views on the subject see F. A.
Walker's Political Economy, and E. v. Bdhm-
Bawerk's Capital and Interest. — J. E. Cairnes's
Leading Principles of Political Economy. — F. D.
Longe, Refutation of the Wage Fund Theory oj
Modem Political Economy. — W. T. Thornton's
treatise on Labour. — F. A. Walker's treatise on
Wages. — Henry George's Progress and Poverty. —
F. V. Wieser's Nat'Arlicfte Werth, and the treatises
of Adam Smith, Ricardo, J. S. Mill, Jevons,
Carey, Sidgwick, Marshall, A. C. Pigou, Roscher,
Wagner, Knies, Cohn, Schouberg, J. B. Say,
Garnibb, Gide, and others.] j. b. c.
DISTRIBUTION, Uses of the Term. In
the early half of this century English econo-
mists fell into the habit of grouping their
subjects under three heads, of which Distribu-
tion and Production were almost always two,
while the third varied (Consumption, James
DISTRIBUTION— DISTRIBUTION OF THE PRECIOUS METALS 603
Mill ; the Nature of Wealth, Senior and John
]\[ill). Adam Smith had not followed the
physiocrats and Turgot (''Formation et Dis-
tribution de la Richesse ") in giving prominence
to the term, and he has often been accused of
neglecting distribution in favour of production
(see Sidgwick, Pol. Econ., pp. 24-25). Ricardo,
on the contrary, wrote to Malthus in 1820 :
"Political Economy you think is an inquiry
into the nature and causes of wealth ; I think
it should rather be called an inquiry into
the laws which determine the division of the
produce of industry amongst the classes who
conciu- in its formation. Every day I am more
satisted that the former inquiry is vain and
delusive, and the latter only tite true object of the
science" {Letters, p. 175). John Mill {Pol. Econ.,
1848) lays stress on the difference which, he
says, exists between the laws of production and
the laws of distribution. The former are
physical facts ; the latter are of human institu-
tion solely. It has seemed to later economists
hardly possible to assert the purely physical
character of the first (see Mill himself. Unsettled
Questions, p. 133) or the purely arbitrary char-
acter of the second, or generally speaking to con-
sider distribution quite apart from production,
consumption, and the nature of wealth. But
it has seemed desirable to define the several dis-
tinct notions clearly, for the purpose of methodic
investigation, and the question arises whether
(a) distribution is to be detached from exchange
and transportation, etc., or {b) is to be
the genus of which they are species. The
latter is the view implied in the common
language of men. The dividend is sometimes
conceived as the total wealth, sometimes as the
total income of the country, the participants
being the inhabitants. Distribution of wealth
is perhaps less strictly a question for the mere
economist than distribution of income. The
narrower view (advocated amongst others by
Prof. Walker, Pol. Econ. (London, 1888), pp. 31,
187-193, and by Ricardo in the words above
quoted) is that distribution must be confined
to the sharing of the product among the
producers. It is urged again that it must not
include mere transportation of goods, e.g. from
the place where they are not wanted and not
saleable to the place where they are both, — this
being not a distribution but a completing act of
production (Sidgwick, Pol. Econ., p. 171, etc.)
According to this view it would exclude many
cases of exchange, for exchange might mean a
transfer from producers to non-producers. On
the other hand, John Mill expressly regards
distribution as including exchange (which is
simply distribution under competition, see Pol.
Econ., III. i, § 1), and certainly to Ricardo ex-
change and distribution were nearly convertible
terms. Professor Marshall even devotes «,
special section to "value or distribution and
exchange" {Principles, bk. vii.) Professor New-
comb {Pol. Econ., II. ii. 61) avoids the term and
describes the three operations needed to present
the consumer with the finished article as
production, transportation, and exchange. If
we confine distribution to a sharing among
producers, we find that we must (1) include
those who are not producers in the ordinary
sense of the word, e.g. landlords, and (2) we
must exclude middlemen and retailers into
whose hands the goods pass by exchange on
their way to the consumer, and (3) we must
nevertheless include labourers and capitalists
who have bargained for parts of the product,
as wages and interest. Exchange would thus
be partly excluded, partly included ; and we are
made to realise the difficulty of separating in
theory what is conjoined in practice. J. l.
DISTRIBUTION, COST OF. See Produc-
tion AND DiSTKIBUTION.
DISTRIBUTION, STATUTES OF. These
Statutes (22 & 23 Car. II. c. 10 and 1 Jas.
II. c. 17) regulate the distribution of the
residuary personal estate of a person dying
intestate — not being a married woman. In
case of the intestacy of a married woman tlie
husband takes the whole residuary personalty
for his own benefit. In all other cases it is
divided as follows : —
1. The widow takes one -third if any de-
scendants survived the intestate, and one-half
if none survived.
2. The children and descendants of deceased
children take two-thirds if a widow survived
the intestate, and the whole if the intestate
left no widow ; the descendants of deceased
children in each generation together take the
share which their deceased parent would have
had if he or she had survived the intestate.
3. The half remaining in the case of a widow
but no descendants surviving the intestate, or
the whole in the case of neither widow nor de-
scendants surviving him, goes to his father,
and if the latter does not survive him, to his
mother, his brothers and sisters, and the children
(but not the remoter descendants) of brothers
and sisters, the mother and each brother or
sister taking equal shares, and the children of a
deceased brother or sister together taking the
share which their deceased parent would have
had, had he survived the intestate. If none of
the relatives named survive the intestate the
next of- kin nearest in degree are entitled in
equal shares. (See Bequest, Power of ;
Descent of Property.) e. s.
DISTRIBUTION OF THE PRECIOUS
METALS. On this branch of the theory of
international trade the conclusions of the
"older school" of economists are still, in the
main, unshaken. Adam Smith's contribution
to the general theory, although invaluable (see
Mercantile System), was largely negative.
It is to his successor Ricardo that we owe the
first clear statement of the principles which
604
DISTRIBUTION OF THE PRECIOUS METALS
regulate the territorial distribution of the
precious metals {Principles, ch. vii. p. 77).
"Gold and silver, having been chosen for the
general medium of circulation, are, by the
competition of commerce, distributed in such
proportions amongst the different countries of
the world as to accommodate themselves to
the natural traflBc which would take place if
no such metals existed, and the trade between
countries was purely a trade of barter." Not-
withstanding modem developments of trade
and credit, this dictum, slightly supplemented,
still holds good. To realise its full meaning
it is necessary to go back a stage, and to recall
the principle which regulates international
trade when carried on by barter (see Barter).
This has been stated by Mill (Principles, bk.
iii. ch. xviii.) "The produce of a country ex-
changes for the produce of other countries at
such values as are required in order that the
whole of her exports may exactly pay for the
whole of her imports." This law of interna-
tional values applies also, without essential
alteration, after the introduction of the precious
metals, and one of the leading functions of
money in international trade consists in adjust-
ing temporary disturbances of the equation,
since (Tooke, State of the Currency) "an in-
creased export of ordinary commodities cannot
always be made with the promptness which
a sudden exigency may demand." There is
general agreement among economists in regard-
ing prices as being now the chief agent in
effecting the movements of gold and silver,
both between mining and non-mining countries,
and between non-mining countries themselves.
It is by successive waves of price that the gold
of Australia and California is exchanged for
the products of commercially related countries,
and, through those countries, is further divided
among the nations of the world ; so that any
alteration in the stock of one is ultimately
felt by all (for the differences in the case of
India in relation to this process, see Bastable's
Theory of Intervutional Trade, p. 67). In
view of the number and variety of influences
affecting prices, the frequency of the transmis-
sion of gold and silver is thus largely accounted
for. One of these influences — improvement in
production — ^may be selected for reference, both
on account of its increasing importance, and
because it is a favourite illustration with
writers on the subject. Thus Ricardo {Prin-
ciples, p. 80, and frequently elsewhere) — "The
improvement of a manufacture in any country
tends to alter the distribution of the precious
metals ^mongst the nations of the world."
That this is so may be easily seen. Leaving
out of consideration, as being suflGiciently
obvious, the effect, in attracting a flow of
money, of the cheapening of commodities not
previously exported (see Mill, Principles, bk.
iiL ch. xxi.), we find that an improvement in
a country's methods of production may have
different results, according to the effect of the
consequent cheapness upon the foreign demand.
Unless that demand happen to be increased
in proportion to the cheapness, there wiU be
a movement of the precious metals in one
direction or the other pending the re-adjust-
ment of the disturbed international equation,
and experience shows that, cceteris paribus, the
influx is generally in the direction of the
country which excels in manufactures. A
national advantage in the production of com-
modities valued for export may have the same
effect.
For the effect of improved banking facilities
on distribution, see Lord Overstone, Tracts, etc.,
on Metallic and Paper Currency, p. 473 ff.
Recent improvements in foreign methods of
production have been suggested as a possible
partial explanation of the fact, of which there
seems little room for doubt, that the quantity
of gold in this country is now less than it
was forty years ago (see Bibliography at end.
Far more powerful causes than this, however,
may be found in the great developments which
recent years have witnessed in our banking
and credit system, and in other economising
devices which have enabled a greater volume
of transactions to be carried on upon a compara-
tively smaller metallic basis. The great dis-
parity, for instance, between the amount of
money per head of the population in the
United Kingdom, in France, Germany, and
the United States, is largely due to the differ-
ence in the habits of these nations in regard to
banking and credit. The amount in circula-
tion in 1912 was estimated as follows : —
Estimated stock of gold and silver, and actual
amount of " uncovered " paper money on
31st Dec. 1912 in the United Kingdom,
France, Germany, and the United States.
(The % converted as 5=:£1.) Annual Report of
the Director of the Mint (U.S.A.), 1913, pp. 64, 65.
In Millions op Pounds Sterling
Country.
Population.
Gold.
United Kingdom
France ....
Germany ....
United States .
Millions.
45
39
65
96
Millions.
146-2
240-0
172-7
375-9
Country.
Silver.
Uncovered
Notes.
Total Metal-
lic Stock and
Uncovered
Notes.
United Kingdom
France
Germany .
United States .
Millions.
23-3
82-2
52-3
108-4
Millions.
23-0
65-2
52-3
152-3
Millions.
192-5
387-4
277-3 '
636-6 1
DISTEIBUTION OF THE PRECIOUS METALS
605
Amount
PER Capita
IN Sterling.
Country.
Gold.
Silver.
Total
Coin.
Paper.
Total
Coin
and
Paper.
United Kingdom
France
Germany ,
United States .
£ s.d.
3 6 2
6 4 6
2 14 8
4 0 0
£s.d.
0 10 7
2 2 8
0 16 7
1 3 0
£ s. d.
3 16 9
8 7 2
3 11 3
5 3 0
£ s.d.
0 10 5
1 13 9
0 16 7
1 12 5
£ s. d.
4 7 2
10 0 11
4 7 10
6 15 5
The fact of the use of two metals, in different
countries, as standards of value, though of the
utmost importance in other connections, does
not necessitate any re-statement of the question,
since it will be found that the movements of
both metals are regulated by the same general
laws (see Del Mar's History of the Precious
Metals, p. 190). The influence of legislation
upon the distribution of the precious metals is
worthy of notice. The marked increase which
recent years have witnessed in the proportion
borne by silver to the total metallic stock of the
United States is chiefly owing to this cause
(see Bland Act), while the reform of the
Austrian currency must alter, to some extent,
the general proportions in which both gold and
silver are at present distributed.
Circulation of gold, silver, and uncovered notes
per head of the population in the various
countries of the world for 1912. The state-
ment, with those above, must be understood
only as estimates (from United States Mint
Report).
Dollars converted at $5=£1.
Un-
Couutry.
Gold.
Silver.
covered
JS'otes.
Total.
£ 8. d.
£ 8. d.
£ s. d.
£ 8. d.
United Kingdom .
3 6 2
0 10 7
0 10 5
4 7 2
Australia
7 9 1
0 8 11
7 18 0
Canada .
4 4 4
2 is 7
6 17 n
India . . .
0 6 3
0 14 5
0 0 8
1 1 4
South Africa .
1 19 5
0 13 8
2 13 1
Straits Settlements
0 10 1
0 14 2
0 io 3
1 14 6
Austria-Hungary .
14 6
0 12 7
13 3
3 0 4
Belgium .
1 13 8
13 6
0 7 10
3 5 0
Bulgaria .
0 9 2
0 4 6
0 9 3
1 2 11
Cuba . . .
2 16 0
0 0 11
2 16 11
Denmark
1 12 7
0 12 0
18 3
3 12 10
Egypt . . .
3 9 1
0 ,5 9
0 2 6
3 17 4
France .
6 4 6
2 2 8
1 13 9
10 0 11
Germany
2 14 8
0 16 7
0 16 7
4 7 10
Greece .
0 7 11
0 4 9
1 12 10
2 5 6
Haiti . . .
0 6 11
0 5 2
0 16 10
1 8 11
Italy . . .
19 3
0 2 10
1 1 6
2 13 7
Japan
0 11 0
0 4 6
0 7 10
13 4
Korea
0 13
Oil
0 2 2
0 4 6
Mexico .
0 8 6
0 15 3
0 13 11
1 17 8
Netlierlands .
2 10 0
0 19 10
2 0 6
5 10 4
Norway .
1 8 1
0 6 4
0 16 11
2 11 4
Portugal .
2 10 6
12 8
2 7 10
6 10
Koumania
0 18 1
0 7 1
19 3
2 14 5
Kussia and Finland
1 18 7
0 2 7
0 19 9
3 0 11
Servia .
0 13 9
0 1 10
0 6 11
1 2 6
Siam
0 0 Oi
0 18 11
0 1 6
10 6
South America
1.5 16 1
2 19 8
11 6 10
30 2 8
Spain
15 9
1 16 6
0 19 9
4 2 0
Sweden .
1 2 7
0 6 4
0 18 8
2 7 7
Switzerland .
2 9 11
0 17 2
1 12 10
4 19 11
Turkey .
14 6
0 4 7
1 9 1
Central America .
0 1 8
0 10 2
5 i 4
5 13 2
United States
4 0 0
1 3 0
1 12 5
6 15 5
[See Kicardo, The High Price of Bullion.—
F. A. Walker, Money, ch. iii. — ''Movements of
the Precious Metals," by J. Shillcock, Journal
Institute of Bankers, vol. ii. p. 497. For statis-
tics and estimates of production, distribution,
total stock, coinage, and use in the arts of the
precious metals, see Jevons, Investigations, p.
262, etc. ; Palgrave, Appendix B, Third Report
of Royal Commission on Trade Depression, 1886 ;
Soetbeer, "Materials," etc., transl. in Appendix
to Final Report of the Gold and Silver Commis-
sion, 1878 ; Reports of Deputy Master of the
Mint, and Reports of Director of the United
States Mint.] f. e. s.
[N. W. Senior, Three Lectures on the TransmiS'
sion of the Precious Metals from Country to
Country, 1827. — J. E. Cairnes, "The Australian
Gold Episode " (in Essays in Pol, Econ. , Theor.
and ApjMed, 1873).]
The course of the distribution of the precious
metals depends largely on the position of the
producing countries. Thus in classical antiquity
they moved from Asia Minor and Spain to
Greece and Italy. The opening of the American
mines in the 16th century gave a ncAv direction
to the monetary current which passed first to
Spain and Portugal, to be thence distributed to
the principal centres of European trade, outlying
countries remaining longunaffected (Clifl"e Leslie,
Essays, 2nd ed., pp. 269-300). At present
Australia, Canada, South Africa, the United
States, Mexico, and South America are the
sources of monetary currents that flow to the
countries most closely connected by trade (see
Gold ; Silver). Of equal importance is the
tendency — noticed by Pliny (70 A.D.), and still
in action — of the precious metals to move east-
wards, in consequence of the habits of hoarding
produced by industrial insecurity. India has
always been the chief recipient, her imports for
1853-1912 being:— silver, £519,846,000; gold,
£305,858,000. She is believed to have taken
about 28 per cent of the world's production of
gold during 1912 and 1913 ; but the people are
beginning now to use banks and investments,
and the old hoarding habit shows signs of de-
clining. China and the Dutch East Indies also
absorb silver.
Besides these permanent movements, various
agencies lead to temporary changes in distribu-
tion. Thus the Autumnal Drain (q.v.) on the
Bank of England is now well known, and the
same phenomenon is noticeable in the United
States, where "moving the crops" leads to a
demand for increased currency in the West, and
a corresponding drain on New York. Such
internal fluctuations are paralleled by inter-
national movements. A bad harvest in England
is one of the causes of a foreign drain, sometimes
ending — as in 1847 — in a crisis. More gener-
ally, any trade disturbance will show its effect
in redistribution of the stock of bullion, an ad-
I'ustment facilitated and carried out through the
mechanism of the Foreign Exchanges {q.v.)
Travellers may directly transport some portion
of the money of the world, and governmental
requirements may, apart from the exchanges,
606
DISTRIBUTIVE JUSTICE— DIVIDEND
lead to transfers of bullion as of other com-
modities (Clare, M(mcy Market Frwier, p. 109).
State administrations often accumulate money
in the process of collecting revenue, and further
create hoards for military or other purposes, e.g.
the German Treasure of £6,000,000 at Span-
dau. In some countries coin is locked up
by the Treasury at times to a very large
amount. The creation of central banks, on
the other hand, has drawn a large propor-
tion of the metallic cu'culation to a few
points, and thereby — artificial restrictions
apart — has made redistribution easier. The
telegraph is an additional aid in securing speedy
readjustment of the existing stock when re-
quired, and in connection with the refined
system of the exchanges, and modern credit
arrangements, reduces the need for money
bullion to the minimum.
[G. Clare, Money Market Primer, London,
1891. — W. Jacob, Production and Consumption
of the Precious Metals, 2 vols., London, 1831
(chs. iii. viii. and xiii. deal with movements of the
metals). — A. Sotbeer, Materials, etc., trans. F.
W. Taussig, in U.S. Consul's Eeports, No. 87,
Dec. 1887, pp. 615-528]. c. f. b.
DISTRIBUTIVE JUSTICE in political
economy means justice in the distribution of
wealth (see Distributiox, Ethics of). As to
what constitutes a just distribution, opinions
agree only in being chiefly of a negative rather
than a positive character. The communist
does not contend that perfect justice would be
attained by his system of equality modified
by differences of need, so much as that the in-
justice of the present great inequalities of
wealth is obvious. The socialist says little
about the distribution of wealth which would
prevail if his arrangements for making the
state the only proprietor of land and capital
were carried out, but insists at length on the
injustice of allowing private owners of property
to enjoy a part of the produce of labour without
having worked for it. The defender of private
property seldom follows Bastiat {q.v.) in main-
taining that the present system is just, but
contents himself with urging that the schemes
of social reformers would be even less just. The
ordinary person who has not thought much
about the subject does not question the justice
of the distribution which is the result of private
property and exchange as a whole, but he is
constantly denying the justice of essential parts
of it. Compassion for poverty and sympathy
with the worker as against the idler frequently
lead him to deny the justice or fairness of per-
fectly honest and open bargains. Still more often
it happens that self interest leads him to deny
the justice of the existing distribution so far as
he himself is concerned ; the widely-accepted
maxim of distributive justice, "a fair day's wages
for a fair day's work," is often understood by
the employed as meaning a little more wages or
a little less work, and by the employer as mean-
ing a little more work or a little less wages,
than the amount fixed by free competition.
Economists have usually declined to discuss
distributive justice at any length, holding that
it is a question of ethics rather than of econo-
mics (see Communism ; Individualism ; Pro-
perty ; Socialism).
[Cairnes, Leading Principles, pt. 11., eh. v. —
Sidgwick, Pol. Econ., bk. iv, ch. vi. — H. Rash-
(lall, " What is Justice ? " in the Economic Review,
October 1891 and April 1892.] E. c.
DISTRINGAS. A writ of distringas was
formerly used for the purpose of protecting
persons beneficially interested in stock standing
in another person's name. This procedure does
not exist any more, but a notice may now be
sent to the bank or company in the books of
which the stock in question is registered, accom-
panied by an afiidavit stating that the person
issuing the notice is beneficially interested in
the stock. The bank or company to whom the
notice is given, must, as soon as the person in
whose name the stock is standing attempts to
transfer the same, inform the person who issued
the notice, who may thus take immediate pro-
ceedings to obtain an order of the court restrain-
ing the transfer. If no such restraining order
be obtained within a week the transfer of the
stock must take place. E. s.
DISUTILITY. See Discommodity.
D'lVERNOIS, Sir F. See Ivernois, Sir
F. D'.
DIVIDEND on Stock and Shares.— The
amount of interest or profit divisible among
holders of stock or shares ; also the amount
payable to each stockholder or shareholder.
Questions as to payment of dividends to
shareholders in incorporated companies are
frequently before the courts ; it is now a well-
established principle that such dividends must
be paid out of profits and not out of capital,
and that any clause in articles of association
authorising payment of dividends from capital
or guaranteeing a certain rate of interest to the
shareholders in all events is invalid and cannot
be acted upon {Trevor v. Whitworth, Law
Reports 12 Appeal Cases 409 ; Ghdnness v.
Land Corporation of Ireland, Law Reports 22
Chancery Division 349. As regards railway
companies and similar companies, see the Com-
panies Clauses Act, 1845, § 121, and as regards
companies governed by Table A to the Com-
panies Act 1862, see Table A, Art. 73).
The rule that dividends must not be paid out
of capital would, among prudent business men,
be thought to involve the further rule that
only so much of the profits is available for
dividend as remains after making provision for
depreciation in any of the assets in which a
company's funds are invested. A rule of this
nature is frequently contained in articles of
association, or acted on by directors when the
DIVIDEND— DIVIDEND WARRANT
607
articles are silent on the subject. In the
absence of such a rule, the directors cannot,
however, be compelled by dissentient share-
holders to make such provision. The excess of
money obtained by working the property of a
company over the cost of working it may, in
such a case, be divided among the shareholders,
though the property itself is of a wasting
nature — like a mine, a quarry, or a patent. It
is also left to the discretion of the directors to
decide what expenses are properly chargeable to
revenue and what to capital (Zee v. Neuchatd
Asphalte Company, Law Reports 41 Chancery
Division 1 ; as to the desirability of legislation
making it incumbent on directors to provide for
depreciation of capital before paying dividends,
see Capital, supra, p. 221). In well-managed
companies the directors provide that the valua-
tion of the assets in the balance sheet is correct ;
which is not possible unless sufficient is taken
from profits to provide for any depreciation.
Dividends in companies are not always paid
pari passu to all shareholders. Companies
frequently issue preference shares which receive
a fixed percentage on their nominal amount,
whilst the other shares, called ordinary shares,
are entitled to whatever remains after payment
of the preferential dividend. Dividends pay-
able to preference shareholders must, like
dividends on ordinary shares, come out of profits,
and cannot therefore be paid when the profit is
insufficient. It is generally stated in the
articles whether preference shares are to be
cumulative, — that is to say, whether a deficiency
in dividend arising from insufficiency of profits
in one year is to be made good out of profits
of subsequent years, or whether preferential
dividends are to be paid out of the profits of
each year only — non-cumulative dividend.
Should no special stipulation exist, dividends on
preference shares in companies registered under
the Companies Acts are cumulative ( Webb v.
Earle, Law Reports 20 Equity 556), but as
regards railway companies and other similar
companies governed by the Companies Clauses
Acts, it is provided by Companies Clauses Act,
§ 121, that "if in any year ending on the day
prescribed in the special act, and if no day is
described, then on the 31st day of December,
there are no profits available for the payment
of the full amount of preferential dividend or
interest for that year, no part of the deficiency
shall be made good out of the profits of any
subsequent year or out of any other funds of
the company."
Railway companies have of late years fre-
quently used a privilege conferred on them by
the Railway Regulation Act, 1868, § 13,
enabling them subject to certain conditions to
divide the whole or a part of their ordinary
stock into preferred and deferred ordinary stock. -
The dividend available for that part of the
ordinary stock which has been so divided is
apportioned as follows : the preferred stock
receives a certain maximum dividend (generally
six per cent), and any balance remaining over
goes to the defen-ed stock. The latter is, of
course, a habitual object of stock -exchange
gambling, speculators always favouring securities
liable to sudden rises and ialls, and it can hardly
be said that it was wise for parliament to create
special facilities for speculative operations in
]-ailway shares, as such operations cannot fail to
liave an indirect influence on the management
of the companies to which they relate.
"Where dividends have been paid improperly
to shareholders, the directors are liable to
refund the amount out of their own moneys,
and when the action has been brought before
the 1st January 1890, they cannot plead any
statute of limitations, being, in that respect,
exactly in the same position as the trustees of
a settlement or will who have committed a
breach of trust {In re Sharpe, Law Reports (92)
1 Chancery 154).
As regards so-called "bonus dividends," see
Bonus.
[Lindley, Company Law. — Buckley, Companies
Acts. — Palmer, Company Precedents. — Hodges,
Railways. — Browne and Theobald, Law of Railway
Companies. ] e. s.
DIVIDEND, Medieval. One part or the
other of an indenture or chirogi-aph, a term con-
fined to the practice of the exchequer, h. Ha.
DIVIDEND (in Bankruptcy). The rate-
able share in money which a creditor who has
proved his debts receives out of the proceeds of
his debtor's estate is called a dividend. When
the estate is a large one dividends are declared
and paid from time to time as the estate is
realised. When the assets do not exceed £300,
the bankruptcy rules of 1886 direct that the
estate shall, when practicable, be distributed in
a single dividend. In other cases, under the
Bankruptcy Act 1883, the first dividend is
directed to be distributed within four months
from the conclusion of the first meeting of
creditors, and subsequent dividends at intervals
of not more than six months (§ 58). Before
the declaration of the final dividend, notice
must be given to persons claiming to be creditors,
but who have hitherto failed to establish their
claims.
Unclaimed dividends are paid into a govern-
ment account of the Bank of England called
the "Bankruptcy Estates Account" (§ 162).
M. D. c.
DIVIDEND WARRANT. A dividend
warrant may be described as a cheque for the
payment of a dividend. It may be crossed in
the like manner as a cheque, and is in the main
governed by the same rules. In one respect,
however, it appears to be peculiar. When a
cheque is payable to the order of two or more
payees, it requires the indorsement of them all,
but if a dividend warrant be payable to the
608
DIVISIBILITY OF MONEY— DIVISION OF LABOUR
order of two or more payees it is the practice
of bankers to pay on the indorsement of any
one of them. This practice appears to have
received legislative sanction, for § 97 of the
Bills of Exchange Act, 1882, in terms provides
that nothing in that act is to affect ."the
validity of any usage relating to^ dividend
warrants or the indorsement thereof."
M. D. 0.
DIVISIBILITY OF MONEY. DIVISIONS
OF MONEY. The divisibility of the material
of money is an important factor in its usefulness.
It is essential that the mass should be readily
divisible into parts, great or small, with exact-
ness and without deterioration ; and, again,
that the sum of those parts, if re-united, should
be equal in value to the original mass. The
precious metals fully meet these requirements ;
and this quality, in addition to their other
merits in respect of durability and portability,
has secured for them their position as the money
of civilisation. The divisions and subdivisions
of money are both the cause and effect of the
scale of prices. They have not in many cases
been selected for theoretical appropriateness,
but have been determined by practical con-
venience, to suit the habits of the people among
whom they circulate. In these instances they
bear some reference to the scale of ordinary
transactions, but it will be found not unfre-
quently that the denominations and divisions
of money have prescribed prices. Especially is
this the case with fees for personal services,
where neither the value of the thing done nor
the cost of doing it can be stated with accuracy.
Such are the fees current in the medical and
other professions, which are quoted in guineas
or half guineas ; such also are the legal fees of
68. 8d. and 13s. 4d., corresponding respectively
to the ** noble " and the "mark." In all these
cases the rate of payment was prescribed by a
denomination of money formerly in use, and
the price has survived while the coin has dis-
appeared. Another instance is to be found in
the parliamentary railway fare of one penny
per mile. At the time that this rate was fixed
there was no experience as to the cost of carry-
ing passengers, nor was any pretence made of
apportioning the rate to the cost or value of
the service performed. The selection was
purely arbitrary, and was suggested by the
existence of the coin. It would undoubtedly
have been 20 or 30 per cent more — or less had
the subdivisions of the shilling been less or more
numerous. So also with the penny post.
This point is further illustrated by the diflferent
rates charged in diflferent countries for interna-
tional postage, where charges would be uniform
but for the diflference in the divisions of money.
In five countries of the Postal Union, as shown
below, the rates differ by as much as 12 per cent
among themselves, ranging from 6 per cent above
the English rate of 2^d. to 6 per cent below it.
Equivalent.
Rate
2id.=
of2^d.
Charged.
1000.
Germany
pfgs. 21-281
pfgs. 20
= 939
France
cents 26-272
cents 25
= 952
Holland
cents 12-595
cents 12i
= 993
Sweden
ore 18*916
ore 20
= 1057
Portugal
reis 46-918
reLs 50
= 1066
Again, increase or reduction in small charges
will necessarily follow the subdivisions of money.
Thus fares by omnibus or tramcars have been
not unfrequently reduced or raised e.g. from 2d.
to Id. OTvice versa, when there could be no ground
for supposing that the cost of carrying a pas-
senger had been reduced or increased by any-
thing like 50 or 100 per cent. r. w. b.
DIVISION OF LABOUR. By the "division
of labour," or, as it is sometimes called, the
" division of employment," is understood the
separation of the total labour required for the
manufacture of a single product into various
distinct processes, and the allocation of each
of these processes to a particular labourer or
body of labourers. It is to be distinguished
from the simple combination of labour, which
consists in the massing together of homogeneous
labour to produce a great effect. Thus in road-
making, although a hundred men are employed
to lay the metal on a road, there is no division
of labour, whUe in the publication of a news-
paper, where one man arranges the types,
another classifies the material, another corrects
the proofs, etc., there is division of labour.
The phrase division of labour has become
current through its use by Adam Smith in the
famous chapters in which he opens the Wealth
of Nations (h^. i. chs. i.-iii.)
Historically speaking, the division of labour
commences with the specialisation of indus-
tries, and the specialisation of processes in the
same industry, to which alone we strictly apply
the term, is only an extension of the same
tendency. In an early state of society each
man is his own smith, clothier, armourer ;
he is farmer, hunter, fisherman, carpenter, all
in one. The earliest division of labour is made
when one individual devotes his whole time to
some special work, such as boat -building, or
the making of bows and arrows ; and we may
therefore say that it is coincident with the first
creation of capital. (See Bagehot's JSconomic
Studies, pp. 57, 58). To the specialisation of
industry follows its organisation, viz. the
formation of groups of labourers whose efforts
are all directed towards the manufacture of
one particular product. The organisation of
industry leads necessarily to the division of
labour, which indeed becomes in time the
principal feature of that organisation. In a
state of society where industry is very highly
organised a single product is frequently the
result not only of a variety of diflferent processes
DIVISION OF LABOUB
609
in one industry, but the work of a number of
different industries also. Some of these are
termed " subsidiary industries," (see Marshall's
JEconomics of Industry, p. 52). In the manu-
facture of machinery a whole series of trades
are employed, from the digging of the mineral
to the finishing of the machine. This combina-
tion of industries is in reality division of labour
in an extended form.
Of the consequences of the division of labour
the most important is the increase in the
quantity of work which it enables the same
number of people to perform in the same amount
of time. For this improved effectiveness of
labour Adam Smith assigns three causes. (1)
The workman acquires greater dexterity in his
work, because it consists of some one simple
operation, and he can therefore do it better and
more quickly than if he had to vary his labour.
In other words, he has constant practice, and
therefore approaches nearer to perfection. It
needs no illustration to point out the extra-
ordinary degree of skill which continuous
practice in any branch of human employment
is known to confer. (2) The workman also
saves time when he is entirely devoted to a
single process, because he does not require to
pass constantly from one place to another, or
exchange one tool for another. Adam Smith
also suggests that where the work is continuous
the application of the labourer is greater than
it is where he has to begin new work every now
and then. (3) By the direction of his whole
attention to a single operation, or a single
process, the workman becomes so thoroughly
familiar with it that any advantageous change
in the machinery he deals with will naturally
occur to him more readily than it does to those
who have their attention divided between
several items of labour. To these causes (4)
increased aptitude and skill has been added.
The recognition of this is generally ascribed to
Mr. Babbage, though that author stated that
he found it in a foreign work (see C. Babbage)
on economics (Gioja, Nuovo P^-ospetto delle
Sdcnze Economiche, Milan, 1815). Increased
aptitude and skill is created by the specialisation
of labour ; it consists in the economy of work
that is gained when each man is employed on
the kind of labour he is best fitted for. Where
a workman has two or more things to do, he
will be less fitted for some than for others ; but
the concentration of his energies on one single
kind of work enables him constantly to labour
at the things he finds most suitable.
That the division of labour, from the above
causes, increases the productivity of labour, and
that very greatly, is not denied. It is urged,
however, that there are counterbalancing results
of the division, less direct perhaps than those
above noted, but still traceable to it, which
have an opposite efiect on the productivity of
labour ; and this apart altogether from other
vol.. I.
advantages or disadvantages due to it. (1)
Where labour is very highly specialised, the
effect of perpetual concentration of the mind on
a single operation is deadening to the mental
faculties. We are all aware that variety of
occupation produces a healthy state of mind,
and that while perpetual practice of one thing
brings about a kind of mechanical perfection, it
has a deteriorating effect on the faculties in
general. The principal way in which this con-
sequence of the division of labour acts on its
productivity, perhaps, is that it counterbalances
to a large extent the probability of useful in-
ventions which we counted among the results
on the other side of the question. On the
other hand, it is urged that work performed
mechanically frees the mind and gives more
time for thought. (2) A more important con-
sideration, but one which affects not the labour
of the individual so much as labour in the
gross, is this — that the specialisation of labour
of necessity involves the unsuitability of the
average workman for any kind of work other
than that he has been trained to. For example,
suppose that a workman is employed on some
small but delicate mechanical operation, which
he has trained himself by long practice to per-
form with extraordinary celerity and accuracy.
Some change in the market, or new invention,
or development of mechanical science, — and
where industry is highly organised all these
causes are to be looked for — renders unnecessary
the continuance of the particular piece of work
he has hitherto done. Had he been in the
habit of doing work in which there was variety
or versatility, it would be much easier for him
to turn his hand to something new ; but in the
highly -specialised condition of industry it is
now unlikely that he will find any work corre-
sponding to that he has been obliged to aban-
don. This disadvantage we may call want of
elasticity of labour ; and we may note that it
tends to lessen the productive power of the
total labour-force in existence. (3) Inasmuch
as health and physical capacity are invaluable
in their effect on the power of all labourers,
anything which impairs or weakens the strength
of the workman diminishes the efficiency of his
work. The manifold division of labour has led
in our time to the employment in the same
business of far larger quantities of operatives
than used to be massed together in Adam
Smith's days. Therefore, though he states
that "we can seldom see more, at one time,
than those employed in a single branch," at
the present time it is common to have all the
branches of a great industry working together
in the same place. For convenience' sake, this
has led to the massing together of great popu-
lations in large centres of industry ; and thus
the conditions of life, as to health, have been
rendered less advantageous to the labourers.
From these considerations it may be deduced
2r
610
DIVISION OF LABOUR
that while the division of labour increases to a
great degree the productivity of labour, it has
counterbalancing effects which modify the
advantage. When we look at some of the
other less obvious results of the division of
labour, we see that it is in most cases opgn to
argument whether they have a tendency to
augment the net result of labour, or the reverse.
We have already seen that the monotony of
work which a great specialisation leads to must
be regarded as an etfect which modifies the
advantages derived from long and continuous
practice ; and in its general influence on the
workman we are bound to suppose it must have
a tendency to impair his mental faculties. On
the other hand, it is pointed out that concur-
rently with the progress of that specialisation,
the labouring classes have attained to a con-
tinually higher standard of education, and to
a greater development of mental power. This
may be partly explained by the fact that an-
other result of the specialisation of labour is
that a greater and greater proportion of the total
work done comes to possess in some degree the
character of skilled labour ; in other words, it
makes demands on the mind of the labourer as
well as on his body. Brute force counts always
for less as the organisation of industry pro-
gresses, and the most striking example of this
tendency which we see in our own day is the
ever-increasing field for the work of women.
The interdependence of industries is another
consequence of which much may be said
favom'ably as well as the reverse. When all
farm labour is done by hand, movements in
other branches of work can only very indirectly
affect those engaged in agriculture. But when
machinery is introduced for ploughing, reap-
ing, etc., the business of farming comes to be
intimately connected with ironwork, the making
of machinery, and probably with the hewing of
coal also. Therefore the cost of production to
the farmer will be affected by inventions in
machinery, by alterations in the wages of the
classes of workmen who make machinery, and
by variations in the price of coal and iron.
The interdependence of industries, of which the
above is a very obvious example, is a most
important factor in modem life. On account
of the hanging together in a greater or less
degree of all trades, good or bad fortune has
a tendency to visit all simultaneously. This
interdependence also breeds a feeling of common
interest among employers of all classes, and
also between labourers on every field ; -with the
result that we now see an increasing tendency,
especially on the part of labour, to band its
forces together for some general object, or for
some special advantage. A universal strike in
any large industry would paralyse the entire
trade of the country.
The division of labour can be carried out
much farther in some industries than in others :
and, as Adam Smith points out {Wealth of
Nations, bk. i. ch. iii.), it is only limited by the
extent of the market. This latter considera-
tion, however, is of very much less importance
now than it was in the days when he wrote.
The improvements in the means of transit
made within the last hundred years have been
so great as in large measure to abrogate the
old limitations of market. The expenses and
difficulties of land-carriage, which Smith notices,
have been so greatly reduced that goods are
constantly sent to market by long journeys
across country. Still, in the smaller industries,
it must always be the case that in a market
where the customers can only be drawn from a
limited area, the division of labour cannot be
carried to any great extent. As among differ-
ent industries, the division is generally carried
out furthest where two conditions are satisfied :
a large employment of workers, and the con-
tinued repetition of identical operations. In a
small business it is clearly impossible to sub-
divide the work done very minutely. Where
the same work can be done continuously, again,
a greater division of labour is possible than
where it has to be varied at different periods.
Thus agriculture is an industry in which the
division of labour can never be very greatly
extended, because the same people, from the
very nature of their business, must be employed
in different operations at different seasons of
the year. On the other hand, in a cotton
factory, the division of labour is probably
extended to its farthest possible present limits.
These differences form one of the many causes
which bring about the continuous flow of popu-
lation in this country from rural to urban
districts ; a tendency which it is hopeless to
check so long as we purchase food in great
quantities from foreign countries with our
manufactured goods.
It is noticeable that in retail trades, in
which a vast quantity of capital is invested
and a multitude of labourers employed, there
does not appear to be as much scope for divi-
sion of labour as in manufacture. Here the
tendency is not for a particular retailer of
goods to confine himself more and more to the
sale of a special kind of article, but for large
retailers to spread their business over as many
commodities, and over as great a variety of
commodities as possible ; and by this means it
would appear that retail trade is more remunera-
tive when it is general than when it is special-
ised. The profits of the retailer depend less
on the amount of work done by his workmen
or the percentage of profits on the sale of goods
than on the total number of sales he can make :
what is commonly called his turn-over. Causes
which in manufacturing industries increase the
power and value of labour, therefore, have no
such effect on the labour employed in the retail
trade. With the retail trades must be classed
DIZAIN— DOCK
6n
those great organisations called the carrying
trades, which aim at the same object, viz. the
bringing to market of goods already made.
[The question of the division of labour is dis-
cussed in all the standard English works on politi-
cal economy. See also TJie Economy of Machinery
and Manufactures by Babbage, chs. xix. to xxiii.,
where many interesting facts in illustration of the
division of labour are recorded. The socialist point
of view may be studied in Capital, by Karl Marx,
translated into English by Samuel Moore and
Edward Aveling, and edited by F. Eugels, and in
Hyndman's Historical Basis of Socialis7n. The
most complete monograph on the History of Divi-
sion of Labour is that by Schmoller in Jakrhuch
fvx Oeseizrjebung, 1889.] M. G. D.
DIZAIN, a coin struck in France in the
reign of Charles VIIL, worth ten deniers, and
was also known as a Carolus. R. l.
DOBBS, Arthur (1689-1765), was the eldest
son of Richard Dobbs of Castletown. He be-
came high sheriff of Antrim in 1720, was
member for Carrickfergns in the Irish parlia-
ment 1727-1760, and was appointed engineer-
in-chief and surveyor general in Ireland by
Walpole. His Essay on the Trade and Improve-
ment of Ireland (Dublin, 1729-1731, 2 parts,
8vo, reprinted in Tliom's Collection of Tracts,
1861, ii. 321, etc.) is full of valuable informa-
tion on Irish trade and population drawn from
official sources. He advocated a better system
of land tenure. In 1732 he introduced an en-
closure act in the Irish parliament (see Viscount
Mountmorres, Impartial Refections on the
Present Crisis, 1796, 8vo).
[M'Culloch, Literature of Political Economy,
1845, p. 46. — Dictionary of National Biography,
voh XV. p. 132, — Appleton, Gyclopcedia of
American Biography, vol. ii. p. 189.] h. r. t.
DOCK.
Development of the Modem Dock System, p. 611; London
Docks, p. 611 ; Provincial Dock Development, p. 613 ;
Warrants, p. 615 ; Effect of Economic Changes upon
Docks, p. 615 ; Competition in relation to Docks, p.
621 ; Incidence of Dock Charges, p. 621 ; Dock Finance,
p. 621 ; Dock Ownership, p. 621 ; Public Ownership,
p. 621 ; (1) Management, p. 621 ; (2) Public Conveni-
ence, p. 621 ; (3) Finance, p. 621 ; List of Mercantile
Docks in the United Kingdom, pp. 616-620.
Development of the Modern Dock System. —
The first commercial dock in this country was
the Howland Great Wet Dock at Rotherhithe,
constructed in 1660 by private enterprise. This
dock, known later as the Greenland Dock, now
forms part of the system of the Surrey Com-
mercial Docks. The earliest example in this
country of a dock owned by a municipality is
the harbour at Port-Glasgow on the Clyde, con-
structed by the municipality of Glasgow in
1662, on account of the distance of the usual
port, Irvine, and the necessity of conveying
merchandise for twenty miles by pack-horses
(Deas, "The River Clyde," Inst, of Naval
Arch., vol. XXX. p. 20). The next important
incident in dock history is the construction of
the Mersey Docks in 1708. In 1665 the gross
burthen of the 15 vessels that represented the
shipping trade of Liverpool was 268 tons. At
this time Liverpool possessed a natural harbour
of about a mile in length, in a "small creek"
off the north bank of the Mersey. The mouth
of this pool became, in 1708, the first Mersey
Dock — the Old Dock, now no longer in exist-
ence (Lyster, on "Recent Dock Extensions at
Liverpool," Inst. Civ. Eng., vol. c, pt, ii.).
This dock was constructed by the Co]"poration
of Liverpool (Rees, Encyclopaedia, vol. xii., art.
"Docks"). The condition of the great docks
of the country was as follows (1911) : —
London Docks. — The eight docks described in
Table A are under the management of the Port
of London Authority, established by the Port of
London Act 1908. The docks generally, and the
channels of approach to them, are entirely in-
adequate to their work, and considerable addi-
tions have been undertaken (1911).
The Act of 1908 provides that, to enable the
Authority to represent tlie varied interests con-
cerned, it should consist of 28 members, of
whom 1 is appointed by the Admiralty, 2 by
the Board of Trade, 4 by the London County
Council (2 being members and 2 not members
of the Council), 2 by the Corporation of London
(1 being a member, 1 not a member), 1 by the
Trinity House, 18 being elected by the Payers
of Dues, Wharfingers, and owners of River
Craft, 1 member, however, being elected by
Wharfingers only.
Besides the docks and warehouses, the Port
of London Authority controls the Avaterway of
the Thames from Teddington, practically to the
Nore, a distance of 70 miles. The dock pro-
perties include a total area of 2583 acres, with
a river frontage about 3 miles, 28 miles of
quays available for shipping, and about 120
miles of railways. There are many cranes with
all appliances for the work. The Port Authority
also exercises much of the jurisdiction of the
Waterman's Company.
The purchase of the dock undertakings was
effected by the issue of Port Stock in substitu-
tion for the various dock stocks raised by the
separate undertakings and companies which
constructed the original dock system, and whose
dates extended from the year 1660 practically
to 1908 ; the amounts were (1912) : —
3 % *' A'' stock (issued 1909) . £9,379,752
4%"B"stock( ,, 1909) . 13,210,706
3| % Inscribed stock (issued 1911) 2,000,000
£24,590,458
Since 1886 the growth in the size of the vessels
using the Port has been continuous, and the ton-
nage of the shipping enteringand leaving the Port
of London from foreign countries, British posses-
sions and coast-wise, in 1912, was 29,495,521
tons. A scheme for the development of the Port
TATSTF A -LONDON DOCKS ( Work under construction in Italics)
^^ — ^ i^^ ■ o : — Tw-3 — 5^§T= ^ s:j~g~^
° ||2
612
DOCK
613
has been arranged to cost about £14,500,000,
the first part now under construction (1911-14)
costing about £6,000,000. Besides the addi-
tions described in Table A, an extensive dredging
programme has been undertaken, widening and
deepening all channels ; a large cold store, fitted
with electric lifts, in Smithfield, for a further
80,000 carcasses, is added (total accommodation
for frozen meat in London Docks approaches
1,350,000 carcasses) ; also two additional pneu-
matic grain elevators, 100 tons an hour capacity,
with suction-pipes, etc., and large new Offices.
Frovincial Dock Development. — While the
dock system of the Thames was developing,
that of the Mersey was growing rapidly. The
growth of the cotton trade, and the increasing
importation of American produce, especially
wheat, stimulated the provision of docks and
warehouses at the chief ports on the western
sea-board. The Mersey and the Clyde became
great industrial centres and great harbours.
Liverpool — The Mersey Docks and Harbour
Board, formed by Act of 1857 — consisting of
28 members, 24 elected by the Dock Rate-payers,
4 a2)pointed by the Mersey Conservancy Com-
are a striking feature of the docks. Special
warehouse accommodation for the storage ol
grain has been provided both at Liverpool and
at Birkenhead. The wool warehouse will take
118,000 bales of wool, while the tobacco ware-
house is probably tlie largest warehouse in the
world. There are large cold storage depots.
Tank accommodation is provided for the storage
of petroleum. The railway facilities connect
the great railway companies with the quays ;
the Board also owns an extensive system of
lines traversing and intersecting the dock estate
in all directions. The port is used by all the
great steamship companies — the White Star, the
Cunard, Elder Dempster, Dominion Line, etc.
In 1909 the number of vessels had risen to
24,799, with tonnage of 16,747,479, the total
rates paid on vessels £730,469 : 17 : 7, and the
rates and dues paid on goods £633,121 : 3 : 5.
As regards export trade Liverjiool stands with-
out a rival in the Kingdom, as the following com-
parative figures of the values of exports for the
year 1909 will show : Liverpool, £157,464,098 ;
London,£120,545,867;Hull,£27,194,425;Glas-
gow, £27,023,646;; Southampton, £26,710,818.
Table B. — Meesey Docks.
Dock Estate.
Water Area.
Lineal Quayage.
Depth of Sill.
Liverpool Docks—
60 Docks and Basins
Birkenhead Docks—
21 Docks and Basins
Acres.
506
427 acres 2967 sq. yds.
171 „ 3259 „ „
26 miles 1466 yards
9 „ 1422 „
Varies from 2' 6" above to
20' below O.D.S.
Varies from O.D.S. to 18' 3"
below O.D.S.
Varies from 3' I" above to
16' 2" below O.D.S.
Varies from 4' 1" to 7' 8"
below O.D.S.
Total .
167Yi
599 „ 1386 „ „
36 „ 1128 „
Liverpool Graving Docks
Birkenhead Graving Docks
Length of Floor . . 10,147' 2"
„ „ . . 2,430' 0"
Total
12,577' 2"
New Docks are under construction. To provide accommodation for vessels of exceptional size (up to 1000 ft.
in length) the construction of a large Dock has been commenced, capable of being used as a graving Dock when
necessary. The dimensions of the Dock are : length, 1020 ft. ; width, 120 ft. ; water -area, over 3 acres ; depth of
sill, 25 ft. below Old Dock Sill. The New Gladstone Docks are to consist of Half-tide Dock, 870 ft. long by
130 ft. wide, with a Sill 30 ft. below datum, a Lock, and two Branch Docks.
missioners (the First Lord of the Admiralty,
the Chancellor of the Duchy of Lancaster, and
the President of the Board of Trade) — controls
the Port of Liverpool and Birkenhea'd.
The docks are equipped with very powerful
modern appliances. Hydraulic power stations
are placed at suitable centres, the power being
used for opening and closing the dock gates, and
for dealing with cargoes. Steam and electric
power is also provided. The natural disadvan-
tages of the river — i.e. the bar, and the im-
mense rise of the tide, the total range between
high and low water being as much as 33 feet
on extreme spring tides and 11 feet on neap
tides — have been met by very complete dredging
appliances, by an immense floating landing-
stage, nearly half a mile long, carried on iron
pontoons, and held in position by bridges con-
nected with the shore and stage by swivel joints
and mooring-chains. The warehouses and sheds
Li the import trade Liverpool is second to Lon-
don alone, and much exceeds all other ports.
The principal articles of trade are corn, cotton,
tobacco, sugar, cattle, petroleum, and provisions.
The borrowing powers of the Board are as
follows: amoimt authorised (1859 to 1906),
£31,789,554 ; amount borrowed, £25,720,874.
Manchester. — The Harbour and Port of Man-
chester was' constituted by the Manchester Ship
Canal Act 1885, and the Manchester Ship
Canal Co. is the Harbour Authority of the Port.
The Ship Canal was opened for traffic in 1894.
There are many lines of steamers sailing to
the principal countries of the . world. Man-
chester is now the second port for cotton in the
Kingdom, the third fruit port, and the fourth
-in value of exports and imports. The traffic
lias increased from less than 1,000,000 tons in
1894 to nearly 5,000,000 in 1911, and the
revenue from less than £100,000 in 1894 to
614
DOCK
over £550,000 in 1910. The work has been
carried out under unexampled engineering
difficulties and corresponding expense, greatly
owing to the district which it serves being the
most densely populated in England.
There are 21 Directors of the Company, 10
elected by the Shareholders, and 11 by the
Manchester Corporation. The capital powers
amount to £18,573,230, and the expenditure on
capital account to June 30, 1910, £16,796,925.
The imports into Manchester are raw cotton
(American and Egyptian), timber, grain, oil,
fruit, frozen meat, wood pulp ; the exports are-
manufactured cotton, coal, agricultural machines,
acids, and an enormous quantity of general
merchandise.
The equipment of the principal docks at
Manchester includes hydraulic, steam, and
electric cranes of great power. Bonded ware-
houses are also provided.
Table C. — Manchester.
(a) Principal docks at fj^^^^ ^^^^^ ^gg^ ^^.^.g ^^ter
Manchester— 9 J ^^^^ ^^^ apxps ! nnavs. 2S6A
dge- (
(in-J
lall i
A 1 /in*.i J 1 -» area, 120 acres; quays,
docks (10th dock y ^^^^^^ g^ j^ji^g i^^"i_
Total area, .70 acres ; water area,
15 acres'; storage ground (in
addition), 77 acres.
proposed),
(&) Runcorn (Bridge
water) Docks "
eluding Small
Graving Dock),
(c) Manchester Dry Docks Co. Ltd,
1. 3'2i miles from Manchester.
Shipbuilding and Repairing Yards.
•D^„4-^-... i?i^nf r^SO ft. long, 70 ft. wide, en-
"^Innl N trance 16 ft. deep; capable
mg uocK. 1^ ^^ lifting vessels of 2500 tons.
2. 2 miles from Manchester.
Graving
Dock
Dry Dock
Floating
Pontoon'
■ 535 ft. long, 65 ft. wide, 22 ft. water
on the blocks.
425 ft. long, 65 ft. wide, 18 ft. water
on the blocks.
'200 ft. long, 63 lit. wide, 16 ft. water
on the blocks ; capable of lifting
of 2000 tons.
The Canal has its entrance at Eastham, 19
miles from the bar at the mouth of the river
Mersey. It is 35^ miles long, and its depth,
as well as that of the four large docks at Man-
chester, is from 26 to 28 feet. There are three
locks at Eastham, forming three separate en-
trances by which access is obtained whenever
the tide is less than 16 ft. 2 in. above the Old
Dock sill. The principal docks (see Table C)
at Manchester are 50 miles from the sea. The
Company also owns the Runcorn Docks, ship-
building and repairing yards, about fifty
wharves and lay -byes situated at various points
between Eastham and Manchester ; besides
these there are the EUesmere Port Docks, the
property of the Shropshire Union Railway (see
Table E). There are oil tanks owned by various
companies, with a total capacity of 26,912,282
gallons (99, 119 tons), and large cold-air storage.
A gi-ain elevator is situated on the canal,
with storage capacity of 40,000 tons.
The Manchester Dock railways are 80 miles
in extent and completely intersect the dock
estate. The Ship Canal Company's railways,
running alongside the canal, are connected with
the other great railway companies of the King-
dom. There is also direct communication with
fourteen other canal companies.
Clyde Navigation. — At Glasgow the trustees
of the Clyde Navigation, by deepening the river-
channel and erecting quays upon the banks, had
practically converted the Clyde into a dock ; but
the extension of trade rendered necessary the
construction of the Kingston Dock, 1867 ,
Queen's Dock, completed 1880 ; and Prince's
Dock, completed 1897. The combined area of
these docks is 74 acres. The expansion of
the mineral trade, in the importation of iron ore
and the exportation of coal, also led to the
construction of the Rothesay Dock, Clydebank,
6 miles below Glasgow, opened 1907 and
having an area of 20^ acres. Special accom-
modation is provided for landing and housing
cattle and storing timber, and a large granary
is (1911) in course of construction. The North
British, Caledonian, and Glasgow & South-
Western Railway Companies have access
through branch lines to the docks, and the
trustees own about 36 miles of harbour railway
on the street level. (See Table D.) !
Table D.
Particulars as to Glasgow Harhour arid DocJcs^
1911.
First Act for improving the River Clyde 1759.
First Act for improving the Harbour
of Glasgow 1809.
First Act for making a Dock at Glasgow 1 840.
Length of Quays 19,234 lin. yds.
Area of Quays, Roads, and Shed space 187 acres.
Area of Shed space .... 66| acres.
Area of Timber Yards . . . .34 acres.
Area of Water Space .... 325 acres.
Amount of Parliamentary Borrowing
Powers £8,500,000
Amount of Debt £6,979,868
Total Capital Expenditure to 30th
June 1910 . . . . . . £9,298,587
Total Income of Trustees from 1752 . £17,258,267
Income for year to 30th June 1910 . £555,403
Depth of Water, at average Low Water
Springs— In River . . . . 22 to 24 feet.
In Glasgow Harbour . 16 to 23 feet.
In Docks .... 22 to 28 feet.
Rise of average Spring Tides—
In River 10 to 12 feet.
In Glasgow Harbour and Docks . 12 feet.
For a general description of the other docks [
of the country see Table E. This table gives a ,
summary of the principal features of each of the ;
docks described. We only regret that the limits
of space compel the exclusion of many interest-
ing details. Since the table was first compiled
in 1892 much improvement has taken place in
dock accommodation. Among these may be
mentioned those carried out at Bristol, where
the capital invested has increased nearly
£4,000,000 within the last twenty years, and
at Southampton, where the capital invested
has increased over£3,000,000. On the Huniber,
new docks have been opened at Immingham
(1912) and Hull (1914) in direct communica-
tion with the collieries of Derbyshire, Notts, and
South Yorks, and are equipped for dealing with
DOCK
615
the rapid shipment of coal, the equipment being
largely electrical. At Cardiff the area of docks and
basins has increased by nearly 100 acres and the
capital invested by over £2, 000, 000. Very great
improvements have been made on the river Tyne
under the care of the Tyne Improvement Com-
missioners, who have spent nearly £7,000,000
on their work. They state, in their report, that
"the river Tyne is the only port of refuge on
the East Coast between the Humber and the
Forth." The great improvement in the river
has been accompanied by a vast increase in the
industries carried on — shipbuilding and repair-
ing, chemical works, iron and steel manufac-
tories, hemp and wire rope works, potteries, etc.
They add : " While Tynesiders now living can
well remember the time when there Avere less
than 7 feet of water on the bar at low water,
there is now a depth approaching 25 feet at low
water, shortly to be increased to 30 feet, and
vessels of the largest class are enabled to enter
and leave the port at almost any state of the
tide." The docks belonging to the North
Eastern Railway Company also provide accom-
modation for the timber traffic, the storage of
grain, and other cargoes. On the Clyde the
area of docks and basins has more than doubled
since our statement in 1892, and the income
has increased in fully the same proportion. In
this connection we may mention that at Swansea
the capital invested has increased from about
£1,400,000 to over £4,000,000, while the area
of docks and basins has groAvn from 60 acres
to 126 acres. At Newport (Monmouthshire)
the area of docks and basins has increased
from about 56 to more than 150 acres ; the
South Dock, of 110 acres, being the largest
single dock enclosed by artificial walls in Great
Britain. Since 1892 the area of the docks and
basins at Dover has increased from 17-^ to 91
acres, and the docks at Fleetwood from 10 to
25 acres.
Dock Warrants. — Under this system goods
may be ''mobilised like money." Such goods
are necessarily stored at great financial centres
under the control of public bodies. See Clear-
ing System ; Conditioning ; Cotton Clear-
ing ; Dock Warrant ; Sampling and
Grading.
Effect of Economic Changes upon Docks. —
Besides the general causes which affect the
business of docks, certain special causes have
had important influences upon them. Their
influence varies with the nature of the trade of
the port, and with the incidence of the dock
charges. At Liverpool the incidence of the
charges upon ships and goods was as follows in
1910 :— Of a total of £1,290,000, dock tonnage
rate was 45 per cent, dock rates 27 per cent,
dues on goods 23 per cent, warehousing 5 per-
cent. At London, under the old system with"
which the arrangements of the Port of London
Authority mainly coincide, warehousing yields
70 per cent and all other charges 30 per cent.
Thus any changes affecting warehousing must
have more important effects on Liverpool than
on London. The warehouses in the Thames
are not exclusively for goods in bond, but the
system of warehousing grew up under a policy
of protection, when articles now free of duty
were taxed and stored, under the supervision of
the customs, in the warehouses till the duty
was paid. The facilitation of commercial inter-
course makes warehousing less necessary and
less profitable. Markets become more closely
di'awn together and more sensitive, and the
risks and expense of prolonged holding of goods
becomes out of proportion to the possible profits.
Among the many economic effects of the open-
ing of the Suez Canal were two in which docks
were directly affected. The first of these was
the impetus given to the building of steamers
of large size, the great development of which
has taken place since ; the second, its influence
on the entrepot trade of Great Britain. The
opening of the Canal reopened the direct trade
routes between Europe and the East. This,
with the development of international commerce
resulting from various causes, enabled France
and Germany to employ lines of steamers on
direct routes between Continental and Eastern
ports, and hence the entrep6t trade of London
gradually diminished. Other causes also, for
example the lowering of prices, have had the
effect of stimulating direct communication (cp.
Dep. Trade Com., Report, III. Q. 10,848). Of
these the most potent was the expansion of
trade, enabling the Continental ports to culti-
vate direct relations with the East. Navigation
laAVS (of France and Spain, e.g.) have stimu-
lated direct intercourse by granting bounties on
ships and cargoes. Although from a national
point of view the importance of the entrepot
trade may be exaggerated, and although at its
highest point it was not more than one- sixth
of the total import of foreign produce, yet the
fluctuations in it affect London more seriously
than any other port in the United Kingdom.
Notwithstanding this the imports of London,
£205,639,879 in 1909, are the highest in the
Kingdom, and the exports, £116,974,484, are
second only to Liverpool.
Individual docks have been subject to the
influence of changes in the technique of pro-
duction. ' The alteration in the sugar trade
through the extensive substitution of beetroot
for cane-sugar seriously affected the revenue
of the West India Docks, while the substitution
of artificial alizarine, and of the aniline dyes
for madder, cochineal, and other products, has
led to the almost entire disappearance of these
from the London import lists, and to the im-
portation from Germany and France of theii
substitutes. These substitutes are mainly
imported at the provincial ports, e.g. Hull,
Newcastle, Harwich, and Leith.
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621
Competition in relation to Docks. — In almost
all the provincial ports the dock corporations,
whether mnnicipal, trustee, or joint- stock,
exercise a local monopoly. Occasionally ports
are so near each other as virtually to enter into
competition for the same trade ; but each dock
and harbour authority in the provinces, with
rare exceptions, enjoys a monopoly of the trade
of the port. At Liverpool and Glasgow, c.cj.
there is no competition in docks, and rates are
fixed exclusively with regard to the needs of
the trust for maintenance and interest, although
there is a necessary limit fixed by the com-
petition of other large ports.
Incidence of Dock Charges. — The policy of
dock owners as regards the incidence of charges
varies very widely. The charges in each port
have arisen largely through local custom. The
charges may be broadly divided into charges on
the ship and charges on the goods. Charges
on the ship may be divided into dues and rent.
Dues are usually charged on net register tonnage,
though they have been from time to time
charged on the gross tonnage, as in 1856 at
Sunderland. (For discussion on the policy of
charging on the net or on the gross tonnage,
see Royal Com. on Tonnage, Report, 1881 ;
also e.g. Slapping World, vol. i. pp. 274, 323,
365, and 402). Under the Harbour Docks Act
of 1847 preferential rates are prohibited.
Dock rent is charged, as in London, on gross
tonnage. In some cases rent begins on entrance,
in other cases it begins after a certain period
has elapsed. Charges on goods may be divided
into rates including landing, weighing, and
delivery in the case of imported goods ; collec-
tion, wharfage, and porterage in the case of
exported goods ; and warehouse rent. There
are besides special charges on particular classes
of goods. The rates on goods are fixed partly
with regard to the difficulty, risk, and cost of
handling them, and partly with regard to the
value of the goods. At Bristol no rates are
charged on exports. It is clear that dock rates
80 levied must act in a measure as a bounty on
exports, and as a corresponding tax on imports.
(On differential rates for freemen and foreigners,
see Maitland, History of London.') There seems
much need for simplification in dock charges.
Tlie classification adopted finally by the railway
companies might form the basis of a classifica-
tion for docks with advantage both to shippers
and dock corporations.
Dock Finance. — The capital invested in docks
in the United Kingdom may be estimated as
not less than £200,000,000. This represents
their probable cost.
It is doubtful whether the total return on
the capital invested can average from 3 to 3^
per cent. In London in 1909 the interest on
the £9,150,000 "A" Port Stock is at 3 per
cent; the £13,210,000 "B" Port Stock is at
4 per cent. At Liverpool £4,677,000 of the
loans are between 4 per cent and 4^ per cent,
£11,710,000 between 3 per cent and 3^ per
cent, and £64,000 between 2^ per cent and 2\
per cent.
Dock Ownership. — Tlie ownership of the
docks in the United Kingdom is distributed as
follows :
State Ownership ....
Municipal Do
Local Public Trust Ownership .
Public Ownership
Joint-Stock Ownership
Private Do.
Private Ownership
37
Public Ownership. — The question of public
ownership of docks has been frequently dis-
cussed. There are three main points involved
— 1st, management ; 2nd, public convenience ;
3rd, finance.
(1) Management. — It is argued that a number
of men selected by their townsmen for known
fitness for administration may administrate as
efficiently as similar men selected for the same
reason by a body of shareholders. No consider-
able support can be found for objecting to ad-
ministration of docks by public trusts in the
records of such bodies. The examples of Liver-
pool and Glasgow are very note^vorthy as highly
successful and efficient trusts. The same class
of men is employed in the practical details of
administration, both in companies and in cor-
porations. (2) Public Convenience. — There is
some reason for doubt whether any general case
could be made out on this ground for or against
public control. The slowness witli which public
bodies sometimes meet public demand has fre-
quently been exemplified in the case of docks
under both joint-stock and public management.
(3) Finance. — While dock property may one
day be extremely remunerative, it is still in a
period of transition. The joint -stock dock
shareholder has had, during these past few
years, in some cases, to go without his dividend,
while the public trust bondholder has, as a
rule, got his interest. In this reference it
should be remembered that municipalities have
other resources at their command than dock
charges. The broad ground of the advantage
in the public interest of public ownership and
control of all services which are essentially
local monopolies, is the argument usually em-
ployed in favour of placing docks under public
control. (See Monopolies.)
[Harb. Docks and Piers Clauses Act 1847. — Sdect
Com. Ho. of Com. Harh.Accovi., 1883.— Z)e^. Trade
Com. Report iii., Entrepot Trade, queries 10,072,
10,074, 10,098, 10,169, 10,283, 10,291, 10,673,
10,692, 10,848, and 11,334. — Macpherson's
Annals. — Porter's Progress of the Nation, sec. iii.,
1837. — Colquhoun, Commerce and Police of the
Thames. — Locke, Hist, of Navigation, 1744.—-
622
DOCK— DOCK LABOUR
Vaughan Tracts on Docks and Commerce, 1839. —
Cruden, 'llist. of the Port of London, 1843.—
Eden, Flan for the Imprwement of the Port of
London, 11^^.— Reasons for Extending Wharves
in London, 1797.— Telford and Douglas, An Ac-
count of the Improvements of the Port of London,
etc., 1801. — Forrow, The Thames and itsJ)ocks,
1877.— Capper, The Port and Trade of London,
1 862! —Howell, A Days Business in the Port of
London, 1850.— "Various histories of London and
of the Thames and district, e.g. Boydell, Maitland,
Pennant, Brayley, Knight, Walford, Loftie.—
Burrows, The Cinque Ports, 1888.— Lyster, "Re-
cent Dock Extensions at Liverpool," Proc. Inst.
Civ. Engrs., vol. c. pt. ii.— Mason, A brief Hist,
of the Dock Co. at Kingston-upon-HuLl, 1885. —
The Industrial Rivers of the United Kingdom,
1888.— Deas, "The River Clyde," Proc. Inst, of
Naval Arch., vol. xxx. p. 20.— B. A. Meeting New-
castle, Official Handbook of Industries, 1889. —
Inst, of Mech. Engrs., Liverpool Meeting, 1891,
Official B.m.dAio6)s..— Shipping World Annual.—
Lindsay, Hist of Merchant Shipping and Ancient
Commerce, 1874. — "Dock Companies Shares,"
Jour. Stat. Sac, xxxix.p. 495.— Turnbull, Dock and
Port Charges. — Thubron, Dock and Port Charges.
— " Floating Docks in London," Industries, vol. 1.
p. 337. — Harcourt, Docks and Harbours. — First
AnnvM Report of the Port of London Authority,
31st March 1910. — Port of London Authority,
Visit of the Instiiicte of Joiirnalists, 17th Sept.
1910. — Tables of Rates and Charges. — Accounts
of the Mersey Docks and Harbour Board. — The
Port of Liverpool : Its Rise and Progress. — Port
of Manchester Official Sailing List and Shipping
Guide, and the other official handbooks and guides
of the different docks issued by the authorities
concerned. — Encyclopcedia Britannica, 11th ed.,
vol. viii., "Docks." — Charles Booth, Life and
Labour of the People in London, 1903.]
DOCK LABOUR. The iuformation given
by Mr. Charles Booth in Life and Labour of
the People in London, vol. 3, Second Series
(Industry), remains the best source for informa-
tion on the conditions of men employed daily
on the docks and wharves and in warehouses,
now under the control of the Port of London
Authority, and their earnings.
Those employed are mentioned in the First
Report of that Authority for the year ended
3l8t March 1910 as follows :—
"All the undertakings transferred to the
Authority were found to be working under dif-
ferent systems in regard to the employment,
payment, and classification of staff; and the
work of reconciling these differences in practice
and of a general re -classification is making
good progress. The annual charge in re-
spect of superannuation and benevolent allow-
ances at present amounts to £70,405. The
question of establishing one pension scheme
for the whole of the staff is under consider-
ation.
"The staff of the Authority at the 31st
March 1910 numbered 11,297, as follows : —
Salaried stafT 1,156
Wages staflf—
Permanent men on the establishment 5,074
Not established, but regularly em-
ployed by the week .... 2,123
Extra men —
Daily average 2,944
11,297'
And the Report continues: "In accordance
with the requirements of section 28 of the Act,
the Authority has taken into consideration the
question of the regulation of the engagement
of casual labour."
• In time it may be expected that the organisa-
tion of the labour required will be arranged on
a better footing than previously.
Meanwhile Mr. Booth's remarks on the sub-
ject will be read with interest. " The earnings
of the professional docker are shared by a con-
siderable number of incomers from other trades
who seek work at the docks, not because the
docks are busy, but because their own trades
are slack, and herein lies the peculiar difficulty
of dock industry. If, instead of coming at
all times, these men from other trades were in-
troduced only when the docks were busiest,
their numbers could even be increased with
advantage, and, combined with a reduction in
his own ranks, would probably lead to improve-
ment in the position of the professional docker."
"The varying demand for labour at the docks
can be provided for in four different ways : (1)
by maintaining at all times a sufficient force to
cope with the largest amount of work offering ;
(2) by working overtime when needed ; (3) by
drawing upon outside labour for additional
hands in busy times ; (4) by postponing some
of the work. Of these four it is upon the first
alone that the employers now rely, and the
only mitigation of its hardship is the extent to
which the men may themselves find other work
in slack times."
The wages received are difficult to estimate.
The work includes great variety of labour,
stowing cargo requiring skill and care ; dis-
charging cargo, though not needing exactly the
exercise of the same qualities, must be efficiently
performed. The classes employed extend from
the "Amalgamated Stevedores Society "down
to general and casual labourers. The average
value of the work of the two last-mentioned
classes may be put at from 4s. 6d. to 4s. 3d.
for those regularly employed. It is impossible to
estimate the earnings of the casual labourer. A
careful regulation of the work is essential to avoid
the evils so long connected with dock labour
Into the methods proposed to secure this we
cannot go here. Mr. Booth truly says, "of all
the causes of poverty and misery, irregular
work, coupled, as it always must be, with
irregular lives, is by far the greatest. A change
in this would effect more than almost anything
else could do for the welfare of the people."
To the owners of dock property also a propei
DOCK WAEEANT— DOCTRINAIRE
arrangement for the supply of efficient and
dependable labour is most important. It is
regularity of employment which it is most
desirable to secure. The more regularly
employed men obtain also the higher rates
of pay.
The statement given above refers to the
labour employed in the London docks. The
circumstances of the other docks in the country
differ considerably from these, but what has been
stated will show the importance of this industry
to the commerce of the United Kingdom.
[Booth, Life and Labour of the People in Lon-
don, vol. ill. second series.]
DOCK WARRANT. A document by which
a dock company or other dock owner certifies
that the holder is entitled to receive certain
goods specified therein, deposited with such
dock company or other dock owner (see Dock
warrants in art. Dock, p. 615). A dock
warrant is generally transferable by indorse-
ment ; a holder, though in good faith, and
though he had given value for it, was formerly
in a less favom-able position than the holder of
a bill of lading ; but since the Factors Act of
1877 a transfer of a warrant by the buyer or
owner of the goods to which it refers, to a person
who takes the document in good faith, has "the
same effect for defeating any vendor's lien or
right of stoppage in transitu, as the transfer of
a bill of lading has for defeating the right of
stoppage m transitu" (Factors Act, 1889, §10).
(See Commercial Instrument.) e. s.
DOCQUET. (1) Declaration by a notary
authenticating an instrument of sasine (Scot-
land, before 1845) ; (2) Declaration by a notary,
by a justice of the peace, or by the parish
minister in his own parish, authenticating the
signature of a person unable to write (Scotland) ;
(3) Authentication of a mercantile account by
signature, initials, or jotting.
[Scotland : Dickson on Evidence, §§ 797-800.]
A. D.
DOCTRINAIRE is a term of reproach desig-
nating one who applies theory without due
regard to facts. The doctrinaire forgets that
in social science a consilience between deduc-
tion and verification is generally requisite (see
Mill, Logic, bk. vi. ch. viii. ix.) He is like
the Aristotelian doctors in the age of Galileo,
who continued to believe that bodies fall faster
the heavier they are in spite of experiments
proving the contrary. However, such open
defiance of facts is rare even in political economy.
An instance is the resolution of the British
parliament that bank notes had not depreciated
with respect to gold in 1811, when the guinea
was commonly exchanged for 24s. shillings in
paper money and silver. The more usual type
of doctrinaire is one who has, so to speak, a
tolerably correct theory of gravitation, but
makes no allowanoe for the resistance of the
air. The omission of this concrete fact may or
may not be serious according to circumstances.
The abstraction may be legitimate in the case
of a stone dropped from a height, but fatal in
the case of a feather. An economic principle
like laissez-faire may be valid in general, but
in some important case be counteracted by
peculiar circumstances. Such peculiarities dis-
tinguish the labour market from markets in
general (see Marshall, Principles of Economics,
bk. vii. chaps, iv. v. vi.) Those who opposed
the Factory Acts on the principle of laissez-faire
were doctrinaires — so time has proved. But
prior to the additional experience of the last half
century it was not easy to see who was the
doctrinaire and who the empiric. A hesitation
between the rule and the exception may often
be reasonable. In general no short and handy
rule can be given for steering between the
Scylla of empiricism and the Charybdis which
swallows up the doctrinaire. Some cautions
against the more dangerous extreme, some educa-
tion of the instinct or tact which is required in
order to hold the right mean, may be obtained
from the example of those who have made ship-
wreck, and from the precepts of the wise.
A signal example is afforded by the so-called
currency principle in banking (see Bank Note ;
Currency Doctrine), which was held by
Lord Overstone, and largely influenced the
Bank Act of 1844. Those who relied on this
principle fixed too exclusive attention on the
"quantity-theory" of money, neglecting inci-
dents peculiar to a convertible currency, and
the fact that bank notes form but a small
part of the English circulation. The theory
is contrary to the fact that after crises, while
prices have greatly fallen, the notes in the
hands of the public have greatly increased (see
Palgrave, Journal of the Bankers' Institute,
January 1890). Other examples are afforded by
some of Ricardo's followers. Ricardo, as Pro-
fessor Marshall says, is "more responsible than
any one else for the habit of endeavouring
to express great economic doctrines in short
sentences ; " for instance, ' ' The natural price
of labour is that price which is necessary to
enable the labourers one with another to subsist
and to perpetuate their race" (Pol. Econ., ch. v.)
"A tax on wages is in fact a tax on profits"
{ibid. ch. xvi.) "Nothing is more common
than to see hats or malt rise when taxed . . .
so with labour, when wages are taxed, its price
rises" (ibid.) "The natural tendency of profits
is to fall " (ch. vi.) Those who have interpreted
these dicta litei-ally, without regard to qualify
ing passages, both "the hangers-on of the
science who have used it simply as an engine
for keeping the working classes in their places, "
and also some socialists — may be considered
doctrinaires (see Marshall, Principles of Eco-
nomics, pp. 63, 532, 672). The appellation
was probably deserved by M'Culloch when he
applied to the concrete ease of Ireland his
624
DOCTRINAIRE— DOGMA
abstract theory that a landlord does not injure,
but rather benefits his countrymen by becoming
an Absentee (q.v.) However, in this and
other instances, it may be proper to attribute
the mistake rather to the reasoning process
than to a neglect of experience. The holder of
a false doctrine is not necessarily a doctrfnaire.
Still it is true that the bad consequences of
wrong theories have been aggravated by neglect
of oiSinary experience and want of common
sense. Examples of wrong theories and their
consequences will be found in the articles on
Balance of Trade ; Mercantile System ;
Physiocrats ; Wages Fund, and many other
headings — beginning with L. P. Abeille (q.v.)
the doctrinaire who taught that a rise in the
price of corn was beneficial to the community,
and that high com prices make high wages.
Such instances fully justify Burke's condem-
nation of the mathematical method in human
affairs (Eefledions on the French Revolviion,
Letter to a Noble Lord, et passim). Burke's
indignation is directed chiefly against the
political doctrinaires of his own time. But it
is equally applicable to the "economists and
sophisters " of a later age. It should be noticed
that the same Burke does not on occasion shrink
from applying economic theory Avith some
severity (see Thoughts on Scarcity, remarks on
the * ' Labouring Poor "). An instructive protest
against the abuse of abstract reasoning is con-
tained in Richard Jones's Hent and other
writings. Whewell, in his preface to the works
of R. Jones, aptly compares the doctrinaire to
one who should assume that the surface of the
earth was entirely detemiined by gravitation ;
making abstraction of the forces of cohesion by
which the mountains are " in fluctuation fixed."
To complete the metaphor, it should be observed
that the abstract hypothesis works very well for
the greater part of the surface of the terraqueous
globe. The difficulty is to discern in each case
what is the character of the subject matter, how
far the hypothesis of perfect fluidity is admissible.
The importance of facts cannot be stated more
emphatically than by Mill in his Unsettled Ques-
tions. The economist must not rest satisfied
until he has examined all the facts which appear
contrary to his theory, and either made allow-
ance for exceptions, or ascertained that the
appearance was illusory. The theorist who
v/ill not take this trouble must be content to
hold his opinions with great modesty. Mill
repeats this lesson in his account of Auguste
Comte ; whose warnings against the danger of
isolating political economy from social science
deserve much attention. Another source of
instruction is afforded in the German historical
school. Those especially who have shown that
they appreciate the value of abstract reasoning
(see Wagner, Quarterly Journal of Economics,
1886) teach with authority that theory without
experience is barren. The method of Prof.
Cohn is very instructive. In his classical work
on English railways he overthrows by argu-
ments drawn from experience the doctrinaires
who preach an equal mileage rate and fares
proportionate to cost. Over the ruins of this
demolished doctrine he builds, upon a broader
basis of fact, a new theory which differs from
the old, not in being less simple — for it is
capable of being expressed in mathematical form
(seeHadley, Railway Transportation, Appendix ;
and art. on Duptjit) — but in better represent-
ing the real circumstances. Among English
economists who have stigmatised the intellectual
vice which is the subject of this article should
be noticed Cliffe-Leslie {Essays) ; Prof. Ingram
(Presidential Address, Section F, British Asso-
ciation, 1878) ; Dr. Cunningham {Growth of
English Commerce, passim). Even unscientific
writers like Carlyle {q.v.) may impart com-
mon sense. Literary humour is a potent
antidote against the crotchets of doctrinaires.
Take as examples: Voltaire's "L'homme aux
quarante ^cus ;" Scott's Malachi Malagrowther ;
some of Thomas L. Peacock's stories, especially
Crotchet Castle ; part of Ruskin's Unto this Last
(Abstract Political Economy ; Facts).
DOCTRINE OF POPULATION (Malthus).
See Malthus, Rev. T. R. ; Population.
DOGMA. This term, which properly should
signify nothing more than opinion, has come to
signify an opinion adopted without proof and
maintained with passion. In political economy
the term dogmatic, like the terms abstract,
unhistorical, etc., is often applied to the old, or,
as they are more indulgently described, the
classical economists. These economists are
sometimes supposed to have based their system
upon certain arbitrary assumptions or dogmas
such as the universal selfishness of human
nature, the universal prevalence of competition,
and the universal tendency of population to
outrun the means of subsistence. They are
sometimes contrasted with the later economists,
who are said to have employed induction rather
than deduction, and to have consulted history
rather than to have employed arguments derived
from the working of their own minds. The
difference in so far as it exists is only one of
degree. No economist — indeed no scientific
inquirer — can avoid holding opinions which
those who differ from him might stigmatise
as dogmas. The processes of induction and
historical inquiry would be both endless and
fruitless to one who undertook them with a
perfectly blank mind. Induction is possible
only if we assume the uniformity of nature.
History has no lessons for us if we do not
assume a certain continuity in human character.
In framing an induction or in writing a history
there is always implied a process of selection
among numberless facts. Such a selection can
proceed only upon some principle adopted by
DOITKIN— DOLES
625
the inquirer ; a principle which he does not
find, but bring. " Let any one watch the
manner in which he himself unravels a compli-
cated mass of evidence ; let him observe how,
for instance, he elicits the true history of any
occurrence from, the involved statements of one
or of many witnesses ; he will find that he does
not take all the items of evidence into his
mind at once and attempt to weave them
together ; he extemporises, from a few of the
particulars, a first rude theory of the mode in
which the facts took place, and then looks at
the other statements one by one to try whether
they can be reconciled with that provisional
theory or what alterations or additions it
requires to make it square with them " (Mill,
Logic, bk. iii. ch. xiv.) Hardly any progress
therefore can be made in political economy
without assuming certain general propositions.
On the other hand, such propositions must be
regarded as merely provisional, and must always
be liable to revision as research goes on. The
same remark applies to the conclusions reached
from such premisses which in turn afford a
point of departure for new theorising.
[See articles Classical Economists ; Doctrin-
aire, and the authorities therein cited,]
F. C. M.
DOITKIF. A small base coin — probably
of Flemish origin — prohibited by Statute 3
Henry V. ch. i. Hence the expression "not
worth a doit." h. Ha.
DOLE-FISH. The proportion of fish received
as their allowance or share, according to custom,
by the fishermen employed in the North Sea
fisheries.
[Statute 35 Henry VIII. ch. vii.] h. Ha.
DOLES. A dole is defined by Dr. Johnson
as "provisions or money distributed in charity,"
but the ordinary use of the term in modern
times implies somewhat more than this. A
dole is now generally understood to be opposed
to regular or permanent help, and to be com-
paratively small in amount. Doles figure largely
in the charitable bequests of old time. Thus
at Oxford, on St. Thomas's Day, there were
given away more than seventy such, ranging
in value from 13s. 6d. up to £5, and hardly
any town or parish in England is without them.
Every kind of condition may be attached. They
are confined to freemen, to residents in certain
parishes, to regular attendants at church, to
widows, to spinsters, to servants, to young
men, to old men, to cripples, to the blind.
The modern spirit, embodied in schemes issued
by the charity commissioners, has abolished
large numbers of them, but they still survive
in places which resist reform. The objections
to the dole-system are numerous and weighty.
"The practice of distributing doles," said Sir
George Jessel in the famous Campden case,
"should be more honoured in the breach than
in the observance. There is no doubt that it
VOL. I.
tends to demoralise the poor and benefit no
one . . . the extension of doles is simply the
extension of mischief." What are the grounds
for so sweeping a condemnation ? The first
principle in administering charity is that it
should be adequate to its purpose of relieving
distress or re- establ ishing independence. Neither
of these objects is secured by doles. They are
not suflBcient in amount to meet a crisis, nor
continuous enough to provide for old age ; in
many cases it is expressly forbidden that the
same person shall be a recipient on two consecu-
tive occasions. Again, they are often so numer-
ous, and so unimportant in amount, as to be
given without any of that preliminary inquiry
which is essential to wise almsgiving, and hence
they fall largely into the hands of persons who
make anything but a good use of them. The
conditions attached to the receipt of doles are
often of an absurd kind. They hardly ever
further their object, they lead to gross hypocrisy.
It is idle to suppose that any religious body
receives moral support from the membership of
those who are attracted by them ; in the great
majority of cases it is brought into disrepute
by the inconsistency of the profession and
practice. Hence, far from being strengthened
by such gifts, religion itself comes under the
suspicion of aiding and abetting unreal con-
formity, and its moral infiuence is weakened
and its progress stayed. Add to these objec-
tions the canvassing for such gifts, the loss of
self-respect involved, the temptations to dis-
honesty in appearance and in phrase, the
melancholy effect on children of witnessing such
conduct on the part of their parents, the in-
ducement offered to give up the attempt to gain
an honest livelihood and seek it by begging
and fawning, the attractions which such
periodical distributions have for the idle and
self-indulgent from every quarter to settle in
the favoured parish or town, and it is not diflS-
cult to see that charitable bequests in the form
of doles tend almost inevitably to increase the
very evils which their founders hoped to abate.
A single example will illustrate this. The
charities of the city of Bristol were, in 1892,
estimated thus: — endowed £50,000, subscrip-
tion and Colston £41,000, private £50,000, in
addition to a poor-law expenditure of £55,500 —
in all £196,600 annually spent on a population
of 221,665' (census of 1891). And what are
the results of the system pursued in many
cases ? It is said to demoralise and pauperise.
"The poor, qualified by residence in parishes
in which endowments exist to receive their
benefits, look upon them as a right, apply for
them regularly, irrespective of need, and accept
them with thanklessness. Jealousies and dis-
contents grow round their distribution. The
thought that they will fall in induces unthrifti-
ness ; debts are run up to be paid off by them ;
and if not this, being something beyond and
:2s
DOLLAR
outside the ordinary sources of income, they are
deemed fittingly applicable for some unwonted
and needless expenditure. Many waste their
hearts in expectancy, and their time — years
may be, — better spent in efforts to earn their
living, in the continual pursuit of gifts. • The
adroit professional charity-hunters get the lion's
share of them. The industrious old people find
themselves too late. Much of the money, and
even gifts in kind, quickly sold or pawned, are
spent in drink" {The Condition of the BHstol
Foot). So far doles have been treated as a
form of bequest only. The same characteristics
and the same results are seen in part in the
case of indiscriminate charity by individuals,
and of out-door relief given by boards of
guardians.
[Charity Commission Act, ed. E. E. Mitcheson,
1887. — Charity Commission Reports. — Charities
Register and Digest, Introd. pp. cxlv. et seq. —
Foor Law Commission, Report and Evidence
(1837). — Rep(yrt of the Committee to Inquire into
the Condition of the Bristol Foor (1885).— Con-
fessions of an old Almsgiver (1871).] l. B. p.
DOLLAR
History of, p. 626 ; of Account, p. 627 ; Hard (Stock Ex-
change use of word), p. 627 ; Hard Spanish, p. 627 ;
United States— gold and silver dollar, p. 627 ; Trade
(United States), p. 627 ; Maria Theresa or Levantiner
Thaler, p. 628 ; Mexican or Peso, p. 628 ; South and
Central American Republics and British Honduras, p.
628.
DoLLAE, History of. The name dates
from the year 1517, when the Counts of
Schlick directed a large coinage of the already
familiar silver " gulden groschen " in Joachims -
thai {i.e. St. James's Dale) in Bohemia, whence
the coins came to be known as Joachimsthaler,
or simply thaler, the coin of the Dale. In
1566, at the Convention of Augsburg, the
thaler was adopted as an imperial coin, under
the name of "reichs-thaler," or "rix-dollar."
At this date the millesimal fineness of the coin
was reduced from 937*5 to 888, though the
weight remained the eighth of a Cologne mark,
or about 451 grains troy. The standard was
again settled at Leipzig in 1690, and subse-
quently in 1763 ; but these changes, and the
history of the rix-doUar, are unimportant for
the purposes of this article, seeing that
with the close of the 17th century the name
(modified to "dollar") was usurped — at least
among English-speaking peoples — by a Spanish
coin, the history of which it is now necessary
to trace.
The unit of the (silver) monetary system of
Spain had been the "real" or "royal" since
at least the days of Pedro the Cruel (before
1369) and was retained by Ferdinand and
Isabella in their Mint Edict of 13th June
1497. It was the multiple of this unit, the
"piece of eight" reals, weighing by law
423-9 grains, of 931 millesimal fineness, and
therefore containing some 394^ grains of fine
silver, which was poured forth from the
Spanish-American mints after the conquest of
Mexico and Peru, early in the 16 th century, in
such profusion as to become a universal coin,
reaching even China — by way of Goa and the
Philippines — before the close of the 16th cen-
tury. Thus, as the rix-doUar and the "piect of
eight " were practically of identical fine weight
and value — 4s. 6d. sterling being the accepted
standard, — it came about that, the geographical
meaning of "dollar" (or thaler) having been
forgotten, the "piece of eight" obtained the
name of the "Spanish dollar." And, as the
rix-doUar began to lose, even in Germany, its
earlier importance — except as money of account
— the name "dollar," from the beginning of
the 18th century onwards, was entirely usurped
by the Spanish coin, which after 1686 ceased
in the Peninsula to be a "piece of eight," and
became a piece of ten reals of "new plate."
In 1728 the Bourbon kings of Spain, in issuing
the new device of the "globe dollar," took the
opportunity to reduce the gross weight to 417 "6
grains, and the millesimal fineness to 916-6,
and in 1772 the fineness was further reduced to
902-7 for the later device of the " Carolus," or
"pillar" dollar. The latter standard was
preserved in Spain up to 1848, and survives to
the present day in the Mexican dollar, the lineal
descendant since 1821 of the Spanish dollar.
It should be added that under Spanish rule
the dollar was uniformly below standard.
Prior to 1728 its fine content was found by the
English mint to be only 385 grains, as against
394-6 by law ; between 1728 and 1772 only
377 grains, as against 382-8 by law ; and be-
tween 1772 and 1810 only 371 grains, as
against 377 by law. The Mexican dollar,
dating from 1821, has steadily improved, until
in the present day, as shown by investigations
at the London Mint in 1891, the dollar is
practically up to its legal standard.
Though Spanish America was lost to Spain
by the revolutionary wars of 1810-21, and
though with 1810 the Spanish dollar practically
ceased to be coined, yet it still continues to
circulate as the standard coin, to the exclusion
of the Mexican dollar, the dominant coin of the
far East, in certain Malay and Siamese- Malay
States — Rhaman, Lege, Patani, and, to a less
degree, Kelantan. But, of far greater import-
ance than the modern circulation of the Spanish
dollar itself is the line of its descendants.
Apart from (i.) the dollar of the Philippines ;
(ii.) the Mexican dollar and (iii.) the debased
piastre of Turkey ; the Spanish dollar has origi-
nated the silver dollar of the United States,
which, in 1785, was avowedly modelled on the
average of the Spanish coins in circulation, and
so indirectly of the gold U.S. dollar worth
49 -316d. sterling. Another gold descendant is
the two-dollar piece of Newfoundland. The
Hong-kong Mint dollar of 1866-68, the
DOLLAR
627
Japanese "yen," of 1871 onwards, and the
recent Canton dollar, are immediately derived
from the Mexican, not the Spanish dollar.
Most of the South American dollars are now
"dollars" only in name, being in reality five-
franc pieces weighing only 25 (instead of
slightly over 27) grammes. In Spain, which
has adopted the monetary system of the Latin
Union, the new five-peseta, or five-franc, piece
is similarly known as a dollar.
[Synonyms. Pieza de a ocho. Peso duro. Piece
(or Royal) of Eight, Piastre, Colonato, Cob (from
coba, slang Spanish for Real) Gourde, Escudo de
Plata, etc.]
[Becher, Bas Oesterreichische Munzwesen (Wien,
1838). — Heiss, Monedas • Hispano Christianas
(Madrid, 1865). — Linderraan, Money and Legal
Tender in the United States (1877). — Zedler,
Universal- Lexicon (1745), s.v. "Thaler." — Mint
Report for 1891.] K. C.
Dollar of Account. On the stock ex-
change of London it has been for many years
usual to reckon the United States dollar as
worth always 4s. ; although the actual exchange
value of the American dollar is usually near
4s. 2d. It is obviously useful to have, for pur-
poses of quotation, a dollar which is worth
exactly one-fifth of a pound sterling. American
railroad shares are always quoted in these
dollars, and the par value of 100 dollars stock
in New York would be, as a rule, nearly 103
dollars in London ; and the dollars in which
dividends on those shares are paid give the
shareholder a rather better percentage than
appears when the rate of dividend is reckoned
at so much per 100 of the nominal 4s. dollars
in which London quotations are given. A. e.
Dollar, Hard (Stock Exchange use of word).
This was the name given on the London
stock exchange to certain bonds issued by the
state of Buenos Ayres. A hard dollar was ori-
ginally intended to mark the difference between
two currencies of the Argentine Republic, the
soft dollar having fallen to an indefinite depre-
ciation in consequence of the over-issue of paper
money by that state. The hard dollar, then,
had a special value ; but in the year 1889 it
was found expedient to convert the hard dollar
bonds into sterling bonds bearing S^ per cent,
so discreditable was it found by the Argentine
government that its "hard" dollars should be
depreciating almost as much as the baser cur-
rency from which it was formerly distinguished.
a. E.
Dollar, Hard (Spanish). The old Span-
ish dollar was known as the peso duro, or hard
dollar. It was struck and issued from 1707
to 1868, when the peseta (franc) system of cur-
rency was adopted in Spain.
The following is a list of the various weights
and finenesses at which this coin was issued at
different times ; from which it will be seen
that, for a coin circulating for so long a period
as 161 years, the variations were not great :
Wei-ht.
w o .
Value in
Value in
OT
s
g8i2
silver 925
standard
Year.
Grains.
£-:§
fine at
silver
rf
p^""
5s. 6d. per
francs
o
ounce.
(900 fine),
francs.
pence.
1707-28
423-89
27-468
930-500
58-638
5-680
1728-72
417-74
27-064
909-722
56-491
5-471 '
1772
417-74
27-064
902-778
56-064
5-429 1
1848
405-75
26-291
900-000
54--281
5-258
1850
402-87
26-105
900-000
53-897
5-221
1854-68
400-64
25-960
900-000
53-598
5-192
The subdivisions of the peso duro were all,
until the year 1864, of proportionate weight
and fineness to the peso. In that year the
escudo, or half-peso, only was struck in metal
of the same fineness as the peso, the remaining
divisional pieces becoming merely tokens, with
a millesimal fineness of 810. These coins, how-
ever, were still coined proportionate in weight
to the hard dollar.
The hard dollar, which was first struck in
1772, is of exactly the same weight and fineness
as the Mexican dollar, and was, in fact, the
coin of which originally the Mexican dollar was
the copy. f. e. a.
Dollar (United States). The standard of
value in the United States, and both a gold
and a silver coin.
Gold Dollar. — Standard gold coin first
authorised by Act of Congress in 1849, and
first issued in that year. Weight 25-8 grains,
fineness 900. Value: English standard (916-6
fine at £3:17: 10^- per oz.) 49-32d. ; French
standard (900 fine) 5-18 francs.
Silver Dollar. — Standard silver coin first
struck in 1793. Weight 416 grains, fineness
892-4 ; altered in 1837 to weight 412-5 grains,
fineness 900. Value : English standard (925
fine at 5s. 6d. per oz.) 55'184d. ; French
standard (900 fine) 5-346 francs. The coinage
of silver dollars was discontinued in 1873, when
the gold dollar was established the sole stand-
ard of value. In 1878, however, an act was
passed reinstating the silver dollar as a stand-
ard coin, and their coinage was recommenced.
F. E. A.
Dollar, Trade (United States). A silver
coin struck for use in the trade between the
United States and China during the five years
1874 to 1878 inclusive. Weight 420 grains,
fineness 900. Value : English standard (925
fine at 5s. 6d. per oz.) 56-19d. ; French
standard (900 fine) 5-443 francs. These coins
were originally legal tender in the United
States to the amount of $5, but were demone-
tised in 1876, and were then only struck for
depositors of bullion on the condition that they
were exported. In 1878, however, their coin-
age was discontinued, as considerable quanti-
ties had found their way back to the United
States, where they were put into circulation
at a profit. The total amount coined was
628
DOLLAR— DOMBASLES
$35,959,360, equal to nearly £8,000,000 ster-
ling Those circulating in the United States
(about $7,000,000, or roughly £1,400,000)
were redeemed by the government at their
nominal value. f* ^' -'^•
Dollar, Maria Theresa, or Leva^iner
Thaler. Austrian silver (trade) coin, first
struck in 1765. Since 1780, however, these
coins have always been issued bearing the date
of that year and the effigy of the Empress Maria
Theresa. They are issued for use in the Levant
and Asiatic trade. Weight 433 -15 grains, fine-
ness 833-3. Value: English standard (925
fine at 5s. 6d. per oz.) 53 -Gd. ; French standard
(900 fine) 5*2 francs. This coin has no sub-
sidiary divisional pieces. It will continue to
be coined under the new Austrian currency
arrangements. r- E. A.
Dollar, Mexican, or Peso. Silver coin ;
weight 417-74 grains, fineness 902-7. Value :
English standard (925 fine at 5s. 6d. per oz.)
56-064d. ; French standard (900 fine) 5-429
francs. The coins subsidiary to the Mexican
dollar are ^ Peso (50 cents), ^ Peso (25 cents),
^ Peso (10 cents), -^ Peso (5 cents), all of
which are 902 7 fine, and proportionate in
weight to the dollar. This coin circulates in
China, Hong-Kong, the Straits Settlements,
and the .East generally, being received by
weight. It is also bought and sold as bullion
in all parts of the world. " Chopped dollars,"
which are Mexican dollars that have been
chopped or stamped with a mark by the
Chinese, are a circulating medium in Hong-
Kong, Foochow, Canton, and Amoy, where
they are usually received at the rate of 717
Canton taels per 1000 dollars. f. e. a.
Dollar (South and Central American Ke-
publics). In the Argentine Republic, Chili,
Colombia, Ecuador, Guatemala, Honduras,
Peru, Uruguay, and Venezuela, the standard
of value is the silver dollar, a coin of 385-8
grains, 25 grammes, of silver 900 fine. Value:
English standard (925 fine at 5s. 6d. per
oz.) 51-613d. ; French standard (900 fine) 5
francs.
The Guatemalan dollar is the standard of
value in the colony of British Honduras.
F. E. A.
DOLLAR, Spanish. See Dollar, Hard.
DOLUS. Expression of Roman law de-
noting wrongful intention in the widest sense.
Fraud presupposes "dolus," but there may be
"dolus" without fraud; for instance an in-
cendiary, or a person committing an assault is
actuated by " dolus." E. s.
DOMAINE. In mediaeval France, as in
mediaeval England, the king was expected to
"live of his own," and to apply to his subjects
for aid to meet any extraordinary expenses.
Hence domaine comes to mean, not only the
lands which the king possesses like any other
landowner, but the whole of the ordinary
revenue of the crown, as distinguished from
the extraordinary revenue or taxes. The
domaine matiriel, or crown lands, was declared
inalienable by an edict of 1318, which was
frequently renewed, and grants from it were
frequently resumed by the crown. In spite of
these measures, however, it continued steadily
to diminish until the l7th century. The
domaine immaMriel consisted mainly of the
almost innumerable rights which belonged to
the crown. The most important of these were
the droit d' amortissenient, the payment by a
corporation for leave to acquire real property,
the droit d'aubaine (see Aubaine, Droit d'),
by which the crown inherited the property of
foreigners dying in France, the droit de hdtardise,
by which the property of bastards feU to the
king, the droit de franc-fief, and the droit de
rigale. The domain revenue also included the
proceeds of the sale of offices, and the Paulette
{q.v.) paid by members of the parliament and
other courts. In the 18th century the domaine
was calculated to bring in about forty- onp
million francs (£1,640,000). R. l.
DOMBASLES, Alexandre Mathieu de
(1777-1843). With the support of M. de
Villeneuve-Bargemont {q.v.) the author of
the Economie Folitique Chretienne, at that time
prefect of the department of the Moselle, he
founded in 1822 the model farm of Roville, the
first agricultural school established in France.
His teaching was mainly experimental, and to
the end he maintained that "in reality the
agricultural improvements, which result from
chemistry or vegetable physiology, amount
hitherto to very little indeed. . . . The theory
of agriculture consists of rules, which are to be
deduced from the comparative observation of
facts in a great number of various cases. . . .
An agricultural school ought to be an agri-
cultural clinique" {CEuvres Diver ses, Paris, 1843,
pp. 214-225). As an experimental teacher,
Mathieu de Dombasles rendered immense ser-
vices to French agriculture by the publication
of his results in the Annates de Roville (9
volumes, 1825, and following years) ; he was
one of the promoters of the beetroot-sugar
industry, popularised the methods of breeding
of Bakewell, and of farming of Sir John Sinclair,
and in a pamphlet, De Vlmpdt sur les Eaux de
Vie (1824), tried to induce the French govern-
ment to protect the distillation of spirits from
potatoes. He also thoroughly explained the
advantages and disadvantages both of small
and of large farms in his essay on L'Etendue
des Propriet6s Rurales dans ses rapports avec la
prosperity de V Agriculture (1825).
In connection with agi-iculture, Mathieu de
Dombasles often approaches economic ques-
tions (see the first part othis (Euvres Diver ses
entitled Economie Politique). He was a staunch
protectionist and an opponent of French colonial
enterprise in Algeria. He also objected to the
DOMESDAY BOOK
628
teaohing of agriculture in country primary
schools. E. ca.
DOMESDAY BOOK is the name which, at
least since the 12th century, has been borne
by the record of the great survey of England
made by order of William the Conqueror.
Apparently the decree for the survey was issued
at a moot held at Gloucester at the midwinter
of 1085-86, and the work was completed in the
course of the following year. Royal commis-
sioners (legati) were sent into each shire with
a list of interrogatories, to which they were to
obtain sworn answers from local juries. Their
procedure seems to have been this — they held
a great shire moot, at which every hundred or
wapentake of the shire was represented by a
jury, while every vill was represented by a
deputation of villagers. From each hundred-
jury they obtained a verdict about all the land
in the hundred, the villagers being at hand to
correct or supplement verdicts, while "the
whole shire " was also present, and from time
to time appeal could be made to its testimony.
The statement thus supplied was "reduced
into writing and duly transmitted to the king.
It was afterwards methodised and abstracted,
and fairly transcribed in the great volume of
Domesday and deposited in the royal treasury
at Winchester, amongst the other muniments
of the realm. It still exists, fresh and perfect
as when the scribe put pen to parchment, the
oldest cadastre, or survey of a kingdom, now
existing in the world " (Palgi'ave, History of
Normandy and England, vol. iii. p. 575). Our
best information about the form of the original
verdicts is contained, not in Domesday Book
itself, but in a document known as the " In-
quisitio Comitatus Cantabrigiensis. " This
seems to be a copy made in the 12th century
of the verdicts delivered by the juries which
represented some of the hundreds of Cambridge-
shire. The verdicts having been obtained,
they were sent to the king's treasury, and a
digest was made of them by the royal officers.
This digest is Domesday Book. If we may
draw a general inference from Cambridgeshire,
the materials supplied by the commissioners
were subjected to a process of rearrangement.
A scheme that was wholly geographical gave
way to one which was partly geographical,
partly proprietary. Domesday Book deals with
each shire separately, but within the shire it
collects, under the name of each "tenant in
chief," all the estates that he holds, no matter
in what hundred they may be. For example,
the Cambridgeshire verdicts showed that Count
Alan had lands in many hundreds. In the
original verdicts the entries relating to his
estates were therefore scattered about ; in
Domesday Book they are all collected together.
Domesday Book consists of two volumes, some-
times called "Great Domesday" and "Little
The latter deals with Essex,
Norfolk, and SufTolk ; the former with so much
of the rest of England as was surveyed. A
document in the keeping of the cathedral
chapter of Exeter, and known as ' ' the Exon
Domesday," contains an account of a large part
of the south-western shires, which is very closely
connected with that gi\'cn by what, for dis-
tinction's sake, is sometimes called "the Ex-
chequer Domesday." Seemingly this Exon
Domesday is independent of the Exchequer
Record, and goes back by a different route to the
original verdicts. The same may perhaps be
said of the " Inquisitio Eliensis," an account of
the estates held by the church of Ely. This
Ely inquest must not be confused with the
Cambridgeshire incpiest.
Domesday Book was printed and published
in 1783 in two folio volumes. A third volume
containing indexes was published in 1811, and
this was followed in 1816 by a fourth volume
containing the Exon Domesday, the Ely In-
quest, and some other matters. Of late years
useful facsimiles have been published by the
Ordnance Survey Office of various parts of the
great Exchequer Record, and can be obtained
at moderate prices. The important Cambridge-
shire Inquisition was first published by N. E.
Hamilton in 1876.
A large literature has gradually been collect-
ing round Domesday Book. Among the older
books Robert Kelham's Domesday Book Illus-
trated (1788) and the essays of Philip Carteret
Webb deserve to be mentioned. Sir Henry Ellis,
in his General Int7'oduction to Domesday Book
(1833), supplied valuable indexes, and summed
up the older learning. In the fifth volume of
E. A. Freeman's Norman Conquest good use
has been made of all that bears on political
history, on the history of great men, great
churches, great events. James F. Morgan's
England under the Norman Occvjyation (1858)
is a good introduction to the study of Domes-
day, and the like may be said of W. de Gray
Birch's Domesday Book (1887). A new epoch
in the scientific exploration of the record is
marked by the various works of R. W. Eyton
dealing with Dorset, Somerset, Lincoln, and
Stafford, especially by the key to Domesday
Book. Two volumes of essays by various writers,
called Domesday Studies (1888-91), contain two
valuable papers by J. H. Round, besides other
matters. In some county histories Domesday
has been well used, but here it is possible to
name only the books of general importance.
F. Seebohm's English Village Community has
done much to awaken a new and an economic
interest in our oldest statistics.
Much remains to be done. The student who
approaches Domesday from the economic side
will at once see that he has before him a vast
mass of detailed statistics which ought to tell
him much about agiiculture, prices, rents, and
the like. At the same time he will feel that
U30
DOMESTIC SYSTEM OF INDUSTRY
he is debarred from making use of these pre-
cious materials by the difficulty of discovering
the meaning of the crabbed formulas which are
repeated on page after page. The difficulty is
a very real one. Domesday Book stands alone.
It is so far removed in time from the documents
which most nearly resemble it, the extents of
manors which are found in monastic cartularies,
that we have to explain it out of itself or not
at all, for we shall look in vain for help else-
where. Then again the terms that it employs
as technical terms are, we may say, derived
from two different languages which have only
of late come into contact with each other.
About half of them have been introduced by
the Norman conquerors, while the other half
are words which were in use in England under
Edward the Confessor. Hence many puzzles ;
for example, what word did English juries say
when French clerks wrote down villanus?
Then again, the more our record is studied,
the more plainly do we see that one main pur-
pose governs both its form and its matter.
King William is not collecting miscellaneous
information in the spirit of a scientific inquirer.
He is in quest of geld. Domesday Book is a
geld book, a tax book. Geldability, actual or
potential, this is its main theme. If then we
are to understand its statistics, the first thing
necessary is a theory of geld, of the manner in
which the great tax has been and is assessed
and collected. Towards the construction of
such a theory not a little has been done by
modern writers, especially by Eyton and Round,
but until the work has been completed, specu-
lations about rents and values seem doomed to
failure. Everywhere, for example, the question
meets us whether we are reading of real areal
units of land or of units which are the results
of a rude system of taxation, and a great deal
of labour must yet be spent on the book before
this question will have been adequately
answered. F. w. m.
DOMESTIC SYSTEM OF INDUSTRY.
This system is opposed to that of carrying on
manufacturing industry in factories {see Fac-
tory System). It was very general in England
before the changes which were effected at the
close of the last, and the opening of the present
century {see Industrial Revolution). Until
the introduction of any but the simplest
machinery, manufacturing industry had been
closely associated with agriculture, and had
been canied on, with few exceptions, in country
towns and villages, in the houses of craftsmen
or handicraftsmen, who worked Avith their own
hands, aided by simple tools and appliances,
and were hence called manufacturers (Latin,
manus, a hand, and facere, to make). They
were assisted by apprentices {see Apprentice-
ship) whose number and time of service were
fixed by law, and by a few Journeymen {q.v.),
or liired labourers, whose wages were, in theory
at least, settled by the magistrates. These
apprentices and journeymen lived in the same
house with the master-craftsman, and ate at
his table. Thus in the woollen trade, which
was the staple industry of the country, the
spinning, weaving, and dyeing were carried on
in the houses of craftsmen, few of whom pos-
sessed more than three or four looms, or had
working under their direction more than eight
or ten people — men, women, and children.
There were apparently even now, and there had
been for some time previously, cases of produc-
tion conducted under the modern system, by
which one individual supplies and controls the
capital which is needed, but the actual processes
of industry were pursued, with apparently few
exceptions, in the houses of the craftsmen.
This domestic system had its unfavourable side,
but it seems to have often led to a feeling of
warm personal attachment between the master
and his men. With the introduction of machin-
ery, however, and in a more marked and general
degree with the employment of steam as the
motive power of that machinery, the domestic
system of industry gave place to the factory
system ; and, although it is still found in some
employments, it is now the exception rather
than, as it once was, the rule. The fact that
steam can only be generated in a fixed spot,
and that the motive power thereby furnished
can only be distributed over a small area has,
no doubt, tended to favour the concentration of
industry in large factories ; and it has been said
that the discovery and substitution of some fresh
motive power, such as electricity, or of some
fresh source of motive power, such as petroleum,
which can be distributed along wires or pipes
from a common centre over a wide area, might
lead to the revival of the domestic system of
industry. But there are various economies of
management, and of purchase and sale, which
lend an advantage to production on a large
scale {see Industries, Large and Small) ; and
these would continue to operate, even if a fresh
motive power, or source of motive power, were
generally introduced. And they would prob-
ably outweigh, except in certain occupations
where the domestic system is still found, the
benefits of the close personal interest which is
felt, and of the continual watchfulness which
is exercised, by the small master. It should
be noted that some of the instances, which now
exist, of the domestic system meet with censure
rather than approval on the part of the public.
What is known by the ambiguous term of
the Sweating system seems to be in reality
one variety of the domestic system of industry.
In many cases it appears to be a system under
which work is carried on in the houses of small
masters ; and the conditions of labour of the
chain -makers and others in some parts of
England are so far similar to those of the
workers under the sweating system in London
DOMICIL OR DOMICILE
631
that they are instances of a domestic system of
industry which has earned the severe censure
of popular opinion. The characteristic evil of
East London seems to be the multiplication in
certain trades of small masters — the ease with
which a man can start on his own account, and
the reckless competition which of necessity
ensues. It is the prosecution of industry iu
domestic establishments outside the sphere of
the factory inspector ; for the domestic system
baffles that publicity, and tends to deaden that
sense of responsibility to popular opinion, to
which the employer in a large factory is sub-
ject. The domestic system, in short, may be
said to be suited to a small population, a
limited market, and an unbroken routine ; it
is unsuited to a large population where pub-
licity is less easily attained, and to a world-
wide market which is subject to rapid and
continual change, and requires the sustaining
resources of considerable capital and the exer-
cise of bold and vigilant enterprise.
[For an account of the domestic system, as it
formerly prevailed, the student should consult
Toynbee, Industrial Revolution, ch. iv. and lecture
ii., and W. C. Taylor, Hist, of the Factory System ;
and for a cousideration of some of its modern illus-
trations, Booth, Life and Lahour of the People in
London, Series 1, vols, ii., iii., andiv., and Series 2,
vol. i., and Reports of the Committee of the House
of Lords on the- Sweating System.'] ' L. L. p.
DOMICIL OR DOMICILE. The validity
of a person's marriage, the legitimacy of his
children, and the devolution of his personal
property after his death, to a great extent,
depend on the law of his domicil. A definition
of this term is contained in the following pass-
age of Justinian's Code (X. 40. 7): "ubi quis
larem rerumque ac fortunarum suarum summam
constituit, unde rursus non sit discessurus si
nihil avocet, unde cum profectus est peregrinari
videtur, quo si rediit peregiinari jam destitit "
(where a person has established his household
gods, and the centre of his affairs and his for-
tunes ; the place he will not leave, if no special
cause calls him forth, away from which he
seems a wanderer, returning to which he is a
wanderer no longer). Hence Prof. Dicey, Law
of Domicil, defines domicil as the legal equiva-
lent for "home."
This definition would leave persons without
a fixed abode, and persons who cannot choose a
home for themselves, without a domicil ; and
iu order to avoid the complications which would
result from that fact, some artificial rules have
been introduced into modern law, according to
which a domicile is ascribed to everybody who
has no "domicil of choice." These rules are
the following : —
(1) Every person on his birth acquires the
domicil of his father. This is called the
"domicil of origin." A "domicil of origin"
is retained until a "domicil of choice" is
acquired; on the other hand, a "domicil of
choice " may be abandoned without the acquisi-
tion of a new domicil, and in such a case the
domicil of origin revives ; e.g. Su person, whose
father was domiciled in Germany at the time
of his birth, establishes a permanent home in
England with the intention of remaining there
for the rest of his life. He has then an
English "domicil of choice." At some subse-
quent time he decides to leave England, but is
undecided as to the country in which he wishes
to settle ; from the moment at which he leaves
England his German domicil of origin revives.
(2) A wife on marrying acquires her husband's
domicil, and whenever a father or a husband
assumes a new domicil, his infant children and
his wife assume the same domicil. If the
father or husband abandons a domicil of choice
without assuming a new one, the infant
children and the wife assume the father's or
husband's domicil of origin, in the same way
as he does himself.
The importance of being able to ascertain a
person's domicil at a given time may be illus-
trated by the following examples. If the
father of an illegitimate child, at the time of
the child's birth, was domiciled in England, the
child can never become legitimate ; if, on the
other hand, the father at the time of the child's
birth was domiciled in Scotland, he may legiti-
mate the child by marrying the mother.
If a man marries his deceased wife's sister
both being at the time of the marriage domi-
ciled in a country where marriage with a
deceased wife's sister is permissible, the mamage
is valid. If, on the other liand, he or she was
at the time of the performance of the ceremony
domiciled in England, the marriage is invalid ;
altliough the law of the country in which the
ceremony was performed allows such marriages.
If a person who dies domiciled in Scotland,
and leaving a wife and children, has bequeathed
all his residuary personal estate to a stranger,
the stranger will receive one-third only, and
the other two-thirds will go to the wife and to
the children ; if, on the other hand, the testator
at the time of his death was domiciled in Eng-
land, no part of the residuary personalty
will go to the wife or children. If a person
dying intestate and unmarried, leaving sur-
viving him his father and his mother and a
brother, was at the time of his death domiciled
in France, the father, the mother, and the
brother will each be entitled to a third of the
intestate's property ; if, on the other hand, the
intestate was at the time of his death domi-
ciled in England, the father will be entitled to
the whole.
There are many circumstances imaginable
under which it may be extremely difficult to
ascertain what a person's domicil is. Many
persons who have emigrated to a foreign
country do not know themselves whether they
632
DOMICILE, SCOTCH— DON GRATUIT
look upon it as a peiroanent home, or whether
they will some day return to their native place ;
and even if they have a well-established inten-
tion, there may be no evidence from which it
can be proved. With the increased facilities
of international communications and the ex-
pansion of international trade, cases in wliich
such doubts arise will become more and more
frequent, and the question arises whether it
would not be better to substitute the principle
of nationality for the principle of domicil ; in
other words, whether it would not be better to
establish the rule that an individual's personal
rights should be determined by the law of the
country whose subject or citizen he is. There
are, however, many objections to this proposal,
and as no rule can be suggested which will
clear away all difficulties connected with the sub-
ject, the balance of convenience is in favour of
the rule to which we are accustomed.
[Dicey, The Law of Domidl.—'Westlake, Private
Inteniational Law. — Foote, Private International
Law. — ^Phillimore, International Law, vol. iv. —
Nelson, Cases, etc., of Private International Law.]
£. s.
DOMICILE, Scotland. Examples: (1)
A person's father — or, if he be illegitimate, his
mother — ^was a domiciled Scotsman (or Scots-
woman) at the time of his birth — domicile of
origin; (2) A person, his own master, has be-
come a domiciled Scotsman by actual residence
with the intention of remaining in Scotland,
and the result of quitting his native country, a
circumstance which must be proved — domicile
of choice ; (3) An Englishwoman, say, marries
a domiciled Scotsman ; she becomes a domiciled
Scotswoman — d&micile by operation of law.
There is a general presumption in favour of the
domicile of origin as against the domicile of
choice, and thus the domicile of origin is
readily held to have been recovered on a Scots-
man's return to Scotland from life abroad.
These are forms of that domicile which govern
the legitimation of children, the succession to
movable (personal) property, and, in general,
the family relations : this is the domicile of
succession. There are still some delicate ques-
tions not finally decided as to the domicUe
necessary to give jurisdiction to the Scotch
courts in cases of divorce. Domicile of citation
is by custom the place at which a person may
lawfully be cited to appear before the court,
this being the place where he has resided for
forty days until he has ceased for forty days to
reside there ; but this is a domicile for the
purposes of procedure (see Jukisdiotion,
Scotland). a. d.
DOMICILED BILL. A bill "drawn pay-
able elsewhere than at the residence or place
of business of the drawee " is said to be ' ' domi-
ciled. " Such bills must be presented for accept-
ance before they are presented for payment,
and if the holder, in consequence of this obliga-
tion to procure acceptance, cannot, with the
exercise of reasonable diligence, present a domi-
ciled biU in proper time for payment, he will
be excused and the drawers and indorsers will
not be discharged in consequence of the delay.
Domiciled bills, whether accepted or not, must
at maturity be presented at the place of pay-
ment, e.g. a bill in Liverpool payable in
London remains unaccepted ; the holder must,
at maturity, present the bill in London,
although no special address for payment be
given ; this can be done by handing the bill to
a notary, who in his protest will declare that no
address was given. e. s.
DOMINIUM. Expression of Roman law
denoting property in its fullest and most
extended sense. e. s.
DOMUS CONVERSORUM. See Jews in
England.
DONATIO MORTIS CAUSA. A gift given
by a person believing himself or herself near
death, subject to the implied condition that it
is to be returned should the anticipation of
death by the existing disorder prove unfounded.
A gift of this sort is invalid if the delivery of
the object of the gift remains incomplete, e.g.
an unindorsed bill of exchange handed over to
the donee by way of donatio mortis causa cannot
be retained after the donor's death. E. s.
DONATION (Scotland). Gift, free or for
some cause not enforceable by law. Must in
general be explicit, and adequately proved ;
and is then enforceable if the subject be not
yet delivered to the donee. Fathers and grand-
fathers may revoke gifts to children or grand-
children so far as to secure themselves a com-
petence in the event of indigence. Free gifts
between husband and wife are revocable at any
time during the life of the donor, even after
the death of the donee ; but not if there have
been a legal or a natural obligation to make the
provision made. In doubtful circumstances it
is generally presumed there is no donation ; a
debtor is not presumed to make a gift to his
creditor ; but these are really jury questions.
A. D.
DONATO, Nicolo, a Venetian who lived
in the last century, known by his book on
politics, which contains a treatise on public
finance : i' uomo di governo, trattati due,
Verona, 1753. This was translated into French:
L' Homme d'etat, par Nicolo Donate, Liege, 1767.
In his book there is a classification of public
finance under seven headings, and a statement
giving details of public expenditure relating
more particularly to the Venetian state, m. p.
DON GRATUIT. The D^cimes (q.v.), the
ordinary contributions of the clergy, were not
sufficient to satisfy the French monarchy in the
17th and 18th centuries. The clerical assem-
blies were frequently called upon to make
additional payments, and these grants, in
theory voluntary, grew under Louis XIV. into
DOEIA— DOUANE
633
a practically compulsory payment of about
15,000,000 livres (£600,000), renewed every
five years. This don gratuit, as it continued
to be called, was nearly always raised, not by
taxation, but by loan. The credit of the clergy
was so good that it was easier for them to
borrow than it was for the government. Ac-
cording to Necker the clerical debt, raised for
payment of the don gratuit, amounted in 1784
to 134,000,000 francs. The Marquis du
Bouille, in his memoirs, asserts that the interest .
upon this debt was paid out of the Decimes
{q.v.), and thus reduced the nominal con-
tribution to the state to such an extent that
the chm-ch was a source of expense rather than
of revenue.
[Necker, De V Adiimiistration des finances de la
France, tome ii. — Gasquet, Memoires du Marquis
du BouilU, p. 44. — Precis des Institutions poli-
tiqices et sociales de Vancienne France.'\ R. L.
DORIA, Paolo Matt., born in Genoa
1675, died at Naples 1743. He wrote princi-
pally on mathematical and philosophical sub-
jects. He lived nearly all his life at Naples,
and is known to have been a friend of Vico.
In his political tract La vita civile con un trattato
(Mia educazione del Principe, published for
the first time in 1710 and republished in 1852
(Turin), he seeks to ])rove that the adminstration
of a state by a prince, in its object and in its
means, is qualitatively identical to that of
private interests by private people, and is only
more complex. The one fundamental rule for
a sound administration of the state is a
financial rule which consists in burdening the
tax-payer least, whilst the prince takes most
from him, and in taxing in such a manner
" that although paying much, everybody should
think he is paying little." Doria is a strict
follower of St. Thomas Aquinas in his theories
concerning the relative importance of agri-
culture and manufactures, in the functions
attributed to money, and in his opinions about
commerce. He has to be classed amongst
the most inveterate of the mercantilists.
M. p.
DORMANT (or SLEEPING) PARTNER.
A partner who takes no active part in the
business of the firm, and who is not known
to be a partner. Such a partner is liable for
the acts of his co-partners in the transaction
of business in the ordinary way, but he has no
authority to bind the firm.
[Sir F. Pollock, The Law of Partnership,
London, 1890.] j. e. c. m.
DORMER, Diego Josi, was born in Saragossa
during the first half of the 17th century. He
graduated as doctor of law at the university
of Huesca, and became later on general chronicler
of the kingdom of Aragon and archdeacon in
the metropolitan church of Saragossa. He was
all his life a most devoted and abundant
historical writer.
In 1684 he published in Saragossa his
Discursos histoi-icos-politicos, a very scarce book,
in which, according to Don Manuel Colmeiro
(Biblioteca de los Economistas Esparwles) he
"explains with exquisite clearness the true
character of commerce, the nature of exchange,
the use and utility of money, and the inefficiency
of the prohibitive system. ... It is one of the
most original works of its class, bold and
precise in its economic doctrine. The author
is greatly in advance of his time, and deliberately
])uts aside the prevailing prejudices, not only in
Spain, but throughout Europe."
[For a com.plete list of his works, see Latasa,
Biblioteca Nueva de Aragon, iv. p. 197.]
E. ca.
DOS. Expression of Roman law for the
property brought by the wife into marriage.
During the continuation of the marriage the
wife retained the ownership, but the husband
had the right of management and enjoyment.
After the dissolution of the marriage the rights
of the parties varied according to the special
circumstances of the case. e. s.
DOSES (of Capital). A term introduced by
James Mill {Elements of Political Economy) to
denote the portions of capital which, according
to the theory of Rent (q.v.), will be successively
applied to land up to the point at which the
portion last applied affords only ordinary
profits. As Jevons observes (Theory of Political
Economy, 2nd ed. p. 232), " He evidently means
by a dose of capital a little more capital, and
though the name is peculiar, the meaning is
s\\\\\)\yi:hdXoia,\\ increment of capital. . . . It is
mere pedantry to insist upon calling that a
dose in economics • which in all the other
sciences is called by the perfectly established
and expressive term increment.'" As the
equivalent of "increment," dose may be em-
ployed wherever the reasotiing requires that we
should consider a variable quantity as increased
by degrees up to the Margin {q.v.) at which
further increase ceases to be advantageous.
Thus, Prof. Marshall speaks of a dose of labour
as well as of capital {Principles of Economics,
bookiv. ch. iii. §2). Some difficulties attending
the use of the term "dose of capital" are
cleared up by Prof. Marshall at the end of the
cljapter referred to. f. y. e.
DOUANE {Fr. Customs). The earliest
customs duties in France, as in Englar^d, were
levied upon exports, and arose from the practice
of buying permission to transport goods from
the kingdom in spite of royal edicts prohibiting
exportation. Import duties seem to have arisen
from the fact that foreign merchants had to
purchase leave to carry on trade in France,
and hence came the practice of apportioning
-their payments to the goods which they
'introduced. These customs duties were origin-
ally called droits de haul passage. The name
douane was introduced later, and was borrowed
634
DOUBLE ENTRY— DOUBLOON
from the Venetian term dogana. The great
diflFerence between France and England, which
illustrates the much later development of
unity in the former country, lies in the fact
that the douane is originally a provincial, not
a national charge. Every province had its
own customs duties, often of great intricacy
and variety ; and these charges, dating from
the days of provincial independence, were
maintained as a source of revenue, after the
provinces had been absorbed by the central
monarchy. It did not require much economic
insight to understand the enormous hindrance
which such a system opposed to the development
of internal trade and production. Colbert, the
most practical if not the most enlightened of
French financiers, made a vigorous attempt to
abolish the provincial douanes, and to have no
custom-house, except on the frontier, but he
was successfully resisted by the "local pro-
tectionists." He succeeded, however, in
'establishing, in 1664, a sort of zollverein in
twelve of the most important provinces, called
the cinq grosses fermes, within which the
circulation of goods was to be free. Beyond
these were the provinces riputdes itranghres,
which refused to accept Colbert's scheme and
retained their local customs, and the provinces
Urangbres, those which were added to the crown
after 1664, and received special privileges at
the time of their union. Colbert also succeeded
in simplifying and making more uniform the
charges which he failed to abolish. The system,
as he left it, lasted with slight modifications
till the Revolution, when the provinces dis-
appeared, and with them the last trace of the
provincial douaiie. • r. l.
DOUBLE ENTRY. See Book-keeping.
DOUBLEDAY, Thomas (1790-1870), son of
a soap manufacturer in Newcastle, was a radical
of Cobbett's stamp, of great influence during
the agitation for the Reform Act of 1832. He
deserves notice here chiefly for his book on
The True Law of Population shewn to he connected
with the food of the people, London, 1841, 2nd
ed. 1843, which contained in an expanded form
a theory he had brought forward in a letter
to Lord Brougham in Blackwood's Magazine,
March 1837. This theory, which he describes
as a "great general law," is that "whenever a
species or genus is endangered, a corresponding
efibrt ^)s invariably made by nature for its
preservation and continuance by an increase of
fecundity or fertilitj'-, " the state of low nourish-
ment or "depletion," being thus favourable
while high feeding or "repletion," is unfavour-
able to fertility, both in vegetables and animals.
Fertility is in inverse ratio to nutriment, even
in the case of human beings. In poor and ill-
fed communities population increases in the
ratio of the poverty and poor living; in
a highly-fed and luxurious nation population
decreases and decays. He shows a goodly list
of examples, from the English peerage to Pit-
cairn Island, to countenance his conclusion.
In his 9th chapter he uses his knowledge of the
tallow and soap trade to support the position
that there had been a decrease in the consump-
tion of meat in England. But his law is an
empirical uniformity of which he has not traced
the deeper causes. Physiologists and biologists
have emphatically pronounced against him.
(See Dr. Charles Loudon, Prohlhne de la Popu-
lation et de la Subsistance (quoted by Double-
day himself) ; and Herbert Spencer, Biology,
vol. ii. pt. vi., Law of Multiplication, ch. xii.
pp. 455, 480, 483 note ; Darwin, Descent of
Man, vol. i. ch. iv. 132, ed. 1871.)
The book is indirectly an attack upon
Malthus ; but the Essay on Population is more
directly criticised in Doubleday's Financial,
Monetary, and Statistical History of England
from 1688 to the present time in 17 letters
addressed to the Young Men of Great Britain,
1847, Letter x., pp. 206 seq. The writer
falls into the vituperative style of his master
Cobbett.
Other writings of Doubleday are : —
Letters in the Newcastle Chronide on the
Petition of the Chamber of Commerce, Newcastle-
on-Tyne, for the Continued Circulation of Local
One Pound Notes (which he opposes), by a
Member of the Chamber, 1828. — Two Letters to
Lord Althorp in Cobbett's Register, 13th April
and 25th May 1833 (on excise duties on soap),
Political Life of Sir Robert Peel, 2 vols., 1856. —
Touchstone, a series of political letters addressed
to the newspapers, republished, with a preface by
John Paul Cobbett. — On Mundane Moral Govern-
ment and its Analogy with Material Government,
1852. — Matter for Materialists, a letter in vindi-
cation of Bishop Berkeley, 1870. He wrote also a
romance, The Eve of St. Mark, and several stage
plays, Diocletian, Caius Marius, etc.
[See "Life" by G-. J. Holyoake in the
Dictionary of National Biography J\ J. B.
DOUBLE-FLORIN, English token silver
coin of the nominal value of 4s., first struck
in 1887, the year of Queen Victoria's Jubilee,
in pursuance of a royal proclamation. It was
of precisely the same design as the florin.
"Weight 349*09 grains, fineness 925. Value in
silver francs (900 fine), 4*64 francs. This coin
has ceased to be issued. f. e. a.
DOUBLE STANDARD. See Bimetal-
lism ; Standard of Value.
DOUBLOON, History of. A gold coin of
Spain, prior to the adoption of the monetary
system of the Latin Union. The name " doub-
loon " has been diverted by general consent from
the Spanish pistole or double escudo (whence
"doblon" in Spanish) to the quadruple pistole,
or * * doblon de a ocho. " Like the Dollar {q. v. ),
the doubloon was a multiple, and not a unit.
Corresponding to the silver unit, or real, was
the gold unit, or escudo ( = $2), concerning the
standard of which the emperor Charles V. and
DOUBLOON— DOVE
635
his mother Donna Juana enacted, in 1537, that
"the escudos which we have commanded to be
struck shall be 22 carats fine, and shall weigh
68 to the mark of gold of om- kingdoms of
Castile, which is the fineness and weight of
the larger escudos of Italy." As this makes
the gross weight of the escudo 52*2 grains
troy, the escudo was thus practically a ducat
(see Ducat). From 1537 to 1772 the 8-escudo
piece or "doubloon," was 916*6 fine per mille,
reduced in 1772 to 901, and in 1786 to 875,
the legal weight remaining 417*6 grains troy
from 1537 up to 1848. Both in 1772 and in
1786 the reduction in fineness was effected not
by a public law, but by a Real drden reservada
addressed to the mints. The doubloon (Peso
Duro de Oro) never had the universal currency
of its silver analogue the dollar : and even
in the New World it was hard pressed by its
Portuguese competitors, the ** moidore " and the
"Johannes." The reason, in the words of Newton,
was that "gold in Spain is of 16 times more
value than silver of equal weight and allay.
But this high price keeps their gold at home in
good plenty, and carries away the Spanish silver
into all Europe." The Spanish doubloon was
succeeded after 1821 by various South American
doubloons, which enjoy a limited currency in
the New World, and are specially quoted in the
London bullion -market. In 1848 the "doblon
d'Isabel" was introduced in Spain, to be
supplanted by the 20 -peseta piece on the entry
of Spain into the Latin Union.
As the fine content by law was (1) 382*8
grains from 1537 to 1772, (2) 376*2 grains from
1772 to 1786, and (3) 365*4 grains from 1786
to 1848, in theory the sterling value of the
doubloon (at £3:17:10^ per oz. of standard
gold) was (1) £3 : 7 : 9, (2) £3 : 6 : 8, and (3)
£3 : 4 : 8 for the same three periods respectively;
but the results of assays reduce these values
roughly by the odd pence. Thus, after 1786,
the sterling value of a doubloon as issued was
£3 : 4s. (see Dollar). r. c.
DOUBLOON. Spanish gold coin, not struck
since 1868, when the peseta (franc) system of
currency was adopted. Weight 129*43 gi-ains,
fineness 900. Value : English standard (916*6
fine, at £3 : 17 : 10^ an oz.) £1 : 0 : 7^- ; French
standard (900 fine) 26 francs. Similar coins
of slightly varying values circulate in the South
American republics and in Mexico.
The old doubloon or onza weighed 418 grains,
fineness 8 7 5, — value, English standard £3 : 4 : 9,
French standard 81 *6 francs. This coin is still
current in Spain, Mexico, and the South and
Central American republics.
A doubloon (or 4-dollar piece) is current in
the Philippine Islands. Weight 104*4 grains,
fineness 875. Value : English standard 16s. 2d. ;
French standard 20*4 francs. r. E. A.
DOUGLASS, William (about 1691-1752)
was born in Giflford, Scotland ; he settled as a
physician in Boston in 1718 ; and wrote much
on medical subjects. He wrote a valuable
Summary, historical and political, of the first
plaiiiing, progressive improvement, and present
state of the British Settlements in North America,
Boston and London, 1755, in which frequent
reference is made to the paper currencies of the
several colonies. He was especially interested
in the monetary policy of Massachusetts, and
contributed to discussions on the subject of a
land bank and paper bills : An Essay concerning
Silver and Paper Currencies more especially with
regard to the British Colonies in New England,
Boston, 1738, pp. 23 (a direct reply to a con-
temporary pamphlet. Some ohscrvatiovs on the
scheme projected for emitting 60,000 I. Bills of a
new tenour, to be redemed with Silver a.nd Gold,
showing the various operations of these Bills and
their tendency to hurt the Publiclc Interest, Boston,
1738, pp. 25, which has itself been erroneously
attributed to Douglass) ; A discourse concerning
the currencies of the British plantations in
America, etc., Boston, 1740, pp. 47 (also with
Postscript, pp. 47-62). This was reprinted in
London in 1751, and is included in a collection
of tracts on Paper Currency, edited by Mr. J. R.
M'Cullocli, printed by Lord Overstone in 1857.
It is referred to in Smith's Wealth of Nations,
bk. ii. ch. ii. Douglass clearly sums up and
accounts for the infatuation for issues of paper
money which prevailed at that time. The fol-
lowing reasons are assigned : that usurers might
be prevented from imposing high interest upon
borrowers ; the scarcity of silver money, which
was shipped away to settle foreign balances ;
that it might be available to meet the demands
of a growing trade ; and to relieve debtors,
"since by large emissions lands rise in denomina-
tion value, and debts become really less."
[^ Brief memoir of William Douglass, M.D. By
Timothy L. Jenni.son, M.D., hiMed. Com. of Mass.
Med. Soc, Boston, 1836, vol. v. pp. 195-240.]
D. R. D.
DOVE, Patrick Edward (1815-1873).
Dove is one of the first notable writers of
this century who advocated the complete
nationalising of the land. In his Theory of
Human, Progression and Natural Probability oj
a Beign of Justice (dedicated to Victor Cousin)
(Edinburgh) 1850, Dove lays down the philo-
sophical foundation of his theories of reform.
Three things are, in his view, indispensable to
the well-being of the human race — (1) the
Bible, (2) ' ' a right view of material phenomena, "
(3) " a right view of mental phenomena." The
science of politics gives us a right view of equity
or justice, and leads us to the conclusion that
humanity progresses from diversity of privileges
to ail absolute equality of rights ; it points the
way to a reconslruction of the natural and God-
given order of society, from which the political
institutions of actual history have so widely
departed. We shall reach the millennium, —
636
DOVE— DOWER
first in mathematics, when all mathematical
truth is discovered and applied, then in the
physical and mechanical sciences and arts, and
then in political science. The perfection of
the last would bring the political millennium,
and one of its conditions would be the -aboli-
tion of the private ownership of land. This is
Dove's central proposition. Though^ he is not
otherwise communist or even socialist, he
demands that the land should be held in
common. His arguments are given at length in
his later book Elements of Political Science
(Edinburgh), 1854 ; but they are sketched in
the earlier with substantial completeness.
Legislation is needed not to grant rights but
to secure rights already granted by nature, the
chief being liberty and property. There is a
progress towards absolute equality in regard to
"natural property"; "the earth and all it
contains belongs 'for the time being' to the
existing generation," and its distribution must
not be determined by the dispositions of past
generations, when these have been contrary to
equity. The assignment to private owners,
for example, of the abbey lands, under Henry
VIII., is "now exactly equivalent to the im-
position of a taxation on articles of consumption,
equal to the present rental of those lands, so
that those who are labourers have actually the
rental of the land taken away from them in the
shape of taxes ; were there no taxes the aliena-
tion of the lands would be of comparatively
minor importance." Taxation must fall either
on land or on industry ; and it is no burden to
the community unless, as now, it is taken from
land and left to lie upon labour. Political
economy is a non-moral science, and unlike
political science it is inductive and statistical ;
it simply traces the effects of certain human
actions on social welfare. But the two studies
mutually depend on one another. " In the
arts man creates form ; in political economy he
creates value ; in politics he creates property."
Evolution must proceed from the arts to political
economy before finally attaining, in politics to
the "rational system of property," an open
career for all human talents and all burden of
taxation borne by the rent of land. ' Dove
thinks this system wiU be only introduced by
a very gradual change of public opinion. He
is no revolutionist, but he does not discuss the
practical steps by which the change would be
introduced with least friction. He is content
for the most part to enlarge on the defects of
the present system. That a shilling a day
should be given to one who labours, and £1000
a day to one who does not labour, seems to him
to set Solomon at defiance. His discussion of
rent is suggestive ; but his strength lies else-
where than in purely economical argument, and
his criticisms of older economists are often
founded on misunderstanding. He was from
the first a free trader. His sketch of Andrew
Yarranton, "the genuine founder of political
economy in England," is a useful contribution
to economic history (see appendix to Elennents
of Political Science). A certain dilfuseness of
style may perhaps in some degree explain his
failure to obtain the popular favour accorded
to more recent writers of the same way of
thinking, who have added nothing to his
doctrines and have lacked his philosophical
breadth.
[For a full list of the writings of P. E. Dove,
and an account of his life, see Dictionary oj
National Biography.} J. b.
DOWER. The term dower is used in two
totally different senses. In the first or popular
sense it corresponds to the French dot and the
Roman dos, a portion which the bride brings
to assist in defraying the expenses of married
life, whether originally her own or given by
her father or other near relative. Over this
portion the husband acquires certain restricted
rights during the continuance of the marriage.
In some countries, notably in France, it is a
matter of course that every bride should have a
dower, and one of the main objects of French
thrift is to provide every daughter with a suit-
able dower. In England there is no general
custom of this kind, although it is common for
fathers in the middle and upper classes to settle
some property on a daughter when about to be
married.
In the second, or legal sense, dower signifies
the provision to which a widow is entitled out
of the land of her deceased husband. At
common law a widow was entitled for her life
to one-third of the freehold lands of which her
husband died possessed. When the title to
dower had once attached, it could not be
defeated by any act of the husband, and thus
the right of dower became a serious obstacle to
the alienation of land. Accordingly the statute
of uses (27 Henry VIIL, c. 10) enacted that
when provision for the wife had been made by
way of jointure, she should lose her right to
dower. Subsequently the right of dower was
often defeated by means of a technical contriv-
ance known as a conveyance to uses to bar
dower. But by the Act 3 & 4 Will. IV. c 105,
known as the Dower Act, the wife's right of
dower in her husband's land was rendered
liable to be defeated by any act of alienation
performed by him, or by a declaration executed
by him under seal or inserted in his will. In
short the right of dower is subjected entirely
to the husband's discretion. Under these
circumstances the right of dower has ceased to
have any importance. The making of a suit-
able provision for a widow is one of the
principal objects of marriage settlements, and
such a settlement is almost always made on the
marriage of persons in the landowning class.
The origin of the common law right of dower
is found by Maine in the influence of the
DRACHMA— DRAIN OF BULLION
637
medieval church which was exercised in favour
of the wife.
[Williams and Goodeve on Real Property —
Keuelm Digby, History of the Law of Real
Property. — Maine, Ancient Law, ch. vii.]
F. c. M.
DRACHMA. Greek modern unit of value
equal to 1 franc, and divided into 100 lepta
(centimes). Weight, 4 "98 grains gold 900
fine, or 77*16 grains silver 900 fine. English
standard value : gold (9 16 -6 fine at £3 : 17 : 10^
per oz.) 9-52d., silver (925 fine at 5s. 6d. per
oz.) 10"32d. The silver drachma piece is a
token coin, 835 fine, weight 77*16 grains, value
•93 drachma. The smallest staiidard coin,
both in gold and silver, is the five-drachma
piece. Greece is a member of the Latin
Union {q.v.).
Drachma was the name of the ancient Greek
unit of value. The Attic drachma was a silver
coin weighing about 66 grains. F. E. a.
DRAFTS ON DEMAND. See Cheques,
Law of.
DRAGONETTI, Giacinto (end of 18th
century), a Neapolitan, wrote in 1767 a treatise
on virtues and remuneration of virtue, Trattuto
delle virtu e deipremi; a spese di Giov. Gravier,
1767, in which he also discusses economic topics,
and shows considerable knowledge of the most
recent economic literature of his time. Agri-
culture especially is discussed by him and
regarded as the pivot of the economic welfare
of the state. He compares navigation to "a
bridge crossing the seas which unites the whole
inhabited globe " ; he considers it so import-
ant that the state is boimd to protect it. But
social progress, though it takes its origin in
agriculture and maritime commerce, must be
maintained by a system which rewards virtue
and punishes crime. Such a system would
harmonise private with public interest, and —
through private interest — encourage the pro-
motion of public interests. m. p.
DRAGONETTI, Ltjigi (early part of 19th
century), wrote Proposta di un novella piano
di Jinanze per il Regno di Napoli, 1820, Napoli,
a book suggesting reform in the management
of the finances of the kingdom of Naples, inter-
esting as showing the defects existing at that
date. Amongst other matters we find him
urging on the government punctuality in pay-
ment of the interest on the public debt, in
order to maintain the standing of the national
credit, and to induce foreigners to invest capital.
He recommends that the tax on land should be
based on a cadastral survey (doomsday-book)
and that personal property and capital employed
in business should bear its fair share of the
burden. Dragonetti advises that the tariff for
the taxation of imports and exports should not
be unduly high, and that it should frequently
be revised, so as to bear a uniform proportion to
the changes of values in commodities, m. p.
DRAIN OF BULLION. The stock of
bullion held by the Bank of England is subject
both to all the influences which produce move-
ments of bullion between different countries,
and to all those which arise out of the condition
of internal trade. Some of these latter are
periodical in occurrence and almost regular in
extent (see Autumnal Drain), whilst others
are occasional and uncertain in both respects,
but all, whether internal or foreign, if occurring
alone, carry with them the elements of reaction,
and thus the average level is fairly maintained.
When, however, two or more of these influences,
acting in the same direction, have come into
play at the same time, a drain of bullion from
the Bank has resulted, producing danger and
alarm, and requiring special efforts on the part
of the directors to counteract it. Continued
drains of bullion, of more or less importance,
have been recorded as occurring in the years
1780-83, 1791-93, 1795-97, 1817-19, 1824-25,
1830-82, 1834-35, 1836, 1839, 1846-47, 1857,
and 1866. The points most worthy of notice
in these movements are : (a) their cause ; (h)
their duration and extent ; and (c) the measures
by which they have been relieved.
The causes have been both general and special.
So far as the general causes can be classified,
they may be grouped as below, the occasions
upon which each one was most strongly in force
being annexed.
Group I. Domestic.
1824-25, 1834-36, 1847,
1866.
1793, 1824-25, 1836,
1847, 1857, 1866.
824-25,
1834-36,
Joint-stock speculation
Banking panic . . \
Commercial distress .
Deficient harvests
ri783, 1793, i;
\ 1830-32, 1£
{ 1857.
/1783, 1795-96, 1830-32,
1 1839, 1847.
Group IL Foreign.
, .,. ri793, 1795-96, 1824-25,
Loans or subsidies . i 1834-36
Joint -stock speculation 1825.
. , ^. , ri832, 1830-37, 1839,
Commercial distress
/1832, II
t 1857.
It will be seen that no distinct line can be
drawn between the groups, or the causes com-
posing them. Commercial distress may give
rise to banking panic, or vice versa ; or either
of these may be largely due to joint-stock specu-
lation. So, also, a domestic cause may give
rise to a foreign drain, as when a bad harvest
leads to large importations of corn ; or, a drain
for foreign purposes may have a domestic origin,
^s in the granting of loans or subsidies, or float-
ing foreign speculations on the home market.
Or, a drain commencing in one cause m^.y be
638
DRAIN OF BULLION
continued thi-ough other influences. There are
also special causes to be found in almost every
crisis.
In duration they have varied greatly. The
earliest appear to have lasted during two or
three years ; thus, from August 1780 to October
1783 ; from August 1791 to February 1793 ;
from February 1795 to February 1797; from
August 1817 to August 1819. In these cases
the records show continuous decline throughout
each period, but as the figures are given only
for February and August in each year, there
may have been intermediate increases. In
1824-25, 1830-32, 1834-35 the decline lasted
from one to two years, and in later times the
movement extended over but a few months.
These figures should be studied in connection
with some others that cannot be shown here, as
the proportion held by the outflow to the initial
stock : or with the average of the preceding year
or period, and the rate of the decrease. For
the years since 1844 a most important considera-
tion is the state of the banking reserve. This
it was that gave to the drain of 1866 an im-
portance beyond that which would appear to
attach to the figures as given above.
Since 1866 the outflow has rarely taken the
form of a persistent drain, whilst the average
stock having been much higher, decreases of
considerable amount have not caused so much
alarm. Movements of this character took place
in 1876 when the bullion decreased from
£29,394,000 on 18th August to £21,704,000
on 29th December ; and in 1879 when from
£35,694,000on 30th July, it fell to£27,602,000
on 31st December. In each case the initial
stock was very much beyond the average of
preceding years, and the reserve was also ab-
normally large.
The manner in which a drain of bullion
should be encountered has been the subject of
much controversy, and very different methods
have been followed at different times. In 1783
the directors laid down the maxim that a drain
snould be met by contracting their issues until
the exchanges became favourable, and they
were successful in acting upon these lines. In
1798 relief was obtained by extended powers
being granted for the issue of exchequer bills.
In 1797 the drain was only arrested by the
passing of the Restriction Act, and the subse-
quent suspension of cash payments. In 1819
the directors communicated to the House of
Commons a resolution denying that the ex-
changes were to be regarded in regulating their
issues. In 1825 the Bank endeavoured, in May,
greatly to contract their issues, but finding
that the outflow continued at an accelerated
pace, they adopted in December exactly the
opposite policy, and lent money freely. In
1830-32, and 1834-35, the outward movement
appears to have been suffered to run its course
without any special measures being taken. In
1836 the pressure was met by a generous policy,
and large advances were made by the bank.
Up to this date the policy of the Bank fluctu-
ated between leaving matters to right them-
selves, or taking action by contracting their
issues, or by freely extending them. The plan
of raising the rate of discount was not in any
case adopted. It was indeed not so fuUy
available as now, nor was it equally likely to
be effective. The transit of bullion was more
expensive and less expeditious, and a larger rise
was necessary to produce an influx. There was
also less floating capital ready for employment
in any market off'ering, and therefore less
probability of attraction by increased rates.
Upon at least one occasion in earlier years a
serious drain of bullion had occurred in the face
of favourable exchanges. During all these
years the Usury Law^s {q.v.) were at least
nominally in force. No doubt in practice they
were largely evaded, but they could not be
publicly disregarded by the Bank of England.
It was not till 1833 that these laws were relaxed
at all, and they continued partly in force for
twenty years longer. But in fact the directors
did not make fuU use of such powers as they
even then possessed. From June 1822 tiU July
1836 the bank rate remained at 4 per cent,
with the exception of the period from December
1825 to July 1827, during which it was main-
tained at 5 per cent.
During the drain of 1839, which was more
serious than any then on record, the rate was
raised, on 20th June, to 5| per cent, and on 1st
August to 6 per cent, these being the first occa-
sions since 1695 on which the oflScialrate had
been placed above 5 per cent. Since then, in
seasons of pressure, recourse has always been had
to increased rates of discount. In 1847 it was
raised to 8 per cent ; and in 1857 and 1866 to
10 per cent. This last occasion is noteworthy
as one where a high rate failed to attract gold,
as the bullion decreased by 2| millions from
21st March to 30th May, notwithstanding that
the rate was raised by successive stages from 6
per cent to 10 per cent. Yet during the same
period the Bank of France, with a rate not ex-
ceeding 4 per cent, was constantly gaining gold.
This was due to the great doubts felt on the
DRAKE— DRAPIER'S LETTERS
639
Continent as to the state of commercial credit
in England. In later years, when an efflux of
gold has been anticipated, it has been prevented
by a timely rise in the bank rate.
One other point in connection with drains of
bullion requires notice. It is an almost invari-
able experience that such movements have an
immediate effect upon the notes in reserve,
instead of acting upon the circulation, as was
expected by the framers of the Act of 1844,
The following instances illustrate this clearly :
Bank of
England.
1846-7.
Bullion.
Note Reserve.
Circulation.
29th Aug.
1847.
SOth Jan.
17th Apr.
SOth Oct.
£16,366,000
12,902,000
9,330,000
8,439,000
£9,450,000
5,704,000
2,558,000
1,177,000
£20,/^6,000
20,1^69,000
20,2h3,000
20,833,000
1857.
18th July
12th Oct.
11th Nov.
Bullion.
Note Reserve.
Circulation.
£11,841,000
10,110,000
7,171,000
£5,687,000
4,024,000
958,000
£19,978,000
19,990,000
20,183,000
In both these instances the bullion was de-
creased by 50 per cent, whilst the circulation
remained almost unaltered. Upon the next
occasion the decrease of bullion was attended
by a much greater decrease in the reserve of
notes, whilst the circulation increased by more
than 25 per cent.
1866.
Bullion.
Note Reserve.
Circulation.
21st Mar.
9th May
SOth May
£14,456,000
13,156,000
11,878,000
£7,918,000
4,951,000
415,000
£20,636,000
22,ShU,000
26,019,000
An important movement in the opposite
direction, of more recent occurrence, illustrates
the direct action upon the reserve, instead of
upon the circulation, of an influx of bullion.
1907.
Bullion.
Note Reserve.
Circulation.
2nd Oct.
6th Nov.
18th Dec.
£37,106,838
28,725,225
33,076,729
£25,636,348
17,694,795
22,399,234
£29,920,m
29,l480,U30
29,127,1^95
[For history: H. D. M'Leod, Theory and Practice
of Banking, also Reports of Parliamentary Com-
mittees on the Bank of England, Banks of Issue, etc.
For fluctuations in circulation and effect on Bank
of England Rate, see Sir R. H. Inglis Palgrave, J5ariZ:;
Rate and the Money Market, 1903; also Documents
492 and 578, U. S. A. National Monetary Commis-
sion, 1910, by the same author.] R. w. b.
DRAKE, James (1667-1706-7), bom at Cam-
bridge, became M.D. in London in 1694, and
Fellow of the CoUege of Physicians in 1706.
His high Tory pamphlets, among which two
especially deserve attention, were the cause of
much persecution to him. Besides being the
author of medical treatises he wrote anony-
mously A Short History of the Last Parliament,
1699, in which he refutes the opinion that
exchequer bills had the nature of ** money"
created by government, and shows them to be
mere money-saving instruments of credit. In
his pamphlet An Essay concerning the Necessity
of Equal Taxes and the Dangerous Consequences
of the Encouragement given to Usury among us
of late years. With some Proposals to promote
the Former and give a check to the Latter. By
the author of the History of the Last Parlia-
ment, London, 1702, Drake argues that money
should be taxed by reducing interest, and that
public credit " be rais'd to a Par with the best
private security, and that no higher Interest or
Praemium be allow'd upon it." This end will
be answered "by a just and equal Tax obliging
all Ranks and Degrees of men to pay to the
support of the Government in proportion to
their share in the Publick and the benefits they
reap from it" (p. 5). He contends that "for
the eleven first years of the late war, 10s. in
the £ per annum, principal and interest, was
paid by land, under which latter name husbandry,
manufacture, and trade are comprehended as
having their existence from and being no more
than the product and improvement of land,
which is the principal stock, and gives birth
and maintenance to them all" (p. 2). This
passage, as well as his struggle against stock-
jobbing and trading companies, counects Drake
with authors like Asgill, Barbon, Briscoe, and
other Tory writers on finance.
{Dictionary of National Biog.raphy, vol. xv.
pp. 446-447, where the last-named tract is
omitted ; for the first tract see Philippovich, Die
Bank von England, 1885, p. 68.] s.b,
DRAPIER'S LETTERS. In 1722 Ireland
complained of the want of copper coin. Copper
had apparently been undervalued as compared
with silver, and in consequence had been
driven from the country. In its place a
number of tokens and worthless coins had been
used as small change. The English government
decided to remedy what was an undoubted
grievance. Unfortunately Ireland, unlike
England and Scotland, had no public mint, so
that coinage was a subject of private contract,
and such contracts, in the eighteenth century,
were invariably occasions for jobbery and
corruption. On 21st Sept. 1723 a patent
was issued to "William Wood to coin copper to
the value of £108,000. The economic and
other objections to the patent were unanswer-
able. Wood himself had purchased it for
£10,000 from the Duchess of Kendal, George
I. 's mistress. That his own profits would have
been excessive is proved by the fact that he
was compensated for the withdrawal of the
patent by a pension of £3000 a year for eight
years. The total issue was ridiculously out of
proportion to the needs of the country, as it
was estimated at more than a fourth of the
whole currency. Finally the issue was debased.
A pound of copper was worth at the outside
13d. ; in England it was coined into 23d. ;
640
DRAWBACKS— DRAWING
but by "Wood's patent it might be coined into
30d. To these objections it must be added
that no Irish official, not even the lord-
lieutenant, or the council, had been consulted
about the terms of the patent.
The patent was itself a scandalous j»b, and
it was also a needlessly irritating assertion of
English sovereignty. Irish opinion was roused,
and both houses of parliament, usually sub-
missive, petitioned against the scheme. A
haughty and threatening answer on the part
of Wood only added fuel to the flame. In
1724 Swift came forward as the mouthpiece of
the prevalent discontent in a series of letters
which were signed M. B. Drapier, and professed
to be the work of a Dublin tradesman. The
importance of the letters is political rather than
economic. Swift had no practical or theoretical
grasp of currency questions. He made no
attempt to state the real objections to the new
coinage. On the contrary he adopted all the
prevalent prejudices, and exaggerated and
illustrated them with that suppressed yet
masterful irony in the use of which he has
never been surpassed. In the famous fourth
letter he quitted the immediate question at issue,
denounced the abuses of English misgovern-
ment, and asserted the rights of the Irish nation
to independence. The printer of the letter was
prosecuted, but the jury rejected the bill in
spite of judicial browbeating. The author,
though his identity was notorious, was left
unattacked, and the government found it
necessary to yield to the storm which it had
provoked. The whole importance of the episode
lies in the impulse which it gave to the opposi-
tion to English rule in Ireland.
[The letters are to be found in Swift's col-
lected works. For comments on them, see Craik's
Ln^t of Swift ; — Lecky's Histoi'y of England in
the Eighteenth Century and Leaders of Public
Opinion in Ireland ; — Stanhope's History of Eng-
land.] R. L.
DRAWBACKS. In theory a drawback is
a portion of the "mercantile system," and is
intended to promote and encourage the exporta-
tion of commodities. It consists in the repay-
ment of a duty which has been already paid in
connection with the manufacture of the com-
modity in question, such repayment to be made
on its export. Theoretically, therefore, draw-
backs correspond to, and are similar to, Bounties
(q.v.), with this distinction — that a bounty is
a direct gift to the exporter of goods, while a
drawback should be merely the remittance of a
tax in his behalf. It is this difference which
caused Adam Smith to hold drawbacks to be
the most reasonable form of encouragement to
exportation ; because, although they must from
their nature favour certain classes of exporters,
they cannot operate so as to draw more trade
into any particular channel than would have
been drawn had neither the tax nor the remit-
tance of it existed : in other words, they simply
cancel the tax and leave trade free to follow its
most natural course. It must always be remem-
bered that Smith held very strong views in
favour of absolute non-interference with industry,
and was consequently averse to indirect taxation.
Drawbacks may be manipulated so as to have
the same effect as bounties and other devices
for encouraging exportation. Where this is
the case there is not only a loss of revenue to
the country which repays the tax, but a sub-
sidy is given on exports which amounts to pay-
ing the foreign consumer to buy certain goods.
Drawbacks, it will be seen, are much more
restricted in their nature than bounties. As
worked in this country they are comparatively
unimportant. They are of no use in encourag-
ing a rising industry in a new country, and
are generally granted simply for the purpose of
increasing the amount of export trade. Adam
Smith's discussion of them (bk. iv. chap. 4)
may be read with great interest. J. S. Mill,
in bk. iv., where he deals with the various
forms of protection, adverts to drawbacks ; and
generally all modern economists, who have
written on the subject of political economy at
large, treat of drawbacks along with bounties.
M. G. D.
DRAWER OF A BILL OF EXCHANGE.
The person giving the order to pay contained
in a bill of exchange is called the "drawer."
If the bill is not paid at maturity, he is bound
to reimburse the holder, provided that all the
necessary formalities have been observed (pre-
sentation in proper time, notice of dishonour,
protest in the case of foreign bills, etc.) (See
Bill of Exchange.) e. s.
DRAWING. This word is used to announce
the redemption of certain bonds, as the borrower
applies a periodical sinking fund to that pur-
pose. The practice was originally connected
with the simple process of drawing lots. A
borrowing government, for example, may en-
gage to pay off 1 per cent of its loan every
year, and then the question arises as to which
bond out of every hundred in circulation shall
be redeemed in order to make the redemption
fair. A drawing is announced, the function
being attended by public officials and other
persons of unimpeachable integrity, and the
bonds which happen to be drawn by lot are
then advertised for repayment at par, or at
whatever the stipulated price of repayment may
be. Cases have been known in which holders
of drawn bonds have gone on receiving dividends
in ignorance of the drawing, and other cases
are on record in which the drawn bonds having
been sold on the stock exchange, it has been
discovered several months or years afterwards
that the said bonds were not a good delivery
(see Delivery, Good). A question also has
arisen where, if a borrowing government form-
ally promises the drawing of 1 per cent of its
DRENGAGE— DRUMMOND
641
debt each year, it is really empowered also to
redeem 2 or 3 per cent, or even the whole of
the outstanding debt, and in the years of active
redemptions — 1888-90 — borrowers found it so
easy to raise fresh loans at diminished rates of
interest that they were continually exceeding
the rate of redemption by drawing beyond the
proportion originally stipulated. The system
of drawing is not altogether commendable, and
was originally employed to give a kind of specu-
lative attraction to bonds which would other-
wise have been neglected by steady investors.
That is, the objectionable element of hazard
enters into the question, which ought to be purely
one of the solidity of the borrower. a. e.
DRENGAGE. A form of land tenure,
common in, if not confined to, the district
comprised in the ancient kingdom of North-
umbria. Drenghs are mentioned in Domesday
and in the survey called the Boldon Book.
Sir Henry Ellis says : " The drenchs or drenghs
were of the description of allodial tenants . . .
and from the few entries in which they occur it
certainly appears that the allotments of territory
they possessed were held as manors " (General
Introduction to Domesday, tom. i. fol. 269).
But, as menial services were required of them
or their servants, at least in Durham, they
must have been inferior to military tenants.
The instance in the Pipe Rolls of Westmoreland,
25 Henry II. of the enfranchisement of drenghs,
and the particulars given in the records of the
palatinate as to the services attached, show
that drengagc was by no means a free tenure.
The services of a dretigh were to plough, sow,
and harrow portions of his lord's land, to keep
a dog and horse for his use, attend the chase
with him, etc. "A drengage seems to have
consisted of sixteen acres to be ploughed, sown,
and harrowed " (Blount's Fragmenta Antiqui-
tatis). The word is derived by Greenwell, in
his glossary to the Boldon Book, from the
Anglo-Saxon "dreogan," to work. Another
derivation is from the Danish ''dreng" a
servant or boy. Spelman, however, defines
drenghs as those who at the coming of William
the Conqueror were put out of their lands and
afterwards restored by him on proof of owner-
ship (Tomlins), and Cowel says "drenched" is
an obsolete word meaning "overcome," and
compares the German "tringen" (see also
Cornage).
[Prof. Maitland, JSngl. Hist. Rev., October
1890.— iVb^es and Queries, I. vii. 137, 298.— See-
bohm, Village Communities, 71.] H. Ha.
DRINKS, Taxes on. See Taxes.
DROFLAND, or Drtfland. Apparently
an ancient service in the nature of driving the
lord's cattle to the fair, commuted for a quit-rent;
but according to Cowel {Interpreter, s.v.) a. due
payable to the lord for the right of passage
I with cattle through the manor (see Thistle-
Rent). H. Ha.
VOL. I
DROIT, ANNUEL. See Patjlette.
DROITS OF ADMIRALTY. In England
the Lord High Admiral (an office that has still
a legal existence) has the benefit of all captures
made at sea by non-commissioned vessels, and
also of all captures of shi^js or goods made in
the ports of England and Ireland through
vessels coming in by stress of weather or other
accident, or by mistake of port or by ignorance,
not knowing of the war, and also of all
derelicts.
By the 1 & 2 Vict. c. 2 it was enacted that the
profits derived from droits of admiralty should be
paid into the exchequer for the benefit of the
state. Phillimore's International Law, vol. ill.
London, 1873. j. e. c. m.
DROITS D'AUBAINE. See Aubaine.
DROZ, Joseph, born at Besan9on in 1773,
died at Paris 1850. The incidents of his life
were varied, and so were his opinions. Belong-
ing to a family of high legal standing, he com-
menced life as a volunteer when the Revolution
broke out ; but afterwards laying down his
arms, became professor of rhetoric at the central
school of Besangon. He subsequently returned
to Paris, where he was closely associated
with the habitues of the Society d'Aiiteuil.
The members of this club, who were Epicur-
ean in spirit and taste, in most things kept
themselves detached from the life of the 19th
century. He derived from this association a
fund of sanguine optimism which never failed.
Towards the close of his life, he came under
the influence of religion. He joined the Aca-
dimie fran(^aise in 1824, and the Academic
des Sciences morales et politiqucs in 1833. In
1829 he published his Economic politique ou
principes dc la science des richcsscs, 1 vol. in
8vo, a valuable work, but one in which he fails
to distinguish, with sufiicient exactness, moral
IVom economic precepts. He also published in
1839-42 the Histoire du r^gne de Louis XVI.
pendant les annees oii Von pouvait pr6venir et
diriger la Revolution franqaise, 3 vols, in 8vo.
The dual title of this work is a sufficient in-
dication of the line of thought pursued in it and
the object proposed. A. c. f.
DRUMMOND, Henry (1786-1860), banker,
economist, and theologian, was the eldest son
of Henry Drummond {d. 1794). He was
brought up by his maternal grandfather, Vis-
count Melville, and was educated at Harrow
and Cambridge, but took no degree. He be-
came a partner in the well-known house at
Charing Cross, and for many years had a lead-
ing share in its administration. Between 1810
and 1813 he was M.P. for Plympton Earls,
and carried through parliament a bill against
embezzlement by bankers of securities under
their charge, which became law (52 Geo. III. c.
63). With his wife he started in June 1817
on a pilgrimage to Palestine, but on passing
through Geneva he stopped to contend with
2 T
642
DRUMMOND— DRUNKAKDS
the consistory on ecclesiastical discipline. In
1825 he founded the professorship i of economy
at Oxford. He was an apostle, evangelist, and
prophet of the Irvingite Church, and built a
church for that community at Albury, where
he lived. From 1847 to his death Jie was
M.P. for West Surrey. He was a frequent
speaker in the House of Commons. Sir Henry
Holland speaks of "the genial temperament
and masculine, though eccentric intellect of
Henry Drummond . . . who could not tread
along the highway of common opinion either in
religion or politics, but his aberrant path was
always pursued with honesty as well as vigour "
{Eecollectims, 1872, p. 156). Some of Drum-
mond's numerous speeches and pamphlets were
collected by Lord Lovaine, 1860, 2 vols. 8vo.
His economical publications are :
Elementary Propositions on the Currency, Lon-
don, 1819, 8vo (reprinted with additions in 1826,
again in 1848, and with Speeches, etc., 1860, vol.
ii.). — Cheap Com best for Farmers, London, 1826,
8vo (anonymous : the landlords are the only
gainers by the tax, all others, including the
farmers, suffer). — Justice to Corn Growers and to
Corn Eaters, London, 1839, 8vo (in favour of
repeal with restrictions). — Cannes lohich lead to a
Bank Restriction Bill, London, 1839, 8vo ("the
Bank of England is the only body which ought to
have the power of issuing paper money," p. 20). —
On the Com Laws, London, 1841, 8vo. — On the
Condition of the Agricultural Classes of Great
Britain and Ireland, with extracts from the Parlia-
mentary Reports and Evidence from 1833 to 18Jfi,
and remarks by the French editor published at
Vienna, London, 1842, 2 vols. 8vo (with preface
by Drummond ; translation of two volumes pub-
lished by the Austrian government to show " the
folly of supposing that it is commerce and manu-
factures rather than agriculture which constitute
the true wealth of this country," pref. xi.-xii. ). —
Letter to the Bishop of Winchester on Free Trade,
London, 1846. — Speech on Motion on Public Ex-
penditure, London, 1849. — Letter to the Working
Classes in Trades and Manufactures, London, 1859
(on the bad treatment received by them "from
manufacturers, millowners, and poor-law guardians,
and of the exertions made by noblemen and gentle-
men to protect " them — p. 29).
[Lord Lovaine, Memoir, 1860. — Oliphant, Life of
Edw. Irving, 1862. — Diet, of National Biography,
xvi. pp. 28, 29. — Historical Register of the Uni-
versity of Oxford, 1888, pp. 67, 68.] h. r. t.
DRUNKARDS, Legislation respecting.
The care and the cure of habitual drunkards has
1 Drummond charged his estate wth a yearly rent of
£100 for the endowment. The corainissioners of 1877 in-
creased the emoluments to £300 from the revenues of
All Souls, besides £200 attached to a fellowship of the
college The professorship is for five years, but holders
of the otflce may now be re-elected. The following have
been the professors: 1825, Nassau W. Senior; 1830,
Richard Whateley ; 1832, W. F. Lloyd ; 1837, Herman
Merivale; 1842, Travers Twiss; 1847, N. W. Senior
(second time) ; 1852, G. K. Ilickards ; 1857. C. Neate ■
1862, J, B. Thorold Rogers ; 1868, Bonamy Price (again
in 1873, 1878, and 1883) ; 1888, J. B. T. Rogers (second
time); 1891, P. Y. Bdgeworth.
of recent years, received more attention on the
part of social reformers than formerly. A series
of Acts dealing with habitual drunkards, both
non-criminal and criminal, have been passed
between 1879-1900. Habitual drunkards are
defined as persons who through continued ex-
cessive drinking of intoxicating liquor are
dangerous either to themselves or others, or in-
capable of managing their affairs, and the care
of such cases comes as much within the province
of legislation as the reception and detention of
lunatics. A person with whom the craving for
intoxicants has become an irresistible impulse,
is not, strictly speaking, a person of sound mind,
and it would be no undue interference with the
liberty of the subject if such a person could be
kept in confinement against his will. The law
now provides for voluntary admission to a
licensed retreat, and for the committal of
criminal cases, or cases constantly appearing in
the police courts, to reformatories. Retreats are,
in England, licensed by the county or borough
council of the district in which they are situate,
and are under the control of the Home Secretary
and an Inspector of Retreats. Application for
admission to a retreat, stating the length of
time the applicant undertakes to remain there,
must be accompanied by the declaration of two
persons that he is an habitual drunkard. The
declaration must be made before a justice of the
peace, who must satisfy himself that it is in
accordance with facts and the intention of the
applicant. The maximum time of detention
is two years, but a case may be readmitted.
British legislation has recognised the principle
that, if a dipsomaniac has once allowed himself
to be confined in a licensed retreat, he cannot
leave it before the expiration of the time during
which he has undertaken to remain, unless he
is previously discharged or allowed to go out on
leave under provisions similar to those laid
down in the Lunacy Act.
Besides licensed retreats the law provides
for certified and for state (of a more penal
character) inebriate reformatories in which
persons convicted of crime committed while
under the influence of drink may be detained.
Cases convicted of being drunk in any public
place three times within a year may also be
detained in these reformatories. In 1908 there
were 20 licensed retreats with 493 voluntary
patients, 11 certified inebriate reformatories,
the number of committals in that year being
262, and in the ten years 1897-1908, 3002.
There were two state inebriate reformatories, the
average number of inmates being 116.
Some interesting statistics were published in
1890 relating to the Dairy mple House at Rick-
mansworth. The following facts as to the family
history of 224 persons discharged from that
retreat are stated : — Insanity in family, 19
cases ; — inebriety in family, i.e. of one or more
of the parents, 34 ; — of the grandparents, 10 ;
DRY EXCHANGE— DUCAT
643
of the brothers, 14 ; of the uncles, 35 ; in all,
93 cases ; — no history obtainable, 112 cases.
Out of these discharged patients there were —
94 doing well ; 10 improved ; 74 not improved ;
10 insane ; 1 dead ; 35 not heard from. Less
encouraging statistics are given by the Inebri-
ates After-care Association. Of 407 selected
cases discharged between 1903-8, 82 were pro-
gressing satisfactorily ; 114 were unsatisfactory ;
and 221 had been lost sight of.
The property of inebriates is now protected
in the same way as that of lunatics. The
Lunacy Act, 1890 (§ 116), authorises the judge
in lunacy to give certain directions as to the
management and administration of the property
of any individual ' ' with regard to whom it is
proved to the satisfaction of the judge in lunacy
that such person is, through mental infirmity
arising from disease or age, incapable of manag-
ing his affairs," and in such a case to appoint
some person to act in a similar capacity as the
committee of a lunatic's estate (see Committee) ;
and the Lunacy Act, 1891, § 27 (4), provides
that the last-mentioned power may be exer-
cised with reference to individuals who are not
lunatics.
The Licensing Act of 1902 })roliibits the sale
of liquor to persons known to be drunkards.
The law relating to drunkenness in Germany,
Austria, France, some of our colonies and else-
where, provides that a dipsomaniac who exposes
himself or his family to the risk of impoverish-
ment, or who imperils the security of any other
person, may be placed under guardianship.
A provision of this nature, if applied with care
and discrimination, must be beneficial to the
persons concerned no less than to society at
large. e. s.
[Wyatt Paine, Inebriate Reformatories and Re-
treats, 1899 ; G. Blackwell, Habitual Inebriates
Act, 1879-98, 1899 ; A. Shadwell, Drink, Temper-
ance, and Legislation, 1902 ; S. Freeman, Guide to
Stat. Law against Drunkenness in England, 1906 ;
H. N. Barnett, Legal Responsibility of the Drunk-
ard, 1908 ; Annual Reports of Inspector under
Inebriates Act. For other countries, see Pari.
Paper (1902), cd. 1474.]
DRY EXCHANGE {Cambium sicmm). A
euphemism applied to the "coverture" or
"colouring" of the stringent statutes passed
during the Tudor period against usury. "A
cleanly term invented for the disguising of foul
usury, in which something is pretended to pass
on both sides whereas in truth nothing passes
but only on the one side " (Cowel). Usury,
which was condemned by religion and law alike
during the middle ages, was from the middle
of the 1 6th century no longer to be confounded
with the legitimate employment of capital ;
but the sentiment which inspired the above
enactments was that of governing classes asso-
ciated with the landed interest.
[Cunningham, Growth of English Industry and
Commerce, 1890, 495 et seq. — Hall, Elizabethan
Society, ch. Iv.] H.Ha.
DRY RENT (Rene sec). An annual rent-
charge reserved upon lands conveyed by deed,
without the insertion of a clause of distraint.
H. Ha.
DUBOS, Ap.b^ J. B. (1670-1742), a mem-
ber of the French Academy, and author of
historical works and of a treatise on poetry
and painting.
The one book of his which requires notice
here is entitled Les Interests de VAngleterre mal
entendus dans la guerre prisente (Amsterdam,
1703), and professes to be a translation from an
English book. Speaking thus as an English-
man, the Abbe remonstrates against the war
policy of the English administration. He is
well acquainted with contemporary English
pamphlets on the Tory side, especially with
Davenant, whom he often quotes. He success-
ively examines the effect of war on each branch
of English trade and manufactures, and dis-
tinctly states (p. 80) that "the attempts we
(the English) shall be obliged to make in order
to enforce in the (American) colonies the just
obedience they owe to the state which has
founded them, will perhaps lead them to
rebellion, when they will have learned that
they can do without us."
Voltaire addresses him in a letter dated 30 th
October 1738, as "the most useful and
judicious writer he knows," but, when writing
to other people, he indulges in sarcasm about
the Abbe's "mistaken" notions as to the in-
terest of England. e. ca.
DUCAT, History of. A gold coin (worth
about 9s. 4^d.) in extensive use on the continent
till this century, and adopted by successive
emperors as the standard coin of the empire in
the middle ages. The coin first makes its
appearance in 1140 A.D., when Roger II., King
of Sicily and Duke of Apulia and Calabria,
issued silver coins to which he gave the name
"ducati," probably because they were first
struck in the duchy of Apulia, especially called
" il ducato," and bore, in an abbreviated form,
the inscription — "Sit tibi, Christe, datus,
quem tu regis, iste Ducatus " (Let this Duchy,
0 Christ, which thou rulest, be dedicated to
thee). The coin then spread through Italy
until, in 1252, it was formally adopted at
Florence, and gold pieces were issued under the
name of "ducati gigliati." These ducati
gigliati, or florens d'or, as they were called
elsewhere, were 24 carats fine, and 64 to the
fine mark. Thirty-two years later, by a law
passed in 1283 a.d., ducats were struck at
Venice by the Doge John Dandolo, the second
of the four celebrated Doges Dandolo, 67 to the
fine mark, and each bearing the inscription of
the original ducat of Apulia. In the 16th
century, these ducats received the name of
"zecohini" (sequins) from Zecca, the Venetian
644
DUCAT— DUCHATEL
mint, whence their Anglo -Indian name of
"chicks" (Rs. 4).
By the beginning of the 14th century these
florens d'or and Venetian ducats had spread
throughout the states of Italy, and especially
the Church states, where Florentine ducats
were universally adopted and issued as '^novelli
ducati papales," with only slight variations
from the original standard of 1252. The
Florentine coin thence spread into Hungary,
whither it was followed by the Venetian ducat,
until in 1365, Venetian ducats were struck by
the king Ludwig, at Kremnitz, of 23f carats
fine, and 67,^ to ^^^ Cologne mark. Later
on ** imperial " ducats were issued at 23^ carats
fine, and 6 8 /^ to the tine mark. From Hungary
and Bohemia the Venetian ducat, preceded
however by the floren d'or, was introduced
into Germany, and continued to circulate as a
foreign coin throughout its various states, right
up to the Augsburg Convention of 1559. In
this year the imperial diet of Germany adopted
the ducat into the currency of the empire
(Ferdinand I.) at a prescribed " dukaten-fuss "
of 23f carats fineness, and 67 to the Cologne
mark (and therefore 67f|- to the fine mark) —
a "footing" subsequently maintained both by
the Leipzig Convention of 1690, by the Austro-
Bavarian Convention of 1753, and the Frank-
furt Coinage Union of 1765.
This adoption of the ducat into the currency
of the empire had the effect of causing the
surrounding states to follow the lead of striking
ducats for themselves. Yet in every case,
though both the floren d'or and the Venetian
ducat (by this time known as the sequin) had
previously obtained in circulation, it was the
latter coin that was adopted and struck as the
standard of cuiTency by the several states ;
by the cantons of Switzerland in the ] 6th and
early I7th centuries, at fineness and weights
varying from 23^ carats and 68^ ducats to
the fine mark, at Berne, to 23f carats and 67^%
respectively, at Basel and St. Gallen ; by
Denmark in 1647 at 23^ carats fine, and 68/^
ducats to the fine mark ; by Holland, a little
later, at 2Z^^ carats fine, and 68^ to the fine
mark ; by Russia, Poland, and Sweden, about
the same time, or a little earlier, at rates
varying from 23^ carats fine to 23f, and 78 to
68^ ducats to the fine mark, and continued
to be coined tiU well into the present century.
Ducats were even struck by the Porte, and
some issued by Sultan Mahomet IV. are
known (1649-1693 a.d.). A Barbary ducat
was current in the West Indies early in the
last century.
The history of the ducat in France, Spain,
and Portugal is slightly diflferent. As regards
the latter country, Pope Calistus III. having
in 1455 demanded supplies for an expedition
against the Turks, Alphonso V., then king,
had quarter-ducats, or " Crusados " struck in
1455, first at 23 carats fineness ; later at 22
carats fine and 28 9 J of these crusados to the
fine mark. These Crusados or Portuguese
quarter- ducats are the ' ' Kreuz-dukaten " of the
German middle ages. Still later (1722-1750),
new crusados were issued at the same fineness
as before, but at an increased weight, viz. 237
to the fine mark. In France, where the ducat
was early introduced, the Florentine coin (64
to the fine mark) was adopted over its elsewhere
successful rival, thanks to the fact that at this
time (14th century) the Pope resided at
Avignon ; while in Spain in 1537, under
Emperor Charles V., the Italian and French
ducat, under the name of the "escudo" (22
carats fine, and 68 to the Castilian mark =69^
nearly to the fine Cologne mark) began and
long continued to form the basis of the
Spanish gold monetary system (see Doub-
loon).
By far the most common "ducats" were those
current in Hungary, Germany, Holland, and
Russia, and averaged in value, each containing
roughly 53*9 grains, about 9s. 4^d. apiece.
The Swedish ducat, however, was only worth
about 9s. 3^d., while the modern Italian gold
ducat was much less. Silver ducats were also
struck in several places, and varied in value
much more than the gold ; e.g. the silver
ducats of Italy were worth 3s. 4d. ; those of
Holland (the daalders) 4s. 2d. ; while the
silver ducat of Sicily had the value of 3s. 4|d.
Ducats were also issued made of platinum
(Russia), and earlier of copper and lead (Venice,
Germany, France, and Holland), while they were
not infrequently struck as medallions.
[Vergara, Monete del Regno di Napoli, Roma,
1715. — Philippi Argelati, De Monetis Italice^ 5
vols., Mediolani, 1750. — Johann Tobias Kohler,
Vollstdndiges Ducaien- Cabinet, 2 vols., Hanover,
1760. — Bonneville, Traite des Monnaies, Paris,
1806]. w. L.
DUCAT {Modern). Austrian standard gold
coin, weight 53*86 grains, fineness 986. Value ;
English standard (916-6 fine at £3 : 17 : 10|
per oz.) 9s. 4|d. ; French standard (900 fine)
11 '85 francs.
Ducats were the principal medium of exchange
in Italy for several centuries. (See Ducat,
History of.) f. e. a.
DUCHATEL, Comte Tanneguy, born at
Paris in 1803, died in 1867. He was on several
occasions a minister of state and organised the
commission of inquiry which resulted in the
law of 24th May 1834. This replaced a large
number of prohibitions on imports by customs
duties (the report of this inquiry has been
published in 3 vols. 8vo). In 1829 he published
a work entitled De la chariM dans ses rapports
avec I'dtat moral et le hien-etre des classes infiri-
eures de la socUti, 1 vol. in 4to. This was
reprinted in 1836 without any change except
that of the title, which became Considerations
DUCPETIAUX— DUE
645
d'economie politique sur la lienfaisance ou de la
charite, etc., 1 vol. in 8vo. Blanqui reproaches
him with too unqualified an acceptance of the
doctrines of Malthus ; but this should rather
be reckoned as a point in his favour. He was
received in 1846 into the Acadimie des Sciences
morales et politiques. His claims to be a de-
scendant of the Tanncguy du Chatcl of the 15th
century appear to be unfounded. a. c. f.
DUCPETIAUX, Edouard, born in Brussels
in 1804, died 1868. In 1828 he published
several pamphlets on Repressive and Provident
Justice, and on the penalty of death. Shortly
after the revolution of 1830 he was appointed
general inspector of the Penitentiary and Bene-
ficent Institutions of the new-born kingdom.
Ducpetiaux was a prolific and indefatigable
writer on the subjects which had from the
beginning of his life attracted his attention.
His principal works on the punishment of
criminals are : Progres et ]Etat de la Mforme
P6nitentiaire (1838), and Des Conditions de
V Emprisonnement se]}ar6 ou cellulaire (1857),
in which he shows himself a consistent advocate
of the cellular system as being the punishment
best adapted to awaken a sense of morality in
the prisoner, by the predominance of the prin-
ciple of amendment over the principle of pure
repression. He was no less devoted to the
solution of the problems connected with the
condition of the working classes. In connec-
tion with this we may mention his Condition
Physique et Morale des Jeunes Ouvriers (1843),
his Paup4risme en Belgique (1844), \ns, M6moire
sur le PaupSrisme dans les Flandres (1850),
which obtained a prize from the Royal Academy
of Belgium, and his important Budgets J^cono-
miques des Classes Ouvrieres en Belgique (1865).
All his works were published in Brussels.
His book on the condition of young opera-
tives is a very full inquiry into their state and
the legislation on this matter in the principal
countries of Europe and in the United States ; but
his two essays on pauperism in Belgium are the
most likely to interest the English reader. The
former is rather too rhetorical, but the second
gives a very graphic account, based on statistics
and exhaustive personal investigations, of the
• miserable state of the population of Flanders
after the decay of the weaving by hand of flax
and linen. In 1848 in the two provinces of
East and West Flanders the average wages of
the adult male weaver had fallen to 6d. a day,
the number of deaths exceeded the number of
births by 4541.(20,715 against 16,174) and
about one-third (453,658) of the population of
; Flanders had to be assisted by state charity.
: Ducpetiaux ascribed this miserable situation to
{ an excess of population, and to an excessive
V prevalence of laissez-faire. He called upon the
1 state to interfere by fostering the spirit of asso-
' elation, popular education, emigration, and
curing labour to adult and able-bodied
paupers. Notwithstanding his appeal to the
state, he is no friend to the English poor system,
which he calls a devouring cancer (p. 272).
He is not an antagonist of the factory system,
and vigorously asserts that mechanical work ia
only degrading because it is too protracted
{Condition des Jeuiies Ouvriers, ii. p. 6).
Ducpetiaux also promoted charitable con-
gresses in Belgium. Towards the end of his
life he changed political sides, passing from the
liberal into the clerical party, but he remained
to the last a steadfast adherent of Malthus' s
views on moral restraint, which were considered
by his new political allies as having a tendency
to immorality. e. ca.
DUE (gerihta, rectitudo, rectum). That
which is owing to the crown or to any corporate
body or to any individual subject by prescrip-
tion or charter. There is this distinction to be
made between a "due" and a "custom" that
the former is warranted by the common law,
being usually levied by virtue of written laws
and contracts which are as ancient as the
common law itself, while the latter, in its first
origin at least, was a more or less uncertain
and unauthorised impost, so that we find the
term "recta" and "mala" applied to the
respective forms of the custom which were
authorised by statute or contract, or else levied
at the will of the king or other lord alone.
Agaia, a "due" for the most part seems to
arise from the ownership or cultivation of the
soil itself, and therefore it is perhaps the most
primitive form of tax; whereas a "custom"
for the most part seems to arise from the
exchange or conversion of the products of the
soil by way of merchandise. The most typical
due of any. Church-seed (q.v.), is certainly
more than a century older than any other
customary contribution. Several kinds of dues
may be enumerated, as ecclesiastical, seignorial,
municipal, and fiscal or regal. Of these ecclesi-
astical dues are of very great antiquity, for
those that are still familiar to us in the present
day as tithes (see Tithes) and church-rates can
be traced back to the English laws of the 8th
century, although many others which were paid
to the early church have long since disappeared.
A still greater antiquity could even be claimed
for them in this country by reference to the
doctrinal writings of the 7th century, and the
analogy of Prankish customs.
The well-known compact between the Anglo-
Saxon sovereignty and the church in virtue of
which the king's dignity and the archbishop's
were respectively maintained, and the peace of
the crown and church went hand in hand, is
further exemplified by the arrangements enforced
by the state for the temporal welfare of the
he^ly order. Anglo-Saxon finance is no intri-
cate problem, simply because whilst the king
lived of his own, the working expenses of
government were amply met by the threefold
I
646
DUE
allodial obligation. But in contrast to their reti-
cence on the subject of lay taxation, the Saxon
laws are replete with the most elaborate direc-
tions for the payment of ecclesiastical dues.
"We enjoin to every Christian man bj virtue
of his Christendom," is the refrain of these
laws, "that he pay tithe and church-scot and
Rome-scot, and plough-alms, and light-scot
and soul-scot." These injunctions are found
equally in secular and ecclesiastical dooms, and
they take the place of honour in the proceed-
ings of great councils like that of Greatanlea.
Under the later Saxon kings the injunction of
the pious sovereign becomes far more stringent
until it is stereotyped in the precise legal defini-
tions given in the Latinised version of the 12th
century jurists, so that at length in the " laws
of Henry I." we find tithe and church-scot and
other dues embraced under the general heading
De placitis Ecclesix pertinentibus ad Begem.
It is true that in Anglo-Saxon times the dues
of the church were put in charge for the crown
by means of a heavy fine for non-compliance or
even by absolute distraint in which the king's
reeve was required to assist the bishop's officer
and the local incumbent ; and we also find the
doctrine prevailing that if the occupier were too
poor to pay, the lord should pay for him.
It is possible that the rigour of this system
of assessment and collection of church dues
was somewhat mitigated by the reflection that
these were eventually offerings made to God, a
theory carefully fostered both by the crown
and the church, so that the term God's dues
{godcunde gerihta or Del rectitudines) is actuaUy
synonymous with church-dues during the latter
part of the Anglo-Saxon period at least, and
thus perhaps the sentence of excommunication
decreed by King Edmund's laws on all defaulters
was justified. On the other hand, the refusal
to pay Peter's pence was a contempt which led
to the appearance of the offender before the
court of Rome itself to make atonement. In
addition to the above persistent injunctions,
these early laws provided further for the pay-
ment of church dues to be made at fixed and
appropriate seasons. Thus tithes became due
always as the plough entered the tenth field,
or more probably in actual practice, plough-
alms were rendered at Easter, tithes of cattle
at Pentecost, the fruits of the earth at AU-
hallowtide, and church-seed at Martinmas ; the
tenth cheese as it was made, or the milk drawn
on the tenth day. In the same way Rome-scot
was payable on St. Peter's feast-day ; and light-
scot at Candlemas, Easter Eve, and All-hallows
Eye. Finally, in order to mark the precision
with which these dispositions were made, we
find provision for the payment of soul-scot at
the open grave, wherever the death might
take place.
The statistics available for the purpose of
estimating the nature and extent of these con-
tributions are unfortunately not nearly so
abundant as these details of the means for in-
suring their payment, or at least they are not
so authentic for the earlier period. It may
easily be gathered, however, that the imit of
assessment was the plough and the normal sum
assessed on every plough the penny. In fact
the Anglo-Saxon Scaet like the Anglo-Norman
Denarius, was the synonym of money, while
the medium of exchange in both periods might
be equally treasure in kind or in currency.
Add to this primitive basis of calculation the
further connection between the plough and the
hearth as representing the stake of one family
in the soil, and it will be possible to account
for nearly every ecclesiastical assessment that
fell upon the husbandman free or unfree.
Moreover, denarius might be, and does indeed
appear to have been, used in its original mean-
ing of a tenth part (see Deniee). Thus the
thane is required to render a tenth of aU that
he has ; a tithe which, reduced to terms of
money according to the normal assessment of
the hide, would be found equivalent to a tenth
penny. The church -scot was originally a
measure of corn that was probably equivalent
to a tenth part of the produce of the normal
virgate holding, and equally it was assessed
upon every hearthstead at which the tiller was
found seated in the midwinter before it fell
due. So the plough-scot and Rome-scot were
expressed in convertible terms of the hearth,
the plough, or the penny. The light-scot was
always a money payment of a halfpenny on
every hide of land because candles were im-
ported from the continent, but if wax were not
available, other produce of the soil such as
cattle was certainly rendered in kind, pecunia
and denarius being once more convertible
terms.
Although no secular institution was endowed
with an oblatory revenue as ancient or as ex-
tensive as that arising from the dues of the
church, it is perhaps possible to trace a certain
analogy between the ecclesiastical and municipal
corporations herein. Pious sovereigns who had
invested the church by virtue of binding ordi-
nances with the power of levying dues upon
all products of the soil within the parochial
*'ministery," were succeeded in direct line of
descent and policy by others who invested the
towns one by one with a like implied privilege
by the terms of royal charters. The one body
held by free alms, the other by the firma
burgi. The latter stood in need of contribu-
tions for the repair of streets or quays and
general administrative purposes, the former
distrained upon its flock on the plea that
churches must be repaired, the poor relieved,
and the clergy themselves housed and fed.
Whatever the value of this analogy may be,
it is certain that the dues legally raised foi
purposes of municipal self-government, pontage,
DUE
647
nmrage, pavage, quayage, moreage, towage,
terrage, strandage, cranage, mesonage, anchor-
age, keelage, bushelage, lestage, ballastage,
measurage, average, primage, and the like afford
by far the best-known, the most enduring, and
the most regular examples of dues. Indeed it
might be thought that the still more historic
contributions known as gable tax, tallage, and
the like, would fall under the head of dues in
a system of common assessment for self-taxa-
tion, but here as elsewhere we must sharply
distinguish between rent and taxation on the
one hand, and between imperial or parlia-
mentary taxation and customary dues on the
other.
This necessary distinction brings our inquiry
within still narrower limits in the case of seigno-
rial or manorial dues, as well as those that
were levied by the king as lord paramount of
the whole realm. Extents, court rolls, and
ministers' accounts, together with surveys,
such as Domesday Book, the Boldon Book,
and the Hundred Rolls, present us with an
infinite variety of payments in the nature of
commuted rents and pecuniary mulcts, the
legal definitions of which are set forth in the
various Bxpositiones Vocahulorum appended to
most of the fiscal registers of the 13th and
14th centuries, but none of these can properly
be regarded as dues. Some such there are,
however, but their existence was from the first
anomalous, and they are chiefly remembered
in the present day amongst the curiosities of
manorial tenures. In certain cases, however,
an inland town or seaport might continue for
centuries under the jurisdiction of a lord who
enjoyed the tolls and other dues, just as a lay-
man might appropriate the dues intended for
the support of the church, and in such cases
the seignorial interest takes the place of the
ecclesiastical or municipal or fiscal.
The dues or '* rights " of the crown qud lord
paramount of the whole land must be carefully
distinguished from the normal sources of im-
perial revenue on the one hand and from the
customary revenue by prerogative or grant of
parliament on the other hand. What remained
were the seignorial dues received by the
sovereign from the manors and farms composing
his demesne, and from escheats and vacant
churches, together with certain other rights
appertaining to his kingly state alone. Even in
the most primitive state of kingship the tribal
ruler appears to have received a contribution
from the products of the soil, the tradition of
which still lingered in the mises and prises of
the 13 th century. That is to say, the king
took toll of certain staple products to maintain
the rude splendour which was as essential to a
civil state of society as the ceremonies and
"ministery " of the church. As far as we are
at present enabled to distinguish between a
recognised rent or custom and a specific due,
it seems probable that the several forms of
purveyance were of the latter nature, together
with those tolls or perquisites which are
peculiar to the fiscal period that precedes the
development of parliamentary supply. Such
an assessment as the avalage is probably of
this nature (Madox, i. 775). On the other
hand, many more, which are popularly regarded
as dues, are really in the nature of rent, such
as the firma unius nodis of Domesday Book
and the gafol or gahlum (Round, Domes.
Studies, vol. i.)
A considerable revenue was certainly obtained
from the end of the 12th to the close of the
13th century by way of dues upon merchandise
at the outports and inland barriers, which can
scarcely be included under the head of customs.
Thus in addition to the general exactions
alluded to in several public charters, we have
notices of a disme and quindisme levied as
early as the reign of Richard I., chiefly, no
doubt, upon foreign imports (Pipe Roll, 10
Ric. 1 m. 12b). These and other dues appear
to have been more or less consolidated under
the administration of the royal chamberlains
at London and Southampton. The exactions
of the king's officers at the Tower of London,
forbidden in several of the city charters, were
clearly of the same nature. It is interesting
to note, moreover, the inclusion of the profits
or droits arising from the sale of prizes of war
and contraband goods amongst the chamber-
lains' accounts ; these, like deodands, forming
a link between the casual and the customary
revenue of the crown.
With the statutory recognition and limitation
of the ancient dues of the crown in respect of
the products of the soil exported under the
distinctive term of Recta custuma and the
corresponding definition of the dues formerly
payable at discretion upon imports, such as
wines by the name of Recta prisa, their history
may be said to belong thenceforth to that of
the customs revenue. Prises and mises are for
the future associated with the unconstitutional
abuses of purveyance, together with caption and
emption, and other relics of the old tribal state.
Certain other dues continued to be levied in
the king's name, such as the penny (denier
or devoir once more), by the ganger of wines
and the aulnager of cloths, and even the Calais
dues themselves (see Deniers de Calais) ; but
these, like the god's-penny, and the cocket, and
tronage dues, are properly to be regarded as
official fees or perquisites, outside the custom-
ary revenue it is true, and yet not included in
the revenue returns for fiscal purposes. It
was by such dues as these, sanctioned by the
authority of the crown, and even put in charge
for the crown, that the royal ministers, from
the smelter of the exchequer to the treasurer of
England, eked out their scanty fees in gremit
scaccarii itself. h. iia.
648
DUE DATE— DUNCAN
DUE DATE (BiU of Exchange). This is
the date at which the holder of a bill of
exchange may claim payment from the drawee.
The following rules, as to the way of ascertain-
ing that date, are applicable in the case of bills
payable within the United Kingdom. * A bUl
is payable on demand : (a) if it is expressed to
be payable on demand, or at sight, or on pre-
sentation ; (b) if no time for payment is
expressed (Bill of Exchange Act, § 10). The
due date of a bill, not payable on demand, is
found by adding three days (which are called
the days of grace) to the time of payment named
in the bill, but this rule is subject to the
following exceptions : (a) when the last day of
grace is a bank holiday, or a Sunday immediately
following a bank holiday, the bill is payable on
the siuxeeding business day {e.g. if a bill is drawn
payable on the 23rd December in a year when
the 26th of December falls on a Saturday, the
due date would be the 28th December) ; (b) when
the last day of grace is Good Friday, Christmas
Day, or a Sunday (not immediately following a
bank holiday), the due date falls on the pre-
ceding business day (thus, in a year in which
Christmas Day falls on a Friday, a bill, drawn
payable on the 22nd December is due on the 24tli,
whereas in the same year, a bill drawn payable
on the 23rd, as shown above, is due on the 28th
only). Where a bill is payable at a fixed period
after sight the time begins to run from the
date of acceptance, or in the case of an unac-
cepted bill from the date of noting or pro-
testing (Bill of Exchange Act, § 14 [3]). On
the continent a bill is sometimes stated to be
payable after usance (or after two or more
usances), the usance being either a fixed time,
or a time varying according to the distance of
the place of issue from the place of payment.
In France the duration of a usance is thirty
days, the time being computed from the day
foUoming the date of the bill (Code de Com-
merce, § 132) ; the German and Italian codes
do not recognise this mode of fixing the due
date. In all continental countries a recognised
practice exists of making bills payable at some
named fair or market ("Messwechsel " or
** Marktwechsel " — German Code, §§ 4, 18,
35; "payable en foire " — French Code de
Commerce, §§ 129 and 133; " pagabile in
fiera" — Italian Codice di Commercio, §§ 252
and 286). If the fair or market extends over
a day, such bills are payable on the day pre-
ceding the last day of the fair or market. The
importance of those assemblages having much
decreased of late years, bills bearing such
indications are becoming scarce. e. s.
DUFAU, F. P., born in 1795, was the
director of the Institute for the Blind in
Paris, and wrote several works on the subject
of their proper treatment. In 1840 he
published a volume entitled TraitS de Statis-
tique ou tMorie de Vitude des lots d'aprks
lesquelles se d6velopperd les fails soeiaux-, »uivi
d'wn Essai sur la statistique physique et morale
de la population frav/^aise. In the theoretical
part he does not approve of the adoption of
coloured statistical maps, as being "only able
to convey vague and indistinct notions to the
mind." In the second part, he intended to
apply the rules set down by himself to the
study of the population, territory, and state in
France ; but declares that, owing to the want
of sufficient materials, he has been obliged to
give up the two last divisions of his investiga-
tions. This work received, in 1841, a prize from
the Academy of Sciences in Paris. In 1847,
under the title of Lettres d une Dame de Chariti,
he gave a complete description of the institu-
tions and associations for the alleviation of the
sufierings of the poor. E. Ca.
DUHAMEL DU MONCEAU, Henri Louis
(1700-1781) was inspector general of the navy,
member of several learned societies, and author
of numerous treatises on manufactures, forestry,
and agriculture ; the principal of which are his
TraiU de la conservation des Grains (1753) ;
^cole d' Agriculture (1759) ; EUmenis d' Agri-
culture (which went through several editions
from 1754 to 1779); and the Traite de la
Culture des Terres (1753-1761), written — at
least the last — to advocate in France the methods
of cultivation originated in England by Jethro
Tull. He is mentioned as a distinguished agri-
culturist by Voltaire in his Pr4cis du Si^cle de
Louis X V. (ch. xliii. ) and in his Lettre d l' Homme
aux QiMrante J^cus, although in the latter with
some mockery on the pecuniary results of his
experiments. A. Young calls him a "useful
genius" (Travels in France, 1792, i. 65).
In 1764 Duhamel printed a small pamphlet
of only fifteen pages {Mflexions sur la Police
des Grains), in which he asserts that, in order
to keep agriculture in a healthy condition,
the price of com must not fall below a price
sufficient to meet the necessary expenses of the
farmer, nor be carried too high, so as to cause
famines, which grind the poor and the artisans.
The natural regulations of a good policy would
be (1) to allow an entirely free inland trade of
corn ; (2) to suppress all tolls on the inland
carriage of corn, either by land or by water ;
(3) to allow every citizen to store corn until a
time of dearth ; (4) to grant free export, without
any privilege of person, when the storehouses
are fuU and the crops continue to be abundant.
Duhamel ends by distinctly denying that
France ought to follow the example of England,
there being a great difference in many respects
between the conditions of the two countries.
E. ca.
DUMOULIN. See Molinaeus.
DUNCAN, Henry, D.D. (1774-1846), a
minister distinguished for his philanthroi>ic
labours and practical sagacity, is best renicm-
bered as the founder of savings banks. It is
DUNCAN
649
true that he was neither the fii'st to suggest the
formation of such banks nor the first to estab-
lish them. Such banks existed on the Con-
tinent, in England, and even in Scotland, before
Dr. Duncan founded the " parent institution "
at Ruthwell in 1810. But the name of Dr.
Duncan is as justly connected with savings
banks as those of Cobden and Bright with Free
Trade ; he did for the one movement what
they did for the other.
The attention of Dr. Duncan had been early
drawn to the condition of the poor, and he
thought and read much on the subject. One
day there came into his hands a pamphlet
bearing the title Tranquillity, the author of
which, Mr. John Bone, propounded a scheme
for the gradual abolition of poor-rates in Eng-
land. A subordinate feature of this scheme
was the ' ' erection of an economical bank for
the savings of the industrious." The sugges-
tion germinated rapidly in the mind of Dr.
Duncan. He saw in it the means of elevating
the condition of the labouring classes and of
preventing the introduction of a compulsory
poor-rate, a measure which he regarded as
certain to injm-e the community. The result
of his study and elforts was the establishment
in his own parish of a bank for savings, and the
publication of its rules (Rules and Kegulations
of the Parish Bank Friendly Society of Ruth-
well, instituted 26th May 1810). The rules
set forth clearly and plainly the nature and
advantages of the scheme, the system of
management, the provision for deposits and
withdi-awals. The latter were in certain de-
fined cases subject to the judgment of the
managing body. The experiment at Ruthwell,
though made in a parish of only 1100 people,
purely agricultural, without resident heritors,
and where the majority of those grown up were
already members of friendly societies, was most
encouraging. From the first Dr. Duncan in-
tended that his scheme should be adopted
everywhere, and by tongue and pen he spread
the knowledge of what was being done in his
parish. In 1814-15 the movement attracted
a large measure of public notice and advanced
rapidly. The table of Dr. Duncan was heaped
with letters of inquuy ; and to save his time,
and to promote the cause he had at heart, he
published in 1815 an Essay on the Nature and
Advantages of Parish Banks, a greatly enlarged
edition of which appeared in the following year.
The essay is in four sections. The first dis-
cusses, with candour and breadth of mind, the
objects and principles of savings banks ; the
second relates their history so far as known to
the author, who speaks of his own labours with
singular modesty ; the third advocates co-
operation between savings banks and friendly
societies ; the fourth, consisting of miscellaneous
remarks, deals vigorously with the morality of
saving and the question of a poor-law. In
1817 Dr. Duncan was forced to take the field
against Mr. J. H. Forbes, the future judge
Lord Medwyn, who had denied that the Ruth-
well bank was the " parent institution," claim-
ing that distinction for Edinburgh, and who
had exalted the management of the Edinburgh
bank at the expense of that of Ruthwell. He
showed without passion, and with dignity and
courtesy, that both these assertions were er-
roneous {Letter to J. H. Forbes, Esq.). This
same year a measure was framed by Mr. Rose
in the interests of savings banks, but its pro-
visions, while highly beneficial to depositors in
England and Ireland, were disadvantageous to
those in Scotland. Dr. Duncan convinced Mr.
Rose that this was the case, and Scotland was
not included within the scope of the act. Two
years later, a bill adapted to the peculiar circum-
stances of Scotland, drafted by Dr. Duncan,
and expounded and defended by him in Scot-
land and London, passed both Houses. The
vindication of the measure is contained in his
Letter to W. R. K. Douglas, Esq., M.P., on
the expediency of the Bill brought by Mm into
Parliament for the protection and encourage-
ment of Savings Banks in Scotland. A Letter
to Managers of Banks far Saving in Scotland,
1819, informed them of the steps they needed
to take in order to take advantage of the act.
In 1824 the Scotch banks were forced to reduce
the interest of 5 per cent which they had
hitherto allowed on deposits from savii)gs banks,
and Dr. Duncan sought to procure for the
savings banks of Scotland the right to purchase,
if they saw fit, those government debentures
the acquisition of which was made compulsory,
by the act of 1817, on savings banks in England
and Ireland. But the treasury refused to
treat Scotland exceptionally. In 1835 a
measure was passed, with Dr. Duncan's hearty
approval, making, the regulations for savings
banks uniform in the three kingdoms, but
at the same time conceding to Scotch banks
established before the date of the act the
privilege which Dr. Duncan had advocated in
1824.
It should be added that Dr. Duncan was a
free trader, and that he published in 1820 a
letter to Mr. Douglas, M.P., in which he con-
tended for the abolition of all commercial
restrictions.- In 1830 he published Presbyters
Letters on the West Indian question, in which,
with his usual sobriety of statement and calm-
ness of judgment, he argued against immediate
and unconditional emancipation, and in favour
of emancipation at a fixed but not distant date —
substantially the policy which three years later
was adopted by parliament.
, [Besides the pamphlets cited, see Memoirs of the
Rev. Henry Duncan, D.D., by the Kev. G. J. C.
Duncan (Edinburgh, Wm. Oliphant and Son,
1848), and the article by Prof. Blaikie in the Diet
of Nat. Biog.] . w. p.
650
DUNCAN— DUNOYER
DUNCAN, John, according to M'CuUoch
(Literature of Political Economy, 1845, p. 286)
was the author of the following work, directed
partly against indiscriminate almsgiving : —
Collections relative to systematic relief of the Poor
cU, different Periods and in different Countriis : with
observations on Charity, its proper objects and its
influence on the welfare of Nations, Bath, 1815,
8vo. H- R- T.
DUNCAN, Jonathan (1799-1865) son of
Jonathan Duncan, governor of Bombay, was
born there, and died in London. He took his
B.A. degree at Cambridge in 1821 and lived
for some time in the Channel Islands. He
edited the Guernsey and Jersey Magazine
(1836-37) and published several historical
works, original and translated. After 1841 he
lived chiefly in London and devoted himself to
currency reform, on which subject he wrote :
How to reconcile the rights of Property, Capital,
and Labour — Tract I. of the Currency Reform
Association, London, 1846, 8vo (all published;
"money need not, and indeed ought not, to
possess any intrinsic value " (p. 6), " value . . .
is labour condensed" (p. 10)). — The National
Anti-Gold Law League; the principles of the
League explained versits Sir R. Peel's currency
measures, and the partial remedy advocated by the
Scottish Banks, London, 1847, 8vo. — Letters on
Monetary Science; by Aladdin, London, 1848,
8vo (contributions signed by this pseudonym to
Jerrold's Weekly News, written "to emancipate
the human mind from the gross errors of bullionism
and the servile idolatry of a comparatively useless
metal "). — The Principles of Money demonstrated,
and bullionist fallacies refuted, London, 1849,
sra. 8vo, — The Journal of Industry, 30th
November 1850 to 15th March 1851, small folio
(only sixteen numbers published ; chiefly devoted
to currency). — TJie Bank Charter Ad ; ought the
Bank of England or the People of England to
receive the profts of the national circulation, 2nd
ed., London, 1858, 8vo.
[Did. of Nat. Biography, xvi. 170, 171.]
H. B. T.
DUNDAS, Henry (1742-1811), first Vis-
count Melville, successively solicitor-general and
lord advocate of Scotland, and thereafter a
prominent member in difierent offices in several
administrations, honoured with the friendship
of Pitt, and for many years the dictator of Scot-
land, was regarded during his lifetime as a
high authority on questions of trade and com-
merce, more especially in connection with the
East Indies. From the formation of the board
of control, he was in fact, though not in name,
the minister for India. In 1793 he moved
the renewal of the monopoly granted to the
company. The speech he delivered on this
occasion was afterwards published, having as a
preface the eulogy pronounced on it by Pitt in
the course of the subsequent debate {Substance
of the Speech of the Bight Hon. Henry Dundas,
on the British Government and Trade in the
East Indies, 23rd April 1793, London, 181$).
From an economical point of view the most
important statement in the speech is the declara-
tion that the existing arrangement in India
was "in opposition to established theories in
goveminent and commerce." The experience
of nine years had however justified the system.
The same views are expressed in his Letters upon
an Open Trade to India (London 1813). He
contends that the question cannot be treated
as a purely commercial one and strenuously
asserts that the trade to India should not be
open.
[Stanhope's Life of Pitt. — Omand's Lord Advo-
cates of Scotland, ii. — articles in Diet, of Nat.
Biog. and Ency. Brit] w. p.
DUNNING, Richard (fl. 1685-1698), pub-
lished A Plain and Easy Method, showing
how the office of overseer of tJie poor may be
managed, whereby it may be £9000 per annum
advantage to the couniy of Devon, withovi abat-
ing the weekly relief of any Poor (1685) ; and
Bread for the Poor, by R. D. (1698). He
defended the old poor law (43 Eliz. c. 2),
which he maintained was sufficient to reduce
poverty, and suggested various methods for its
better administration. The chief value of
Dunning's pamphlets consists in the informa-
tion they contain relative to the condition of
the labouring classes in Devonshire at the end
of the 17 th century.
[Eden's State of the Pocrr (1797), i. 225, 248-
252.] w. A. s. H.
DUNOYER, Charles (1786-1862), bom at
Carennac (Lot), died at Paris. He studied
law at Paris ; then assisted in preparing the
Becueil de jurisprudence of Sirey. He wel-
comed the fall of the empire, though he only
accepted the legitimist monarchy so far as it
respected the liberty of the people. In con-
junction with Charles Comte he established,
12th June 1814, the journal entitled Le Censeur,
but the Terreur blanche compelled them to
discontinue the publication of this paper in
1816. They resumed it eighteen months later,
but modified its title to Le Censeur Europeen.
The increasing severity of the press laws, how-
ever, seriously hampered them, and, finally,
the assassination of the Duke of Berry, 13th
February 1820, and consequent troubles led to
the entire suspension of the paper. After this
Comte and Dunoyer, notwithstanding the
similarity of their political and economic
opinions, were compelled to separate — the
former went to Switzerland, while Dunoyer
devoted himself exclusively to economics. He
gave at Paris in the Athenaeum Institution a
course of lectures on political economy and moral
science, which were afterwards published in a
volume bearing the title of L'industrie et la
'morale considirdes dans leurs rapports avec la
liberty, in 8vo, 1825.
When the Ordonnances of the 26th July 1830
DUODECIMAL SYSTEM— DUPIN
651
appeared, Dunoyer protested in writing against
this breach of the charter of 1814. After this,
despairing of the elder branch of the Bourbon
family, he turned to Louis Philippe, whose
accession to power he welcomed with enthusi-
asm. Appointed, shortly after the ** three
days," prefect of the department of the AUier,
he was transferred in 1832 to the prefecture
of the Somme ; this he quitted in 1838 to
enter the council of state. This last post was
better suited to his disposition, wliich, though
calm, was full of energy, and ill- adapted to
the compromises and the half-measures which
necessity requires of practical politicians.
In 1830 he reprinted his volume of 1825
with many additions, under the title of
Nouveau traiU cC6conoime sociale, etc., 2 vols.,
1830, in Svo ; but just before the second
volume was put into circulation a fire, in
1835, consumed nearly all the copies. Ex-
tending the scope of his work, Dunoyer
republished it in 1845 under the title De la
liberty du travail ou simple exposd cles conditions
dans lesquelles les forces humaines s'exercent
avec leplus de puissance, 3 vols, in 8vo. Besides
being the author of this masterly work, Dunoyer
was a contributor successively to the Revue
Encyclopidique, the Revuefraru^aise, the Journal
des debats, and the Journal dcs economistes. The
revolution of 1848 was a heavy blow to him,
royalist and liberal as he was in his political con-
victions ; he remained, however, on the council
of state, and only relinquished his seat there
after the coup d'etat of 1851. Bitterly hostile
to the second empire, as lie had been to the
first, he wrote a work directed against the new
order of affairs. This book, which was pub-
lished after his death, and then only at
Brussels, is entitled Le second empire et une
nouvelle restauration, 2 vols., 1865, in 8vo.
He was elected, in 1832, a member of the
Institute (Academie des Sciences morales et poli-
tiques), and in 1845 president of the society of
political economy. His miscellaneous works
{Notices d'economie sociale), and the second
edition of his book La Liberie du travail, were
published, both at the same time, in 1886 (3
vols, in 8vo), through the filial care of his son
Anatole Dunoyer.
Dunoyer was one of the great economists of
the 19th century. He wrote with much force
in support of the theory of "immaterial
wealth," even going so far as to say that, from
the economic point of view, no " wealth " could
be other than "immaterial." He was a warm
supporter of the theories of Malthus on popula-
tion ; but he was no believer in the theory of
rent, considering that there was only one factor
in production, i.e. labour. Firm and elevated
in character, rigid in life and thought, even
more severe towards himself than towards
others, Dunoyer was one of those men whose
career affords one of the highest examples. He
died in the enjoyment of that esteem which hia
frank and loyal conduct won for him in every
public position that he had occupied.
A. c. f.
DUODECIMAL SYSTEM. The following
remarks under this rubric are given simply
because, as we have devoted considerable room
to the subject of the decimal system, it might
be supposed that we had not fairly considered
the relative merits of an alternative, or, as
some may imagine, a superior system. But
the fact is that there never has been, and
undoubtedly never will be, any true duodecimal
system in use by mankind in notation, calcula-
tion, weights, measures, or coin. The funda-
mental reason for this is that whilst the number
of digits in the universally-accepted decimal
system corresponds with the natural number of
fingers on the hand, or with what may be
called the digital system, whereby all savage
races, and even cultivated man, assist their
arithmetic, this cannot be in a notation by
twelves. The latter would require fresh addi-
tional integers beyond the nine in use. Enor-
mous, almost insuperable, diflficulties would be
involved in this. It is true that a dozen, like
a score, has always been a favourite group of
numbers. But this has had no real effect on
the more effective arrangement for large as well
as small numbers into decimal groups of 10,
100, 1000, and so on, in preference to 12, 144,
1728, and so on. Even as regards money,
although it is correct to say, as pointed out in
the article Decimal System, that all European
nations once had a system of account, but not
all of them of coinage, divided into twentieths
of the pound or livre, and into twelfths of the
shilling or sol, they have all, except England,
deliberately discarded the duodecimal as well
as the vigesimal part of this arrangement, so as
to gain the superior advantages of the decimal
subdivision. The division of the year into 12
months, the foot into 12 inches, and the now
almost obsolete English apothecaries' pound
into 12 ounces, are practically the sole remain-
ing relics of the system. F. H.
DUPIN", Baron Charles (1784-1873), born
at Varzy (Nievre), died at Paris. He came
out in 1803 with distinction from the Poly-
technic school, after having been at the head
of the list iji the entrance examination. Louis
XYIII. created him a baron (1824), Louis
Philippe, a peer of France (1837) ; he was
appointed a representative of the people after
the revolution of 1848, and Napoleon III.
made him a senator. "The changes," he said
satirically, "are not in myself, but in the
powers that be ! " Dupin, who was endowed
with much ability, devoted his life to the
extension of technical teaching in France. It
was he who suggested that map of France in
two colours (black and white) which shows by
gi-aduated shades the degree to which primary
652
DUPIN— DUPONT
instraction has been carried in every depart-
ment. This most useful statistical method,
though now familiar, was, in 1827, quite a
novelty. Of his writings as an economist wo
may mention Le petit producteur fran^ais, Paris,
1827, 7 vols, in 8vo.
In a familiar yet witty style this little book
describes, in the form of a dialogue, the strictly
regulated system existing in France before
1789, and the commercial and industrial
liberty which the majority of modem econ-
omists desire to see realised. The names of
the two personages, the old "Prohibant" and
the young "Lefranc," show clearly enough the
side to which Dupin inclined then. Afterwards
he became one of the pillars of the protectionist
system. This time it was not the "powers
that be " who had changed.
[See French Diet, de I'J^c. politique. — His work
The Commercial Poioer of Great Britain, exhibiting
a complete View of the Public Works of this Country,
with atlas and plans, was translated from the
French, 2 vols. (Knight), 1825.] a. o.f.
DUPIlsr, Claude, bom towards the end
of the 17th century, died in 1769 ; he was the
grandfather of Madame Georges Sand, TiAe
Am-ore Dupin. First an officer in the French
army, he became aftei-wards a fermier gindral.
In 1745 he printed anonymously his Oecono-
miques (Carlsruhe, 3 vols.), but the name of
the place (Carlsruhe) appears to have been used
to deceive the police. Notwithstanding these
l>recautions, Dupin found it advisable to with-
draw from circulation all the copies he could
coUect, and very few are known to exist in
our days. The chapter entitled Mimoire sur
les Bleds was published separately in 1748,
and reprinted in the Journal J^conomique
(February and March 1760). Dupin appears
to be entitled to the honour of having been the
first in France to advocate a more liberal policy
conceming the corn trade, as Herbert's essay
was only published in 1755. "When corn is
dear," he says, "money is lavished to import
it from foreign countries. Is it not a mistake
not to be forgiven, to prevent its export when
its price is gone down to nothing (vol. i. p. 205).
... If the trade in com were constantly free,
com would never be wanting (vol. i. p. 208)."
However, he does not push his deductions from
this principle to their legitimate conclusion,
for in his proposed legislation on this subject,
although he recommends a free inland trade,
he shackles it with numerous formalities, and
as for foreign trade, he only allows com to be
exported when the price is lower than 12 livrcs
per sack ; from 12 to 18 livres, com may be
imported against payment of a duty of 3 Hvres
per Paris setter; from 18 to 24 livres, the
duty is to be only of 5 sous per sack. At 24
livres a bounty of 2 livres is to be granted on
imports.
Some terse and pregnant remarks may also
be gathered mostly from the rest of the first
volume, for instance this one (p. 115), " Money
ought to be considered like any other com-
modity and never restrained in its natural
course" ; but such enlightened opinions are
not followed to their ultimate conclusion.
"Never has money been drawn from a state
without its being provided with the same
value of goods or produce, and we must suppose
that these goods were useful to the buyer, for
the simple reason that he has bought them"
(Oec. vol. i. p. 114). "Money, which flows out
of a state, calls other money in ; the money
that comes in calls other money out. This
is the mechanism of trade ; to oppose it is to
ignore and to destroy the principles of trade.
... It is the interest of a state to have rich
neighbours ; if they are poor, they will, not
come to buy our superfluous goods. A shop-
keeper sells nothing in a place peopled with
beggars. . . . It is an absolute mistake to
think that we can dispense with our neighbours,
and that they cannot go on without us ; the
richer our climate, the more we need them to
consume our excess of riches. If heaven has not
granted us certain goods, or if the disorder of
the seasons deprives us of our usual produce,
these same neighbours will come to our help "
(p. 115).
Besides this work Dupin wrote, also anony-
mously, and with the assistance of two Jesuit
fathers, some very bitter R6flexion^ sur quelques
parties d'un livre intituU VEsprit des Lois
(1749), but Madame de Pompadour interfered,
and almost the whole edition was suppressed
by the author. In 1759, Dupin criticised
Montesquieu's views on trade, finance, and
the influence of climate under the title of
Observations sur wn, livre irditule VEsprit
des Lois, but in a more temperate style, and
without any indication of author, date, or
place.
For a very Retailed account of the printing and
suppression of Dupin's books, see Du Plessis'
notice on 01. Dupin in the Bulletin du Biblio-
phile, Paris, 1859, p. 309. e. Ca.
DUPONT (or, as he himself wrote, Du
Pont), Pieere Samuel (1739-1817), received
the addition of de Nemours to his surname
from the place which he represented at the
constituent assembly, in order to distinguish him
from another Dupont in the same assembly, and
was one of the greatest of the "men of great
learning and ingenuity in France " (Adam Smith)
who were called "economists." Born at Paris,
Du Pont early ranged himself on the side of
the Physiocrats (q.v.) His first work (1763)
attracted the friendship of Quesnay and other
leaders. The most valuable of their doctrines,
free trade, was ably advocated by him in his
Exportation et importation de grains, 1764.
If Quesnay was the father of physiocracy,
Dupont was its godfather, for he gave it its
DUPONT— DUPONT-WHITE
653
name by the publication of bis Fhysiocratie,
1767 ; a collection of Quesnay's articles, which
the editor introduced by a Discours (see Daire's
Physiocrates, part L tome ii. p. 19). To the same
period belongs his Origine et Progres d'une
SdeTice TwuvelU (see Daire, Ihid. tome ii. p.
335), based upon that "little book written
by Mr. Mercier de la Riviere," which Adam
Smith calls "the most distinct and best con-
nected account of this doctrine" {IV. of iV.,
bk. iv. ch. ix.). Many other expositions of
physiocratic doctrine were contributed by
Dupont to the Journal de V Agriculture . . .
and the E'phtmeHdes (q.v.), which he success-
ively edited (1765-1772). He was aided in
his editorial work by the pen and advice of
Turgot. Almost the only cloud in the friend-
ship between the two publicists arose when
Dupont, with the usual indiscretion of editors,
ventured to "touch up" the now celebrated
"Reflexions sur . . . la richesse," contributed
by Turgot to the Ephem6rides. When Turgot
became minister he did not forget his friend.
Dupont was appointed to an important and
confidential post ; which he forfeited on the
fall of Turgot, but was afterwards employed
under Vergennes, in an office not altogether
congenial to a great opponent of the commer-
cial system, the "bureau de la balance du
commerce." The practical ability of Dupont
w^as displayed in the negotiation of the treaty
which secured the independence of America
(1783), and the treaty of commerce with
England (1786). In the constituent assembly
Dupont de Nemours played a considerable
[»art. He was president for some time. His
eloquent voice was often heard on the side of
sound theory and good sense. His protests
against the creation and increase of the issue
of assignats were founded upon the justest
reasoning. Siding with the king at the emeute
of 10th August 1792, Dupont fell under the
ban of the extreme party. While hiding from
their pursuit, he wrote, during this period of
enforced leisure, his optimistic PhilosopMe de
Vunivers. Discovered at length and dragged
to prison, Dupont would infallibly have been
guillotined, but for the timely fall of Robes-
pierre. Under the directory Dupont obtained
the influence due to his financial ability ; but on
the revolution of the 18th Fructidor he aban-
doned politics and retired to America. He
resided in France during the empire, devoted
to literary pursuits. It was during this period
that he edited the works of Turgot (1809),
which he enriched with interesting notes.
Dupont took office under Louis XVIII. in
1814, but on the return of Napoleon once
more retired to America, where he died in
1817.
It is impossible in a curt abstract to convey
kan adequate impression of the exuberant genius
which, during more than half a century, con-
tinned to pour forth eloquent discussions on
varieties of subjects ranging from the "philo-
sophy of the universe " to the habits of insects.
If in political economy Dupont made no great
advance ; if, contrary to the advice of Turgot,
he turned in one circle, confined to a narrow
sect ; he at least purified and embellished the
doctrines of that sect. He empliasised what
was best in its teaching, the principle of laissez-
faire. With potent voice he bade trade,
Lazarus-like, be loosed ; "Otez-lui ses liens et
laissez-le aller." The magic of his eloquence
was enhanced by the influence of a character
noble and disinterested. He lived up to his
motto : aimer et connaitre. The breadth of
his public spirit corrected the narrowness of
his theory (see EphemiiIRIDEs).
[A full account of Dupont's economical career is
given in Schelle's Du Pont de Nemours et Vecole
Physiocratique, 18S8. Among earlier authorities
may be mentioned Daire ; who, in the first part
of his Physiocrates, tome ii. p. 307, gives an outline
of Dupont's life and a selection from his writings.
Other authorities are referred to by Schelle, wh(r
also gives a list of Dupont's writings, occupying
forty 8vo pages. The principal of these works
have been mentioned above. Some more detailed
references to the EpMmerides may here be added.
The "impot direct et unique" of physiocratic
theory is discussed by Dupont in Ephemerides,
1770, torn. V. {Principes des Finances) ; the
"liberty of commerce" Ibid. (1770, vol. vi. ; ei
passim), the wastefulness of slave -labour {Ibid.
1771, vol. vi.) The Fragments in EpMvi., 1771,
vol. vii., contain some striking reflections on the
theory of population, a subject which was resumed
by Dupont in his last work, and according to
Schelle one of his best, Examen du livre de M.
Malthus, 1817. See also Briejlicher Verkehr Carl
Friedriclis von Baden mit Miraheau und Du Pont,
2 vols., Heidelberg, 1892.] F. Y. E.
DUPONT-WHITE, Charles (1807-1878),
born at Rouen. After having practised as
a barrister at the court of cassation from
1831 to 1843, he became, in 1848, general
secretary at the ministry of justice. Distin-
guished by the elegance of his style, he was a
sound economist and a resolute thinker, but
too ardent a champion of centralisation and
the extension of governmental authority. His
earliest work, entitled Essai sur les relations du
travail avec le capital, 1 vol. in 8vo, 1846,
shows that the bent of his mind was adverse to
liberty. In that volume he vigorously opposes
the maxim of Gournay, laissezfaire, laissez-
passer. Of his other publications, the best
known are : De la suppression de I'impdt du sel
et de r octroi, br. in 8vo, 1847 (he would gladly
have substituted for these, taxes on landed
property and capital), L'individu et Vdat, 1
vol. in 8vo, 1856, and La Centralisation (a
sequel to the last mentioned), 1 vol. in 8vo,
1860. His other works are principally poli-
tical. He also tianslated the works of Jolin
654
DUPRE DE SAINT-MAUR— DUPUIT
Stuart Mill on Liberty and Eepresentative
Government. A. c. f.
DUPRE DE SAINT-MAUR, Nicolas Fran-
cois, born at Paris about 1695, died 1774.
He is better known in the present time by his
works on money than by his translation of
Milton's Paradise Lost (Paris, 1729, 3 vols, in
8vo), which nevertheless secured his admis-
sion into the French academy in 1733. His
economic writings mentioned below are now
necessarily out of date, and their places taken
by more recent works on the same subject.
They may still, however, be consulted with
advantage.
Essai sur les monnaies ou reflexions sur le rap-
port entre V argent et les denrees, 1 vol. in 4to, 1746,
and Recherches sur la valeur des monnaies et sur le
prix des grains avant et apres le concile de Franc-
furt (1 vol. 12mo, 1762). A. c. f.
DUPUIT, A. J. Etienne-Juvexal (1804-
1866), was born in Piedmont and died in Paris.
An engineer and mathematician, holding the
office of Lnspecteur-gendral des ponts et chaussies,
Dupuit was led both by his occupations and
studies to reflect upon the advantage which
the public derive from means of communication,
and on the method of measuring with precision
that species of advantage, and utility in general.
His profound reflections are embodied in two
articles in the Annales desponds et chauss6es, viz.,
" De la mesure de I'utilite des travaux publics,"
1844, and *'De I'influence des peages sur I'utilite
des voies de communication," 1849. The author
of these papers ''must probably be credited with
the earliest perfect comprehension of the theory
of utility," as Jevons says (Theory, preface,
p. 30). By the example of water supplied at
different prices to a town, Dupuit shows in the
first paper that "tons les produits ont une
utilite, non seulement pour chaqiie consomma-
teur, mais pour chacun des besoins h la satisfac-
tion desquels il les emploie." To measure the
total utility obtained by a purchaser, Dupuit
employs a construction similar to that which
Professor Marshall has made familiar [Prin-
ciples of Economies, bk. iii. ch. vi.). The curve
in the annexed diagram represents the varia-
tion of demand with price ; the abscissa
measured along OP corresponding to price, and
the ordinate measured along ON to the quantity
of the commodity purchased. The constraction
is the same as that of Cournot {q.v.), published
in 1838 ; which Dupuit does not appear to have
seen. Upon the principle that "il n'y a
d'utilite reelle que celle qu'on consent h, payer, "
the total utility corresponding to the consump-
tion of the quantity or is measured by the
area ornp. For the utility of each portion such
as //' is represented by the amount of money,
/nW, which the purchaser is just willing to
give for that increment of commodity. (The
reservations with which this representation
must be accepted are well stated by Professor
Marshall, loe. cit.). Such is the absolute utility,
not taking into account what the purchaser has
to pay for the quantity or. This value being
subtracted, the ''relative utility" (Professor
Marshall's "consumer's rent"), is np?. By
parity of reasoning the (relative) utility incident
to the drop from the price op' to op is iiqn'.
Dupuit assumes the area of the triangle oiqn' (a
straight line beingdrawn through nn') to be greater
than this relative utility, on the assumption that
the curve is convex ; which would seem not to
be universally admissible. The paper concludes
with some very weighty reflections on the
mathematical method in political economy.
Referring to the objection that statistical data
for the measurement of utility are not obtain-
able, Dupuit replies "quequand on ne pent
savoir une chose c'est deja beaucoup que de
savoir qu'on ne salt rien." If the earlier
theorists, instead of formulating the balance of
trade, had confined themselves to declaring
that the question was above their powers,
they would perhaps have done a greater ser-
vice than those who afterwards exposed their
errors.
In the second paper (1849), Dupuit applies
these principles to the measurement of the
advantage derived by the public from roads and
other means of communication. First he shows
that the method proposed by J. B. Say for
evaluating this utility is inadmissible. He
proves that a government seeking a minimum
return to meet fixed charges and the maximum
advantage of the public, will in general impose
a different scale of charges for canals and rail-
ways, from a monopolistic company seeking a
maximum return (cp. Marshall, bk. v. ch. xiii.)
The incidents peculiar to a regime of monopoly,
that price is not in general proportional to cost,
that articles will be charged according to what
they will bear, that a mileage rate is not to be
expected, etc., seem to be stated here as per-
fectly as by the most recent writers on railway
problems.
These important principles are restated by
Dupuit in several of his articles in the Diction-
naire d^^conomie Politique, of which the follow.
DUQUESNOY— DUTCH AUCTION
655
ing is a complete list — "Eaux,"
"Routes," " Voies de Communication." It will
be seen from the last that Dupuit is not blind to
the advantages of competition ; though, in cases
where it is impossible, he accepts governmental
management. With these articles should be
read one which appears to have been originally-
designed for the Dictionnaire, and accordingly is
referred to in the article on " Peages " — the ad-
mirable paper on " Utilite" in the Journal des
Aconomistes, for July 1853 ; perhaps, as the
editor of the Journal says, more "clear and
methodical " than the memoirs upon which it
is based, and which have been here described.
A full statement of the oflBces which Dupuit
held, of the engineering works which he con-
structed, and of the books and papers which he
wrote, both in his capacity of engineer and of
economist, will be found in Titres Scientifiques,
1857 (British Museum, sub voce Dupuit).
F. Y. E.
DUQUESISrOY, Adrien Cyppjen (1763-
1808). A member of the States General of
France, where he generally voted with Mirabeau,
he was maire of Nancy, and later on of an
arrondissement of Paris, and one of the chief
writers in the Ami des Patriotes (1792). He
did most useful work by his Recueil de Memoires
sur les ^tablissements d'humaniU, including
translations of Rumford, Eden, Bentham,
Ruggles, Howard, etc. He also published,
separately, translations of Hoeck's Statistical
View of the States of Germany, and of Bentham's
Tracts on the Poor {Esquisse d'un Ouvrage en
faveur des Pauvres), Paris, 1802. e. ca.
DURATION OF LIFE (as an Element of
Well-being). Length of days is referred to in
the earliest literature as a blessing to the
individual ; but it has been reserved for modern
statistics to estimate more exactly the advantage
which a community derives from an increase
in the longevity of its members. A rough
measure of the prolongation of life is afforded by
the Expectation of Life {q.v.). Thus, for
the period 1871-80, as compared with the
period 1838-54, the mean life-line of males
(41-35 years), is longer by 1-439139 years.
In other words a million of males bom in the
later period would live 1,439,139 years more
than in the case of the former period. So a
million of females would live 2,777,584
additional years, if born in the later period.
Or, taking the mean annual number of births
as 858,878 — 437,492 males and 421,386
females — the additional years lived by this
annual number of children would be 1,800,047.
But this addition of nearly two million years
of life does not represent the whole advantage
which the community derives from the change
in the death-rate. For of these additional
years the greater part — 66 per cent in the case
of males and 65 per cent in the case of females
— are lived at the most useful period of life,
the period at which the individual is least
dependent on others and most productive,
namely, between the ages twenty-five and sixty-
five. This calculation is taken from the supple-
ment to the forty-fifth annual report of the
Registrar- General (1885). A similar conclusion
had already been reached by Dr. Noel
Humphreys upon somewhat different and less
perfect data {op. cit. x. note ; and Journal of
the Statistical Society, 1883).
As to the causes which have contributed to this
gain of life, see the Registrar -General's supple-
mentary report above referred to, and Dr. G. B.
Longstaff's paper on *' The Recent Decline in the
English Death-rate," Journal of the Statistical
Society, 1884 ; and his Studies in Statistics.
Some other writers on the subject — not all wise —
are mentioned by Dr. Humphreys at the beginning
of the paper above referred to {Journ. Stat. Soc. ,
1883). F. T. E.
DUSSARD, Hipp. (1798-1876), bom at
Morez, died at Nyer near Olette (Eastern
Pyrenees). He commenced life as a publicist,
writing in the Revue Phwyclopidiquc, 1819-33 ;
the Bulletin de Ferussac (a periodical devoted
to science and industry), 1823-30 ; and in the
Temps, the journal founded 15th October
1829 by Jacques Coste, which ceased to appear
17th June 1842, up to whicli date he remained
a contributor. He signed the protest of the
journalists against the ordonnance of July 1830,
but he did not, like many others, derive any
advantage from the new regime, as he preferred
to remain in opposition. He supplied, in 1844,
working with Eug. Daire, the notes to the
edition of the works of Turgot (2 vols, large in
8vo.) published by Guillaumin. He assisted
from its commencement (in 1841) in editing
the Journal des ^conomistes, in which he wrote
many articles, having been editor-in-chief of that
journal from February 1843 to May 1845. He
was the traffic manager of the Paris and Rouen
railway, and distinguished himself after the
revolution of 1848 by placing himself at the
head of the courageous volunteers who under-
took the defence of the railways in the neigh-
bourhood of Paris, which had been overrun by
bands of incendiaries. His brave conduct
gained for him the office of prefect of the Seine
inferieure, in which position he successfully
closed the national workshops (see Ateliers
Nationaux) ; this judicious intervention
brought to an end the labour disturbances,
and restored the confidence of employers. He
left this post for the council of state, in which
he did not remain long ; his name having
been drawn as one of the members who had to
retire. Returning to private life, he busied him-
self with various occupations, such as works of
irrigation, forestry, and railways, in the manage-
ment of all which he displayed great ability.
A. C. f.
DUTCH AUCTION. See Auction.
606
DUTCH SCHOOL OF ECONOMISTS
DUTCH SCHOOL OF ECONOMISTS. In
Holland, during the l7th century, tlie most
glorious period of Dutch history, economics
were not regarded as an independent science,
deserving separate treatment. Economic theory
at that date must be sought for in the works of
eminent writers on theology, jurisprudence, and
politics. Perhaps the best information can
be found by studying the means adopted to
promote the general welfare of the country.
Practice preceded theory. The discussions on
practical questions of the day gave rise to in-
numerable pamphlets, and by searching these
we may still trace the general ideas underlying
action. Laspeyres and Van Rees among others
have done good service in utilising these sources
of information. The titles of their works are
mentioned below.
In this place attention can only be called to
some of the most illustrious writers whose
opinions on economic questions were ahead of
their times, although m many cases the living
generation refused to be guided by their advice.
Hugo Gkotitjs (1583-1645) advocated free-
dom of commerce as one of the natural
rights of man. It leads to a useful division of
labour between nations. Both parties gain by
the exchange, the abundance of the one supply-
ing the penury of the other. Grotius allows
the right of free immigration to foreigners. In
his opinions concerning value we find a forecast
of the most recent theories, as he distinctly
asserts the subjective element in the determina-
tion of price. "Mensura ejus quod res
quaeque valeat maxime est naturalis indigentia.
. . . Non tamen haec unica est mensura.
Nam hominum voluntas, quae rerum domina
est, multas res magis desiderat quam sunt
necessariae. . . . Et contra evenit ut res
maxime necessariae minoris sint propter
copiam" {De Jure Belli ac Fads, ii. ch. xii. § 14,
n. 1). Grotius describes money as the common
measure of value, and regards fixity of purchasing
power as the first quality money ought to
possess. Though gold and silver do possess that
quality in a satisfactory degree, he recognises
that abundance and scarcity in the precious
metals, as in other goods, will bring with them
variations in their purchasing power. Grotius
was among the first to defend the taking of
interest on scientific grounds, and distinguished
the different elements in the interest, viz. — the
price for the use of capital, — the wages of the '
creditor and the insurance -premium for his
risk. Nevertheless he was opposed to taking
compound interest, and advocated the fixing of
a maximum interest by legislation.
Graswinckel (1600-1668) is conspicuous
for his defence of free trade in com, and for his
clear insight into the causes of the general rise
of prices during the latter part of the 16th and
the beginning of the 17th century. He de-
scribes the pernicious eflfects of forbidding the
re-export of foreign corn, as the doing thia
would deter foreign producers from sending
their com to our markets. Even in a state of
famine, when it would be legitimate on general
grounds, practical considerations make Gras-
winckel advise against such a prohibition,
because the best remedy is the high price
itself. As water flows to the lowest level, so
com flows to the highest market. Their own
private interest will prevent merchants from
exporting corn in times like these. A policy
that proscribes itself ought not to be proscribed
by odious restrictions. Graswinckel clearly
sees the use of forestalling com in times of
approaching dearness. It is folly to consider
speculators as the cause of the dearness. He
that keeps in his granaries the corn he has got,
in the hope of a rising price, does not cause
the high price, but the expected rise causes him
to keep what he has got. The best thing
government can do for preventing excessive
dearness is to collect statistics respecting the
quantity of corn still in the country. The
knowledge where this quantity is, which wiU
probably be more than enough to feed the
people for two years, will dispel unreasonable
fears and prevent hoarding by private indi-
viduals. Apprehension of dearness is the prin-
cipal cause of dearness.
Concerning the rise of general prices in his
time, Graswinckel wrote: "The change has
been one, not in the commodities, but in the
money. As there is four times more money
in the world than there was before, there must
necessarily follow a decline in money and a rise
in commodities, if such can be called a rise.
For leaving money out of account, and nieasur
ing commodities against each other, wages
among the rest, all things have remained at
their former level." Considering these varia-
tions in the value of money, he expressed the
opinion that the best way to fix the rent of
land would be to stipulate for payment in corn.
Salmasius (1588-1658) was the most influ-
ential among the many writers who defended
the taking of interest. But while most of them
hoped to protect the lower classes against ex-
cessive rates by legislation or by the monopoly
of a public body, Salmasius recommended con-
fidence in free competition, as that would com-
pel money-lenders to lower interest to a fan-
rate in order to augment their business.
The works of Pieter de la Court (1618-1685)
on economic subjects are among the best, not
only of this, but of all other countries. One of
his works, the Aanwysing, pub. 1669 (see below),
has been ascribed by deliberate fraud to the
statesman Johan de Witt, in a French transla-
tion under the title Mimoires de Jean de WiU,
1709 (also in English, 1743, Political Maxims of
the State of Holland, by John de "Witt, pensionary
of Holland, London, J. Nourse). De la Court
deserves a high place in the history of economic
DUTCH SCHOOL OF ECONOMISTS
657
thought for his ardent defence of the freedom
of industry against corporations and monopolies.
In his native city, Leyden, he found ample
evidence for illustrating his conviction that
industry suffers under government tutelage,
and that the interests both of producers and
consumers are best served by free competition,
even in freedom to make cheap goods, perhaps
of low quality, but within the means of their
customers. Producers ought to have absolute
liberty in order to be able to follow tlie changing
tastes and fashions of consumers. Regulations,
even if they could be efficient in the beginning,
would remain unaltered long after they had
become obsolete, as, even under the best of
governments, a law once made is only amended
when much harm has been done. De la Court
not only attacked the regulation of industry and
the testing of manufactured goods by public
authority, but also all close corporations of
producers. Under the pretence of protecting
citizens against aliens, and of procuring work
for native industries, these corporations de-
prive all their fellow-citizens of the liberty of
buying where they find the commodity can be
had the cheapest and the best ; they retard the
increase of the community by increasing the
difficulty of finding a living in it ; they give
rise to all kinds of vexatious disputes concern-
ing the limits of their rights, and in the end
they do not even benefit those persons for whose
profit they were intended, as b}^ secure earnings
and luxury men everywhere are made idle, lavish,
and stupid. Still De la Court did not defend
freedom of trade in the modern sense of the term.
He recommended freedom of labour and of
competition as the best policy for strengthening
his native country, but he was not opposed to
import and export duties on foreign manufac-
tures as high as the interests of commerce would
permit.
Of the statesman, Johan de Witt, we may
mention here a memoir on the value of annuities,
the one of his writings which, excepting his
correspondence, has most attracted public
attention.
We can only recall the names of other dis-
tinguished writers as Usselinox, Boxhorn,
I Huber, Bynkershoeic, Noodt, etc.
! In the 18th century we find among others
' the works of Ricard, De VEspine, and Le Long
on commerce, of Pinto on credit, of Luzae on
the wealth of Holland, and many treatises on
the decline of prosperity and the means of
reviving trade.
Among political arithmeticians Kbrsseboom
deserves to be remembered as an original writer,
who improved the method of Halley in con-
structing life-tables by following out the history
i of a generation of persons of a certain age,
I individually, till all of them had died. Struyck
\ and Nieuwetytk worked in the same direction.
In the 19th century political economy has
VOL. T.
found a place in the curriculum of the Dutch
universities. Along with statesmen like Van
HoGENDORP, Van Hall, and Thorbecke, the
Professors Aokersdyk, Van Rees, and Visser-
ING are to be named among its most distinguished
representatives. The central figure among Dutch
economists of the last generation was W.C.Mees,
for many years (1863-1884) the president of the
Netherlands Bank. His works on economics
are not very numerous, but all of them are
characterised by great power and originality of
thought. He never joined in the optimism of
the French school of Basti at and other partisans
of laissez-faire. Neither could he assent to
the principles of the German economists who
regarded economics as a purely historical study.
Against the French he maintained the funda-
mental truth of Maltiius' doctrine on population,
against the Germans the necessity of abstract
economic reasoning. In questions of economic
method he followed Ricardo, but with a fuller
understanding of the limitations of the abstract
treatment, and a much more careful handling
of his hypothesis. His book, Chapters in Poli-
tical Economy, a model of sound reasoning and
clear insight into the problems of distribution
and foreign trade, has not met, even in his
native country, with the degree of attention it
deserved, as it was more difiicult reading than
most of those who concerned themselves with
economics were- accustomed to. It may be
considered as the best exposition of the general
theory of economics before the works of Jevons
and the Austrian school of economists. In
1869 Mees deduced from a correct theory of
value the principles of international bimetallism
which, since that date, have steadily gained
ground among students of monetary science in
all countries. In other papers, read before the
Dutch Royal Academy of Science at Amsterdam,
he treated of the incidence of taxation and of
the elementary conceptions of political economy.
In his youth he published an exhaustive history
of banking in the Netherlands.
Among recent Dutch economists iV. G. Pier son,
successor of Mees as president of the Netherlands
Bank and atone time chancellor of the exchequer,
held high rank. His Principles of Economics
was translated into English (Macmillan, 1902-
1912). In his Manual of Political Economy
he succeeded in interesting cultivated people in
the study of scientific economics. Through
this work the latest improvements in economic
theory, initiated by Jevons, Mengeu, and
others, and their application to problems of
distribution, have reached wide circles of
readers. Pierson combines an extensive know-
ledge of the literature of political economy and
a full appreciation of the historical inquiries of
our eastern neighbours, Avith the gift of prudently
using the deductive method. Though his mode
of treatment is less systematic than that of
Mees, it is much more attractive ; he always
2u
658
DUTCH SCHOOL OF ECONOMISTS
tries to interest his readers in the general
knowledge he wishes to impart to them, by
reference to the practical problems on which
the theories throw light.
The study of Mees and Pierson by the
younger generation of economists explains the
slight influence in Holland of the German
school of Schmoller and others, who recommend
an exclusively inductive treatment of economics,
and the favourable reception of the doctrines
of the Austrian school. The question of
economic method was much discussed in the
Netherlands a few years before the work of
Menger on the subject appeared. Borgesius and
Levy had recommended the inductive treatment,
and were refuted, among others, by D'Aulnis,
Pierson, and Heymans. Since 1880 the con-
troversy may be considered as closed.
Following the lead of Mees and Pierson,
many young authors have attempted to work
out special problems on deductive principles.
In this spirit Beaujon wrote on the theory of
international trade, Harte on interest, Falken-
hirg on the rate of wages, Verryn Stuart on
socialistic theories of value. Much highly
original work has been done by applying the
principles of Jevons and Menger to the theory
of taxation, in the works of Cohen Stuart on
the progressive income tax, and by Tasman on
the incidence of taxation.
Another feature of the Dutch economic
school of the present day is its adherence to
the fundamental ideas of Malthus' doctrine of
population. Excepting a few writers, among
others. Professors Fissering and Cort van der
Linden, aU are convinced that the great mass
of the people cannot permanently better its
standard of living, if it does not diminish
competition by limiting its numbers. A lively
controversy arose about Malthusianism and so-
called Neo-Malthusianism about the years
1875-76. Ghreven and Fan Houten defended
neo-Malthusianism against the objections of
Professor Evers and others. Pierson lately
declared in his treatise that all the objections
to that doctrine which an economist was
competent to judge of, appeared to him to be
invalid, and that the question ought to be de-
finitely settled on medical grounds. Professed
neo-Malthusians were called more than once to
professorships at the public universities, and a
neo-Malthusian league has set up an active
propaganda since 1880.
Next in importance to a due regulation of
aumbers, Dutch economists regard all kinds of
measures for "social reform." They do not
proclaim Malthusianism as a panacea for all
evils, but they are convinced that all other
measures for elevating the masses, however
useful in themselves, will avail little, unless
"peopling up to them " as Mill expressed it,
is prevented. The theory of laissez-faire, which
never had been accepted without qualification,
even by the older generation of economists, such
as De Bruyn Kops and Fissering, is visibly
losing ground m the minds of the general
public, and is regarded as insufficient and in-
complete by all scientific writers on economics.
Here the impulse came from Germany. The new
German school of the ** Kathedorsocialisten"
found eloquent and ardent expositors in Fan
Houten, Kerdyk, Borgesius, and others. Van
Houten initiated the factory -legislation in
1874, and since that date public opinion has
been steadily ripening for more extended state
interference. Since 1886 parliamentary and
royal commissions have collected materials for
further legislation concerning the interests of
the working classes, outside agriculture. A
weekly paper on social questions, under the
able editorship of Kerdyk, has worked since
1887 in the same direction. Compulsory
insurance has been recommended by various
writers, and government seems not unwilling to
propose such a measure. Trade-unionism and
the co-operative movement not having attained
among the working classes that degree of
development their friends had wished for, the
necessity of state interference begins to be
recognised by many who would have preferred
self-help.
Socialism in its most uncompromising shape
is actively propagated by Domela Nieuwenhuis
and others by means of papers and public
meetings, and finds an increasing number of
adherents among the younger generation in the
great cities and in the northern provinces.
Quack has been occupied for many years in
writing an extensive history of socialism, which
has now been carried down to the year 1850.
D'Aulnis has given an able criticism of modem
socialistic theories from Marx downwards.
In commercial matters there is but one opin-
ion among economists in Holland. Free trade
is considered the best policy for countries
generally, and more so for a small country,
where trade flourishes and combinations among
producers would easily dominate the market if
foreign competition were excluded. Beaujon
defended free trade with great acumen in the
second part of his essay on international trade.
An agitation for duties on corn, set up a few
years ago, vigorously defended by Diepen and
in a more scientific spirit by Harte, has met
with energetic resistance on the part of our
best writers, e.g. Pierson and the younger
Mees, and may be said to have subsided since
that date.
In the "battle of the standards," Dutch
economists, since the exposition by Mees of the
principle of bimetallism, are agreed that theor-
etically that would be the best system, because
it would give the greatest guarantee of fixity
of value in the standard coins. We possess
many valuable articles on the question by Bois-
sevain, who recently gave a very able defence
DUTCH SCHOOL OF ECONOMISTS
659
of the bimetallic theory against its English and
continental opponents in his work The Mone-
tary Qtiestion.
The necessities of the exchequer and the need
for reform in the fiscal system have directed
attention in an unusual degree to (questions of
finance. Sickenga has published, commencing
mih. 1863, an historical exposition of the rise of
the present system, in establishing which men
like GoGEL, Van Hall, and Betz took a promin-
ent part ; Sprenger Van Eyk wrote a masterly
risumS of the present situation with all its im-
perfections ; Pierson, Van Nierop, Cort van der
Linden and Treuh are among the most dis-
tinguished writers on the principles of taxation.
Holland possesses a Monthly Review, of long
standing, exclusively devoted to economics,
edited from the first by De Bruyn Kops and
after his death (1888), by a committee, in-
cluding many of the writers mentioned above.
Statistics are much indebted to De Bosch
Kemper, who founded the Dutch statistical
society and has edited since 1849 the year book
of that society.
Below are given the titles of the works men-
tioned in this article.
Laspeyres, Geschichte der volksxoirthscJiaftUchen
A nschauungen der Nlederldnder und ihrer Litter-
atur zur Zeit der RepuUik, 1863. — Van Rees,
Geschiedenis der Staathuishoudkunde in Neder-
land tot het einde der achttiende eeuw (History of
political economy in the Netherlands to the end
of the 18th century), 2 vols. 1865-68.
17th century : Grotius, Mare liberum, 1609 ;
Irdeiding tot de Hollandsche Rechtsgeleerdheid
(Introduction to Dutch jurisprudence) ; De jure
belli ac pads, 1625. — Graswinckel, Aenmerkingen
ende betrachtingen by 't Piacaetboek op 't Stuck van
de Lyftocht (Remarks on the edicts concerning the
trade in corn), 1651. — Salmasius, De usuris, 1638 ;
De modo usurarum, 1639 ; Dissertatio de foenore
trapezitico, 1640. — Pieter de la Court, Het welvaren
der stad Leyden (The Welfare of the city of Ley-
den), 1659 ; Interest van Holland ofte gronden van
Hollands- Welvaren (The Causes of the wealth of
Holland), explained by V. D. H. (Van der Hove,
= De la Court), 1662 ; Aanwysing der heilsame
politike Gronden en Maximen van de Republike
Win Holland en West Friesland (Demonstration of
the salutary political maxims of the Dutch Re-
public), 1669. — Johan de Witt, Calculatie van de
loaardye der Ly^renten (Calculation of the value
of Annuities, etc.), 1671.
18th century : Le Moine de I'Espine, De Koop-
handel van Amsterdam {Le Commerce d'A.), 1715
(new editions by Le Long). — Ricard, Traiti du
Commerce, 1715 ; Le nigoce d' Amsterdam, 1722.
— Kersseboom, Proeve van politiqxbe Rekenkunde,
vervat in drie verhandelingen tot eene proeve om te
weeten de probable vienigte des voiles in deprovintie
van Holland en West- Vriesland (Essay in Political
Arithmetic, contained in three dissertations on the
probable numbers of the population of the pro-
vinces of Holland and West Friesland), 1748 (the
original editions from 1738 to 1742). — Pinto,
Traits de la. cvrculation et du credit, 1773. — Luzac,
Hollands rykdom (The Wealth of Holland), 4 vols.
1780-83.
19th century : Van Hogendorp, Bydragen tot
de huishouding van staat in het Koningryk der
Nederlanden (Contributions to the Political Eco-
nomy of the Kingdom of the Netherlands), 10 vols.,
1818-25.
De Bruyn Kops, Beginselen der staathuisJwud-
kunde (Principles of Political Economy), 1850. —
Five editions — Vissering, Handboek der praktischt
staathuishoudkunde (Manual of Practical Political
Economy), 1860. — Four editions— Mees, W. C,
Overzicht van eenige hoofdstukken der staathuishoud-
kunde (Sketch of some Chapters in Political
Economy), 1866. — Pierson, Grondbeginselen der
staathuishoudkunde (First Principles of Political
Economy (1875-76). — Three editions — Leerboek
der staathuishoudkunde (Manual of Political Econ-
omy), 2 vols., 1884-90.
Hey mans, Karakter en methode der staathuis-
houdkunde (Scope and Method of Political Econ-
omy), 1880. — Harte, De rentestand (On the Rate
of Interest), 1883. — Falkenburg, Bydrage tot de leer
van liet arbeidsloon (On the Theory of Wages),
1890. — Verryn Stuart, Ricardo en Marx, 1890. —
Cohen Stuart, Bydrage tot de theorie der pro-
gressieve inkomstenbelasting (On the Theory of the
Progressive Income-tax), 1889. — Tasman, Afwente-
ling van belastingen (On the Incidence of Taxation),
1889.
Greven, De Ontwikkeling der Bevolkingsleer
(The Development of the Theory of Population),
1875. — Articles in the periodical Vragen des Tyds
(Questions of the Times) since 1875, by Van
Houten, Kerdyk, Borgesius, etc. — Sociaal Weekblad
(Weekly Paper on Social Questions), since 1887,
ed. Kerdyk. — Quack, De Socialisten, Personen en
stelsels (The Socialists, the Men and the Systems),
1875 seq., 3 vols. — D'Aulnis de Bourouill, Het
hedendaagsche Socialisme toegelicht en beoordeeld
(A Description and Criticism of Contemporary
Socialism), 1886.
Beaujon, Handel en handelspolitieck (On Foreign
Trade and its Policy), 1886. — Harte, Vryhandel
en Bescherming (Free Trade and Protection), 1890.
— Mees (M.), Nadulen van het protectionisme voor
de werkende klassen (Why the Working Classes
lose by Protection), 1891.
Mees, W. C, Proeve eener geschiedenis van het
bankwezen in Nederland (Essay on the History of
Banking in the Netherlands), 1838 ; De viunt-
standaard in verband met depogingen tot invoering
van eenheid van munt (On the Monetary Standard
and an International Unit of Money), 1869. —
Boissevain, The Monetary Question, 1891.
'S>\ckeng2i,^ Bydrage tot de geschiedenis der be-
lastingen in Nederland (Contributions to the His-
tory of Taxation in the Netherlands), 1864 ;
Geschiedenis der Nederlandsche belastingen sederi
het jaxir 1810 (History of Dutch Taxes from the
year 1810), 1883, 2 vols. —Sprenger van Eyk, De
ryks-en gemeentebelastingen in Nederland (General
and Local Taxation in the Netherlands), 1891. —
Treub, Ontwikkeling en verband van de Ryks,
Provinciate- en Gemeentebelastingen in Nederland
(On the Development of and the Relation between
Imperial, Provincial, and Local Taxes in the
Netherlands), 1885. — Cort van der Linden, Leer-
t
660
DUTENS— DWELLINGS, INDUSTRIAL
boek der Jinancim. De theorie der hdastingen
(Manual of Finance. The Theory of Taxation),
1887.
Sloet tot Oldhuis, Tydschriftvoor staathuishoud-
Iffiinde en Statistiek (Magazine of Political Economy
and Statistics), 1841-75, 28 vols.— De Bniyn Kops,
De Economist, 1852-91, 69 vols. —StaatMndig en
staathuishoudkundig jaa/rhoekje (Annual of the
Dutch Statistical Society), 1849-84, 36 vols.—
Jaar^fers. Annuaire statistique des Pays- Bos,
since 1881 ; Bydragen vanhet Statistisch Instituut,
since 1885 (Publications of the Statistical Bureau
of that Society). — Palkenberg, Bydrage tot de leer
van het Arbeidsloon, on the lines of the Austrian
economists. — Cossa, Introdvzione alio Studio delta
Uc&n. Pol, 1892. H.B.G.
DUTENS, Joseph Michel (1765-1848),
bom at Tours, was inspector-general of roads
and bridges (jponts et chauss^es) from 1830 to the
time of his death. In his writings he manifests
a spirit retrograde even relatively to the time
when he lived, and favourable to government
regulation. With aU this he was conscientious
and hardworking. In 1840 he was admitted to
the Academy of Moral and Political Science.
The economic works published by him are
entitled : Analyse raisonnie des principes fonda-
mentauxdel'Sconomie politique, 1 vol. in 8vo, 1804.
— Philosophie de Viconomie politique ou nouvelle
exposition des principes de cette science, 2 vols, in
8vo, 1835. — Essai comparatif sur la formation et
la distribution du revenu de la France en 1815
et 1835, in 8vo, 1842.— Finally, Des pretendues
erreurs dans lesqueUes, au jugement des modemes
economistes, seraient tombSs les anciens iconomistes,
relativement au principe de la richesse nationale,
in 8vo, 1846. a. c. f.
DUTOT. No biographical details respecting
this author are discoverable. It is only known
that he was cashier of the India Company in
which the well-known John Law was concerned.
(The name of this company was changed from
that of Gompagnie d' Occident to that of Gom-
pagnie des Indes, May 1719.) The book of
which Dutot was the author is entitled Rifleadons
politiques sur les finances et le commerce (2 vols.
1718-1738, reprinted in 1743, 1764, and also
in the collection of GuiQaumin). In it he exa-
mines the questions what would be the eflFect on
the public revenue, on the price of merchandise,
on the foreign exchanges, and in consequence
on trade, of the increase and diminution of the
monetary value {i.e. of the purchasing power)
of the cii-culating medium (money). This work,
although too partial to the Syst^me of Law, is
very instructive reading, especially when its
date is remembered. It was written in opposi-
tion to the views of Melon (g'.v.)
["Les Reflexions de Dutot sect incontestable-
ment ce qu'il y a de plus profond sur le systfeme
de Law, et sur la cause de sa chute," Thiers. See
reference in M'Culloch's Literature of Pol. Eccm
P-344.] A.c.f. ''
DUTY, CUSTOMS. See Customs.
DUTY, EXPORT. See Exports, Duties on
DUTY, IMPORT. See Import Duties.
DUTY, Legacy, Probate, Succession.
See Death Duties.
DU VERNEY. See Paris Du Verney.
DUVILLARD de DURAND, Etienne
(1755-1832), bom in Geneva of an ancient
French Huguenot family. He was member of
the French Academic des Sciences, and head of
the statistical department of population in the
office of the French ministry of the Interior ; he
is best known by his Tables of Mortality, which
are inserted (p. 159) in his Analyse et Tableaux
de I'lnJluenAX de la petite V&role sur la Mortaliti
(Analysis and Tables of the Influence of Small-
pox on Mortality), Paris, 1806. They have
long been in use in France. According to
Querard {France Littdraire), he left mathemati-
cal dissertations in manuscript under the titles
of "social mathematics," "mathematical statis-
tics of population," and "A mathematical
theory of banking and finance," which are the
object of a report to the Acadimie des Sciences,
given as an appendix to the Analyse et Tableaux.
In 1 7 8 7 he published his Recherches sv/r les Rentes,
les Emprunts et les Remboursements. e. ca.
DWELLINGS, Industrial, may be defined
as homes for the poorer wage-earning classes
specially constmcted with a view to meeting
the particular needs of the occupants, and
ameliorating their physical and moral condition
Since about the year 1840 the construction of
such dwellings, in or near centres of labour, has
been, in this country, the object of public and
private enterprise, as well as of extensive
national and local legislation (see Dw^ellings,
Regulation by the State in England, and
bibliography of same). The object of such
enterprise has been "to provide, instead of
miserable house accommodation for which ex-
tremely high rents are charged, which is ill
arranged, insanitaiy, overcrowded, and lacking
the conditions under which the ordinary
decencies of life can be observed, clean homes
at moderate rents, with proper ventilation and
sanitary arrangements, and not too far from
the places where the occupants have to work "
{Report of Dwellings Gommittee of Gharity Ch'-
ganisation Society, August 1881, the whole of
which report may be advantageously studied on
the subject). The various evils resulting from
the unsatisfactory dwellings of the poor wiQ be
found detailed in the evidence given before the
Royal Commission on the Housing of the Work-
ing Classes, 1885, and in the First Report of the
Commissioners issued in 1889 ; but it may be
briefly stated that in the design, construction,
and location of industrial dwellings it is speci-
ally intended to mitigate or remove the follow-
ing defects : — (1) Undue crowding, either of
houses on a site or of occupants in single
apartments. (2) The immorality which is tlie
frequent result of so large a number occupying
one room as to make decency impossible. (3)
DWELLINGS, INDUSTRIAL
661
The wasteful disposal of tenants on a given
area, owing to their homes being inconveniently
planned or designed originally for a different
class of occupant. (4) Unduly high rents
resulting partly from the last defect. (5) Un-
healthy conditions arising from the overcrowd-
ing above mentioned, from faulty construction,
or from lack of proper sanitary appliances. (6)
Inconvenient distance from the daily work of
the tenants.
Whereas it has been stated that, in a specially
constructed building, from 1200 to 1600
tenants can be accommodated per acre without
overcrowding, while the same area would, even
in a "crowded " district contain only some 300
or 400 if housed in the old-fashioned manner
and in old-fashioned dwellings, it is reasonable
to expect that a great financial profit to the
owners should accompany the substitution of
"model" dwellings for houses of the old un-
satisfactory class. According to reports, events
did not, in the earlier days of the movement,
altogether justify these expectations, though
some of the companies owning industrial dwell-
ings realise substantial interest on their capital.
It appears that legislation while facilitating the
acquisition of land for the purpose of building
model blocks, has occasional!}^ given such delay
and publicity to the transaction as to prejudici-
ally aff"ect the cost. Hence in some of the
provincial towns of Great Britain the more
cautious movements of the purchasers, even
when backed by legislation, have been attended
with more successful results tlian similar but
more open negotiations in the metropolis, where
the knowledge of the compulsory powers has
led to exorbitant demands for compensation.
(At the same time see the evidence on p. 418
of the Royal Commission Minutes, and the
suggestions there made as to the terms on
which the Peabody Trust bought from the
Board of Works.) Further it has been stated
by experts specially called in to advise on the
financial aspects of these schemes, that ' ' to
build for the lowest self-supporting class in
central positions in London the land must
practically be given." This statement and the
fact that more than one "Dwellings Company "
now secures a satisfactory interest on its outlay,
are to be reconciled partly by the circumstance
that it is not always, nor perhaps often, the
lowest classes who occupy the "model" dwell-
ings, partly by the fact that not all the dwell-
ings even of one company are built on "central"
sites, and partly also by the consideration that
the associations which promote these buildings
may be broadly divided into two classes : — (1)
Those which are purely philanthropic, or at
least do not make a dividend their first aim.
(2) Those whose primary object is to realise a
large proportion of rental to outlay. It is
satisfactory, however, to learn from the pub-
lished accounts of 1890 that, with the exception
of the Peabody Trustees, even the most philan-
thropic of these institutions realise a dividend
of from 4 to 5 per cent, the percentage of gross
rental upon cost varying from 7*6 to 9*1.
During that year the Peabody Trust received a
gross rental of 5*1 per cent on cost, and spent
2*1 percent. The Improved Industrial Dwell-
ings Co., whose undertakings have been
amongst the most extensive, pay a 5 per cent
dividend, while 4| per cent is reached by the
Metropolitan Association, which has been nearly
fifty years in existence. The Peabody Trust,
instituted in 1862 during the lifetime of Mr.
Peabody, ranks among the most important of
the metropolitan agencies. It was stated in
1881 that whereas the rents of three-room tene-
ments in their buildings varied in a period of
five years from 3s. lid. to 4s. 4^d. per week,
the average wages of the tenants of these rooms
was from £1:3:1 to £1 : 5 : 10. Thus less
than one-fifth of the wages was expended in rent,
a satisfactory condition in face of the evidence
given before the Commission that in dwellings
of the unimproved class 88 per cent of the
poor population paid more than one -fifth of
their income in rent, 46 per cent paying from
one-fourth to one-half, while 3s. 10-|d. might
be taken as the average rent of one room let as
a tenement. The Trustees at the time of the
commission were stated to let their rooms at
about 20 per cent less than the commercial
companies, their charge for a single room being
2s. and upwards. No doubt the lowness of
their rents has served to keep down the rental
in the "model" dwellings of other proprietors.
There is great competition for admission to the
Peabody buildings in the more popular neigh-
bourhoods, recommendations of good character
are required of the applicants, and thus it is a
sort of guarantee of respectability to have lived
in a Peabody Building. A result of this com-
petition and the consequent selection of appli-
cants is that the better class are chosen, and con-
sequently the Trustees' dwellings are practically
not available fof the lowest or poorest classes.
An epoch in the early history of the " dwell-
ings " movement was marked by the erection,
on ground adjoining the Great Exhibition of
1851, of a model dwelling from designs of Mr.
Roberts, and under the initiative of Prince
Albert, who was at the time President of the
Society for the Improvement of the Condition
of the Labouring Classes. The special feature
in the construction of this block, which contained
four complete dwellings on two floors, was its
fireproof nature. The walls were of special
hollow bricks, and the floors of a similar material
set in arches and covered with ' ' metallic lava."
Each tenement contained a living room, parents*
'bedroom, two small bedrooms, a scullery, and a
"w.o. (For illustrations and descriptions of
this building see The Builder, 1851, pp. 174,
311, 343). In the following year a competition
I
DWELLINGS, INDUSTRIAL
was instituted at Nottingham for designs of
similar buildings ; and a block of dwellings,
more or less on the "Prince Albert" model,
was erected at Windsor. About the same date
various efforts were made in the provinces to
improve labourers' dwellings, chiefly in tHe north
of England, by the enterprise of large owners of
land or employers of labour. Such were the
building of the workmen's colonies at Saltaire
and Copley, by Mr. (afterwards Sir Titus) Salt
and by Mr. Akroyd respectively, the latter
building also the village of Akroydon. Good
examples of such colonies are the model settle-
ments at Port Sunlight near Liverpool, Bourne-
ville near Birmingham, and Earswick near
York. In 1851 Mr. Denison built a set of
single men's lodgings at Leeds, and similar
lodgings were built in Huddersfield in 1854.
Sir Sydney (then Mr.) Waterlow was among the
first promoters of the typical modern metro-
politan artisans' dwellings. He began his
operations in 1860, at first with his own capital,
and built no fewer than ninety tenements. His
next step was the formation of the Improved
Industrial Dwellings Company, the above-men-
tioned "Society for the Improvement of the
Condition of the Labouring Classes," and the
" Metropolitan Association," being already
established. The principal organisations in
existence in London (1909) are the Metropolitan
Association for Improving the Dwellings of the
Industrious Classes, dating from 1847, with
fourteen sets of dwellings containing 1441 tene-
ments (5105 rooms) ; the Improved Industrial
Dwellings Company with 5421 tenements
(19,945rooms) ; the Peabody Fund with eighteen
sets of dwellings containing 5469 tenements
(12,328 rooms) ; the Artisans', Labourers', and
General Dwellings Company, ten sets of buildings
with 1467 tenements (3495 rooms) and 6195
cottage dwellings ; the East End Dwellings Com-
pany with 2096 tenements (4276 rooms) ; the
Guinness Trust with eight separate buildings
containing 2574 tenements (5338 rooms) ; the
six Rowton Houses, hotels for working men
with rooms for 5162 persons. These, all private
enterprises, working on a commercial basis,
with others of the same kind, provide accom-
modation for over 150,000 persons. The late
Mr. W. R. Sutton in 1909 left nearly £2, 000, 000
for providing good working-class dwellings, and
blocks for the housing of 300 families have been
begun in the City Road. As early as 1867
thirty towns in the provinces of England had
formed an association or taken some definite
action towards improving the dwellings of
artisans, but this is not carried out on a large
scale. Newcastle, Leeds, Hull, and Dublin are
among those towns in which private enterprise
assists improved housing. Municipal building
has extended in the provinces. Down to the
end of 1906, 142 local authorities (including
the London County Council and twelve Metro-
politan Boroughs) had put into practice Part
III. of the Housing Act of 1890, which provides
for the erection of working-class dwellings.
These were sixty -nine County Boroughs and
Town Councils, forty -nine Urban District
Councils, and twelve Rural District Councils.
The dwellings consist of lodging-houses, block
dwellings, tenement houses, cottage flats, and
cottages, providing 20,606 dwellings, with
56,949 rooms. London, Liverpool, Manchester
and Salford, Birmingham, and Newcastle, Edin-
burgh, Glasgow, Aberdeen, Dublin, and Belfast
are among the towns which have done most
in this way. The figures, however, show that
municipal building has done less in the whole
United Kingdom than private enterprise in
London alone.
A great work in the "housing of the poor"
was carried on for more than twenty years by
Miss Octavia Hill upon a system of her own,
which is known by her name. Miss Hill, who
was opposed to the prevalent methods of building
and conducting *' model dwellings," objects to
them, among other reasons, because they do
not help the most necessitous poor, nor can they
in any way ameliorate the actually criminal
classes, who are obviously undesirable tenants
for blocks. They are a nuisance to more respect-
able neighbours, and if grouped together are
destructive to property. The cardinal point of
Miss Hill's "system" is a carefully organised
method of rent collection. She has at her
service a body of unpaid collectors whose
self-imposed duty is, while collecting the pay-
ments due, to inspect the tenants and their
manner of life, and by every means of personal
influence to assist the more degraded to im-
provement. Though Miss Hill has built
several new houses, her work has principally
consisted in buying up old buildings, generally
for the sake of tenants already occupying them,
over whom she is desirous of exercising moral
influence, while at the same time ameliorating
the condition of their homes. The first act on
acquiring a property is, if needful, "to put the
drains, water-supply, and roofs to rights."
Other improvements follow in porportion as
the tenant shows himself appreciative of these
attentions, and ready to protect his dwelling
from misuse and destruction.
As regards the general principles of construc-
tion which are found to be most successful in
block dwellings, it may be noticed that the
buildings of the best types, though varying,
have certain essential features in common.
They differ from ordinary tenements in having
a staircase, or staircases, which are not only
common to the tenants, but open to the
public ; the door, if any, at the entrance being
open at least by day. Five or six stories is
the usual height ; the buildings commonly
stand round a wide square or quadrangle
entered by an archway from the street, the
DWELLINGS, INDUSTRIAL
663
entrance to the staircases being from within
the square. Light and air are primary con-
siderations, and tall dwellings should not
stand in a narrow street, but with an open
space round them, or the tenants of the lower
rooms will have insufficient light. The stair-
cases are sometimes open to the air, but if
built within the block, should be lined with
glazed bricks. They are generally so tall and
narrow that top light is insufficient, and in
the best buildings they are provided with good
windows. All windows of rooms should open
direct into the space in front or back of the
buildings, not into narrow areas, as it is import-
ant to get direct daylight. Sanitary accommo-
dation is one of the debated problems among
designers of these buildings. For convenience,
cheapness, and simplicity, it is better to collect
the apparatus into a distinct portion of tlie
building. Where the tenements are arranged
on the external gallery system, with only one
or tv/o staircases in a block, the w.c. accommo-
dation is sometimes grouped together by the
staircases. But among the more respectable
class of residents greater privacy is preferred,
and a separate w.c. is provided for a small
group of tenants. An approved arrangement
is that on each floor of a staircase there should
be four sets of rooms, one wash-house (with
copper washing trays and a bath) serving the
whole set of four, and two sinks and closets.
By means of this distribution a certain privacy
is maintained, and in the matter of the wash-
house an objection is met which is almost fatal
to the prospects of some of the dwellings in
which a wash-house common to the block is
provided in the upper part of the building.
In the best blocks, however, the dwellings are
self-contained, each having a scullery fitted with
copper and sink, and beyond it, shut off by a
door, a closet and coal-bunker.
Tenements in model dwellings vary in size
from one to six rooms, but by far the greater
number consist of two. Rents (weekly) vary
from 4s. 6d. for 2 rooms to 15s. 6d. for 6
rooms in London ; 3s. for 2 rooms to 7s. 9d. for
6 rooms in the provinces. In Scotland 2s, for
one room to 6s. 5d. for 3 rooms ; in Ireland
Is. 6d. for one room to 6s. 9d. for 4 rooms.
The occupations of the tenants vary so
greatly as to defy analysis ; all whose work is
inoffensive or is not done at home are con-
sidered suitable tenants if respectable ; but in
well-managed blocks those trades are considered
inadmissible which can be in any way obnoxious
to occupants of the building. It is important
to realise the proportion of wages to rent. In
a set of one-roomed tenements rented at from
3s. to 4s. the wage-earners were found to make
from about 15s. to 288. a week, in another
building, three-roomed tenements at 4s. 6d.
were occupied by families in which the father
earned from 25s. to 30s.
The diflBculty of obtaining sufficient sites in
central positions has induced the building of
blocks of artisans' dwellings in suburban dis-
tricts. The consequent distance of the occupants
from their work leads to two difficulties : the
impossibility of return for the midday meal, and
the expense of travelling. The former of these
has been obviated by the action of many em-
ployers who have provided mess-rooms for their
work-people. The second difficulty is partly
met by the institution of woikmen's trains.
These trains have been of great service to the
working classes living in the suburbs. But a
family in which there are two or three wage-
earners has so much to pay in travelling that
the cheapness of the trains is not a sufficient
compensation for the added expense of living
far from work. Again there are some classes
of work, such as small jobs for tailors, in which
whole families are often engaged, which cannot
be carried on if the distance between the shop
and the home is great.
To meet the difficulties which attend the
acquisition of the ownership of a tenement in
a block dwelling, the Chambers and Offices
Act was passed in 1881. Its purpose is "to
facilitate the management of blocks of buildings
occupied in sections as separate tenements, and
the disposal of each separate tenement." The
number of small houses purchased through
Building Societies (q.v.) by members of the
working classes shows a great desire on their
part to own their homes. In this connection
should be mentioned the work of the "Tenant
Co-operators, Limited," a society formed in 1888
to apply to the owning and letting of workmen's
dwellings the principle of co-operation. This
has been developed on slightly different lines
carrying out tlie method known as Co-partner-
ship Housing, the Ealing Tenants, Limited,
1901, being the first society entirely doing this.
In 1905 a central organising body was formed,
called the Co-partnership Housing Council, to
encourage and assist the movement which is
growing with great rapidity. Tenants con-
tribute a share towards the capital with which
land is bought, and well - designed and well-
placed houses are built. The rents allow of a
return of 5 per cent on share capital and 4 per
cent on loan capital. Surplus profits are divided
among tenants in proportion to rental, the
amounts being credited to each tenant in shares
until his share capital equals the value of the
house he rents, which then becomes his own,
his subsequent share in the profits being paid
to him in cash. There are now (1909) twelve
societies. The movement is both sound and
vigorous and promises to do good work in the
future. Its sphere is at i)resent essentially
suburban, but it has been proposed by the
Select Committee on Rural Housing (see
Reports) that a Co-partnership Housing Society
should bo formed in every English county.
664
DWELLINGS, MODEL: FRANCE
The rural employers of labour have, in a large
number of cases all over the country, built im-
proved and sanitary cottages for their employ6s.
In many cases this work has been one of pure
philanthropy, for it is impossible at the present
rates of wages to demand of an agriaultural
labourer a rent which will remunerate the builder
of a model cottage in a genuinely rm-al district.
A substantial diminution in overcrowding
took place between 1891 and 1911, the percent-
age of overcrowded population having dropped
in England and Wales from 11-23 per cent in
1891 to 8-20 per cent in 1911.
[C. Booth, Life, and Labour of the People in
London, 1st Series, vol. 3, 1904. — Journ. of Stat.
Soc, 1875, 1891.— Royal Inst. Brit. Arohts. Trans-
actions, 1866-1875. — Reports of Mansion House
Council on Dwellings of the Poor. — Bd. of Trade
Reports. — Cost of Living of Working Classes, Eng-
land, 1908 — in German Towns, 1908 — in French
Towns, 1909 — Proceedings of International Hotcs-
ing Congress, Loudon, 1907. — New Encyclopaedia
of Social Reform. — Dewsnup, Housing Problem in
England. — Nettlefold, Practical Housing Reform :
— Practical Town Planning. — ShadweU, Indus-
trial Efficiency, ch. xi. "Housing." — Co-partner-
ship, and works recommended therein (monthly
publication, Bloomsbury Sq., W.C.)] P. w.
DWELLINGS, Model, of Working Classes
IN Francb. Need for better housing of the
working classes in France was brought to public
notice as early as 1851, when many etlbrts to-
wards improvement began. In 1852 a sub-
vention of 10,000,000 francs (£400,000) was
decreed in favour of improvements in workmen's
dwellings, i.e. 6,000,000 (£240,000) to raising
asiles at Vincennes and Le Vesinet ; 2,000,000
(£80,000) to the construction of seventeen
houses in Paris ; and 2,000,000 (£80,000) to
builders, includmg £48,000 awarded on condi-
tions in Paris, at the rate of one-third of expenses
actually incurred in building. The financial
results of this last scheme were unsatisfactory.
Napoleon I II. built forty-one houses in Paris, and
offered them to a workmen's society which should
subscribe 100,000 francs (£4000). The Societe
co-operative immobili^re accepted the offer.
In Paris the high cost of land, building
materials, and labour rendered improvement
difficult. It was stated in 1890, that 6000
francs (say £240) was the lowest sum which a
detached workman's residence could cost in
Paris. The lowest estimate for contiguous
model dwellings was 5000 francs (£200) per
house ; and, in each case, the rent was fixed at
about 8 per cent per annum upon the capital.
A group of ten houses, sold at cost price (5500
francs [£220] each) to the SocUti des habitations
ouvrikres de Pa^ssy-AtUeuil, was let out upon
the Mulhouse system (v. infra). Each house
contained two rooms, a kitchen, cellar and
garden, and could be bought by a twenty years'
tenancy at from 450 to 500 francs (£18 to £20)
a year. The main difficulties encountered in
Paris were the low wages of the woikmen con-
cerned, their deficient sanitary education, and
want of attachment to a particular residence.
A pioneer effort was that at Mulhouse (now
German territory) where was founded in 1853
the Soddi mulhoiisienne des Citis ouvrieres,
under the presidency of M. Jean DoUfus. Its
shares of 5000 francs (£200) apiece originally
numbered sixty, and were held by twelve
persons, but were increased to seventy -one
divided among twenty holders. 300,000 francs
(£12,000) of the subvention above, referred
to were received from the emperor. Small
houses, with separate gardens, were built and
offered to tenants at a yearly rent of 8 per
cent on the cost price. Share capital might
not receive more than 4 per cent. Any surplus
after payment of expenses was devoted to
works of public utility. The distinguishing
feature of the society, however, was its system
of sale. By advancing about one -tenth of
the cost of the house the tenant became its
incipient owner. A yearly rent of about 10
per cent on the cost paid for a period of from
12 to 15 years made him the absolute owner.
Interest upon the cost of the house was cal-
culated at 5 per cent, and the same interest
was allowed upon all sums paid by the tenant
over and above ordinary rent. The amount
standing to a tenant's credit was paid over in
full in case of his death, removal, etc. The
experiment yielded excellent financial and
moral results. By 1889, 1124 houses, costing
3,485,275 francs (£139,400);^ had been builtand
sold ; 4,584,020 francs (£183,360) had been
received ; sums due amounted to 424,950 francs
(£17,000). Rents were always regularly paid.
The occupants of the houses exceeded 8000.
The rules forbade sub-letting. One family only
resided under each roof. And a house once
acquired might not, without the directors'
sanction, be resold within ten years. The price
of a house, originally about 2500 francs (£100),
was in 1890 upwards of 5000 francs (£200).
The rise was partially explained by the ex-
haustion of the subvention in the construction
of roads, drains, and so forth at an early stage.
Such expenses were afterwards thrown upon
houses as they were built. Houses were fre-
quently mortgaged by their tenants. At Lille,
in 1865, a society very similar to that of
Mulhouse was started — the municipality
guaranteeing 5 per cent interest on its capital
up to 2,000,000 francs (£80,000). Napoleon
III. presented 100,000 francs (£4000) to the
society. At Havre the Mulhouse system was
adopted by a society founded in 1871, capital
200,000 francs (£8000). The mimicipality
voted it a subvention of 25,000 francs (£1000)
and, following the example of Lille, offered
a guarantee of interest upon capital up to
500,000 francs (£20,000). By 1890 117
houses had been built, and half of them sold.
DWELLINGS, MODEL: FRANCE
665
At Orleans a society, founded by two workmen
in 1879, had by 1890 built and sold 220
houses, and paid 5 per cent upon its capital,
then of 450,000 francs (£9000). At Nancy a
society of 200,000 francs (£8000) capital, by
the same date built and sold 57 houses, costing'
from 4500 (£180) to 7000 francs (£280). It
is said that this society paid too much for its
land. Having paid 5 per cent up to 1884, it
then fell to 2^ per cent, and was wound u]).
At Rouen a society with 200,000 francs capital
'£8000) was formed in 1885, and a block of six
houses was built to accommodate ninety-five
families. Interest on shares was limited to 4
per cent. By 1890 there were seventy tenants
in residence, of whom twenty were small em-
ployes. The Avages of tenants ranged from
600 francs (£24) to 1200 francs (£48) a year.
Rents ranged from 87 francs (£3 ; 10 : 0) (one
room) to 450 francs (£18) (four rooms) a year.
These prices compared favourably with those
of other lodgings far less comfortable and
healthy in the same central quarter. Societies
similar to those described were established at
St. Quentin, Amiens, Nantes, Lyons, Rheinis,
and elsewhere (that of Rheims being on a
co-operative basis), undertaking the improve-
ment of old dwellings as well as the con-
struction of new. At Lyons, Marseilles, and
other towns, savings banks were encouraged
to invest their profits in aid of the construction
of workmen's houses.
Ein[)loyers engaging regularly a laige number
of hands, in many cases supplied their opera-
tives with suitable houses rent free within easy
distance of their work. Among others may be
named the settlements of Anzin, Ijcaueourt,
Blanzy, Commentry, Le Creusot, ]\laine, and
Noiseul. The experiment of M. Jean Godin at
Guise is described under FAMiLisTfeRE {q.v.).
There is substantial agreement among French
writers as to the superiority of suburban
cottages over town dwellings.
[Jules Simon, VOuvrierr, Paris, 1861. — Le
Travail, Paris, 1866.— E. Miiller et E. Cacheux,
Les Ilahitations ouvrieres en tons pays, Paris, 1879.
— Marjolin, Les Causes et les effects des logements
insalubres, Paris, 1881. — Du Mesnil, L' Llabitation
du pauvre d Paris, Paris, 1882. — E. Laurent,
Les Logements insaluhres, Paris, 1882. — G. Picot,
Un Devoir social et les logements d'ouvriers, Paris,
1885. — E. Cacheux, Habitations ouvrieres et pour
employes, Laval, 1885. — E. Cheysson, La Que.stion
des habitations ouvrieres en France et d Vetranger,
Paris, 1886. — A. Delaire, Les Logements d'ouvriers
et le devoir des classes dirigeantes, Lyons, 1886.
— A. Raffalovich, Le I^ogement de Vouvrier et du
pauvre, Paris, 1887. — A. Perrot, Les Citis ouvrieres
de Mulhouse (4th ed.) Mulhouse and Paris, 1889.
— E. Rostand, Questions d'iconomie socicde dans
une grande ville populaire [i.e. Marseilles), Paris,
1889. — Compte rendu du Gongris international
des habitations d bon marchi {Official lieport of
tJie Paris Exhibition, 1889).— 0." Triidiuger, Die
Arbeiterwohnungs/rage, Preisschrift (1889). —
Board of Trade Report, " Cost of Living in French
Towns," 1909.] h. H.
A gi-eat advance !in the development of the
housing of the working classes in France took
place in 1894, when a law was passed to promote
the building of improved dwellings bearing the
name and putting into practice the principles
of M. Siegfried, the founder in 1889 of a
society called the Socidc Fraw^aise des habita-
tions d bon 7narcM. More recent laws are the
Public Health Act of 1902 and the Housing of
the Working Classes Act 1906, followed by
regulations drawn up in 1907. The former act
empowers municipalities to buy land com-
pulsorily in connection with providing healthy
habitations. The act of 1906 established
Gomites de patronage in every department. It
provides grants in aid of working-class dwellings
and remits certain taxes on tliose that fulfil
certain conditions. Under its auspices housing
societies are formed and public bodies, such as
savings banks, charitable institutions, etc., are
encouraged to invest money in l»uildings con-
nected with these societies. There are forty-
six societies in Paris alone and many in the
[U'ovinces. The standard of good housing is
still lower in France than in England. Single
dwellings are far less frequent in France, and
there is also a much larger proportion of small
tenements, consisting of one to three rooms only,
in that country than in England, Rents are
generally lower in France than in England.
The provision, mentioned above, by large em-
ployers. Mining Companies, Railway Companies,
and manufacturers, notably MM. Schneider and
Creusot, of dwellings for tlieir work-people has
made great strides. Their houses are excellently
built and arranged and have large gardens.
Housing reform, which meets with great
difficulties in Germany owing to the recent
great increase in urban population, has been
vigorous in both public and private eflbrt,
especially during the last tweiity years. S{)aco
cannot here be given for an account of the work
in this or other foreign countries. See Board
of Trade Jteport, "Cost of Living in German
Towns," 1908 ; Encyclopcedia Brilannica, 11th
ed.), voL 13, "Housing."
DWELLINGS (Regulations by the State
IN England). The regulation of dwellings by
the state m England is of very modern origin.
Down to the nineteenth century the responsi-
bilities of the government in matters of health
were ignored or confined to the ideals of in-
dividuals. The first impetus to any recognition
of such responsibility was given by the poor-law
commissioners in their fourth and fifth reports
(1838-39), and probably originated with their
-secretary Mr. Chadwick (afterwards Sir E.
X/HADWIck). The conmiissioners utilised the
opportunity afibrded by a j)urely financial
question to direct inquiries into the " prevalence
666
DWELLINGS: STATE REGULATION IN ENGLAND
of certain physical causes of fever in the metro-
polis," and also into "some of the physical causes
of sickness and mortality to which the poor are
particularly exposed." A further report on the
sanitary condition of the labouring population
of Great Britain, issued by them in 1842, directed
attention to "the condition of the residences
of the labouring classes where disease is found
to be most prevalent," and to "circumstances
connected with the internal economy and bad
ventilation of places of work, lodging-houses,
dwellings, etc." Already in 1840 the subject
had attracted the attention of the House of
Commons, and a select committee had reported
in favour of a general buildings act, a general
sewerage act, the establishment of a central
board of health, and the appointment of
sanitary inspectors in large towns. Legislation
on the subject falls under two heads, viz. (L)
to enforce sanitation, and (XL) to facilitate the
repair or removal of insanitary buildings.
I. Under this head may be mentioned : —
(a) Two acts passed by the influence of Lord
Shaftesbury in 1857 to control common lodging-
houses. Subsequent acts, 1866-67, have placed
the control of these houses, usually distinguished
by having a common sitting-room, with the
police. (&) For London, the Nuisances Re-
moval Act of 1855, extended and amended by
the Acts of 1866 and of 1876. By the first of
these a nuisance is defined to include foul and
defective drains and cesspools, accumulations
of filth, and overcrowding ; information as to
such may be given by persons immediately
affected, by any two inhabitant householders,
or by any official person to the local authority,
who is bound to ascertain by inspection the
truth of the information, and if satisfied, to call
on the person responsible — in cases of structure,
the owner — to remove the nuisance. Failure
to do so may be met by an order issued by a
magistrate, and ultimately by the closing of
the house. Under the Act of 1866 the local
authority is empowered to make regulations in
the case of houses occupied by more than a
single family (1) for fixing the number of
inmates, (2) for registration, (3) for inspection,
(4) fo7 general supervision, (5) for cleansing, —
and to inflict penalties in cases of neglect. To
these powers the Act of 1874 added similar
powers with respect to ventilation, paving, and
drainage, separation of the sexes, notification
of infectious or contagious disease, which last
was made compulsory by the Act of 1889.
Further regulations, of a more minute kind,
and also as to new buildings, are contained in
the Metropolis Management Acts of 1855 and
1862. Whilst the above refer to existing
buildings, the erection of new buildings in
London is regulated by the Metropolitan Build-
ing Acts of 1855 and 1878. (c) Outside
London the action of the local authority is
governed by the Public Health Act of 1875.
As in London, the local authority is empowered
to make by-laws dealing with houses occupied
by more than one family, and also for the
notification of disease. It is compelled to
appoint medical officers and inspectors of
nuisances, to report on the sanitary condition
of the district generally. Procedure for dealing
with sanitation is still regulated (1911) by
these acts and by a Public Health Act (London)
1891, amending and consolidating j^revious
legislation. The work of the authorities in-
cludes, besides the details mentioned above,
construction, with special attention to the pre-
vention of damp and decay, the cleaning of
streets, the removal of house-refuse, the pro-
vision of sanitary conveniences, and the water-
supply.
II. The early acts designed to provide for
the demolition of insanitary buildings are the
Torrens' Acts (1868, 1879 and 1882), so called
from their promoter, W. T. Torrens, and the
Cross Acts (1875, 1879 and 1882) from Viscount
Cross. The former apply to single or small
groups of houses, while the latter deal with
large areas, i.e. places with more than 25,000
inhabitants. By the Housing of the Working
Classes Act of 1885 the administration of the
sanitary acts, hitherto permissive, was made
compulsory upon the local authority ; all son-
tracts with regard to buildings presupposed a
sanitary state ; the Cross Acts were extended
to every urban sanitary district ; the local
authority was empowered to build lodging-
houses and to make loans to building societies.
The Housing of the Working Classes Act 1890,
amended in 1894, 1900 and 1903, and the
Housing, Town Planning, etc.. Act 1909, carry
on now ( 1 9 1 1 ) the sam e principles. By Part i. of
the Act of 1890, the local authority may order
an inspection of suspected houses, and if
necessary, prepare an "improvement scheme"
to be laid before the Local Government Board
which, in its turn, issues an order, confirmed
by special Act of Parliament, to the local
authority to destroy the premises after paying
compensation. Under Part ii. the local
authority can simply serve notices on owners
to repair such premises at their own expense,
and on failure to comply may issue an order to
close them, followed by an order to destroy
them if action is delayed for three months.
This involves the consideration of re-housing
displaced persons, by the purchase of land
and raising of loans, dealt with under Part
iii. the provisions of which have been since
strengthened and in some cases made com-
pulsory, where before only permissive, by the
Act of 1909. This Act enforces with greater
stringency the regulations for the closing and
destruction of insanitary houses. It extends
the powers described above to County Councils,
and increases those of the local authorities.
iRepts. of Commission (1885) and Committees
DWELLINGS— EAENINGS OF MANAGEMENT
667
H. G., 1881-82.— H. Duff, Legal Obligations in
respect of Dwellings of the Poor, 1884. — What to
do and how to do it. Manual of law affecting the
Housing and Sanitary Condition of Londoners. —
E. Spencer, Artizans' and Labourers' Bioellings,
1881.— D. Schloss, Homes of the Poor, 1885.—
Repts. of Mansion House Council on the Dtoellings
of the Poor, 1885, seq. — C. S. Loch, DiceUings of
the Poor, 1882. — Rawlinson, Old Lessons in Sani-
tary Science revived, 1883. — Aschrott, Verein fur
Socialpolitik, 1886. — Dwellings of the Poor, Kept.
of Investigation by Church of Scotland, Glasgow,
1891. — Booth, Life and Labour of the People in
London, 1st Series, vol. 3. — E. R. Dewsnup, The
Housing Problem in England. — Co-partnership,
esp. Jan. and Aug. 1910.] L. R. P.
EAGLE. United States standard gold coin
of the value of ten dollars, weight 258 grains,
fineness 900, value — English standard (916*6
fineat£3 : 17 : 10|anounce)£2 : 1 : 1^, French
standard (900 fine) 51*83 francs. Also double,
half, and quarter eagles of the same fineness
and of proportionate weight. f. e. a.
EARNEST MONEY. Probably derived
from the same root as the word Arles (q.v.),
which is used in some English dialects, and
can be traced from the Latin word arrha, a
sum of money paid down on conclusion of a
bargain as a security for its due performance.
It generally becomes forfeited in case the bar-
gain remains unperformed, but this depends on
the an-angement between the parties. The
payment of earnest money establishes the
validity of a contract for the sale of goods of
a value exceeding £10, which might otherwdse
be void under the statute of frauds {e.g. the
administration of the estates of deceased persons,
the taking of partnership accounts, foreclosure
and redemption of mortgages, the execution of
trusts, partition actions, guardianship matters,
etc.) E. s.
EARNINGS AND INTEREST FUND.
This term was employed by Professor and Mrs.
Marshall {Economies of Industry, bk. ii, ch. vi.
§ 3, old edition) to denote that part of the
"net-income of the country" which remains
"after deducting rent and taxes." The share
of this income which "the landlord can claim
as rent" is, they remarked, "fixed by definite
economic laws," and the share taken by the
state as taxes is arbitrary in character ; and the
amount, therefore, "which remains after de-
ducting rent and taxes from the net annual
income " may be regarded as a "given fund,"
and called the "Wages and Profits Fund," or
the " Earnings and Interest Fund." The latter
expression is preferred because the earnings of
management are " similar in nature " to those
of other kinds of labour, and " are in the long-
run governed by the same laws." It seems
therefore better to classify the receipts of the
employer (see Employers and Employed).
so far as they represent earnings of manage-
ment, together with other earnings, and to
include his receipts, so far as they represent
interest on capital, under the same head as
interest generally.
[See also Professor Marshall's article on "Theories
and Facts about Wages, " printed in the Report oj
the Industrial Remuneration Conference, 1887,
pp. 186, etc. In his Principles of Economics, 2nd
ed., bk. vi. ch. ii. § 1, footnote 2, Professor Mar-
shall adduces reasons for withdrawing the expres-
sion as being liable to misunderstanding. He
would substitute the idea of a stream or flow for
that of a fund, and would not "put rent aside,"
in the way the phrase might suggest. ] L. L. P.
EARNINGS OF MANAGEMENT. A
technical term for one of the elements of j^ro-
fits, according to classical English economics.
Profits, regarded by Mill as the return to capital,
are divided by him into three portions : interest,
insurance for risk, and wages of superintend-
ence, or earnings of management, as they are
now more commonly called. They consist of all
the profit that is left over after the other two
elements have been abstracted ; and unfortun-
ately, according to the threefold division, it is
impossible in any other way to allocate the share
which falls to management. We have an exact
criterion of interest on borrowed capital, on
first-class security in consols and corporation
stocks. Risk generally fixes its own price by
means of insurance ; but there is no scale or
measure for the earnings of management, and
in consequence they are held to vary with each
individual case, though as a greater profit may
be considered as roughly representing a greater
quantity of business capacity, the one should
roughly measure the other.
The earnings of management, being in reality
a payment for skilled labour, are in a proper
sense wages ; and they appear in the market as
such in the countless instances where business
supervision is delegated to subordinates. As
understood generally, they embrace the great
bulk of profits, however. There is thus a
difficulty in bringing under the same term the
great percentages on capital frequently earned
as profits, a-nd the comparatively small salaries
attached to the delegated management of
business — a difficulty which the admitted
superiority of personal supervision is not suffi-
cient to solve. A limited liability company
for banking, insurance, or other purposes
divides among its shareholders say 8 to 10 per
cent. Half of this, at the very least, is earn-
ings of management, according to hypothesis.
But it goes to people who do not manage the
concern ; while, as to those who do, their salaries
are fixed by the demand for and supply of
668
EARNINGS OF MANAGEMENT— EASTERLINGS
business power, so that the management of the
business is paid for at its full price. It would
therefore seem that there is still an element in
profits, unaccounted for, which cannot properly
be held as covered by the term earnings of
management. •
With this proviso, however, the form of
wages may be in general considered as the price
accruing to the capitalist for the services he
renders in managing his business, and his
capacity as being measured and determined by
that price. The exercise of this capacity can-
not, by any careful method of reasoning, be
counted as anything but labour, unless indeed
that term be unscientifically restricted to manual
labour only, — a labour which is employed
to develop a visible and material product. It
is, in the highest meaning of the words, skilled
labour ; and yet it differs in one singular respect
from almost every form of work so classified.
The skilled workman in general, whether his
energy be that of brain or muscle, whether he
be mechanic or scientific, artisan, journeyman,
lawyer, doctor, or Avriter, works in a particular
industry, within the compass of which his
sphere is limited. In a word, his labour is
specialised. The work of business management,
on the other hand, is as little specialised as
anything outside of mere muscular labour-power
can be. Professor Marshall gives two reasons
for .this {Principles, 1st ed., vol. i. p. 643) :
first, that every one has to manage the business
of his own life, and secondly, because technical
knowledge is becoming in most cases subordi-
nate to the non-specialised faculties of judgment,
resource, and the like. It may be suggested
that perhaps the cause of the wide scope of
business power is that it rests upon just those
faculties which underlie all technical or special
skiU, plus versatility. It would be a gi-eat
mistake to suppose that this faculty is not a
talent in itself, and quite apart from other
species of ability. Many men possess qualities
which place them in a distinguished position in
some sphere of activity, who yet are not fitted
to manage any public business, and sometimes
show themselves, notwithstanding the universal
training above mentioned, singularly unfortu-
nate in the management of their own. No more
striking instance of the existence of a special
faculty of business power can be found than
that of the number of men, eminent in thought
and action, who have turned out indifferent or
incapable statesmen.
Earnings of management, being in reality a
species of wages paid for a particular kind of
labour, are regulated by the supply of business
capacity in a community, and the demand for
managers. It must be noticed, however, that
the phrase is commonly used to denote all that
remains of profits after rent and interest are
deducted. In purely productive industries
there may seem to be little distinction between
the two ; but in retail business the difference ia
important. In the latter, the gross profit does
not principally depend on the amount of
capital employed, but on the number of trans-
actions performed ; and in these industries, as
to a lesser extent in all, the profits proper which
accompany success are far in excess of the
market value of the business capacity of the
capitalist. Used in the wider sense, the phrase
covers all the advantage that fortuitous circum-
stances, monopoly, or other causes in trade may
confer on an owner or investor of capital (see
CoNJUNCTUR ; Dearness, Artificial ; Mono-
poly). M. G. D.
EASEMENT. The owner of one piece of
land may be allowed to exercise cei-tain
rights over another piece of land belonging to a
different owner. If these rights consist of the
privilege of taking away tangible objects (e.g.
peat, underwood, fish, etc.), they are called
profits ; in all other cases they are called ease-
ments. The piece of land to which the benefit
of an easement attaches is called the "domi-
nant tenement " ; the one which is subject to
its burden has the name of the " servient tene-
ment." If the owner of the dominant tene-
ment is entitled to use the servient tenement
for certain purposes {e.g. for the purpose of
walking over it or driving cattle over, or taking
a drain through it), the easement is called an
"afl^mative" one ; if, on the other hand, the
owner of the servient tenement is restrained
from exercising his privileges of ownership in
certain ways {e.g. from erecting buildings which
obstruct the lights of the dominant tenement,
or from removing buildings so as to take away
the support from a wall on the dominant tene-
ment), the easement is called a "negative" one.
Easements are acquired (1) by express grant
from the owner of the dominant tenement ; (2)
by implied grant ; this arises when part of the
property is sold having apparently privileges
in the nature of easements relating to another
part of the property, e.g. when a house is sold
enjoying certain lights, in consequence of an
adjoining piece of land belonging to the same
owner not having been built over, the o^vner
will not after the sale be allowed to erect build-
ings obstructing such lights ; (3) by prescrip-
tion, i.e. by enjoyment for a certain number of
years. The subject of easements is treated
very fully in the notes to Sury - . Pigot, in
Tudor's Leading Cases on Real Property ; see
also Gale on Easements ; Goddard on Easements
(see Property, Law of). e. s.
EASTERLINGS. This name was given in
the middle ages to the German merchants who
visited England, and ultimately came to be
applied generally to the members of the Hanse-
atic League. Mediaeval law in all countries
connected the licence to trade with nationality.
The foreigner had no rights, except such as
could be acquired by individuals or communities
EASTERLINGS—EAST INDIA COMPANY
669
who could afford to purchase them from the
ruler of the country. In order to obtain such
trading privileges in England, the German mer-
chants formed themselves into a hansa or guild.
The original hansa in London, which has its
origin in the reign of Edgar, was formed by the
merchants of Cologne. They continued to
have a monopoly of trading privileges until the
13th century, though the natives of other
towns had succeeded in gaining admission, and
the association had groAvn to include traders
from the Rhine valley and Westphalia. But
the rising towns of northern Germany resented
the exclusive pretensions of Cologne, and set
themselves to break down the monopoly. In
1266 and 1267, Hamburg and Liibeok were
allowed to form hansas of their own, on the
model of that of Cologne. Under Edward I.
these three associations were united into the
great German hansa, of which we find the first
documentary mention in 1282. The buildings
of this corporation on the banks of the Thames,
consisting of dwellings and warehouses, were
known as the Steelyard (StaJilhof). The cor-
porate property and discipline were administered
by an alderman elected annually, with the help
of two assistants and a cou.ncil of nine. For
their privileges from the state, the Easterlings
contracted for the payment of customs duties,
while they discharged their obligations to the
city by annual payments to the lord mayor
and by maintaining a watch and ward at the
Bishop's gate. Originally the hansa was an
indej.eudent community, but in the course of a
long struggle with the jealous and rival native
population, it came to rely more and more
upon the growing league of towns in North
Germany, and ultimately became a "counter"
or depot of the Hanseatic League.
Although the Easterlings were traders and
left money-dealing in the hands of the Lom-
bards, yet their name came to be applied to
money. Probably this was due to the excellent
quality and uniform weight of their own coins.
Matthew Paris tells us (sub ann. 1247), that
•■'moneta esterlingorum, propter sui materiam
desiderabilem, detestabili circumcisione coepit
deteriorari et corrumpi." The statutes of
Edward I. refer to a definite coin called
"sterling," which is thus described : Denarius
Anglise, qui vocatur Sterlingus, rotundus sine
tonsura, ponderabit 32 grana frumenti in medio
spicfe, et 20 denarii faciunt unciam, et 12 uncise
faciunt libram. From England these coins
passed to France, and we find frequent references
to them in the middle ages. That the quality
of the coins was for the time excellent is proved
by the survival of the term sterling, to denote
money of standard weight and quality, to the
present day.
[Pauli, Pictures of Old England. — Kunze,
llansedkten aus Englo,nd, 1275 - 1412. — Du
Gangs, Olossarium, s.v. " Esterlingus. " — Helen
Zimmem, Hansa Tovms (Story of the Nations
Series).] r. l.
EAST INDIA COMPANY (1600-1858).
The circumstances attending the formation and
the aims present to the minds o'" the promoters
of the East India Company did not differ
materially from those which influenced the
foundation of the other "venturer" Companies
of the same epoch, from among which it stands
out pre-eminent by reason of the magnitude of
its operations, and its profound imperial import-
ance. Like them its early attempts were
ventures for the sake of quick gains ; like them
it owed much to the spirit of daring enterprise
characteristic of the age. The dilference which
became so marked afterwards was due to several
causes ; partly to the larger sphere of its
activity ; partly to a difference in its manage-
ment ; and partly to certain embarrassments in
which it found itself involved through its rela-
tions with native powers and the rivalry of con-
tinental companies and European nations.
From very early times the East had been
viewed as a great source of wealth, and con-
sequently as a gi-eat goal of trade. This feeling
was accentuated rather than lessened after the
Portuguese had discovered and at first monopo-
lised the passage round the Cape of Good Hope.
Many schemes of adventure had been formed,
and some of them tried. The Levant Company
had striven, but without much success, to ex-
tend its operations overland in the direction
of India. On the other hand, attempts had
been made to open a north-west passage which
should be to the English what the Cape route
liad been to Portugal. One of these found
place in 1591, when a license was granted by
Queen Elizabeth to send out three ships. They
were sent under Captain Raymond, but without
success. But the hope of trade with India was
not abandoned ; the prospect was too promising.
In 1599, no doubt after some preliminary action,
the project which was to issue in the formation
of the East India Company was first put on a
substantial basis. On 22nd September of that
year a record was drawn up of the people who
had agreed to subscribe to the intended voyage
to the East Indies. On 24th September a
meeting of the subscribers was held, and in due
course a charter was applied for. For a time
operations were checked owing to negotiations
of the government with the Dutch, but in the
autumn of the next year the matter was pro-
ceeded with ; and on 31st December 1600 a
charter was issued to the Governor and Company
of Merchants of London trading to the East
Indies. The charter was drawn on the lines of
those previously issued to other companies,
from which it differed in no important point.
The history of the company can only be re-
. viewed in its essential features. These cluster
chiefly round two points ; (1) the mode of con-
duct of the company ; (2) its negotiations with
670
EAST INDIA COMPANY
native powers, and rivalry with other European
companies and powers.
(1) The early voyages of this company were
like those of certain others, of the nature of
separate "ventures," that is, members of the
company subscribed in varying proj)ortions
towards a certain expedition, the proceeds of
which were afterwards distributed among them
according to their respective shares. This
method endured till 1612, when what was
termed the first joint stock was subscribed.
This, however, is a term which is likely to lead
to misunderstanding. It did not imply the
formation of a permanent capital divided into
shares and distributed among the members of
the company in varying proportion. It was
little other than a somewhat prolonged series
of ventures. Subscriptions were taken up in
the most various amounts from members,
none of whom were necessarily bound to sub-
scribe, and paid into the hands of the governor
and directors, who then applied the money at
their discretion for the equipment of a number
of expeditions for the benefit of the subscribers.
Thus the first joint stock subscribed in 1612
was distributed among four voyages, and came
to an end in 1617 ; the second joint stock,
contributed 1617-18, furnished three voyages,
and so on. Such a method, while in some
respects a decided improvement on that pre-
viously pursued, had serious drawbacks. With
each succeeding voyage the amount of "dead
plant " belonging to the company, in the form
of factories in India, etc., was increased ; and
so the relations of the members of future to
those of preceding joint stocks were rendered
somewhat complicated.
Meantime the company was experiencing a
foretaste of the difficulties and dangers which
finally caused it to assume political responsi-
bilities. On the one hand it had to contend with
private rivals (Interlopers, q.v.) at home ; on
the other, the rivalry of continental powers and
companies 1 threatened its existence in India.
So early as 1602 a factory had been founded at
Bantam, despite the keen opposition of the
Portuguese. As operations extended, new
factories were established, notably one at Surat
in 1612, and new enmities incurred. The
relations with the Mogul were rendered more
amicable by the tact and capacity of Sir
Thomas Roe. But the Dutch were about to
prove the most formidable opponents of the
young company. The friction which had arisen
owing to various causes, chiefly perhaps to the
1 The following is a list of the chief foreign companies
licensed to trade to East Indies. The Dutch Com-
pany, founded 1602. The French Companies ; the first
founded 1604 ; the second, 1611 ; the third, 1615 ; the
fourth by Richelieu, 1642 ; and the fifth, 1644. In 1719
the French Company of the Indies was established, and
lasted till 1796. The first Danish company, 1612, and
the second 1670. In 1723 the Osteiid Company was
established; in 1731 the Swedish Company; and in
1733 the Royal Company of the Philippine Islands.
efforts of the company to establish a trade vnth
the Spice Islands, assumed such serious propor-
tions, that the attempts to bring about a peaceful
settlement by the Treaty of Defence made in
1619 proved unavailing, and the opportunity
of much future quarrel was given by the
massacre of Amboyna. The immediate result
was the withdrawal of the English from the
neighbourhood of the Malay archipelago. In
a few years new efforts were made in the main-
land and a factory was established at Armagaon,
which growing, absorbed that at Masulipatam.
In its time abandoned, it was supplanted by
the settlement of Fort St. George (1639-40).
The acquisition of this station marked a new
step in the progress of territorial aggrandise-
ment. In 1646 grants were made in Bengal,
and in 1661 Bombay was ceded to the British
Crown as part of the dowry of Catharine of
Braganza on her marriage with Charles II.
The quan-el with the Dutch had been rendered
of less importance than it threatened, through
the energetic action of Cromwell, who in the
treaty of 1654 had inserted a clause dealing
with the demands made on both sides for com-
pensation for injury. To adjust these, a com-
mission of award was appointed and began its
sittings 30th August 1654. But owing to
events such as these, and in part, no doubt,
to the increasing importance of the companies'
factories, a more definite territorial aim would
seem to have presented itself to the minds of
some. It became a matter for consideration
whether the company was to be considered one of
commerce alone, or one which had other beside
trade interests. But yet another point. As-
suming that commerce was its chief aim, could
its attainment be assured without the acquisition
of territory by the company ? Such territory
would need to be protected. The appointment
of Sir Josiah Child as governor in 1686 was with-
out doubt a distinct advance in the direction of
this new policy. Again, in 1687, when the ques-
tion of the grant of charters and commissions
was mooted with the king (James II.) and his
council, he had agreed that it would be better if
such charters and commissions were gi-anted by
the court of the company instead of emanating
from himself. The company, it should be noticed,
had in 1624, supplemented its ordinary judicial
authority by the power of punishing its servants
by martial law. Matters were such, that further
advance was natural, and in 1689-90, instruc-
tions were sent from home to the regency of
Bombay, as also to Madras, which contained the
following noteworthy sentences: "The increase
of our revenue is the subject of our care as much
as our trade ; 'tis that must maintain our force
when twenty accidents may interrupt our trade ;
'tis that must make us a nation in India ; with-
out that we are but as a great number of inter-
lopers, united by His Majesty's royal charter, fit
only to trade where no body of power thinks it
EAST INDIA COMPANY
671
their interest to prevent us ; and upon this
account it is, that the wise Dutch, in all their
general advices which we have seen, write ten
paragraphs concerning their government, thsir
civil and military policy, warfare, and the
increase of their revenue, for one paragraph that
they write concerning trade."
These words are an open declaration in favour
of the new policy. Commerce, if still a main
aim, was henceforth to be undertaken on a
secure basis of territorial possession and political
dominion.
At home, however, the company had found,
and were still to find, their exclusive rights
questioned and combated. At the outset their
progress had been hampered by the grant of a
royal license to trade to Cathay, Japan, etc.,
given to Sir Edward Michelbourne, who had
made full use of his opportunities to wring
booty from the natives. They had convinced
the king (James I. ) of the need of maintaining
their powers, and had received a renewal of their
charter. But a more serious rival menaced them
in the next reign. In 1635a license was gi-anted
to an association formed by Sir William Courten.
This association, afterwards known as that of
the Assada merchants, sent out ships and
entered upon commerce to tlie detriment of the
East India Company, both by reason of competi-
tion and, as was also alleged, by reason of the
bad treatment the natives experienced at the
hands of its servants. In answer to the petition
of the company, the king (Charles I.), in 1639,
promised the withdrawal of the license, but the
promise remained unfulfilled. In 1650 a kind
of amalgamation took place, and the Assada
merchants became members of the company.
But in so doing they did not wish to deprive
themselves of the right to trade in their own
bottoms, in other words, they wished to bring
about a return to the earlier principles of
separate ventures, in part accordance with
which the commerce of the company had been
carried on before 1612. In consequence, they
appealed to the Protector against the enforce-
ment of the joint-stock trading. The company
replied, and in 1654 obtained a decision from
the council of state in favour of joint-stock
management and exclusive trading.
Such had been the history of the company
before its important declaration in 1689. Al-
most immediately after that events took place
in England which nearly brought about its ex-
tinction. The arbitrary and severe measures
which had marked several of their acts in India
had excited the animosity of the House of
Commons, already prejudiced against societies
not of their own creation. In 1690 a com-
mittee reported in favour of the formation of
a new company which should be constituted by
act of parliament and not derive its authority
from royal charter. In accordance with this re-
commendation, next year the king (William III.)
was petitioned by the Commons to dissolve the
old company. His apparent neglect of this
request does not seem to have aroused much
feeling. Not so, however,' his renewal, in
1693, of the charter. A declaration was drawn
up and passed, asserting the right of all English-
men to trade to East Indies and elsewhere unless
prohibited by act of Parliament, and the king
gave way. In 1698 a new association, termed
the English Company, was formed (with right
of exclusive trading after 1701), and the exist-
ence of the old company was limited to the
three years from date for which they could claim
notice. To maintain their control over India,
members of the old and now condemned company
bought up shares in the new company. During
these three years the two companies traded in
rivalry, in which the older association, fortified
by experience and provided with stations, ships,
and stock, had a distinct advantage. As the
last year (1701) ran on, the old company not
unnaturally showed itself more willing to enter-
tain the idea of a compromise, to which the
members of the new company were not averse,
and in January 1702 a partial union was effected
under the title of "The United Company of
Merchants trading to the East Indies." Several
causes of difiiculty and dispute remained over ;
but the need of harmonious working was too
great to allow of their long continuance ; and
in 1708, on the arbitration of Lord Godolphin,
a complete and final union was brought about.
The early opponents of the company had
been overcome ; its right as against home com-
petitors was established ; a settlement in India
obtained. It was an acknowledged political
power as well as a trading company.
(2) In this direction it had to progress, for
the animosities aroused by its dominion, coupled
with the ambition of France, made it impos-
sible for it to exist as it was, one power among
many others. It had soon to choose between
supremacy or political extinction.
The death of Aurungzebe (1707) and the
consequent disruption of the Mogul empire
afforded the opportunity, and in part created
a necessity for further political action on the
part of those European companies whose in-
terests were involved in India. The French
under La Bourdonnais initiated a policy of
advance, which under the more skilful and
more ambitious guidance of Dupleix became a
policy of aggression and conquest. They
sought to subordinate or expel their rivals, the
English, and to establish themselves as a
ruling, if not predominant, power in the
country. Inaction on the part of the English
company was impossible, and ill -prepared
though they were, a strenuous resistance was
offered to the designs of the French. Under
'the leadership of Clive the English, too, pro-
gressed towards sovereignty, and the battle of
Plassey (1757) made them virtual masters of
672
EAST INDIA COMPANY— EASTLAND COMPANY
the NawaVs dominions. Their creature, Meer
JaflBer, whom they placed upon the throne,
made them a grant of territory in Bengal. A
few years after they stepped into the position
of what we may term definite individual sove-
reignty, receiving from the Mogul emperor an
acknowledgment of their right to the Avenues
of the three provinces — Bengal, Behar, and
Orissa, which they combined into a presidency
of Bengal. Other acquisitions were made in
the neighbourhood of their other stations. The
French war was a turning point in the history
of the East India Company. When it emerged
successful, the political ambitions, inchoate till
then, had realised themselves in power, destined
ultimately to become imperial. The task of its
control was in fact too important to be com-
mitted to the sole will of a trading company,
and henceforth governmental interference and
supervision begins.
The economic interest of the new period
centres chiefly in two subjects — the economic
settlement of India, and the successive acts
whereby the state drew affairs more and more
witliin its own control.
By the act of 1773 an important change was
made in the government of India. Till that
date the government of each province had been
separate, the direction in each case resting with
a council composed of the senior civil members
in the company's service. By this enactment
alterations were made in certain directions. A
governor-general was appointed and a supreme
council specially constituted for Bengal. To
this governor and council the other presidencies
were placed in subordination so far as the
making of war and the entering into treaties
were concerned. In addition the home govern-
ment, while recognising for the first time the
possession by the company and its servants of
administrative functions, provided that every-
thing in the company's correspondence which
related to civil or military afiairs, which con-
cerned either the government of the country or
the administration of the revenue, should be
laid before the ministry. In the constitution
as thus established, there were three grave
defects: — The governor was left dependent
on the will of the council ; no definite connec-
tion was established between the various pre-
sidencies ; the relations between the ministry
and the Indian government were but ill -de-
fined. It was to remedy the two latter of these
that the act of 1784, which established the
board of control, was passed. This body con-
sisted of six members of the privy council, of
whom the chancellor of the exchequer and one
of the chief secretaries of state were to form
two. But, as in the absence of these two ex-
officio members the senior of the remaining four
was to preside at the board, the chief power
was vested in the hands of one man who, under
the title of the president of the board of control,
performed many of the functions which now
fall to the lot of the secretary of state for India.
The first defect noticed above was largely
remedied by the act (26 Geo. iii. c. 1&), which
Lord Cornwallis obtained when he took the
post of governor -general. By it he and his
successors were empowered to override the
council in cases of emergency.
To Lord Cornwallis is due the organisation
of the young empire. Under his rule British
officials became something more than mere
collectors of the revenue ; under him the out-
lines of the land system were laid down ; and it
was owing to him that the administration be-
came so efiective and so honest. In 1793 the
charter was renewed for another twenty years.
Lord Cornwallis had regulated the condition
of the country and Lord Wellesley established
the preponderance of the British power. His
policy, though it was not formally assented to
by the company, was necessary for the sake
of peace and stability. "When he left India
the company was established as the great
sovereign power. In 1813 the charter was
once more renewed. When in 1833 it came
up again for renewal changes were made. The
power of trade was taken away from the com-
pany, despite the protest of those who, still
faithful to earlier conceptions, continued to view
trading as its main function. A further access
of power was granted to the governor-general
and the supreme council.
Further progress was made in the direction,
both of the acquisition of wholly new territories
and of the subordination to active government
of the protected or dependent native states.
But the rule of the company was about to end
after a period of some two and a half centuries
from its beginning. The fanatical outburst
which swelled into the mutiny aroused a feeling,
whether right or wrong cannot be here dis-
cussed, that the government of India was too
important to be left to the directors, however
controlled, of a company originally formed for
the purpose of trade, and in 1858 it was for-
mally and finally transferred to the crown.
[Bruce, Annals of British India. — Histories by
James Mill and others. — Chesney, Indian Polity.
— Parliamentary Papers and Keports.]
E. C. K. G.
EASTLAND COMPANY (established 1568).
This company was an association of the English
merchants trading to and from the Baltic.
From the wording of their charter it seems that
they were formerly called the Dantzig merchants.
In 1568 a charter was issued to the traders
desirous of associating themselves, granting to
them "to enjoy the sole trade through the
Sound," into Norway, Sweden, Poland, Lithu-
ania (except Narva, the trade with which was
claimed by the Russian Company), Prussia,
and also Pomerania, from the river Oder east-
ward to Dantzig, Elbing, Konigsberg, Ebling,
EATON— ECK
673
Braunsberg, also to Copenhagen and Elsinore,
and to Finland, Gothland, Bornholm, and
Oland. The company thus constituted was a
"regulated one," and the members of it were
entitled to trade ' ' in their own bottoms. " The
provisions of the charter were much the same
as those laid dowTi in other cases. The various
privileges were confirmed in 1629, with the
single proviso that the trade in grain between
the countries and districts enumerated and
England was thenceforth to be free. During
the early as well as during the latter portion of
its existence, the difficulties encountered by the
company were considerable ; in particular they
found themselves impeded in their passage
through the Sound. Thus in 1602 complaints
were made with regard to the excessive charges
levied on their vessels when passing through ;
in 1653 they petitioned Cromwell on account
of the detention of their ships in Denmark. At
home they met with disfavour from the strong
and growing feeling against monopolies. But
on the whole they received considerable support,
an ordinance being passed in their favour in
1647. The privileges so warmly cherished did
not long survive the Restoration, for in 1672
it was decreed, firstly, that there should be a
free trade to Norway, Denmark, and Sweden ;
secondly, that any one should be entitled to
trade to the other Baltic ports within the
limits of the Eastland Company's charter on
bis joining that company, which, it provided,
any trade could do on payment of 40s.
[Macpherson, Annals ; MS. authorities.]
]<:. c. K. G.
EATON, Daniel Isaac (1752 ?- 1814), a
London bookseller who upheld the cause of
freedom of the press, at the cost of eight
prosecutions, for the publication of works by
Thomas Paine and Pigot, of his own periodical
(see below), and of a free - thinking work of
doubtful authorship called Ucce Homo. Very
few of the trials ended in a conviction. His
weekly periodical. Hog's Wash, or Politics for
the People, 1794, dealt, not systematically, with
political and social subjects in a violently re-
volutionary spirit. Rhetorical hatred of" kings
appears as a set-off to real consideration for the
poorer classes. The unequal distribution of
wealth was treated as the fundamental mis-
chief ; parliamentary reform, peace, the lower-
ing of taxes, especially of duties on necessaries,
subscriptions for poor labourers, republican
government for the sake of economy, the re-
cognition of the natural equality of men ; these
are some of the various remedies proposed.
Eaton translated Helvetius's Law of Nature and
True Sense and meaning of tlie System of Nature,
1810, and Feret's Preservative against Religious
Prejudices, 1810.
[Howell's State Trials, xxii. 763-822 ; xxiii.
1013-1054 ; xxxi. 927-958 —Notes and Queries,
3rd series, vol. x. 396.— Z)zc^. Nat. Biog. xvi. 336.
E. O. P.
VOL. T.
EBAUDY DE FRESNE, born (c. 1760) at
Vesoul, published in 1788 his Trait6 d' Agricul-
ture considiree tant en elle mime que dans ses
rapports avec VEconomie (''Treatise of Agricul-
ture considered in itself and in its relations
with Economy "), 3 vols. 8vo ; and presented
in 1790 his Plan de Pcstauration et de Libera-
tion, based on the former work to the National
Assembly of France. According to De Fresne,
French agriculture was suffering from the undue
extent of corn-growing, and an excessive con-
sumption of fodder in large towns, resulting
in a loss of manure. He advocates the extension
of pasture lands, and a more developed produc-
tion of cattle and consumption of meat (instead
of bread), but most of the methods he suggests
to reach this end are very unpractical, e. ca.
ECK, JoHANN (1486-1543), was professor of
theology at Ingolstadt, and is best known as
the antagonist of Luther ; he played also an
interesting part in the movement of economic
thought. He was among the first, if not in-
deed the very first, to maintain that a contract
to pay a certain percentage for the use of money
was not necessarily usurious. His justification
he apparently found in the theory of *'the
triple contract," contractus trinus, which had
grown up before his time, but which he would
appear to have been the first to popularise. A
contract of partnership (societas), where both
partners shared in the risk and gain according as
their undertaking prospered, had long been recog-
nised by theologians as lawful. It was argued
that as another sort of contract, a contract of
insurance, was also in itself free from objection,
it was permissible for one partner to contract
with the other to receive a less return than he
might otherwise fairly- expect, on condition
tliat in any ease his capital should be restored
to him. It would then be equally lawful to
add a fm-ther contract by which the investor
insured himself against the chances of fluctuating
dividends by surrendering a further portion of
the return he might otherwise look for, in ex-
change for the promise of a definite annual
percentage. By the combination of these three
contracts in one — "the triple contract," the
investor obtained a security both for the return
of his capital and for a certain annual percent-
age ; so that the contract, though still techni-
cally one of partnership, was essentially one of
loan.
Eck, who before his controversy with Luther
had already sought fame as a public disputant,
announced himself in 1514 at Ingolstadt as
ready to maintain the thesis that merchants
might lawfully bind themselves to pay 5 per
cent. The Bishop of Eichstatt, as ordinary
and chancellor, forbade the disputation ; and
the university of Mainz, being consulted by its
archbishop, gave the opinion that it was inex-
pedient. Thereupon Eck, assisted with money
and letters of recommendation by the great
2x
674
ECONOMIC FREEDOM— ECONOMIC HARMONY
German financiers the Fuggers, set off for the
university of Bologna, and there defended the
same proposition with much applause from the
jurists. This Bologna disputation excited
general attention ; it was ironically referred to
in the LUUroe, Ohscuroi-um Firorum as showing
that usury was allowed by "theology"; and
the humanist Pirkheimer wrote to Eck that
now the great merchants dared to say that any
bargain was just. About the same time Eck
stated a case for the Sorbonne ; and although
the faculty gave no decision, the opinion of
Eck was adopted by the distinguished Scotch
divine at Paris, John Major. The subject fell
into the background with the appearance of the
Lutheran controversy. It is probable that the
extremely conservative position taken up at
first by the Protestant divines on the question
of usury prevented for a time the development
of opinion among Catholic theologians in the
direction pointed out by Eck. A bull of Sixtus
V. in 1586 condemned all contracts for insur-
ing either the capital or a certain rate of profit.
But this was explained away ; and " the triple
contract" was very generally recognised as
lawful by Catholic divines and faculties from
the beginning of the 17th century.
[Schmoller, Zur Oeschichte der nationalokono-
mischen Andchten in Deutschland, 1861, pp. 127-
128. — Janssen, Oeschichte des deutschen Volkes,
15th ed., 1890, i. p. 444 (where it is urged that
Eck was altogether alone ; and that he did not
defend usury but merely the triple contract, and
that only in the case of rich merchants who received
money for trading purposes). — Endemann, Stvdien
in der romanisch-canonisiischen Wirthschafts-u.
Rechtslehre, vol. i. 1874, pp. 384-385.— Funk,
Zins u. Wucher, 1868, pp. 84-86 (where the argu-
ment in defence of the triple contract is spoken of
as justified by circumstances), and Oeschichte des
kirchlichen Zinsverbotes, 1876, pp. 57-64 (where
it is described as mere sophistry). — Ashley, Econ-
omic Hist., vol. i. pt. ii. — Th. Wiedemann, Dr.
Johann Eck, 1865.] w, j. a.
ECONOMIC FREEDOM. This is a term
properly signifying a condition in which com-
petition acts without influence from other causes.
If used in the same popular sense as free trade,
it ought to mean merely freedom from legisla-
tive imposts or governmental supervision. In
order to meet the requirements of a scientific
phrase, however, it must be given a more
extended meaning ; and include the absence of
such determining causes of value as combination,
custom, immobility of capital and of labour,
etc. Professor Marshall uses the term as
generally descriptive of modern industry as
compared with the economic condition of the
middle ages ; and this is a singularly happy
definition from a literary point of view. Those
influences which are most powerful at the
present day in affecting exchange values are
styled economic causes, which in reality ex-
presses the fact that competition has a much
wider range than it had in past centuries.
This is the necessary result of the discoveries
and inventions of modern times. The railway,
the steamboat, the telegraph, aU combined
towards the amalgamation, for fixing of prices,
of all the markets of the world ; the breaking-
up of much that was ancient and customary,
which went on simultaneously with these inno-
vations, introduced strict contract and com-
mercial principle into every sphere of industry.
Education, spread throughout all classes, intro-
duced an equality between contracting parties
previously unknown. Economic freedom, how-
ever, though correctly applied to describe modern
industry in a wide sense, is not properly a
scientific term ; and if it is so used, it may
lead to great confusion. In the first place,
there are points in which the industry of to-day
is not so free as it was in earlier times ; in the
matter of wages, for instance, although industry
is now, in Great Britain generally, free from
legislative interference, it is more liable than
ever to interference from combinations, whether
of masters or of men ; moreover, the very con-
ditions of modem trade cause an interlacing
between different branches so intimate that they
affect each other in greater measure than at any
earlier period. Again, in using such a phrase,
we must not forget that the era it applies to
has been as yet very brief ; and that, though
it is an important era to ourselves, it may turn
out to be of merely passing value in the pro-
gress of a science yet so young as that of
economics.
Strictly speaking, economic freedom involves
a great deal more than we admit even in
industry under present conditions. The repeal
of differential duties, which established free
trade, is the most prominent sign of the econo-
mic tendencies of the age in England ; but
absolute freedom involves no less the repeal of
duties on tea, sugar, wine, etc., and in fact the
abolition of all indirect taxation. The absence
of all restrictions on the hire and sale of land,
and of aU regulation of the hours of labour, are
essentials to economic freedom in the strict
application of the words. Freedom of combina-
tion is to most minds a necessary attribute of
economic freedom ; yet the results of combina-
tion are such as to destroy that absolutely un-
fettered competition which is of the essence of
the term. M. G. D.
ECONOMIC GOODS, see Goods, Economic.
ECONOMIC HARMONY. A phrase ren-
dered classical by Bastiat, the title of the last
of whose works it forms {Harmonies ^cono-
miques). In this work (chap, x.) may be found
the key to the meaning of the term, " the con-
stant approximation of all men towards a level
which is always rising — in other terms, im-
provement and equalisation — in one word,
harmony." This sentence, if understood as a
precept of action, combining legislative and
ECONOMIC HISTORY
67a
social effort, miglit stand as an expression of
the aims of a eoUectivist or socialist of the
present day. But with Bastiat it expressed a
doctrine, not a precept ; and therefore bears an
interpretation diametrically opposed to the
theory of the communist. For indeed Bastiat's
fundamental principles of harmony he termed
property and liberty ; and his doctrine of
economic harmony is that, under absolutely free
exchange of labour and other commodities,
and the fullest security of private property,
whether in land or other things, the arrange-
ments of providence are such as to continually
improve the condition of the human race ; and
that any disturbance of these fundamental laws
retards that improvement. Professor Marshall
{Principles, 1st «d.. vol. i. p. 453) states the
doctrine thus : " The maximum satisfaction
is generally to be attained by encouraging
each individual to spend his own resources in
the way which suits him best ; " and he follows
with some interesting criticisms of the theory,
or rather limitations, of its operation. The
latter definition, which is a description of what
has been termed "enlightened self-interest,"
scarcely includes all that is involved in the
individualist theory of Bastiat ; but it is an
accurate statement of the principle which under-
lies it.
The phrase economic harmony represents, in
another form, the extreme individual theory,
and can hardly be properly called an economic
doctrine ; it is rather an ethical or utilitarian
deduction from economic data. But it is used
as a normal rule chiefly to exhibit the limita-
tions to which it is subject. It rests really
upon the premiss that it is inditierent to any
one except the consumer in what manner wealth
is consumed ; a position not seriously main-
tained by any economist, and explicitly opposed
to the last of Mill's four classical propositions
regarding capital — "a demand for commodities
is not a demand for labour." The importance
of consumption as a factor in economics has of
late years come to be more highly appreciated ;
and its effect on an idea of maximum satisfac-
tion will be found to modify greatly, if not to
destroy as a normal principle, the doctrine of
economic harmony.
[See Harmonies of Economics.] m. g. d.
ECONOMIC HISTORY. As to the relation
between economic history and economic theory,
five views are possible, which may for con-
venience be given the following brief designa-
tions :
(1) "The 710 - connection view." This was
the view of those who regarded political economy
as a purely deductive science, derived infallibly
from a few simple abstract postulates which
every reasonable being must necessarily grant.
Political economy, in this view, was not only
not "greedy of facts " ; it could be constructed
in absolute disregard of any alleged facts except
the assumed postulates. To those who held
this view, economic history had no direct
interest, any more than heraldry or genealogy.
(2) "The hand -maid view." This view,
which is but a slight modification of (1), is still
very generally current. It is that of those who
while believing that "economic laws" are to
be obtained by deduction from given assump-
tions, are interested to find illustrations or
confirmations of their conclusions in facts
furnished by economic history. If the facts
agree with the theory, so much the better for
the facts ; if not, then they are left alone, and
the implication is that the historian is mistaken
with regard to them.
(3) "The corrective view" is again a modi-
fication of the preceding. It grants that
economic history may sometimes furnish reason
for questioning abstract conclusions, and pro-
poses in that case to re-examine the original
postulates, and either to modify them, or, if
they are still tenable, to examine into the dis-
turbing influences which have affected the
result. This is a position which has been
avowedly held by many recent writers, e.g. by
Cairnes ; but there are few examples of the
practical application of the implied rule.
(4) "The concurrent view" is one appropri-
ate to a period of compromise following upon
one of controversy, and it is at present not
infrequently expressed. It is that economic
history and economic theory have each an
interest and importance of their own which
will attract students whose bent is in one or
other direction ; and it leaves to the future the
decision of the question what bearing historical
work may have on economic method.
(5) Finally "The supersession view," which
is one often held by what are called "econo-
mists of the historical school," teaches that the
science of political economy, as it has been
created by the classical economists, will ulti-
mately be replaced by, or incorporated in, a
science based on historical investigation.
Among the writers of this school, again, there
are two divergent tendencies. Some think
that the political economy of the future will
resemble that of the classical school in contain-
ing " laws " or brief generalisations concerning
rent, wages, profits, interest, etc., but derived
wholly or chiefly from induction from observed
facts past or present. This view, however, is
seldom directly formulated, and may perhaps
be said to be due to a certain vagueness of
thought as to the character of economic "laws."
Others hold that political economy will ulti-
mately be replaced by a doctrine of economic
development — a philosophy of economic his-
tory ; a view which is largely due to the influ-
ence of modern conceptions of evolution, and
of the organic nature of society (see Historical
School and Historical Method). In their
view, abstract deductive theory will continue to
876
ECONOMIC LAW— ECONOMIC MAN
be of use, as a mincyr method of investigation, and
as a useful preparatory training, but it will no
longer dominate the field of economic thought.
[G. Schmoller, on Die Schriften von Karl
Menger u. W. Dilthey zur Methodologie der Staats-
und Sozialwissenschaften in Zur LitterOturge-
schichte der Staats- und Sozialwissenschaften
(1888).— K. Menger, Methode der Sozialwissen-
scha/t.'—Die Iirthiimer des Historismus (1884).—
J N. Keynes, Scope and Method of Political
Economy (1891), ch. ix., note B.— W. J. Ashley,
Economic History, vol. 1. pt. 1 (1888), pre-
face ; and On the Study of Economic History m
the (Harvard) Quarterly Journal of Economics
for January 1893.— J. K. Ingram, History of
Political Economy (1888), ch. vi. These books,
especially those of Ingram and Keynes, will guide
the reader to the very considerable literature upon
the subject.] W.J. a.
ECONOMIC LAW. This phrase has fre-
quently given rise to confusion. Law, in its
imperative sense, belongs to no science ; properly
speaking, it is a term in the art of legislation.
Law, in its indicative sense, as a statement of
cause and effect, is pm-ely scientific ; and when
political economy is treated as a positive science,
it is in this sense that the phrase is used (see
Marshall, Principles, introd.). In common
parlance, however, an economic law is fre-
quently understood to be something impera-
tive, or at least a statement that a certain
course of action is wise or just ; and the con-
fusion between the art of legislation based on
economic formulae and the science of economics
itself (from which the works even of the classi-
cal English economists are not free) has done
much to spread this misunderstanding. To
break the laws of a science is in one sense im-
possible, as they are merely generalised state-
ments of fact ; yet it is not uncommon to hear
it said that a certain course of action will break
the laws of political economy ; when what is
intended to be conveyed is that it will lead to
a result different from that expected, and that
the laws of economics prove this. Thus it is
dften said that to regulate the hours of labour,
or to introduce differential import duties, is to
break economic law ; and M. de Laveleye, in
his very able effort to include the science of
economics in an art of sociology, evidently
considers luxury liable to be condemned in a
similar manner. (See also his Elements of
Political Economy, for an account of economics
treated as an art with definite moral aims.)
The laws of a science are always in them-
selves useful as guides to action, merely because
of the deductions we draw from them. The
objection made to this view of the subject, that
rich laws are entirely barren and uninstructive,
is therefore one which would apply equally to
every science. In another form, however, the
objection has considerable force. A scientific
law presupposes unchanging circumstances ; and
any alteration in these introduces a new law to
vary the relations of cause and effect. In
physical science we find uniformity to a fai
greater extent than in economics. It is this
uniformity which has caused the phrase " exact
science " to be used ; and mathematics, in
which the circumstances never change, is the
most exact of all sciences. But in economics,
where the conditions are dependent, not on the
inanimate forces of natm-e, but on the varia-
tions of human feeling, passion, sentiment, and
taste, it may well be thought that no generalisa-
tion, comprehensive enough to be useful, can
be made. The older English economists were
aware of this ; and to get out of the difficulty
they presupposed a state of matters in which
mankind is governed by one single passion,
viz. the desire for wealth. Happily they never
adhered to the limitation they set for them-
selves ; indeed, a science of economics on these
lines is as inconceivable as a science of dynamics
where every force is neglected excepting that of
gravity. The great complexity and variety of
circumstance which surround every economic
problem are such as to render the enunciation
of general laws, on a large scale, barely possible,
and if possible barely useful. In consequence
of this, few efforts have been made to reduce
any economic truths to theorems ; nor is it
probable that any such theorems will be found
of great value. Economic laws are rather
expressions of tendencies than actual predic-
tions of cause and effect (see Laws of
Political Economy).
[See Der Gebrauch des Ausdruckes " Gesetz" in
der National Okonomie, by J. Bonar, Zeitschrift
fiir Volkswirthschaft, 1892.] M. g. d.
ECONOMIC MAN. This term has been
often used to indicate a more or less imaginary
being postulated for theoretical purposes by
Abstract Political Economy (g'.-v.) Those
writers who defend the use of the conception,
have regarded it as analogous to the perfectly
rigid or perfectly smooth body assumed in
theoretical mechanics. Speaking rouf'^ly, the
economic man is one who in his economic rela-
tions is moved only by regard to his own
material interests. But in reality there is con-
siderable ambiguity in the use of the term.
It can be most clearly understood when applied
to the sphere of contracts. Thus Dr. Keynes,
maintaining in a qualified form the legitimacy
of the conception, writes {Scope and Method of
Political Economy, 1891, p. 121): "Is it not
a patent fact that in buying and selling, in
agreeing to pay or to accept a certain rate of
wages, in letting and hiring, in lending and
borrowing, the average man aims at making as
good a bargain for himself as he can ? " Hence
in relation to contract, the notion of the econo-'
mic man is tolerably clear. He may perhaps
be best defined negatively, either as one who is
not moved by regard to the interests of the
opposite party to the contract ; or, more gener-
ECONOMIC MAN— ECONOMIC SCIENCE
677
ally, as one who is not influenced by such
motives as class-prejudice, public opinion, resent-
ment, compassion, or personal partiality. When
we pass to economic actions outside the sphere
of contract, it is not so easy to define the
economic man. We may consider first the
nature of the objects upon which a man's
material resources are expended. So far as
economists have treated the problem of demand
and consumption on a deductive basis, they
have certainly not assumed that the economic
man normally or necessarily expends such
wealth as he may have acquired only upon
objects subserving his individual interests.
For example, the family, rather than the
individual, is often taken as the unit in econo-
mic science. But the economic man may be
admitted to determine his expenditure under
an indefinite variety of influences, such as
philanthropy, love of ostentation, etc. In fact,
the deductive economist, in his indifference to
the purposes for which wealth in general is
desired, cannot rightly be charged with recog-
nising none but egoistic motives to its acquire-
ment. Passing from consumption to produc-
tion, we have to recognise the universally
antagonising principles to the desire of wealth,
namely, aversion to labour and to the postpone-
ment of enjoyments. These aversions are no
doubt of a purely egoistic kind. But, as all
economists have recognised their importance,
they clearly have not represented the economic
man as inspired merely by a desire for accumu-
lation, irrespective of the eflbrt or sacrifice
involved. Indeed, they have gone further in
difl'erentiating the various motives operating in
industry. For, from Adam Smith downwards,
they have allowed, not only for aversion to
toil in general, but also for various degrees
of aversion corresponding to various kinds
of employment. But another and somewhat
different qualification is necessary in concrete
applications of economic doctrine. In the
abstract sciences it is frequently convenient
to take no account of forces of the nature of
friction. Thus there are influences which
retard, and perhaps permanently modify, the
tendency to equilibrium of supply and demand.
These influences are mainly those of custom,
habit, and ignorance. For example, a labourer
is not, or has not been, easily moved to change
his abode or mode of employment, in circum-
stances in which he would immediately do so
if he were deliberately to balance its advan-
tages and disadvantages, including risk of
adventure and breach of old associations, etc.
Similarly, important limits to the mobility
of capital exist. The actions neither of the
labourer nor of the capitalist are wholly the
result of cool, unimpassioned, and completely
informed reason. Economists of all schools
have, of course, recognised these facts. But
it may specially be noted that the deductive
economists of the most declai-ed type have
attributed to the working classes a character
which is the reverse of economic. An import-
ant part of the doctrines of Ricardo and of his
followers is based on the tendency of the labour-
ing class to multiply until their resources are re-
duced to the level of bare subsistence. In this
notable case, the chiefs of the deductive school
have postulated a particularly uneconomic man.
With respect to the range of application of
the conception of the economic man, there are
some not unimportant differences of view among
the supporters of the abstract method. Bage-
hot, for example, regards the conception as
applicable only to the latest phases of economic
development. Mill and Cairnes, on the other
hand, hold that the results of the abstract
method indicate universally operative tendencies,
the realisation of which is, more or less, actually
interfered with by conflicting forces. A slight
modification of this view represents the motives
of the purely economic man as manifesting
themselves in the long run, — on the ground that
other and conflicting motives cancel one another
when a sufficiently large area is contemplated.
[Mill, Unsettled Questions of Political Economy,
Essay v. — Cairnes, Logical Method of Political
Economy, Lecture ii. — Bageliot, Economic Studies,
Essays i., ii. — Keynes, Scope and Method oj
Political Economy, chs. i., iv., vii. — Sidgwiek,
Principles of Political Economy, Introduction,
ch. iii. — Marshall, Principles of Economics, 1891,
vol. i. pp. 71-81. — ClifTe Leslie, Essays in Politi-
cal Economy, 1888, Essays i., xv. — G. J. Goschen,
Address on " Ethics and Economics," to the British
Economic Association, Economic Journ., Sept.
1893.]
The idea of a semi-economic man, one for whom
the advantage of another counts, not indeed for as
much as his own, but still for something, is sug-
gested by Prof. Edgeworth in his Mathematical
Psychics, pt. i. end of § 2. A similar conception
is more usefully employed by Prof. Marshall in his
consideration of the compromise benefit of a mono-
polist (PWwa)j^es, bk. V. ch. xii. ). The whole subject
of egoism and sympathy in their economic aspect is
well treated by Prof. Pantaleoni in the beginning
of his Principii di Economia pnra. See also Mr.
Bonar's discussion of utilitarianism in his Philo-
sophy and Political Economy, 1893. w. e. J.
ECONOMICS, for other articles under this
heading see Political Economy.
ECONOMIC SCIENCE and ECONOMICS.
The terms "economy" and "economic" or
"economical," are now used chiefly in two
meanings, which it is well to distinguish clearly ;
since, though divergent in their history, they
are liable to fusion, and therefore in some degree
to confusion.
"Economy" originally meant, in Greek, the
management of the affairs of a household,
especially the provision and administration of
its income. But since both in the acquisi-
tion and in the employment of wealth it is
678
ECONOMIC SCIENCE
fundamentally important to avoid waste either
of labour or of its produce, ''economy" in
modern languages lias come to denote generally
the principle of seeking to attain, or the method
of attaining, a desired end with the least
possible expenditure of means ; and the words
* * economy, " " economic, " * ' economical, " are
often used in this sense, even without any direct
relation to the production, distribution, or
consumption of wealth. Thus we speak of
"economy of force" in a mechanical arrange-
ment without regard to its utility, and of
" economy of time " in any employment whether
productive of wealth or not.
On the other hand, as there is an obvious
analogy between the provision for the needs of
a state and the provision for the needs of a
household, "political economy," in Greek, came
to be recognised as an appropriate term for the
financial branch of the art or business of govern-
ment. It is found in this sense in a treatise
translated as Aristotle's in the 13th century ;
and so, when, in the transition from mediaeval
to modern history, the question of ways and
means obtrusively claimed the attention of
statesmen, "political economy" was the name
naturally given to that part of the art of govern-
ment which had for its aim the replenishment of
the public treasury, and, — as a means to this, —
the enrichment of the community by a provident
regulation of industry and trade. And the term
retained this meaning till the latter part of the
1 8th century without perceptible change — except
that, towards the end of this period, the enrich-
ment of the people came to be less exclusively
regarded from the point of view of public finance,
and more sought as a condition of social well-
being.
But in the latter part of the 18th century,
under the ^influence primarily of the leading
French " Economistes " or "Physiocrats" —
Quesnay, De la Riviere, and others — the con-
ception of political economy underwent a funda-
mental change, in consequence of a fundamental
change in the kind of answer which these thinkers
gave to the question "how to make a nation
wealthy." The Physiocrats proclaimed to
France, and through France to the world, that
a statesman's true business was not to Tnake laws
for industry and trade in the hope of increasing
wealth ; but merely to ascertain and protect
from encroachment the simple and immutable
laws of nature, under which the production of
wealth would regulate itself in the best possible
way if governments would abstain from meddling.
A view broadly similar to this, but less extreme,
and, partly for this reason, more directly influ-
ential, was expounded in Adam Smith's Wealth
of Nations. Instead of showing the statesman
how to "provide a plentiful revenue or sub-
sistence for the people "—which was one of the
two main objects of political economy, accord-
ing to the traditional view — Adam Smith aims
at showing him how nature, duly left alone,
tends in the main to attain this end better
than the statesman can attain it by govern-
mental interference. Accordingly, so far as the
widespread influence of Adam Smith's teach-
ing went, that branch of the statesman's art
which aimed at * ' providing a plentiful revenue
for the people" tended almost — though not
altogether — to shrink to the simple maxim of
laisser /aire : leaving in its place a scientific
study of the processes by which wealth is pro-
duced, distributed, and exchanged, through the
spontaneous and partly unconscious division of
labour among the members of human society,
independently of any governmental interference
beyond what is required to exclude violence or
fraud. A part, indeed, of the old art of political
economy — that which aimed at " supplying the
state with a revenue sufficient for the public
service " — remained indispensable to the states-
man ; but it was held that this traditional art
required to be renovated by being rationally
based on the doctrines of the new-bom science
just described. It is, then, this scientific study
of a department of social activity that most
writers on the subject now primarily mean by
the term "political economy": such part of
the old governmental art so called, as the doc-
trine of the new science is held to admit, being
commonly regarded as "applied political
economy." In consequence of this change the
adjective "economic," instead of the too cum-
brous "politico-economic," has come to denote
the matters investigated by the science of poli-
tical economy, and the propositions and argu-
ments relating to them.
By thinkers and duly -instructed students
this distinction between "science" and "art"
— between the study of " what is " and the study
of "what ought to be" — is usually regarded as
simple and clear ; and accordingly Avhen such
persons speak of the " laws of political economy "
they mean not rules by which the process of
the social production and distribution c.Xvealth
ottght to be governed, but general relations of
CO -existence and sequence among phenomena
of this class, ascertained by a scientific study of
this process as it actually takes place. This
distinction, however, has been found difficult to
establish in common thought : even well-edu-
cated persons still occasionally speak of the
"laws of political economy" as being "violated "
by the practice of statesmen, trades-unions, and
other individuals and bodies. It is partly in
order to prevent this confusion that the terms
"economic science" and "economics" have
recently come more and more into use, as a pre-
ferable alternative for political economy, so far
as it is the name of a science. As to the scope
of this science, — it would be generally agreed
that it is a branch of a larger science, dealing
with man in his social relations ; that it is to
an important extent, but not altogether, capable
ECONOMISTES— EDEN
679
of being usefully studied in separation from
other branches of this science ; and that it is
mainly concerned with the social aspect — as
distinct from the special technical aspect — of
such human activities as are directed towards the
production, appropriation, and application of
the material means of satisfying human desires,
so far as such means are capable of being ex-
changed. It would also be generally agreed
that the method of economic science is partly
deductive, partly inductive and historico-
statistical. But to attempt a more precise
determination of its method and scope, and
especially of its relation to the art or system of
practical rules which should guide the action
of governments or private individuals in eco-
nomic matters, would require us to enter into
questions of a highly controversial kind ; which
will be more conveniently discussed when we
come to deal with the older and wider term
Political Economy {q.v.) h. s.
ECONOMISTES. The narrower term Physio-
chats {q.v.) is now generally applied to the
writers who were known in their own time, and
to Adam Smith, Malthus, etc., as the J^cono-
mistes. The chief members of the " sect " were
QuESNAY, the elder Mirabeau, Mercier de la
RiviteRE, Du Pont de Nemours, Abeille, Bau-
DEAu, Rowland, Saint P^ravy, Le Trosne.
As to the origin of the name compare Mira-
beau (Letter of 20th December 1767 to J. J.
Rousseau): "Dema part, je fondai chez moi
un diner et une assemblee tons les mardis. J'y
re9us tons les etrangers qui viennent voir le
baton flottant sur I'onde, les magnats qui me
viennent voir, et surtout la jeunesse. C'est de
ces assemblees, qui ont ete fructueuses k I'exces,
que nous est venu le nom d'ficonomistes."
Levallois, J. J. Rousseau, ses amis et ses ennemis,
Paris, 1865, ii. 385.
[For further remarks on the Economistes, see
Physiocrats.] h. h.
£lOU. A French coin, so called from the
shield covered with fleurs-de-lis which was
stamped upon it. It Avas originally a gold
coin, and was first struck in 1336. But the
historic ecu of the 17th and 18th centuries
was a silver coin (ecu blanc), corresponding to
the English "crown," and worth six francs.
There was also petit dcu or demi-ecu, worth
three francs. These coins were in circulation
at the beginning of the present century. In
recent times the term 4cu has been applied to
a piece of five francs. r. l.
The gold ecu of 1336 was made of pure metal.
(See Traite Historique, des Monnoyes de France,
Le Blanc, Paris, 1692. ) The silver ecu, first struck
in 1641, was of silver, 913 fine. (See Traite des
Monnaies d'or et d' argent, Bonneville, Paris, 1806.)
F. B. a.
EDEN, Sir Frederick Morton, Bart.
(1766-1809), graduated at Oxford, and was
chairman and one of tho founders of the Globe
Insurance Company. Eden's independent posi-
tion was favourable to his completing, in the
thirty-second year of his age, his principal work,
involving much study and expensive research,
The Stale of the Poor. This book, called by
M'Culloch, "the grand storehouse of informa-
tion respecting the labouring classes of Eng-
land," entities its author to rank with Arthur
Young as one of those immediate successors of
Adam Smith who best developed the inductive
branch of political economy. The importance
of facts as a foundation of theory is insisted on
in the preface and opening pages of this work
(p. xxix and p. 4) ; "These and many similar
questions [relating to the poor laws] cannot,
as it seems to me, be fully and satisfactorily
answered, unless many minute circumstances
are previously stated, which have rarely been
sufficiently attended to in the plausible and
ingenious but unsolid speculations of several
merely theoretic reasoners." Such writers
" voluntarily impose upon themselves the task,
so much and so justly complained of by the
Israelites, of making bricks without straw."
"The edifice of political knowledge cannot be
reared without its 'hewers of stone' and
'drawers of water.' I am content to work
among them." " I have purposely and almost
wholly abstained from drawing conclusions from
the facts here presented to the public." For-
tunately not "wholly." In the first chapter
of his second book Eden discourses freely "of
national establishments for the maintenance of
the poor, and of the English Poor Laws, and of
Mr. Pitt's proposed bill for the better relief of
the poor." His reflections upon the events and
opinions which he records are just and striking :
for instance, on the "fathers of the poor,"
whom Child {q.v.) proposed to create, "not
only clothed in the garbs, but vested with the
powers of papal inquisitors " (p. 188) ; or, with
reference to Henry VIII. 's confiscations, on
the danger of reposing confidence in " the most
specious promises made by any reformers by
violeTice, whether they be overbearing despots
like Henry the Eighth, canting Puritans like the
parliament and their adherents in the time of
our First Charles, or blustering and boastful
constitution-mongers like many of the modern
revolutionists." Although Eden declares, "I
have never wasted that time in polishing a
sentence -which I thought I could better employ
in ascertaining a fact," he enhances by consider-
able literary attractions the curious and im-
portant information which he has collected.
The subjects which Eden principally dealt with
are suflBciently indicated by a title which is almost
a catalogue : The State of the Poor, an history of
the labouring dasses in England from the Con-
quest to the present period, in which are particu-
larly considered their domestic economy with respect
to diet, dress, fuel, and habitation, and the various
plans which from time to time have been proposed
680
EDEN— EDGEWORTH
and adopted fcrr the relief of the poor, together
imth Parochial Reports relative to the administra-
tion of Workhouses, and Houses of Industry ; the
state of Friendly Societies, and other public institu-
tions, in several agricultural, commercial, and
manufacturing districts, with a large appendix,
. . . 1797. A translation of the less detailed parts of
this work is published in Duquesnoy's Recueil de
Mimoires sur les Etablissements d'Humanite, No.
21, 1799 ; and also separately, 1800. There is an
analysis of Eden's work by Cabanis, in the Mercure
Frangais, Nos. 29, 30, 32, an. vi. (1798). Eden
is also the author of (1) Porto- Bello, or a Plan
for the Impyr&veTnent of the Port and City of
London, 1798.— (2) An Estimate of the Nurriber
of Inhabitants in Great Britain and Ireland,
1800, written on the eve of the first census, and
estimating, by means of the number of baptisms,
the population of Great Britain and Ireland
(inclusive of sailors and soldiers) as 10,710,000.
(The real number, according to the census, was, in
round figures, 14,991,000).— (3) Eight Letters on
the Peace and on the Commerce and Manufactwres
of Great Britain, 1802, defending the peace with
France, and illustrating the economical position of
England by statistics and interesting reflections. —
(4) Address on the Maritime Rights of Great Britain,
1808 (first edition 1807), commending the orders
in council of 1807, and "ofi'ering some suggestions
on the measures necessary to render the United
Kingdom independent of other countries for the
most indispensable articles now supplied by foreign
commerce." The suggestions comprehend a plan
for the encouragement of Anglo -Merino sheep,
which the author defends against " Adam Smith,
the great enemy of bounties," having regard to
"what, on the whole, in pecuniary or political
advantage, will be the gain to the country when
the measure is carried into full effect." Eden
is stated (in Walford's Insurance Cyclopcedia\
to have privately printed a considerable pamphlet
On the Policy and Expediency of granting In-
surance Charters, 1806, to which M'CuUoch refers
in his Literature. There is among the Bentham
MSS. {BHt. Mus. Addit MSS., 31,235) a letter
from Eden to Vansittart, containing observations
on Bentham's scheme of annuity notes, f. t. e.
EDGEWORTH, Maria (1767-1849), daugh-
ter of R. L. Edgeworth, owing to the great
popularity of her moral tales for children,
has had considerable influence on the attitude
of thought in England regarding economic
questions. An intimate friend of Malthus,
Richard Jones, and Ricardo, and well ac-
quainted with their works, her writings evince
considerable power of applying economic prin-
ciples successfully in everyday life. Her novels
and tales were directly written to inculcate a
utilitarian morality, and the virtues which she
specially exalts are those assumed to exist in
the economic man of abstract theory — in-
telligence, honesty, love of truth, industry,
prudence, and judgment ; she excelled in her
truthful portraits of the stupid, the wilfully
ignorant, the extravagant, and the sentimental,
against whom she directed a keen wit and
satire, the more deadly because good-humoured.
Her books for children dwelt on the pains ol
idleness and the pleasures of industry, an aspect
of the labour question now too little regarded.
Her pictures of life among the Irish peasantry
and the English working classes contain fre-
quent reference to the lucrative employment of
young children ; but although she believed that
work was pleasurable even when remunerated,
and goes so far as to make four orphans under
thirteen years of age support themselves (see
Parent's Assistant: — The Orpham), the children
in her stories always seek and receive facilities
for educating themselves. Numerous instances
of generous and yet discriminating relief of the
distressed, to be found both in her fiction and in
her life, show her to have been in advance of her
time in her views on almsgiving ; her stories,
Rosamond and Egerton Abbey, exemplify this.
(See also article in Charity Organisation Review,
Nov. 1889). To the economist the most valu-
able of her writings are the novels dealing with
the relations of landlord and tenant in Ireland.
The land agent, middleman, or "journeyman
gentleman" is presented in all his aspects,
good, bad, and indifferent. Castle Rackrent is a
delightful history of three generations of Irish
spendthrift and absentee landlords, written from
the point of view of an old family retainer.
The hero of The Absentee, whose parents have
deserted their Irish estates for London society,
travels incognito to inspect the condition and
treatment of their tenantry ; and the account
of his adventures, given by one who had her-
self acted as land agent on her father's estate
and who was entirely free from party spirit, is
well worth studying apart from its artistic
merits. The nearest approach to definite exposi-
tion of economic theories is to be found in
Ennui, in the criticism of the well-meant actions
of an Irish landlord by his Scotch agent. Mr.
M'Leod *' doubted whether the best way of en-
couraging the industrious was to give premiums
to the idle." "He was told that somi -Indian
Brahmins were so very compassionate that they
hired beggars to let fleas feed upon them. He
doubted whether it might not be better to let
the fleas starve." "He doubted whether long
leases alone would make impro^dng tenants."
"He doubted whether, if a farm could support
but ten people, it were wise to encourage the
birth of twenty. It might be doubted whether
it were not better for ten to live and be well
fed than for twenty to be bom and be half
starved." " He doubted whether it would not
encourage the manufacturers to make bad stuffs
and bad linen, since they were sure of a sale
and without danger of competition," and "he
doubted whether it would not be better for a
man to buy shoes if he could buy them cheaper
than he could make them." The admirable
portrait of King Corny in Ormond elicited warm
praise from Macaula^.
EDMONDS— EDWARDS
681
[Helen Zimmem's Maria Edgeworthy 1883.
The books for children still widely read are :
Frank, Rosamond, Harry and Lucy, The Parent's
Assistant, Moral Tales, and Popular Tales. See
also article in International Journal of Ethics
for April 1892, where the writer has treated this
subject at greater length.] c. e, c.
EDMONDS, Thomas Rowe (1803-1889),
bom at Penzance, educated at Cambridge (B. A. ,
1826), was actuary of the Legal and General
Life Assurance Society from 1832 to 1866.
He wrote Life Tables, 1832 ; Inquiry into the
Prmei'ples of Population, 1832 ; Laws regulat-
ing Human Mortality, 1866 ; and contributed
many papers on the same subject to the Lancet.
He also published : —
Practical, Moral, and Political Econoviy, or the
Government, Religion, and Institutions most con-
ducive to Individual Happiness and to National
Power, London, 1828, 8vo. (**The social system
is the limit towards which all governments tend,
and at which they cannot fail to arrive sooner
or later," p. 283. The author considers that
labourers should work six hours a day, and pro-
poses a tax on marriage.)
[Walford, Insurance Cyclopcedia, ii. 470-74. —
F. Boase, Modern English Biography, i. 961. —
Marx, Misere de la Philos., pp. 49-50.] h. r. t.
EDUCATION, Economic Aspects of.
Trade and industry may be affected by educa-
tion in two ways. In the first place, their pro-
gress may be assisted by General Education,
which, though developed without any im-
mediate or particular reference to their well-
being, must necessarily promote it by quickening
the intelligence and calling into play the
latent capacities of the people of any country.
In the second place, a particular industry will
be advanced by means of Technical Education,
which renders those employed or likely to be
employed in any industry more fully ac-
quainted with the nature of its processes and
with such branches of general education as may
be deemed to have a direct and immediate
bearing on these. It is education directed to
an end, and a particular end. General Educa-
tion, in its early stages, may be the same for all
classes, notwithstanding their differences of
calling ; in its later or specialised stages it will
dii'ect attention to certain cognate branches of
study with the view of inducing students to
concentrate their powers on the problems
presented by these studies. Should these
problems coincide with or resemble those in-
volved in the profession or trade they may
adopt, they wiU be additionally benefited.
Technical Education, on the other hand, will
have regard to the special requirements of the
profession or trade in which the students in
question are, or are likely to be employed. It
will be evident that the term Techniatl Educa-
tion, though usually employed as above, may be,
expanded so as to include or imply an education
more fitly described as specialised education.
General Education. — In order that the ad-
vantages of such education may be fully felt
it is necessary that it should (1) in its primary
stages be national ; (2) in its later or specialised
stages be open to all those fitted to avail them-
selves of it. The first of these conditions has
been recognised by civilised nations. As a rule
it has, so far at least as a certain minimum,
been made compulsory. There is overwhelming
testimony to the benefits conferred on industry
by such a state of things. The second condition
is less fully regarded, little provision being
made in many countries, among which we must
include England, where the higher education is
costly. The advantages of a high standard of
General Education may be seen from many ex-
amples, as for instance the position of America
and in some degree that of Germany. England,
where in industry the standard of workmanship
is high, owes her position to causes somewhat
different. She owes much to her political
condition, and much also to the free and fair
intercourse of life common to her.
Technical Education. — The early recognition
of the desirability of such training may be
gathered from the evidence before Royal Com-
missions, etc. (see especially " Royal Commission
to inquire into condition of the Handloom
Weavers," Pari. Paper, 1841, vol. x.), in which
the difference in artistic merit between English
and French work is instanced and the demand
made for the establishment of schools of design,
etc. But England made much less rapid advance
in this respect than most of the chief foreign
countries, where highly - organised systems of
technical instruction have been adopted (see
L' Enseignment Commercial, par Eugene Leautey).
In this country, on the contrary, little was
achieved till 1890.
[The " economic value " of the intelligence of
the population is borne witness to by all our lead-
ing economic authorities. See e.g. Marshall,
Principles of Economics, 1st ed. pp. 264-276.]
E. C. K. G.
EDWARDS, Bryan (1743-1800) was born
at Westbury. In 1759 he went out to Jamaica
to the house of his uncle, a merchant in that
island. On his uncle's death he succeeded to
the business and other property. His chief
interests lay in the West Indies, and though
shortly before his death he returned to England
and sat in parliament as member for Gram-
pound, he continued to act chiefly in the
interest of the West Indies. His principal
work is ITie History, Civil and Commercial, of
the British Colonies in the West Indies, published
in 1793 ; a third edition of this work appeared
in 1&07 in an enlarged form, containing a brief
autobiography and chapters on the French colo-
nies in the West Indies. These were first pub-
lished in 1797 as A Historical Survey of the
French Colony in the Island of San Domingo,
The economic importance of the book which
682
EDWARDS— EFFICIENCY OF LABOUR
reached a fifth edition in 5 vols. 8vo, in 1819,
lies (a) in the full and accurate account of the
West Indies contained in it ; (b) in an able and
temperate discussion of the slavery question
from the point of view of a defender, though not
an advocate of it. He considers it impossible
to abolish the slave trade, but insists that it
should be placed under government regulation,
and considers that the importation of a larger
number of negresses would bring the trade to
a natural end. His arguments in defence of
slavery are of the usual type, but he admits
that the institution has a tendency to injure
the character of the planters.
He also wrote Thoughts on the Late Proceed-
ings of Government respecting the Trade of the
West India Islands with the United Staies,
1784 ; Speech at a Free Conference between the
Council and Assembly of Jamaica on Wilber-
force's Proposition concerning the Slave Trade,
1790 ; and some other pamphlets on West
Indian Questions.
[British Museum Catalogue. — Dictionary of
National Biography. — M'Culloch, Lit. Pol. Econ.,
p. 92.] c. G. c.
EDWARDS, George, M.D. (1752-1823).
George Edwards took his doctor's degree at
Edinburgh in 1772, and practised at Barnard
Castle in Durham, and afterwards in London,
where he died. Besides a few medical works
he published a large number of pamphlets upon
social questions, propounding various remedies
for the social ills which weighed upon England
in the early part of the 19th century. He
seems, however, to have been more impressed
with the evils than capable of studying them
scientifically ; and to have been little more
than a political visionary. His chief discovery
in his own eyes was the invention of the income
tax. The British Museum contains about forty
pamphlets by him, which are principally de-
voted to recommending the precepts contained
in his larger books.
Their titles are: The Aggrandisement and
National Prosperity of Great Britain, 1787. —
The Royal and Constitutional Regeneration of
Great Britain, 17 S7.— The Practical Means of
effectually exonerating the Public Burthens of pay-
ing the National Debt, and of raising the Supplies
of War vnthout new Taxes, 1790. — Effectual
Means of providing against Scarcity and High
Prices of different Articles of Food, 1800 ; A
Plan of an Undertaking . . . for the improve-
vient of Husbandry, etc., Newcastle, 1783, 8vo. —
Radical Means of counteracting the present
Scarcity and preventing Famine in the Future ;
including the Proposal of a Maximum founded
on a New Principle, etc., London, 1801, fol.— ^
Plain Practical Plan by which Great Britain may
extricate herself from her present Difficulties, etc.,
London, 1808, 4to ; with many more of the same
kind.
[Gentlemen s Magazine, 1823 ; Dictionary of
National Biography; Allibone's Dictionary Brit,
and Amxr. Authors, i.] c. g. c.
EFFECTS. This is one of the vague and
undefined words which often occur in legal
documents, and are a frequent cause of litigation.
A gift of the testator's efiects in a will, unless
restrained by the context, means a gift of the
whole of the personal property, and may, if
other circumstances favour such an interpreta-
tion, include even real estate. The word also
occurs in partnership deeds in the combination
** estate and effects of the partnership," which
has been held to include all the property of the
partnership "available for the purpose of dis-
charging the debts and liabilities." (Steuart
V. Gladstone, 10 Chancery Division 626.)
EFFECTUAL DEMAND. See Demand;
Demand Curves.
EFFICIENCY OF LABOUR is the resultant
of combined (1) strength, (2) skiU, (3) diligence
and care on the part of the labourer. The pro-
duct of his labour is manifestly governed very
largely also by the efficiency of the tools he is
supplied with, and the efficiency of the superin-
tendents under whom he serves ; but these are
rather external aids furnished from the side of
capital than constituent conditions of efficient
labour itself. The most perfect tools are value-
less in the hands of the inefficient, whereas
the truly efficient workman, according to an
eminent practical authority, Mr. Nasmyth,
the inventor of the steam hammer, is a man
who can always produce his result with the
tools that lie to his hand, or, as the same idea
is expressed in the curious maxim of another
eminent engineer, Maudsley, the criterion of
the thorough mechanic is to be able to cut a
plank with a gimlet and bore a hole with a saw.
The workman who can do as well with bad tools
as his neighbour does with good, will accomplish
with good tools much more remarkable results ;
but the secret of his efficiency in both cases
lies in the physical, mental, and moral energies
of the man's own being.
(1) The first condition of the fit workman is
physical vigour — not merely muscular, but
general vigour, for as Professor M. Foster ob-
serves *' the power of doing work hangs not on
the muscle alone, but on the heart, the lungs,
the nervous system, and indeed the whole body"
(Text-booJc of Physiology, p. 845). Nervous
energy is of especial moment, because fatigue
is much more a nervous than a muscular con-
dition. Professor Foster considers it doubtful
whether men ever, even in their severest
efforts, draw on more than a portion of the
store of energy lodged in their muscles ; it
is the store of energy in the nerves that gives
out. People differ much in their power of
sustaining hard and continuous exertion, and
in the degree of ardour and "go" they throw
into it, and the difference depends on the
general conditions of sound physical health,
especially on original constitution, more or less
EFFICIENCY OF LABOUR
683
plentiful diet and adequate or inadequate repose.
A mountain stock has more grit than the
average, even though it has been more poorly-
fed ; and Mr. Jones, one of Mr. Brassey's
managers, always preferred mountaineers for
railway -making when he could obtain them.
English workmen enjoy better fare and shorter
hours than other workmen, and they are noted
for their physical strength, their endurance,
and their rapidity at work. Mr. Brassey found
English navvies able to do heavier work, to do
more work in the day, and to remain afterwards
fresher for an extra spurt if required, than any
other navvies in the world. In constructing
the Paris and Rouen railway, in which he
employed 4000 Englishmen and 6000 French-
men, he took great pains to ascertain the rela-
tive industrial capacity of the two nations,
and he came to the general conclusion that
three Englishmen did the work of four French-
men. In ''shifting" materials the English
navvy was found to do twice as much work in
the day as the French, though he worked two
hours less, and he received twice the wages,
and a half-franc more, because he could be
counted on for additional speed under pressure ;
while for the hard work of mining and tunnel-
Img, Mr. Brassey employed none but English-
men ; and even in Italy, where he found the
Piedmontese excellent workers — in some respects
better than the English — and employed them
in tunnelling in dry rock, he still reserved the
more arduous labour of tunnelling in clay for
English limbs (Brassey, IForJc and Wages, pp.
118, 146). For mere strength Englishmen
excel even their better- fed but longer- worked
American kinsmen. ''When we want physical
force combined with skill," says the well-known
American ironmaster, Mr. A. Hewitt, "we get
Englishmen" {Trade Union Commission Re-
port, qu. 6980). In girder rolling he said the
Americans were more active and better rollers,
but when it came to puddling the heavy bars
there were no workmen like the English ; and
the reason was, what he thought every observer
must remark, that the English were superior to
the Americans in physical development. Sir
I. L. Bell, in a comparison of five American
furnaces with those of Cleveland, calculates
that the workers in an English furnace, with
a shorter working day, move 2400 tons of
fuel, ore, and limestone in the week, while the
same number of Americans move only 2100 tons
{Iron Trade of United Kingdom, p. 137).
Luxemburg ironstone, again, is not harder to
work than Cleveland ironstone, but two Cleve-
land miners turn out 10| tons of stone in an
eight hours' day, whereas two Luxemburg
miners turn out only 1 0 tons in a twelve hours'
one {ib. 86). In continental textile mills
Mr. Mundella always found five hands doing
work that was done in England by three.
During the eight hours strike in Melbourne in
1859, it was ascertained for a wager that an
English bricklayer laid half as many bricks
again in the day as a German. Then in Eng-
land itself, the well-fed Midland labourer will
do twice the work of the ill-fed Dorset hind ;
whilst the Australians, the best-fed and shortest-
worked race of work-people in the world, strike
even English eyes for the extraordinary vigour
and "go" they put into their work. Lord
Brassey praises the "remarkable physique" of
the Australian navvy, and Captain Henderson,
R.N., said Australian dockers coaled a ship
three times as fast as English ones {Proceedings
of Royal Colonial Institute, xix. 122). More
specific proof still exists of the connection be-
tween work and feeding. Mr, Brassey often
employed agricultural labourers for navvy work,
and when they first came they would lie down
utterly exhausted about three in the afternoon,
but after twelve months of good wages and
better diet than they enjoyed before, they be-
came quite fit to do their work without any
difficulty. Irishmen in their own country are
the poorest of workmen, mainly because of
their poor fare. Arthur Young said, in his time,
that an Essex labourer at half-a-crown a day
was cheaper than a Tipperary labourer at five-
pence ; and Mr. J. Fox said to the Trade De-
pression Commission that, though he paid the
hands in his Manchester mill 20 per cent higher
wages than the hands in his Cork mill, the
real cost of the work was the same in both.
But when the Irish come over to England and
get better diet their working power soon im-
proves ; Sir I. L. Bell says, many young Irish-
men come to Cleveland ironworks, and though
not worth much at first, yet "as soon as their
improved style of living permits it," they be-
come equal to any workman in Cleveland, both
for ability and will to work. M. Chevalier
mentions that when Messrs. Manby and Wilson
started their French foundry at Charenton in
1820, they brought over a few of their English
hands with them, and found these did far more
work than the French labourers. Suspecting
the reason to be better nourishment, they took
steps to get the French work-people to eat as
much meat as the English ; and the result was,
that in a short time they did nearly as much
work as the English too. The eff"ect of shorten-
ing hours of labour in improving industrial
energy will be treated separately, but even the
minor changes in the sanitary conditions of work,
effected by the Factory Acts, have caused such
a perceptible increase in productive capacity
that Dr. J. Watts says Lancashire cotton opera-
tives care far more about being employed in a
good mill, with plenty of air and light, than
about the exact price per lb. they get for spin-
ning or per piece for weaving, because "they
know practically what is the effect of these
conditions upon the weekly wages " {Fads about
the Cotton Famine, p. 44). The same sound
684
EFFICIENCY OF LABOUR
physical conditions which enlarge productive
capacity at the time also extend the term of
efficient working life.
(2) Skill is a compound of general mental in-
telligence, special technical culture, and acquired
manual dexterity. All work involves head
work. The good workman must be a thinking
and planning being, and according to his general
intelligence will be his share of the supreme in-
dustrial qualities of resourcefulness, versatility,
and precision. The intelligent man needs a
shorter apprenticeship and less superintendence,
and is less wasteful of materials, all simply be-
cause he understands better than the ignorant
man the nature of the stuff he handles, the
working of the tools and machinery he uses,
and the end and object of the commodity he is
making. Hence the immense industrial value
of general education. The want of education
has hitherto been the chief industrial defect of
the English workman. Escher, a Swiss manu-
facturer, who employed about 2000 hands of
all nationalities, said, in 1840, that while the
English workmen were the best in what they
had actually learnt, they were of less value out-
side their own specific work than the Swiss or
the Scotch, because of their inferior education
(MiU, Political Economy, bk. i. ch. vii. § 5).
But on the other hand, a later Swiss manu-
factm'cr, Herr Wunderley, who also employed
men of all European nationalities in his mills,
stated to the Technical Instruction Commission
that there was a certain practicality and method
in English labour — a mechanical genius, he
termed it — which seemed to enable it to do,
without much knowledge, what continental
labour did with it (Technical Instruction Com-
mission Report, p. 269). Mr. Mundella, too,
thinks that English labourers naturally more
inventive than foreigners, more apt in devising
means for ends, but this is probably due in
some degree to their greater physical energy,
their greater determination not to be mastered
by a difficulty; for Mr. E. Rose, in 1832,
stated one of the chief diflferences between
French and English work-people to be that the
French got much sooner bewildered with a
difficulty and gave in, while the English still
kept on trying to find a way out until the thing
was done (Senior, Political Economy, p. 150).
But all are agreed that this and other in-
dustrial capacities would be greatly developed
by better education. Mr. E. Peshine Smith
states that the Massachusetts Board of Education
procured from the owners of factories in that
state, some fifty years ago, a report of the dif-
ferent rates of wages paid and the education
of the recipients, and the amount of wages
varied exactly as the education, the lowest being
foreigners who signed their name with a mark,
and the highest the girls who went to school
in winter and worked in the mills in summer.
He adds that it was estimated that popular
education gave an advantage of 20 per cent to
the American manufacturer in competition
with foreigners (Manvnl of Political Economy,
151). American manufacturers used to say
that, from their better education, two American
mill hands would do the work of three English
ones, and Mr. Harris Gastrell, in his report to
the English Foreign Office in 1873, admits
that this may be so still in the mills — now
apparently a minority — where American has not
been superseded by foreign labour (p. 682).
Sir W. Fairbairn said, that for difficult
engineering work they always looked out for
the best -educated workmen ; and when Mr.
Mundella asked a Swiss manufacturer how his
countrymen had taken the ribbon trade from
the French, he was answered, *' We beat them
by means of an educated people."
Special dexterities are, generally speaking,
the result of special training and practice.
No doubt cunning of hand may be inherited
like other faculties, but even then greater
facility still comes from repetition. This is
the source of the increment of production
obtained through division of labour. The
jack-of-all-trades never has the chance of be-
coming master of any ; but when every man
confines himself to a separate trade, the sum
of their total work is improved, both in quality
and quantity, through the greater perfection
each man acquires in the performance of his
special branch of work by means of constant
repetition. On the other hand, an extreme
sub-division of labour may involve a certain
monotony which is not favourable to efficiency
even in the special branch of work concerned,
and is certainly adverse to general efficiency.
Marx, however, exaggerates the ill effects of
specialisation when he caUs the modern "detail
workman" a mutilated and crippled monstrosity,
a mere bit of the machine he sits and watches.
Mr. Nasmyth, with much more practical experi-
ence, says he has often been struck to observe
how this process of watching the beautiful and
precise working of machinery exercised a posi-
tively intellectualising effect upon the labourer
which was not unfavourable to versatility.
Another essential for good work, hardly behind
manual facility, is visual accuracy, and Mr.
Nasmyth thinks the average workman comes far
short in this quality ; he found that his own
men in general spent most of their time in
applying the rule and straightedge, while the
dexterous workman seldom used these tools
at all ; his eye was enough.
Intermediate between this cunning of ^ye and
hand, and general mental intelligence, stand
certain special mental capacities, such as artistic
taste and mastery of sciences cognate to the
workman's trade, which are of great importance
for good work, though some authorities contend
they are less the concern of the manual labourer
who executes the work than of the designers and
EFFICIENCY OF MONEY— EGOISM
685
managers who direct it. The French have long
excelled all other nations in taste, and the
Germans have pushed to the front in some
industries through their better technical and
scientific instruction.
(3) Diligence and care are the moral virtues of
labour, and in the national distribution of
industrial qualities they are the portion of the
Germans. The English, as Defoe said, are
the most diligent-lazy people in the world,
very strenuous in their work while they are at
it, but prone to breaks of idleness after pay-
days, or at other times, for purposes of dissipa-
tion. This is, of course, a great advance in
diligence over the uniform sluggishness and
aversion to labour of many inferior races, but
it stands much below the diligence of the
Germans, who are not only steady and docile
in general, but have a conscientiousness and
power of taking pains which alone render them,
says Sir C. W. Siemens, preferable to other work-
people for many special kinds of work. No
race is incurably indolent. The Scotch in the
last century were counted the laziest people in
the United Kingdom, and in this century are the
most industrious. The Irish are still thought
idle in Ireland and found active out of it.
The diligence is always due to circumstances,
to a change from conditions in which nothing
was to be made by working to conditions in
which present work is seen establishing future
comfort, and is made pleasant and cheerful by
the hope so inspired. The great encourager of
willing industry is good wages. It is an old
contention — which was already successfully
refuted with a considerable induction of facts
by Adam Smith ( Wealth of Naiions, bk. i. ch.
viii.) — that good wages only make men indolent,
enabling them to supply their wants with so
much less labour ; and Professor Caimes (Some
Leading Principles of Pol. PJcon., p. 240) has
made a kindred objection, that good wages are
a bad thing, because they always encourage
dissipation ; but both these objections err by
drawing an unwarrantable conclusion as to the
general operation of good wages from the ex-
perience of their operation in particular in-
stances only. The countries of the highest
wages are also the countries of the highest
productivity ; and while wages have been gener-
ally rising for half a century, drunkenness has
been lessening. j. R.
EFFICIENCY OF MONEY. This term is
proposed by Mill to express "the average
number of purchases made by each piece in
order to eflfect a given pecuniary amount of
transactions." According to the ** quantity
theory," in that rudimentary form which makes
abstraction of Credit, the value of money will
be inversely proportional to the quantity multi-
plied by the efficiency thereof. This proposition
is not true of the rapidity of circulation, when
defined, e.g. by Roscher, as the number of
purchases made by each piece per year (or other
unit of tiTne) ; unless indeed the total amount
of transactions is regarded as constant.
A wider definition of " efficiency " covers the
circulation of instruments of credit as well as
coins. Thus Mill: "as money tells upon
prices not simply in proportion to its amount,
but to its amount multii^lied by the number of
times it changes hands, so also does credit."
Mr. Macleod has in view this wider sense when
he introduces the happy phrase "duty" of
money (Economic Philosophy, i. p. 211).
There is reason to believe that the efficiency
of money in both these senses varies from time
to time. Mill says {Pol. Econ., bk. iii. ch. xii.
§ 3), " the money of the community is virtually
increased in a time of speculative activity . . .
by increased rapidity of circulation." So
Walker {Pol. Econ., art. 174), "the rapidity of
circulation varies from day to day with the
state of trade and the temper of the public
mind." But precise observations of the extent
of variation are wanting. "On that subject
there are no statistics," says Prof. Marshall
{Evidence hefore the Royal Commission on Pecent
Changes in the value of Silver and Gold).
Much the same may be said of efficiency in a
third sense in which the term is sometimes
used, namely, to denote the amount of pecuni-
ary transactions which a given quantity of the
metallic standard either effects directly by hard
cash payments, or supports and renders possible
by acting as a reserve. We may say that the
efficiency of money in this sense is greater in
one country {e.g. England) than another ; but
an accurate measure is not to be expected ; for
even if we could ascertain (1) the total amount
of metallic money, whether in active circulation,
or in reserve, and also the " efficiency " (in the
first sense of the term) of that part which is in
active circulation ; and (2) the total volume of
things on sale ; we should still require to know
the average number of times each of these things
changes hands during the year, the rapidity of
the circulation of goods, and, as Prof. Marshall
says {loc. cit), "with regard to that we have no
statistics whatever ; indeed there has never been
any attempt to obtain statistics on the subject."
[Mill, Political Economy, bk. iii. ch. viii. § 3,
ch. xii. §§ 3, 4. — Walker, Political Economy, art.
174. — Money, p. 62. — Roscher, System of Political
Economy, § 123, and authorities there cited. — H.
D. Macleod, Economic Philosophy, i. p. 211.
On the statistical aspect of the subject some
hints may be obtained from the following : On
Currency, anonymous, attributed to Sir J. W.
Lubbock, London (Charles Knight and Co.), 1840
(included by Jevons in his list of Mathematico-
Economic books). — Dr. Franz Krai, Geldwert und
Preishewegung (Staatswissenschaftliche Studien,
Dr. L. Elster).] See Rapidity of Circulation.
F. Y. E.
EGOISM. This term may be said to have
a popular and also a philosophic meaning. In
686
EGOISM
popular usage it is nearly equivalent to selfish-
ness, and expresses the temper of mind which
sacrifices to one's own welfare the welfare of
others. Economists have often been accused
of assuming that all men are egoists in this
sense, and of giving practical precepts in con-
formity with this assumption. In philosophic
usage egoism has a more subtle meaning.
Egoistic psychology finds the only possible
motive of action in the desire to attain pleasure
and to avoid pain, although it allows that this
desire may often prompt to actions which in
ordinary parlance would be called unselfish.
Egoistic ethics, taking its premisses from egoistic
psychology, defines morality as the intelligent
pursuit of that which instinct compels us to
pursue, as the rational pursuit of pleasure and
avoidance of pain, although it tries to show
that such morality is compatible with what
is commonly known as unselfishness. The
founders of modern political economy have
often been censured for assuming the truth of
egoistic psychology and the validity of egoistic
ethics. This charge is quite distinct from the
other charge, although the two are commonly
confused. The first has excited most odium.
The second is more difficult to disprove. No
distinguished economist has said that men all
are and ought to be selfish. But many dis-
tinguished economists have held that self-love
is the mainspring of human action.
Adam Smith's view respecting the influence
of self-love on economic action is most plainly
stated in his account of the principle which
gives occasion to the division of labour ( Wealth
of Nations, bk. i. ch. ii.): "Man has almost
constant occasion for the help of his brethren,
and it is in vain for him to expect it from their
benevolence only. He will be more likely to
prevail if he can interest their self-love in his
favour and show them that it is for their own
advantage to do for him what he requires of
them. ... It is not from the benevolence of
the butcher, the brewer, or the baker, that we
expect oui- dinner, but from their regard to
their own interest. We address ourselves not
to their humanity, but to their self-love ; and
never talk to them of our own necessities, but
of their advantages. Nobody but a beggar
chooses to depend chiefly upon the benevolence
of his fellow-citizens." At first sight this
passage seems to assert that selfishness is the
only economic motive. But on further con-
sideration it will appear that the operation of
self-love here described is not of that injurious
kind which would commonly be considered
selfish. Tradesmen who undertook to supply
everything gratis would be far less useful to
society than tradesmen who expect a fair price
for their goods. Such an expectation is not
selfish in the popular sense of the term. It is
only conformable to common sense. Similarly,
when Adam Smith recommended complete
economic liberty and trusted to self-love to
generate the best economic system, he did not
mean to preach selfishness in the popular sense.
The self-love to which he trusted was self-love
restrained by the criminal and civil law, by
pubHc opinion, by conscience, and by social
and amiable instincts. With his sentiments
we may compare those of Malthus expressed in
the Appendix to his Essay on Population : "The
great Author of nature ... by making the
passion of self-love beyond comparison stronger
than the passion of benevolence, has at once
impelled us to that line of conduct which is
essential to the preservation of the human
race. ... He has enjoined every man to
pursue as his primary object his own safety and
happiness and the safety and happiness of
those immediately connected with him. . . .
By this wise provision the most ignorant are
led to promote the general happiness, an end
which they would have totally failed to attain
if the moving principle of their conduct had
been benevolence. Benevolence indeed as the
great and constant source of action would
require the most perfect knowledge of causes
and effects, and therefore can only be the attri-
bute of the Deity."
Here self-love is not only stated as the
actual, but justified as the best, motive of
ordinary human action. Yet the self-love here
justified is not selfishness commonly so called.
Thus it includes "those immediately connected
with" oneself, i.e. one's family. Again the
benevolence here disparaged seems confined to
the desire of doing good directly to others.
The scope of such benevolence must always be
narrow for most men. In ninety-nine cases
out of a hundred the greatest service which a
plain man can render to society is to do his
own work well. His work will doubtless be
ennobled by his perceiving that it has a value
for society as well as for himself. But if he
were to forsake it and devote himself entirely
to works of charity he would be less useful than
in his old calling. Malthus felt that he had laid
himself open to misinterpretation, for he adds
in a note : "It seems proper to make a decided
distinction between self-love and selfishness,
between that passion which under proper regu-
lations is the source of all honourable industry
and of all the necessaries and conveniences of
life, and the same passion pushed to excess
when it becomes useless and disgusting and
consequently vicious."
These quotations do not justify the inference
that Adam Smith and his successors alleged
that mankind universally were or ought to be
selfish in the plain sense of that term. " This
opinion may be dismissed at once as a popular
error which finds no support in the teaching or
practice of the best economists " (Marshall,
Principles of Economics, bk. i. ch. vi. , ' 'Economic
Motives.") But the above quotations do show
EGOISM— EIGHT HOUKS MOVEMENT
687
that the founders of modern jjolitical economy
accepted an egoistic psychology and an egoistic
ethics. In other words, they took for granted
the current philosophy of their day. That
philosophy regarded man simply as a subject
of pleasure and pain, and defined morality as
the line of conduct which led to happiness.
The motive of duty to one's fellows was found
in the gratification of the social instinct.
Human shortcomings were made good by the
over-ruling benevolence of God or of nature
which led every man to promote the good of
others even when thinking solely of his own.
It may well be that such a philosophy is in-
adequate or even corrupting ; but it is unfair
to blame an economist for accepting the philo-
sophy current in his own day. With the
ultimate solution of psychological or ethical
problems an economist has nothing to do. As
a man of science he has only to estimate the
motives which actuate men in producing, dis-
tributing, and consuming wealth. As an
adviser of individuals or of states, he has only
to take for granted the highest morality known
to his age.
Egoism or selfishness in the popular sense is
perhaps more conspicuous in the economical
sphere than in any other sphere of human
activity. Yet even here it affords no universal
key. " Ethical forces," says Prof. Marshall
in the preface to his Principles of Economics,
"are among those of which the economist has
to take account. Attempts have indeed been
made to construct an abstract science with re-
gard to the actions of an ' economic man, '
who is under no ethical influences, and who
pursues pecuniary gain warily and energetically,
but mechanically and selfishly. But they have
not been successful, nor even thoroughly carried
out. For they have never really treated the
economic man as perfectly selfish ; no one
could be relied on better to endure toil and
sacrifice with the unselfish desire to make pro-
vision for his family ; and his normal motives
have always been tacitly assumed to include
the family aff"ections. But if they ' include
these, why should they not include all other
altruistic motives, the action of which is so far
uniform in any class at any time or place that
it can be reduced to general rule ? There seems
to be no reason." And in the chapter on
economic motives above referred to. Prof. Mar-
shall points out that it is the measurable, not
the selfish character of motives, which brings
them within the range of economic inquiry.
Of course the motives thus measurable are
not simple but highly complex. We may be
able to measure, e.g. the force of the complex
motive which leads a particular class in a par-
ticular country to spend money on the educa-
tion of their children. But we cannot measure,
nor for economical purposes is it necessary to
measure, the relative importance of the ele-
ments in this complex motive, such as desire
for the worldly advancement of one's children,
desire for their spiritual perfection, etc. Nor
need we determine how far each particular
motive approaches to pure selfishness or pure
unselfishness.
In giving practical advice the economist
must equally take account of ethics. It will
be useless or mischievous to give advice which
the common conscience of mankind declares to
be immoral ; and equally useless or mischiev-
ous to give advice which assumes that gi'eat
masses of human beings are exempt from human
weakness. In estimating the force of egoism
under actual conditions, and the possibility of
controlling it to higher issues, the economist
will be guided aright only by a sagacity which
is the gift of nature, although it may be im-
proved by study. It would not be hard to
show that even so well-informed a writer as
Mill thought contemporary men more selfish
than they are, and expected men in the future
to be less selfish than they are likely to prove.
[See Goschen in jEcon. Journ., Sept. 1893, and
Economic Man.] f. c. m.
EGRON, Adrien Ci^sar, born in Tours, was
a printer and publisher in Paris (fl. first half of
19th cent.). He printed in 1844 his Livre de
VOuvrier; ses devoirs envers la SociStS, la fa-
mille, et lui-mime and in 1847 his Livre du
Pauvre ; devoirs de celui qui donne et de celui
qui 7'egoiL Both works consist mainly of a series
of extracts out of different writers from the Bible
and Aristophanes to modern times, illustrating
the duties of the rich and of the poor respect-
ively. These are connected by rather prolix
considerations of his own. He is much more a
Christian moralist than an economist. E. ca.
EIGHT -PIECE (or piece -of- eight). A
Spanish silver coin of the value of eight reals,
was for many years known as a "piece-of-eight"
throughout the British, American, and West
Indian colonies, where it was the principal coin
in use from the time of the foundation of those
colonies until the early part of the 19 th century.
It circulated in the United States until as late
as the year 1857, when it was withdrawn from
circulation in that country and demonetised.
Pieces-of-eight were also to be found in circula-
tion in New South Wales during the early years
of that colony's existence ; and they are still
used in some of the islands of the East Indian
archipelago. The title " piece-of-eight " fell
into disuse about the end of the 17th century,
when the coin began to be known as the
''Spanish" or "hard" dollar (see Dollar,
Hard). f. e. a.
EIGHT HOURS MOVEMENT. An agita-
tion for a universal eight hours day of labour
— for eight hours work without diminution of
pay — was begun in England as far back as
1833, by two large employers, John Fielden,
M.P., and Robert Owen, and a special or-
688
EIGHT HOURS MOVEMENT
ganisation, the National Regeneration Society,
as it was termed, was formed to carry on
the agitation, but it led to no results, and the
question was not practically raised ^ in this
country again tiU the present energetic move-
ment sprang up here and on the continent
simultaneously about the year 1887. Mean-
while a successful beginning had been made
with the eight hours movement by the working
class in Victoria in 1856, in New South Wales
in 1863, and in the United States in 1866,
and under the same general influences which
brought the question up in Europe, this
Australian movement took a fresh start in
1884, and the American in 1886. Of the fifty-
two trades of Melbourne which, by 1892, enjoyed
the eight hours day, thirty-two obtained it since
1884. In the United States, where the agita-
tion died away altogether after the industrial
depression of 1873, in which its previous gains
were all lost, the struggle was renewed every
spring with a great campaign of strikes, and
the eight hours day spread among the more
poAverful trades.
A special plea for the eight hours' day is set
up on behalf of certain exceptional trades on
account of their dangerous, unhealthy, or
exhausting character, but with respect to the
mass of ordinary occupations the demand is
usually based on one or other of two different
and indeed opposite grounds. The advocates
of one section base it on the necessity of the
eight hours day for realising the recognised
claim of modern workpeople to reasonable
leisure for the culture, enjoyments, and duties
of life, and on the small cost, if any, at which
the claim can, in their view, be realised,
inasmuch as experience seems to justify the
expectation that the personal efficiency of
labour would be so much improved under an
eight-hours system that the rate of individual
production would remain as high as before.
Another section plead for the eight hours day
because they believe it will result in the
contrary alternative of a general diminution
of individual production, and they think it
will prove, on that account, a sure means of
increasing the demand for labour, thinning the
ranks of the unemployed, and raising the
general rate of wages. The latter plea, though
apparently the most prominent and influential
in the present movement, is unsolid, going
against the possibilities of the case in its view
of the eff'ect of a general diminution of individual
production, and against its probabilities in its
view of the effects of a general eight hours day.
On the former point it is admitted, by those
who use this plea with discrimination (cp. Webb
and Cox, Eight Hours Day, p. 107), that if a
general diminution of individual production
involved a corresponding diminution of the
aggregate production of the country, it would
necessarily cause a fall instead of a rise in the
demand for labour, because the amount of work
which society requires done at any given time
depends strictly on the extent of the produce
of society at that time. But they contend
that the aggregate production of the country
will not be diminished, inasmuch as any
shortcomings wiU be made up by the work of
those who are at present unable to obtain
employment at all. They seem to believe it
possible to make work for the unemployed by
means of capital that only comes into existence
as the product of the work it is supposed to
make, but if they can do that under an eight
hours system, why cannot they do it now ?
As a matter of experience the eight hours
day has surprisingly little effect on the numbers
of the unemployed. In Victoria, for example,
where three-fourths of the population now work
only eight hours a day, the unemployed are
strangely enough a greater and more constant
trouble than they are here, and, stranger still,
they seem to have become even a greater
trouble since the eight hours day became
general some years ago than they were before.
Whatever are the causes of this redundancy,
the eight hours day has had little influence
to check them ; and the reason of this is twofold.
First, shortening the hours of labour has no
possible effect on the ordinary causes of fluctua-
tions of employment, bad harvests, injudicious
speculations, wars, bad weather, sudden changes
of fashion, etc. ; and second, shortening the
hours of labour involves no corresponding
shortening of the product of labour, because
it enables the labourer very largely, in many
cases completely, to recover by the greater
intensity and energy of his work what he loses
by its shorter duration.
The degree of this recovery naturally diflers
in different occupations, but we have now had
extensive experience of the eight hours day,
and the results of that experience show (1) that
there are extremely few occupations in which no
recuperation at all takes place, but the diminu-
tion of work has been exactly proportional to
the diminution of time of work ; and (2) that
in the majority of trades in which the experi-
ment has been tried, the recuperation has been,
not partial merely, but complete. Nay, in a
number of cases there has been a positive in-
crease of product. Mr. W. Allan, Scotia Engine
Works, Sunderland, for example, found the
labour cost of his engines to have become slightly
less. Mr. Beaufoy, M.P., vinegar and jam
manufacturer, gets more work done in the year,
and without any overtime, than he ever got
done even with some months' overtime before,
and he did not employ a single additional hand
except three or four gate-keepers. The South
Yorkshire miners had their hours reduced in
1858 from twelve to eight, and turned out
much more in the. short day than they did in
the long one. The men in some of the depart.
EIGHT HOURS MOVEMENT
689
ments of the Springfield Armoury, U.S.A.,
were found in 1868 to have done considerably
more work in eight hours than they used to do
in ten ; and in the other departments the old
rate of production, though not similarly exceeded,
was fully maintained. The same result of a
full maintenance of the old rate of production
is reported of many other eight hour experi-
ments in trades so various as iron shipbuilding,
chemical manufacture, engineering, glass-
making, cabinet-making, printing, masonwork,
cutlery, soda manufacture, typefounding.
There is more than one instance of this
occurring even in cotton -spinning, when the
mills were working slack time. The reason is
in all cases the same ; less lost time and more
physical energy. While the period of nominal
work is shortened, the period of effective work
is really lengthened. The large number of the
trades in which the eight hours day has been
already introduced without interfering with the
amount of production certainly suggests the
probability of its similarly successful introduc-
tion into most other productive trades. The
London gas-workers, indeed, did not maintain
their production, but then the reduction in their
hours was very great, from twelve to eight, and as
it was, their product per hour was so much im-
proved that, though their hours were shortened
by a third, they did in one of the gasworks one-
sixth, in another one-seventh, and in a third
only one-twelfth less work. There are other
trades, like gate-keeping, and perhaps certain
branches of tram and railway service, in which
the work is not susceptible of compression into
shorter time, but they are not numerous. And
it is worthy of notice that the Huddersfield
Tramways, on substituting two eight hours
shifts for one fourteen hours day, did not require
twice as many conductors and drivers as before,
but only half as many again. Under all these
circumstances the very current expectation that
the eight hours day will do anything consider-
able in thinning the number of the unemployed
is illusory, and the true hope of the movement
lies in the probability — the very great proba-
bility— that the eight hours day may be
generally introduced without in any way im-
pairing production, and therefore without in
any way either lowering the rate of wages
or lessening the competing capacity of the
nation.
Those who believe in this probability will
not be greatly concerned whether the eight
hours day is to come by trade-union agency or
by legislative enactment, the aspect of the ques-
tion on which opinion in this country is chiefly
divided. There cannot be said to be two
opinions about the desirability of the eight
hours day in itself ; for experience of previous
shortening of hours justifies the expectation
that the leisure will be a much more abundant
source of good than of ill to the working
VOL. I.
classes ; but even among these classes them-
selves there is a strong, though declining,
opposition to obtaining it by compulsory legis-
lation. Unconditional compulsion, indeed, is
not contemplated by any one, except in the
case of certain special trades, such as mining and
baking, which are alleged, rightly or wrongly,
to be more dangerous or unhealthy than the
rest ; what is commonly demanded by the advo-
cates of legislation is an eight hours law con-
ditioned by trade option in some form : either
(1) in the form of making the law enforceable
only on such trades as petition for it by a clear
majority of their members (or of their organised
members) in the whole country ; or (2) in the
form, carried by decisive votes in the trade-
union congresses of 1891 and 1892, and known
as the trade exemption principle, of making
the law enforceable on all trades which do not
petition by a majority of their members (or of
their organised members) to be exempted from
its operation ; or (3) in the form — commended
by Mr. Gladstone in 1892, and known as the
local trade option principle — of giving the right
of option or exemption to the majority of each
trade in each district. These limitations proceed
from a general recognition that an eight hours
day cannot be equally practicable or suitable for
all the twelve thousand different occupations of
England, and that any law fixing the hours of
ordinary adult labour must be applied with
considerable elasticity in accordance with the
desires and circumstances of diverse trades.
But legislative interference is alleged to be
necessary in order to enable trades to get what
they desire, inasmuch as under present con-
ditions, though a majority of adult labourers in
a trade might want an eight hours day, they
could always be prevented from obtaining it
as long as a minority were willing to work
longer, and the interference is accordingly repre-
sented as really promoting instead of infringing
the freedom of adult labour.
On the other hand, the opponents of eight
hours legislation contend that it makes a pre-
judicial inroad on the freedom and independence
of the labourer, that it will prove disastrous to
production and trade, and that in any case it
is unnecessary since trade -union agency will
answer the purpose more safely and more
effectually. Trade-union agency has certainly
proved' sufficient in Victoria. Of the fifty-two
eight hours trades of Melbourne, not one got
the eight hours by law, and though the miners
in other districts have had an eight hours act
since 1883, many of them had the eight hours
day long before. A factory act, restricting
women's hours to eight, has existed in that
colony since 1874 ; but in accordance with one
of its clauses, its operation has been very gener-
ally suspended by the minister at the request
of the workers ; and though the number of sus-
pensions is now diminishing, the enforcement of
2t
690
EINERT-EJECT, EJECTMENT, EJECTION
the eight hours day in the factories depends
more really on opinion than on the law. On
the other hand, many eight liours laws were
passed in the United States in the first heat of
thTmovement, forty years ago, but they have
long been inoperative, and all recent gams frave
been won by trade-union agency. Long labour
conflicts are, however, costly and hurtful to
trade, while their results are short-lived, and
English trade-unionists incline to legislation
tliimu'h a desire to avoid the expense and misery
of a strike, and their belief that law will better
secure permanence in the arrangements.
In 1909, the coal mines (eight hours) Act was
passed, and came into operation in Durham and
Northumberland, January 1910.
[Hadfield and Gibbins, A Shorter Working Bay,
1892.— Webb and Cox, Eight Hours Day, 1891-—
John Rae, "The Balance-Sheet of Short Hours,"
in Contemp. Rev., Oct. 1891, and Eight Mows
for Work, 1894.-- J. M. Robertson, The Eight
Hours Question, 1893.— W. J. Shaxby, An Eight
Hours Day, 1898.] J. »•
EINERT, Carl (1777-1855), a German
jurisconsult, known for his theory of foreign
exchanges. Alluding to the influence of politi-
cal economy on the development of jurisprudence
and commercial legislation, Cossa remarks that
"Einert's book {Das WechselrecU), propounding
a legal theory of the bill of exchange founded
on its modem economic functions, contributed
largely to prepare the way for the German law of
1848, which marked a new epoch in the history
of the legislation of Mils of exchange " {Guide to
Study of Political Economy, ed. 1880, pp. 30, 31).
Das Wechselrecht, nach dem Bediirfniss des
Wechselgesch&fts im neunzehnten Jahrhunderte,
Leipzig, 1839, 8vo, — Ueber das Wesen und die
Form des Literal- Contracts wie dieser zur Zeit der
Justinianeischen Gesetzgebung au^gebildert gewesen
und Vergleichung desselben mit dem Wechsdf
Leipzig, 1852, 8vo.
[Dr. C. Einert namentlich in seinen Beziehungen
zu der jungsten Entwickdung des deutschen Wech-
selrechts dargestelU, Leipzig, 1855, 8vo. — All-
gemeine Deutsche Biographie, v. 759.] H. B. T.
EISDELL, Joseph Sal way (fl. 19th cent.),
author of: A Treatise on the Industry of Nations,
or the Principles of National Economy and Taxa-
tion, London, 1839, 2 vols. 8vo (vol. i. deals with
production, and vol, ii, with distribution, consump-
tion, and taxation ; translated, with introduction,
by Prof. F. Ferrara, in Biblioteca ddV Economista,
Serie I. , vol. viii. Ferrara calls it a mere compila-
tion without special character, but interesting, as
showing the views of the English school of econo-
mists, " se una scuola inglese vi ha "). — An Essay
on the Causes and Remedies of Poverty, London
1852, sm. 8vo ("poverty and crime, therefore, among
a great mass of the population, are the sign and
evidence of industrial improvement, not, however,
yet universally adopted," p. 58). h. r. t..
EISELEN, JoHANN Friedrich Gottfried
(1785-1865), bom at Rothenburg, died at
Halle, where he gave much attention to the
conduct of the aff'airs of the city. He edited
a second edition of L. H. von Jakob's Die
Staats-Finanzwissenschaft, 1837, and wrote :
Grundzuge der Staatswirthschaft oder der freien
Volksudrthschaft und der sich darauf beziehenden
Regierungskunst, Berlin, 1818, 8vo. — Handbuch
des Systems der Staatsurissenschaft, Breslau, 1828,
8vo. — Die Lehre von der Volksurirthschaft in
ihren allgemeinen Bedingungen und in ihrer
hesonderen Entudckelung, oder wissenschaftliche
Darstdlung, der burgerlichen Gesellschaft als
Wirthschaftssystem, Halle, 1843, 8vo.
[Allgemeine Deutsche Biographie, v. 764.]
H.R.T.
EJECT, EJECTMENT, EJECTION. The
object of proceedings in ejectment is to recover
possession of land. The action of ejectment,
properly so-called, was abolished by the Com-
mon Law Procedure Act of 1852. It was used
as a means of ascertaining the title to land. It
involved a remarkable series of fictions designed
to escape from the inconveniences attaching to
what were known as real actions {i.e. actions
for the recovery of real estate). The party
claiming delivered to the party in possession a
declaration containing the names of imaginary
parties, John Doe and Richard Roe. The
declaration set out that John Doe was lessee
of the land in question, holding of the real
plaintiff, and had been ousted by Richard Roe.
A notice signed by Richard Roe was served
upon the real defendant, to inform him that
Richard Roe had no real title to the land, and
that judgment would go against him by default,
so that the real defendant would be turned out,
unless he appeared to defend his title. The
action was then tried as between John Doe and
the real defendant. If John Doe obtained
judgment, this was tantamount to a judgment
in favour of the real plaintifi', under whom
John Doe claimed. The place of the old action
of ejectment is now taken by an action for the
recovery of land, which differs little from other
actions in the High Court. Proceedings brought
by an undisputed proprietor wishing to get rid
of a tenant whose term has expired, or who has
made default in payment of his rent, are com-
monly described as proceedings in ejectment.
Such proceedings may be taken either at com-
mon law or under the Common Law Procedure
Act of 1852. The action at common law
cannot be brought unless the landlord, or his
agent authorised for that purpose, has made
a demand of the precise amount of rent then
due, and on the precise day on which the rent
becomes due under the terms of the agreement.
The demand must be made before sunset of that
day, and the tenant may pay at any time up
to midnight. It must be made either at the
place where the rent is payable or on the land
itself. The necessity for the demand is the
same, even though there be no person on the
land to pay. But any or all of these require-
ELASTICITY— ELECTION
691
ments may be dispensed with by the express
terms of the lease. The Common Law Pro-
cedure Act, 1852, dispenses with the formal
demand if half-a-year's rent be owing, and no
sufficient property to meet the claim can be
found on the premises. But this enactment
applies only when the agreement of tenancy
gives the landlord a right of re-entry for non-
payment of rent. When half-a-year's rent is
in arrear, and neither the value of the premises
nor the annual rent amounts to £50 a year,
the county court can order that the landlord
shall be put in possession of the premises.
By whatever procedure effected, ejectment is
the ultimate remedy of a landlord against a
defaulting tenant. By means of ejectment he
recovers possession of the land for which he no
longer receives rent. Unless he could in the
last resort employ this remedy, the premises
which he has let would often be practically
valueless to him. For there may be no suffi-
cient goods on the premises to distrain upon,
and the defaulting tenant may not be sub-
stantial enough to make it worth while to bring
an action against him personally. Besides
default might be made again and again by a
tenant remaining in possession. The circum-
stances which make ejectment of defaulting
. tenants peculiarly unpopular seem to be these :
— sympathy with the instinctive attachment
which almost all persons feel for a place which
they have long inhabited ; a vague notion of
proprietary right in a tenant who has occupied
the land a long time, and a more definite
feeling of injustice when the tenant, although
a defaulter, has in years past executed improve-
ments which have added to the permanent
value of the land. In this last case, adequate
compensation should be made, but the power
of vindicating proprietary right is essential to
the well-being of society. Ejectment and
eviction are, legally speaking, the same process,
but eviction is perhaps the term oftenest used
in common parlance (see Eviction).
[Wharton, Law Lexicon, Art. Ejectment. —
Woodfall, Landlord and Tenant (14th ed.), ch.
22. — Copinger and Munro, The Law of Rents,
chs. xxiv. and xxv. ] F. c. M.
ELASTICITY is a technical term employed
by Prof. Marshall, to denote the sensitive-
ness of the response which a certain thing
returns to changes in another thing that
- stands in a causal relation to the former ;
i.e. the ratio between the percentage increase
(or, it may be, diminution) of one thing,
say X, and the percentage increase (or dimi-
nution) of another, say y. (1) in symbols : ,
•- — -, or — • - (cp. Marshall, Frinciples of
X- y Ay x^
Economies, 2nd edition, bk. iii. ch. iv. p. 160,
et seq., Journal of the Statistical Society,
Jubilee Vol. 1885, p. 256).
An important case is the "elasticity of
demand." "The elasticity of demand in a
market is gieat or small according as the
amount demanded increases much or little for
a given fall in price, and diminishes much or
little for a given rise in price " (Marshall,
Principles of Political Economy, bk. iii. ch.
iii. 1st ed.). The difference in this respect
between different commodities has been felt,
though not so accurately conceived and ex-
pressed, by some other writers. Thus Mill :
' ' If the article is a necessary of life, which,
rather than resign, people are willing to pay
for at any price, a deficiency of one -third
may raise the price to double, triple, or quad-
ruple " {Political Economy, bk. iii. ch. ii. § 4).
And again, " Some things are usually alfected
in a greater ratio than that of the excess or
deficiency, others usually in a less. . . . The
amount of what people are willing to expend
on it . . . may be aftected in very unequal
degrees by difficulty or facility of attainment "
{ibid. bk. iii. ch. viii. § 2). [Compare Auspitz
and Lieben, Theorie des Preises, p. 41, et seq. —
Seligman, Shifting and Incidence of Taxation,
p. 148, et seq. — Irving Fisher, Mathematical
Investigations in the Theory of Value and Prices,
p. 46, et seq."] Prof. Marshall holds that in
general the elasticity of demand "is small,
when the price of a thing is very high rela-
tively " to the means of a class of purchasers,
"and again when it is very low; while the
elasticity is much greater for prices intermediate
between what we may call the high level and
the low level " (Marshall, Principles of Econo-
mies, bk. iii. ch. iv. § 2). The elasticity of
demand is a prime factor in determining the
interest whicli the consumer has in a fall of
price (see Coxsumer's Rent), and the effects
of bounties and of monopolies {op. cit. bk. v.).
ELASTICITY OF DEMAND. See previous
article and Demand.
ELDER, William (1806-1885), was born in
Pennsylvania, and died in Washington. He prac-
tised medicine and wrote frequently for the press.
Besides several volumes in general literature,
he published The Debt and Resources of the
United States, Philadelphia, 1863, pp. 32 ;
Questions of the Day, Philadelphia, 1871, pp.
367 ; and Conversations on Political Economy,
Philadelphia, 1882, pp. 316. Elder belonged to
the Carey School, and advocated a political
economy which was national as opposed to
cosmopolitan. He introduced the term " guar-
antyism " to denote the various charitable,
savings, and philanthropic agencies to promote
thrift. D. R. D.
ELECTION. The doctrine of election was
introduced by the courts of equity (see Equity),
and may be shortly stated as follows : if by a
will or deed a testator or donor disposes of
property belonging to another person, and by
the same instrument confers a benefit on that
692
ELEGIT— ELIOT
person, sucl). person cannot at the same time
accept the benefit conferred upon him and
refuse to surrender his property in accordance
with the disposition of the testator or donor.
He must choose (" is put to his election ") as to
whether he wiU accept the benefit and surremder
the property in question, or whether he will
keep his property and forego the benefit, or at
least part of it, the principle being that where
the value of the benefit under the will or deed
exceeds the value of the property with respect
to which the election arises, the party dis-
appointed by the election is not entitled to
compensation beyond the value of that property.
Thus if a testator by his will gives A an estate
belonging to B, of the value of £10,000, and
by the same instrument gives B a legacy of
£20,000, B may elect to conform to the will
by conveying the estate in question to A and
receiving the legacy of £20,000 ; but if he
elects against the will, he must pay £10,000 to
A by way of compensation and may retain the
remaining £10,000. In many cases the facts
are not so simple and the doctrine frequently
gives rise to considerable difficulty. E. s.
ELEGIT (Writ of). A writ of execution
(see Execution), by virtue of which a judg-
ment creditor is enabled to take possession of
the debtor's land. The writ does not in itself
authorise the creditor to sell the land, but an
order for that purpose may be obtained by
application to the chancery division of the
high court (27 & 28 Vict. c. 112, §§ 4-6).
Execution by "writ of elegit" was introduced
by the Statute of Westminster (13 Ed. I. c. 18),
and originally extended to the debtor's chattels
(excluding beasts of the plough), but was
restricted to one-half only of the land. The
last-named restriction was removed by 1 & 2
Vict. c. 108, whilst on the other hand the
Bankruptcy Act 1883, § 146, enacts that writs
of elegit are no longer to extend to chattels.
A recital is contained in the writ, showing that
the creditor has chosen this means of execution
in preference to others, which in the original
Latin form (quod "elegit") included the word
from which the name is derived. E. s.
ELEVATOR. Part of the machinery in
unloading vessels (see Docks, Mechanical Appli-
ances at Docks). In America a public ware-
house for produce (see Warehouses).
ELIBANK, Patrick Murray, fifth lord
(1703-1778), lawyer, soldier, and pamphleteer,
was admitted a member of the Faculty of
Advocates at Edinburgh in 1728, and served
in the Carthagena expedition under Lord Oath-
cart in 1740. He thought the existence of the
national debt a very great calamity, and stock-
holders and stock-jobbers a most pernicious
class of men, whose ill-gotten wealth gave
them the power to further their speculations by
embarking the nation on harmful lines of
policy. He accuses them of having caused the
war of 1739 ; and suggests that their property
might with advantage be confiscated, like the
property of the monasteries in 1537, and the
proceeds devoted to encouraging our manufac-
tures by bounties.
On economic subjects Lord Elibank wrote An
Inquiry into the Origin and Consequences of the
Public Debt, Edinburgh, 1753-1754.— ^ssay on
Paper Money and Banking from Essays on the
Public Debt, Frugality, etc., 1755. This essay is
reprinted in M'Culloch's Seled Tracts on Paper
Currency, etc., London, 1857. M'Culloch says
of this, "It is a poor performance." — Letters on
the proposed Plan for altering Entails in Scotland,
Edinburgh, 1765.— See also Douglas's Peerage of
Scotland. ^- H.
ELIOT, Francis Perceval (c. 1756-1818),
entered the civil service, and for some years
before his death was a commissioner of audit
at Somerset House. His economic writings are
chiefly on subjects connected with currency and
banking. He considered that notes might
safely be issued on good securities, and need
not be restricted to representing actual deposits .
of bullion. He belongs to a class of writers
fostered by the Bank Restriction, who, in Sir]
Robert Peel's words, "would not admit the]
doctrine of a metallic standard." Eliot advo-]
cated an "ideal money" which "admits ol
invariable value, because it is not formed of
substantial and therefore variable materials.*
. . . "The money of account remains in itself
fixed and undepreciated, while the precious
metals may either be suffering an intrinsic de-
preciation," or the converse (Observations, p. i
33). As General Walker remarks, it is scarcely]
Avorth while to separate the parts of truth and]
error here. Otherwise a rudimentary concep-|
tion of the standard which is formed by an|
Index Number might be ascribed to Eliot.'
Compare the context of the passages above cited j
(and OhservatioTis, p. 41), where reference isj
made to Sir George Shuckburgh. Consistently!
with this view, Eliot maintains that during thej
war it was the gold which was appreciated notj
the paper depreciated. He wrote :
Demonstration or Financial Remarks with occa*
sionaZ observations on Political Occurrences, 18071
(the first part discussing sinking funds, the latterl
part "noticing in a summary way some of thej
principal events since the decease of that ever toj
be regretted statesman," Pitt.) — Observations <m\
the Fallacy of the supposed depreciation of the Paper j
Currency of the Kingdomunthreasons for dissenting^
from the Report of tJie Bullion Committee, 1811 ;j
Second edition, with a supplement replying to 2
criticisms, 1811. — Letters on the Political Situation ]
of this Country, addressed to the Earl of Liverpool
by Eliot under the signature of Falkland. — Pam-
phleteer, Nos. vi. and vii. (1814), No. x. (1815),
No. xiii. (1816).
[Quarterly Review, February 1811 — "Tracts on]
the Report of the Bullion Committee." — Peel,j
speech on the Bank Charter A.ct, May 1844.-— j
I Walker, Money, p. 277. j f. y. e.
ELIZABETHAN LEGISLATION— ELLIS
693
ELIZABETHAN LEGISLATION. For
notice of the legislation of the period of Queen
Elizabeth, in its reference to economic changes,
see Legislation.
ELKING, Henry {fl. 1720), who was at one
time extensively engaged in the Greenland whale
fishery, published (1) The Interest of England
considered with respect to its Manufactures, etc.,
London, 1720, 8vo. This pamphlet was directed
against the importation of calicoes by the
East India Company, to which Elking attri-
butes "the decay of trade, the melting of coin,
the scarcity of silver, and the increase of poor."
The importation of East India calicoes was, in
accordance with these principles, prohibited in
the following year (1721). (2) A View of the
Crreenland Trade and Whale Fishery, with the
National and Private Advantagesthereof, London,
1722, 8vo, 2nd ed. 1825. Reprinted in vol. iv.
of the Oversione Collection of Select Economical
Tracts, 1859. This is one of the most valuable
of the early pamphlets on the whale fishery.
Elking gives an account of its origin, and pro-
gress of the fishery and its condition at the time
he wrote, and suggests means for getting it once
more into English hands. (3) The Interest of
Great Britain considered, etc., London, 1723.
[M'Culloch'a Literature of Pol. Econ., p. 233. —
Halkett and Laing's Dictionary of Anonymous
Literature, 1240. — Brit. Mus. Cat.] w. a. s. H.
ELLIOTT, Ebenezer(1781-1849). Ebenezer
Elliott, the " corn-law rhymer, " was born at
Masborough near Sheffield, and was the son of
a manufacturer who had obtained a share in a
small iron-work in that place. He received
very little education, but at an early age he
began both to read largely and to write verses.
His early attempts in verse writing are not of
much value. On his marriage he invested the
money his wife brought him in his father's
business. But the trade was declining at the
time ; his father died worn out by business
anxieties ; and after a few years spent in a hope-
less struggle, Elliott found that he was a ruined
man, ruined, he always maintained, by the
corn laws. In the year 1821, however, he
made a fresh attempt, and for some years he
prospered. But after the year 1837 trade again
began to fall off, and when in 1842 he gave up
business, he was only able to take with him
the sum of £6000. The losses of these five
years were another result of the bread-tax he
so hated. This hatred was the passion that
inspired all his best poems. He was filled with
fierce indignation against the law that had kept
him poor, as an employer, and that pressed
so hardly on the workers whom he wished to
benefit. In The Splendid Village, The Village
Patriarch, and above all, in The Banter, the
reader feels the depth of his feeling for the poor
and his hatred of the landlord class. In the
Corn-law Ehynus (1831) the whole of his bitter
anger breaks out. No one can read them with-
out feeling some share of the indignation that
inspired them, and as a picture of the state of
men's minds at the time their force and brevity
make them invaluable. c. G. C.
[Watkin's Life, Poetry, and Letters of Ebenezer
Elliott, 1850. — Athenceum, 12th January 1850. —
Poetical Works, 1876.]
ELLIS, William (died 1758), a self-taught
farmer of unusually wide agiicultural knowledge.
His early writings made his name. He was
afterwards employed by a bookseller to write
in monthly instalments, but made tlie mistake
of producing the required quantity by padding
with quack receipts, old wives' tales, etc., and
thereby injured his reimtation. He was too
much occupied in travelling about the country,
acting as a consulting farmer and selling seeds
and agricultural implements, to work his own
farm at Little Gaddesden, Herts, according
to his own teaching ; on his journeys, however,
he learned the methods of farming prevalent in
diflerent counties, and his habits of observation
enabled him to enrich his writings with shrewd
criticism and comparisons. He treats most
fully of the management and breeds of sheep,
the use of manures, the growing of timber,
especially of oaks, the need of different soils,
and the latest improvements in ploughs. His
style is homely, often rough, and sometimes
ungrammaticah
The following is a list of bis works : —
The Practical Farmer ; or. The Hertfordshire
Husbandman, 1732. — Chilternarvd Vale Farming
explained, 1733.: — The London and Country
Brewer (see Country Housetvife, p. 12). — New
Experiments in Husbandry for the Month of
April, 17S6.—The Timber Tree improved, 1738. —
Tlie Shepherd's Sure Guide, 1749. — A Compleat
System of expierienced imjjinrements, made on
Sheep, grass lamhs, and hi > use lambs, 1749. —
The Modern Husbandman, 1750. — The Country
Housewife s Family Companion, 1750. — Every
Farmer his own Farrier, 1759. — In 1772 was
published Ellis's Husbandry abridged and method-
ized, the original padding and some of the less
intelligible and interesting matter being omitted.
[Biographical notice in preface to last named
work.] E.G. p.
ELLIS, William (1800-1881), ably dis-
charged for fifty years the duties of chief under-
writer to the Indemnity Insurance Office. Ellis
is mentioned by Mill in his Autobiography {a.-mong
the disciples of Bentham) as "an original
thinker in the field of political economy, now
honourably known by his apostolic exertions
for the improvement of education." Of these
distinctions the latter appears the more perma-
nent. Ellis used to convey to the young a
knowledge of political, or as he preferred to say
"social," economy and of "right conduct," by
the method of "Socratic" dialogue. His
method deserves this epithet, so far as it incul-
cated the homely virtues with the zeal of the
Socrates of Xenophon. A Platonic vein of
894
ELLMAN— EMANCIPATION
speculation is not to be looked for in Ellis's
dialogues.
A good account of Ellis's " conduct teaching is
riven in the Memmrs written by his granddaughter,
Ethel Ellis, 1888. The Life, by E. K. Blyth,
1889, describes his economical, as well a* his
educational, work ; and contains a complete list of
his writings. Of these may be mentioned : various
articles in the Westminster Review; including one
on M'Culloch's Political Economy/ by Ellis and
J S. MiU jointly (July 1825) ; Outlines of Social
Economy, 1846 ; Progressive Lessons xn Social
Science; Philosocrates, 1861-64.
J. S. Mill refers to an essay by Ellis, published
in the Westminster Review for January 1826, as
" the most scientific treatment of the subject which
I have met with " (Pol. Econ., ch. iv. § 2). The
subject is "the effect of the employment of
machinery on the happiness of the working classes,
an effect which the writer pronounces to be bene-
ficial with less qualification than economists would
now generally employ. f. y. e.
ELLMAN, John (1753-1832). A success-
ful farmer of Glynde in Sussex, best known for
his improvements in the breed of Southdown
sheep, for the origination of the Sussex Agri-
cultural Association, and as one of the founders
of the Smithfield Cattle Show. As an agricul-
turist he was so much esteemed by his contem-
poraries that his biographer, Walesby, writing
shortly after his death, claims that EUman had
by his discoveries so increased the productive-
ness of agi-iculture as to effectually disprove the
doctrines of Malthus. EUman himself abstained
from abstract economics, and is chiefly inter-
esting to students of the science for his helping
Arthur Young {q.v.) with materials for the
latter's Annals of Agriculture. Ellman ap-
pears, from his correspondence with Young in
this connection, to have supposed that the Poor
Rate {q.v.) and similar imposts fell almost ex-
clusively on the farmers, who had to support the
used-up labourers when past work in factories.
He also urged very strongly that the wages of
labour should be proportional to the labourer's
skill.
[See life of Ellman in preface to Baxter's Library
of Agricvltwre, 4th ed., 1851. — Yaxm^s Annals of
Agriculture, London, 1784, etc.; and Dictionary
of National Biography, London, 1888.] a. h.
ELUS were financial oflBcers in France who
superintended the collection of taxes in those pro-
vinces which had not estates, or assemblies, of
their own. They are to be distinguished from
the tresoriers, who collected the domain revenue.
The dlus originated in 1356, when the states-
general made the most notable attempt to impose
constitutional checks upon the crown. Not
content with claiming the sole right of imposing
taxes, they insisted upon entrusting their collec-
tion to their own elected officials (Mm). Charles
V. subsequently maintained both the taxes and
the collectors of 1356, though he turned the
latter into royal officials, and they continued
till the revolution. The district of an 4lu wa*
called an Section, and hence the provinces which
had no estates come to be called the pays
d'electim, as distmgmshed from the pays d' Stats.
The provincial estates were quite distinct from
the Etats g^n^raux (q.v.)
[De Tocqueville, L'Ancien Eigime.] R. L.
EMANCIPATION. The general subject ia
dealt with in connection with Serfdom,
Slavery, Enfranchisement of Land, and
ViLLENAGE, but the emancipation of the negro
slaves in America offers some points of special
economic interest. The main influences which
led to abolition were unquestionably moral and
religious; but there had been growing up a strong
suspicion that the system was wasteful, and it
was too palpably an outrage upon the prevalent
laissez-faire principle to last far into the 19th
century, wherever English ideas were in vogue.
A close scrutiny brought out that the one solid
basis of efficiency was the easiness of direction
of unskilled labour in large masses, but the fol-
lowing objections left a large adverse balance.
(1) Slave labour wasted the soil through its
lack of intelligence ; (2) it confined agriculture
to certain products, especially sugar, cotton,
tobacco ; (3) it prevented the rise of manufac-
tures ; (4) it degraded labour, and thus arrested'
immigration of fresh white people, and prevented
the formation of an industrious middle class ;
(5) it prevented the industrial development of
which the negro population was capable ; (6)
it kept down the gross production of a com-
munity in favour of net -production ; and
further, kept back net-production in general, in
favour of the net-production appropriated to a
small portion of the community. AUov/ing for ,
the general material progress of the world as a
stimulant, and in the case of the British "West
Indies for the equalisation of the sugar duties
in 1846 and the rise of beet sugar sines 1860,
as obstructions, a comparison of the present
condition of the countries affected with their
condition before emancipation substantiates this
arraignment of the slave system in every point.
(1) With greater intelligence and better J
appliances the soils are no longer wastefully'
exhausted. Mr. Briggs, an intelligent Barbados 1
planter, who resolutely improved his methods, i
made a large fortune soon after emancipation, I
and the soil of that island now appears likely!
to continue to yield its 50,000 tons of sugar a|
year indefinitely. (2) Agriculture has been^j
extended and varied. In the West Indies the
once despised "subsidiary" products have, in
gross, taken the chief place from sugar, except r
in Barbados ; lands hitherto thought useless'
have been brought into cultivation — 50,000]
acres were added to cultivated areas in Jamaica ,
alone between 1880 and 1890 ; in South Carolina
the forests are giving employment to 700 timber
mills ; in Brazil coffee-production increasesl
every decade. (3) Manufactures have sprung;
EMANCIPATION— EMBARGO
695
into existence in the Southern States. In
South Carolina minerals are being worked,
notably the phosphate rock ; and manufactures
have passed from 8^ million dollars before
emancipation to 16f millions in 1880 and 32
millions in 1884. In the West Indies to turn
to manufactures would be pernicious waste of
natural advantages, and no one desires to see it
done.. (4) The lower classes of the white race
are rapidly improving their position. Professor
Bryce says of the South, " The chasm that used
to divide the poor whites from the planters has
been in many places bridged over by the growth
of a middle class of small proprietors in the
country and of manufacturing industries in the
coal and iron regions " (^American Commonwealth,
iii. p. 95). In the West Indies there is no
change in this respect ; the employing class has
diminished (Jamaica from 40,000 to 17,000),
and opinion is, on the whole, against the suit-
ability of these colonies for any other class of
white people. (5) There has arisen in the
West Indies a peasant class of negroes of whom
it is no exaggeration to say that they have the
most favoured lot that has ever fallen to any
considerable portion of their race. In Barbados,
where there was no unoccupied land available
for squatting, the emancipated negroes at once
became wage-earners, and they so continue ;
in Jamaica there was abundance of land avail-
able, and the planters were so ill-tempered in
their attitude to the new status that the negroes
in large numbers became independent peasants,
and the separation of labour from capital has
therefore been far wider than it needed to have
been. There are now over 90,000 small holdings
among the 100,000 families in the colony. In
Trinidad and Demerara also the negroes aban-
doned plantation work, and resort was made to
East Indian coolies for this purpose ; still the
negro population increases and prospers on other
products — cocoa, for example, and fruits not
requiring much capital and adapted for small-
scale production. In the Southern States,
whatever is to be allowed as to their low politi-
cal and social condition from a European point
of view, it cannot be gainsaid that there are
now millions of negroes industrially wealthy
in comparison with the condition of their
fathers, whose labour had little influence upon
their own material well-being. (6) The gross
produce of all the countries affected has more
than kept pace with the growth of population,
and the wealth is more widely distributed.
Whereas, in former times 60,000 families
worked in Jamaica on slave rations, while some
8000 received an abnormal return for both
capital and superintendence, an examination of
the imports now shows that there is a very
considerable net-produce in the hands of the
common people of the colony. If the summit
of luxury has fallen, the level of subsistence
has risen to a stage of comfort and civilised
life. The statistics of all the countries in
question indicate a similar change. Even in
Cuba, where the emancipation has not led to
any extensive industrial change, the output of
sugar has not been affected so far.
The following remarkable figures are given for
Brazil : — Annual produce of coffee, 1835-1840,
slave-trade in existence, 88 million lbs. ; 1855-1860,
slave trade abolished, 264 millions ; 1872-1877,
emancipation bypurcliase in progress, 389 millions ;
1890, emancipation completed, 880 millious.
Of course fixed capital was lost during the
transition, but when the old capitalist class still
represents Jamaica, for example, as a standing
reproach to Great Britain, serious inquirers will
find this unsupported by the official statistics of
the colony. If a colony with an increasing
area of cultivation, an increasing public revenue,
and increased expenditure on public institutions
of all kinds, increased support of voluntary
religious bodies including a now disestablished
branch of the Episcopal church, and a pauperism
of less than one per cent, is a reproach, where
are the jewels of an imperial crown to be sought ?
[The economic chapters and appendices in
Cairnes's TheSlave Power, 2nd ed., 1863, excellently
introduce the subject, which can be further studied
in the histories of the various colonies (especially
Gardner's Jamaica, 1873), of the United States
of America, of Cuba, and of Brazil. For the
present condition of the countries affected, the
many statistical works published in America show
the situation in the southern states ; whilst our
colonies can be studied in the Reports in their
Blue Books, issued from time to time by the
colonial office for a few pence each. Amongst
noteworthy articles of recent issue are N. Lubbock,
Our West Indian Colonies (from sugar-merchant's
point of view). — Royal Colonial Institute Proceed-
ings, vol. xvii. — H. Fowler, "Capital and Labour for
the West Indies," ibid., vol. xxi. — Lord Brassey,
"The West Indies in 1892," ibid., vol. xxiii.— D.
Morris, " Fruit as a Factor in Colonial Commerce,"
ibid., vol. xviii. — C. S. Salmon, Capital and Labour
in West Indies, Pamphlet, 1883.] a. c.
EMBARGO. The word " embargo " used in
a general sense means any prohibition affecting
commerce ; in a more special sense, it is a term
of international law implying the seizure of
foreign ships. Formerly ships belonging to a
foreign power were placed under embargo in
contemplation of war, but in modern times
this practice has been discontinued, and the
only occasion on which an embargo of ships is
now resorted to is when it is sought to use
reprisals in the case of any specific wrong com-
mitted by any foreign state. If in such a case
the relations between the two powers concerned
re-assume their normal condition, the ships
which have been placed under embargo are re-
leased ; if on the other hand war is declared, the
ships are confiscated (see Angarie, Droit d').
[Hall's International Law, 3rded. 1890, pp. 366
373.] E. s.
696
EMBEZZLEMENT— EMIGKATION
EMBEZZLEMENT. This offence is defined
in Mr. Justice Stephen's Digest of the Grimi'nal
Law (Art 309) as "the conversion by a clerk,
or servant, or person employed in the capacity
of a clerk or servant, of any chattel, money, or
valuable security delivered to or received or
taken into possession by him for or in the
name or on account of his master or employer."
Embezzlement differs from theft principally in
the circumsUnce that the thing embezzled has
not yet come into the possession of the person
entitled to it, and is not taken out of his pos-
session by the offender, whilst in the case of
theft the thing stolen is taken by the offender
out of the possession of the person entitled to
it. Thus, if a shopman receives money for
goods sold by him for his employer and puts
this money into the till and then takes it out
of the till and appropriates it, he commits a
theft of the money. But if the shopman, after
receiving the money, puts it into his pocket
and afterwards applies it to his own purposes,
this is embezzlement. If a clerk or servant
appropriates a thing given into his custody by
his employer, this act is not embezzlement but
theft. For the thing so misappropriated is
regarded by law as still in the possession of the
employer. A further distinction between theft
and embezzlement lies in the fact that theft
may be committed by anybody upon anybody,
but that embezzlement can be committed only
by a clerk or servant or person employed in the
capacity of a clerk or servant and with refer-
ence to property belonging to the employer.
Accordingly, before an offence against pro-
perty can be described as embezzlement, it
must be shown that the property was in the
possession of the oflfender, and that he stood in
the relation of a clerk or servant to the injured
party. The ascertainment of these points is
often a matter of great nicety. Embezzlement
is a felony, and renders the criminal liable to a
maximum penalty of fourteen years' penal
servitude.
[For the present state of the law regarding em-
bezzlement, consult Stephen, Digest of the Grim-
inal Law, Arts. 297, 309-312, and 325. For the
history of the law regarding embezzlement, see
Stephen, History of the Criminal Law, vol. iii.
pp. 161-156.] p. c. M.
EMBLEMENTS (from the med. Latin word
enLbladare = to sow with com), technical name
for growing crops. Where the owner of land
dies intestate, the emblements do not go with
the land, but devolve on the personal repre-
sentative for the benefit of the next of kin {e.g.
if a man dies leaving two sons and one daughter,
the land goes to the eldest son, and the emble-
ments are divided between the three children
in equal parts). A person entitled to land for
his own life, or during the life of another
person, is entitled to the crops sown during his
tenancy and reaped after its termination ; but
it is now provided (by 14 & 15 Vict. c. 25),
that in the case of land held at rack rent, the
tenant or his representative may after the
termination of the tenancy hold on the same
terms to the end of the current year ; and the
rule as to emblements does not therefore come
into operation in such cases. E. s.
EMERSON, GoTJVEENEUR, M.D. (1796-
1874), was born in Delaware and settled as a
physician in Philadelphia. He devoted much
of his time to scientific and agricultural in-
quiries ; and gave special attention to medical
and vital statistics. In 1872 he translated and
prepared a preface for The Organisation of
Labor by F. Le Play, Philadelphia, pp. 41 7,. (
preface, pp. v.-xiii.
[Biographical Encyd. of Pennsylvania, 1874,j
p. 27.] D. R. D.
EMIGRATION — its Effects on ti
Country of Origin. In aU that has been
written on the subject of emigration, a minor
place has been assigned to the discussion of it
effects upon the population of the country whichj
the emigrant leaves. The assumption, how-
ever, that these effects must be in every way|
beneficial underlies most of the pamphlet anc
other literature on the subject of emigratioi
and colonisation which exercised the public
mind in this country during the period from'
1820 to 1850, or thereabout.
It would be idle to dwell on the pre-historio
migrations of the Indo-European races, or the
hardly less remote expatriation of the Phoeni-
cians. Nor will our knowledge of the economic
condition of the ancient Greeks justify us
drawing too confident conclusions from the mosti
regular system of emigration which the ancient]
world exhibited. The Romans were not girenj
to emigrate in the sense in which we now
the term, although they made great political^
use of their "colonies." Nor can the descents
of the barbarous hordes of the north on the]
declining Roman empire in the early centurie
of our era, or the victorious career of Spa
conquest in the new world in the 16th century,
be considered to famish any economic lesson.
Such movements of population as those of j
the Flemings and Huguenots to England!
in the 14th and 17th centuries were preg-
nant with economic results, but were tooj
partial and irregular to constitute an era of|
emigration.
The beginning of emigration, as we have to
consider it, may be placed in the I7th century ;
and the nations which chiefly furnish instances
of it are the English, the French, the Dutch,
and Portuguese. The motives which prompted
these earlier streams of emigration were usually
love of adventure or political discontent. The
feature which marked this emigration off from
previous movements was its steady set towards
new countries ; the freshness and emptiness of
7
EMIGRATION
697
the new lands swelled the volume of the stream
which they attracted. There can be little
doubt that the new impulse reacted with a
considerable effect on the conditions of life in
the countries which the emigrants left behind ;
the Dutch being at that time the first to feel
the influence.
With the 19 th century emigration entered
on a new phase, and then England was in the
van. She was suffering from acute commercial
distress at home, and anxious about her vast
possessions abroad. It occurred to a certain
section of thinkers that the latter could be
utilised as a remedy for the former, and various
schemes of state-aided emigration to the
colonies were much debated throughout the
second quarter of the century, both in and out
of parliament. Such were those to facilitate
emigration from the south of Ireland to Canada
(1823) and to relieve distress in the Highlands
of Scotland (1841). At this time, indeed, the
idea of emigration became merged in the more
complex idea of colonisation. " Of colonisa-
tion," writes Wakefield, "the principal ele-
ments are emigration, and the permanent
settlement of the emigi'ants on unoccupied
land." We refer again later to the distinction
between the secondary results of emigration
to a foreign state, and those of emigi-ation to
a colony or similar possession.
What was thought of the economic bearing
of emigration at the time alluded to may best
be gathered from the following passage from
Wakefield's book :
"My fancy pictures a sort and amount of
colonisation that would amply rej»ay its cost
by providing happily for our redundant people ;
by improving the state of those who remained
at home ; by supplying us largely with food and
the raw materials of manufacture ; and by
gratifying our best feelings of national pride,
through the extension over the unoccupied parts
of the earth of a nationality truly British in
language, religion, laws, institutions, and attach-
ment to the empire."
The first words of this passage strike the
keynote of the modern intention in emigration.
The movements of the individual and the larger
schemes projected by the state are alike con-
nected with the sense of undue pressure and
competition at home. Love of adventure,
political complications, religious difficulties,
which have been active forces in causing emi-
gration formerly, play a less conspicuous part
now. Yet they are still not absolutely unim-
portant : the existing movement of the Jews from
Russia is strongly influenced by these motives.
The circumstances are too recent to enable us
to judge whether the eflect on the prosperity of
Russia may not be similar to that experienced
by Spain after the expulsion of the Jewish-
Mahommedan population in the time of Ferdi-
nand and Isabella. The former large emigra-
tion from Germany, which was usually assigned
to the existence of conscription, may with greater
probability be traced to the pressure of financial
burthens resulting from military expenditure.
Professor Mayo Smith, in his recent work, laid
it down that persons rarely emigrate in order
to better themselves, but because they are
actually pinched at home.
And this at once suggests the most important
o f the questions which our subj cot presents. The
effect of emigi'ation on any particular state must
largely depend upon the functions which have
daily been discharged by the emigrant. We
must ascertain then, what are the classes of
people who do emigrate. It is not enough to
speak about "relieving one labour market and
supplying another " ; we must discover if we
can what branch of labour is chiefly aflected,
and to what extent its efficiency is impaired by
the removal of its active members.
Next in importance is the question of volume
of emigration and drain on the population.
Thus emigration must be examined both as
to quantity and quality ; but having arrived
at some decision on these points in any par-
ticular case, and at an estimate of the actual
loss to the country which they involve, we
shall have to set off against it the advantages
gained by the persons left behind, the freedom
from over - competition, the raising of the
standard of comfort, and so forth — a subtle and
difiicult inquiry. In this way we should gauge
what may be considered the primary results of
emigi-ation.
The secondary results are partly commercial,
partly political. Mill kept the first-named very
clearly before him when he penned the follow-
ing passage : —
"The question is in general treated too ex-
clusively as one of distribution — of relieving
one labour market and supplying another. It
is this, but it is also a question of production,
and of the most efl&cient employment of the
productive resources of the world. Much has
been said of the good economy of importing
commodities from the place where they can be
bought cheapest ; while the good economy of
producing them where they can be produced
cheapest is comparatively little thought of.
. . . The exportation of labom'crs and capital
from old to new countries, from a place where
their productive power is less to a place where
it is greater, increases by so much the aggregate
produce of the labour and capital of the world.
It adds to the joint wealth of the old and the
new country what amounts in a short period
to many times the mere cost of effecting the
transport. There needs be no hesitation in
affirming that colonisation, in the present state
of the world, is the best affair of business in
which the capital of an old and wealthy country
can engage."
Similarly Wakefield, in a work which followed
V
r
698
EMIGRATION
Mill's: " The practice of colonisation ... has
reacted with momentous consequences on old
countries by creating and supplying new objects
of desire, by stimulating industry and skill, by
promoting manufactures and commerce, by
greatly augmenting the wealth and population
of the world" ; and he goes on to add in words
which we may quote without tying ourselves to
accept them, "it has occasioned directly a
peculiar form of government, the really demo-
cratic, and has been, indirectly, a main cause
of the political changes and tendencies which
now agitate Europe."
The above sketch of the lines to be followed
in an investigation into the effects of emigi'ation
may be considered to hold good generally for
all times and for all peoples ; but it is question-
able whether any sufficiently trustworthy data
exist to enable us to draw fair inferences con-
cerning the earlier emigrations. Even in regard
to recent years we shall do well if we can
arrive at fairly accurate conclusions in respect
of one or two countries, such as England or
Germany, in which statistics are becoming
understood. It is hardly necessary to observe
that the case of the United States, whose statis-
tics are suflBciently careful and elaborate, fur-
nishes no illustration of the efiect of emigi-ation.
Such emigration as may take place from the
States is so individual and spasmodic that,
compared with the large volume of Immigra-
tion (q.v.), it may be neglected.
In considering the results of emigration from
Europe in the 17th and 18th centuries, it is
almost impossible to separate political and
economic phenomena.
Spain suddenly found an area for her develop-
ment which has been unequalled even by Great
Britain ; she subdued many native peoples and
settled a vast territory. There was a constant
flow of Spaniards to Central and South America.
The ease of conquest and the lust of gain had a
large share in the deterioration of the national
character ; loss of population and a false con-
ception of wealth completed the downfall of an
empire. If it be sought to fasten a portion of
the blame on emigration it will not be forgotten
that, while the drain on the resources of the old
country was excessive, the Spanish emigrants
were for the most part the worst type of mer-
cenary soldiers.
The history of Portugal presents rather differ-
ent features. The Portuguese in those days, as
now, were deeply imbued with the trading
instinct ; they had far more capacity than the
Spaniard for settling down on new territory.
The effect of discovery and conquest in this
case is parallel to that upon Holland ; a people
dwelling in a circumscribed area suddenly rose
to the level of a first-class state ; the more rapid
loss of power by Portugal was probably due to
the weakness of its political constitution as
compared with that stern combination of free
men who had gone through thie fire of oppres-
sion and emerged a fresh nation.
The Netherlands form the best instance,
besides our own country, of the beneficial effects
of regular emigration. To them it was a safety-
valve : the closing years of the 1 6th century
had purged away the dross of the nation ; it
was composed of men, on the whole, remark-
ably even in power, will, and capacity ; to
avoid fretting and wear and tear at home a
proportion of such men must find an outlet
abroad ; the emigration from Holland accord-
ingly included many of the best of its citizens,
and they did not hesitate to settle permanently
in their new homes, and reproduce the political
constitutions and commercial aptitude of the
mother country. On the other hand the volume
of emigration was not large, and we have De
"Witt's authority for the fact that there was a
constant immigration into the free republic
from surrounding nations ; the centre of the
system was never exhausted. The new settle-
ments distinctly increased the trade and power
of the Netherlands ; the monopoly which they
established of the East India trade was only
partly due to the chartered company ; it could
not have lasted so long but for the Dutch mer-
chants on the other side of the world.
We may pass over France, which furnishes
no further lesson, and take the early history of
English emigration. There we find emigration
proceeding along two distinct lines — the inten-
tional transporfiN,tion by the great companies of
such persons as would form a useful community,
and the voluntary expatriation of large bodies
of persons of the same political or religious
persuasion. The class of emigrants who left
England at that time was thus, in the main, a
very good one. It was only natural that the
intention of the founders of the settlements
should be better than the results attained.
The proposal in the case of Carolina — that not
more than 100 or 150 settlers should be sent
over the first year, and none but labourers,
artisans, and skilful seamen should be sent
during the next two or three years — is a fair
sample of the way in which the nucleus of a
colony was intended to be constituted. But in
practice it was impossible to avoid an influx of
worthless characters ; and in spite of Bacon's
warning, adventurers and government alike
could not resist the temptation of sending out
condemned prisoners, vagrants, gipsies, and bad
characters, — people ''divers ways gathered up
in England."
England, however, did not lose by the
exodus. "Virginia," says Doyle, "was the
offspring of economical distress : " in fact, Great
Britain could at the time afford to part with a
large slice of population. The ablest workmen
and richest merchants did not go ; those who
did emigrate, whether honest men or rogues,
left a feeling of relief among those who remained
/
EMIGRATION
699
behind them ; there was more elbow-room, but
there was no gap ; the work at home went on
better.
The number that emigrated at this period
was considerable ; although our information is
not sufficient to be tabulated. To Virginia
alone 1261 persons went in 1619, 1000 in one
year previous to 1635, 2000 the next year,
1600 the next, and so on — many thousands in
all ; and the movement was steady year by
year. In 1639 an order in council was issued
with the object of restraining the efflux of popu-
lation. There was an alarm that this was
becoming a drain on the country's resources.
But the very next year there were appeals for the
rescission of the order in whole or in part ; and
Sir Josiah Child, writing in 1692, denies that
there ever had been a drain on the people.
In the large extent of this emigi-ation lay the
germs of its future benefit to England. The
plantations called out enterprise and activity
on the part of those who remained behind.
** I say," writes Child, "that for provisions,
clothes, and household goods, seamen and all
others employed about materials for building,
fitting, and victualling of ships, every English-
man in Barbadoes or Jamaica creates employ-
ment for four men at home." The emigration
of a considerable number of men, and the suc-
cessful growth of their settlements in new
lands, transformed England into the first com-
mercial and carrying nation of the world.
In the 18th century the stream of emigra-
tion flowed more slowly ; the severance of the
United States, and the wars in which Great
Britain was engaged, both contributed to check
it ; and when next it assumed larger propor-
tions a new era had begun — the era of emigra-
tion without conquest or settlement, directed
as much to foreign countries as to British
possessions. In 1815 the number of emigrants
from the United Kingdom was 2081, in 1820
it was 25,729, in 1830, 56,907 ; in that year
the Colonisation Society was formed ; in the
next year the first effort was made to regulate
emigi-ation ; an agent general for emigration
and certain '* South Australian " comniissioners
were the chief centres of authority for some
years, and in 1840 the Colonial Land and Emi-
gration Board was established in Downing
Street. It had become clear that the matter
was one of great interest both to the mother
country and the colonies. On the one hand
was the theory described as "shovelling out
the paupers," on the other was the demand
that no emigrant should be sent to the colonies
except under proper safeguards, and with some
guarantee of his fitness. And on the lines
which wore settled fifty years ago, the attitude
of the state towards emigration has remained
ever since. Tlio activity of societies and other
quasi-public influences has, however, been grow-
ing, till we are confronted at the present day
with the efforts of philanthropists and charit-
able institutions such as the Church Army.
We can now examine in more detail, in the
case of our own country, the answers to the
questions propounded above.
1. As regards the stamp of the emigrants
from England it is specially noted in 1845 that
one-half were unskilled labourers, and four-
fifths of the remainder agricultural labourers
and farmers, the great bulk being exceedingly
poor and depending on immediate employment
for subsistence. And a study of the Board of
Trade returns for the last lew years confirms
the same opinion. "'There seems no doubt,"
says Sir R. Giffen in his report, " of the broad
facts that the majority of the adult male
emigrants are laboui'ers, and of single adult
female emigrants, domestic servants." In the
last nine months of 1912 out of 223,608 adult
emigrants (British subjects) leaving the United
Kingdom 124,156 were males, and 99,452
females, classified as follows :
Male—
Agricultural 23,289
Commercial and professional , , 19,770
Skilled trades 38,816
Labourers 30,942
Miscellaneous . . , . . 11,330
Female —
Domestic and other servants . , 31,983
Dressmakers and other trades . . 5,765
Teachers, clerks, and iirofessions , 3,379
No stated occupation .... 58,325
It may reasonably be assumed that the major-
ity of those whose occupations are notstated were
also unskilled labourers ; hence it is probable
that some 156,000 out of 224,000, about sixty-
nine per cent, were of this description. The
reports of the Emigi'ants' Information Office may
at first sight appear to contradict this, as the
larger percentage of their recorded inquiries has
been from mechanics ; this, however, is natural
from the position of the office in London, and
the general readiness of the mechanic as com-
pared with the unskilled labourer in availing
himself of an institution of this kind.
It would appear to be the fact that neither
of the ordinary tenets as to the class of persons
who leave the country is correct. The pauper
cannot go — despite the theory that emigration
was to relieve the weakest portion of the com-
munity ; the receiving country rejects him, and
the regulations which agents of government
here and abroad have sought to enforce con-
stantly tend to encourage the better class of
emigrant. Macintyre, writing seventy years
ago, insisted on this: "Emigration, as it is
carried on from this country, does not afford any
relief to the masses of the people reduced to the
verge of starvation." " The conditions required
of the persons selected for emigration show that
they are picked individuals." Emigration has
done little or nothing towards elevating the
lowest classes of our people. But, on the
other hand, it appears to be untrue that only
V
700
V-
EMIGRATION
the best of them are leaving us. "With some
reservation as to what stamp of man is really
the best and strongest in a community, we need
uot accept that theory. While it is obvious that
a man must have some capital before he can emi-
grate to Australasia or the States, especiaily if
he take his family with him, and that he must
have some energy to cause him to make the
eflfort to move, the fact seems to be that the
best and most skilled workers, those who feel
they can make their way, remain at home ;
the less competent hands emigrate. The figures
given above support this opinion, which is en-
dorsed by Sir R. Giffen (comp. Francis
Galton's Hei-editary Genius, p. 346). Hence
it appears that the loss of productive power to
the country is not serious. And if the pro-
ductive capacity, the skill and worth of the
emigrants is improved in their new sphere, there
is a clear economic gain to the world at large.
A more real disadvantage to a country is found
in the tendency of males to emigrate in greater
numbers than females. Emigration in this
aspect appears as contributing indirectly to the
gi-cater immorality and pauperism which usu-
ally result from the excess of females. Simi-
larly there may be a loss to the community in
having to educate and bring up a new set of
children to take the place of adult emigrants.
The questions of the effect of the removal of
labour on wages, and the prospect of thereby
raising the standard of comfort amongst the
labouring classes, are matters which bring us to
the consideration of the volume of emigration.
To raise wages in any particular trade it is
necessary that an ample number of that par-
ticular craft should be removed at one time ;
and that is an event which does not occur.
Some effect might be produced on all trades by
the removal of a very large mass of general
labour ; but neither is that at present attain-
able ; though there is a growing tendency
towards encouraging emigration in families and
small communities, e.g. to the state colonies
of the Argentine Republic.
In computing the volume of emigration, we
must obviously set off against it the total of
immigration in each year. Thus in 1912 the
gross number of emigrants from the United
Kingdom to non- European countries (including
foreigners and children) was 656,835; the
number of immigrants was 340,696 ; the net
emigration being thus 316,139. Sir R. Giffen
notes that both vary in well-defined cycles,
guided by the state of trade ; when prosperity
is at its height there is a decline of gross emigra-
tion, accompanied by increase of immigration.
It has unfortunately happened of late years in
England that the immigrants who take the
place of our British emigrants are foreigners of
a lower stamp than our own people ; so that
there is a double loss apart from mere figures ;
for these foreigners not only replace better men.
but tend again to lower the standard of comfort
and depress the status of the workers.
The annual average number of persons of
British and Irish origin who have emigrated
since 1851, with proportion to the total
population of the United Kingdom, is as
follows :
Period.
1851-1860
1861-1870
1871-1880
1881-1890
1891-1900
1901-1910
1911-1912
Annual
Average.
164,085
157,182
167,891
255,853
174,279
284,146
Proportion
to Total
Population.
•58 per cent
•50 „
•51 „
•70 „
•44 „
•65 „
461,096 1-01
These figures include tourists and travellers as
well as emigrants. In 1912 a new method of
computation was adopted demanding a state-
ment of the countries of last and of intended
future permanent residence. It is now possible
to separate emigrants from and immigrants to
the United Kingdom from passengers passing
through. Thus in 1912-13 out of 474,509
British subjects who left for non -European
countries, 407,729 were bond fide emigrants,
and of 341,660 persons (British and alien) who
arrived, 74,798 intended to remain.
Of the emigrants from the United Kingdom
in 1912 about 25 per cent went to the United
States, 40 per cent to British North America,
18 per cent to Australia, 13 per cent to other
British Colonies, and 4 per cent to other
foreign countries.
The secondary results of emigration are {a)
commercial ; (6) political.
(a) They differ according as the emigrants go
to a foreign country or a colony. When a colony
is protected like a foreign country against British
goods, it does not much matter commercially
whether he goes to a colony or not. But where
preference is given to British goods, and there
is a growing tendency towards this among our
colonies, it makes a great difference. The
general effect is well described by Wakefield.
**The emigrants would be producers of food
. . . and raw materials of manufacture for this
country ; we should buy their surplus food and
raw materials with manufactured goods. Every
piece of ouy colonisation, therefore, would add to
the power of the whole mass of new countries
to supply us with employment for capital and
labour at home. Thus employment for capital
and labour would be increased in two ways and
two places at the same time ; abroad, in the
colonies, by the removal of capital and people
to fresh fields of production ; at home by the
extension of markets or the importation of food
and raw materials,"
How true this is may be seen by the growth
of trade between Great Britain and her colonies
(see Imports and Exports). The enhance-
EMIGRATION
701
ment of Great Britain's commercial prosperity,
owing to emigration to her colonies and the
United States, is an admitted fact. But when
the emigrant goes to a foreign country and is
lost in the general mass of its population, it is
impossible to earmark his particular effect on
increase of trade : if trade were free, old associa-
tion might do much ; but in the vast majority
of cases the matter is determined by other
causes. Of all the nations who have most
increased the national commerce with foreigners
through emigration, we should select the Ger-
mans as the most successful at the present day.
But a large emigration may sometimes pro-
duce a transfer of trade which is a distinct loss
to a country. England seems to be experiencing
something of this sort in consequence of the
high tariffs of other countries, e.g. the McKinley
Act of the United States ; when manufactures
are transferred bodily to their best market
there Avill be a loss of people and of proiits
to England. But in this case emigration is
a result rather than a cause, differing herein
from the emigration of the Flemings from the
Low Countries in the 14th century, which pro-
duced a transfer of the woollen manufacture to
England.
(h) With purely political results of emigra-
tion we are not here concerned. On the one
hand, it tends to the union of nations and to
the establishment of peace ; on the other, it is
always increasing the responsibility of a nation
towards foreign powers. England with her
many subjects scattered over the globe, and her
vast possessions across the seas, is the great
example of the double responsibility. We are
' not likely now, as the Romans did, to make
emigration a distinct method of control over
subject peoples.
In reviewing the foregoing results we have
purposely selected Great Britain as their chief
exponent. And we have dealt with the king-
dom as a whole : in Scotland and Ireland, taken
separately, we find two well-marked opposite
results. Scotland has sent out a steady
stream of emigi-ants whose departure has only
strengthened those who were left behind, Ire-
land, partly from poverty, partly from political
causes, has been rapidly depleted of the stronger
part of her population. In examining the emi-
gration from other countries, we also find special
phases to arrest us. Norway and Sweden have
both been centres of a large emigration, which
appears to be gaining strength. In Norway
the causes and effects have been akin to the
case of Scotland. In Sweden the parallel is
rather with Ireland. In Italy the large annual
emigration is becoming a serious drain, and
the face of the country is already showing
this. The loss of the more enterprising
peasantry is making more helpless those who
are left behind. Germany, on political grounds,
has checked the tendency to emigrate ; she
does not wish to lose her soldiers at the best
period of their lives.
The comparative strength of emigration in
certain European countries may be gauged by
the following figures for 1910-11 :
Great Britain and Ireland . 10-05 per 1000
Holland .
7-30
Germany .
Italy .
Norway .
Sweden .
•39
. 15-43
. 5-0-2
. 3-59
These figures show the gross emigration ; we
must go further for the net result. In the
last three countries mentioned there is little
immigration to balance the drain. One of the
best instances where population has, decade after
decade, been kept stationary by emigration is
that of tlie Leeward Islands in the West Indies.
Emigration from France is very slight.
Before concluding, a reference is required to
the considerable annual emigration from India
to the British tropical colonies, and from China
to the Australian colonies and the United
States. The Indian government do not en-
courage emigration, except under very strict
conditions and safeguards. The Chinese law,
till recently at any rate, prohibited it ; but
pressure of population set the law at defiance,
and the government, as is its wont, connived.
In 1852 Sir E. Bowring expressed the opinion
that it left greater ease to those who remained
and cleared the country of vagrants. Hardly
any women leave China, and this gives the
movement a special feature. An indirect effect
of slow growth may be expected in the case
of Indian coolie emigration, especially that
to the West Indies. The lowest classes of
the population go : their return at a stated
period is part of their agi-eement ; they come
back much improved in circumstances, with
standards of living gi'eatly raised. But the
population of both China and India is so
crowded that hardly a mark can yet be said
to have been left upon it by emigration.
[The aspect of emigration here discussed is
but slightly referred to in most published works.
Special attention may be called to chapters II. and
IX. of Immigration and Emigration : A Study in
Social Science, Prof. Mayo Smith, London, 1890 :
this book has a full bibliography. — The reports
of the Emigration Commissioners from 1832 to
1870. — Jhe annual statistics of the Board of
Trade, especially the reports for 1877 and 1891.
First and second reports on the Emigrants' In-
formation Office, 1887-88. — An Essay on Planta-
tions, by Sir Francis Bacon. — A Treatise, by John
de Witt, Pensioner of Holland. — A Discourse
concerning Plantations, by Sir Josiah Child (all
three re-published amongst select tracts, London,
1827). — The Effects of Distant Colonisation on the
Parent State, Thomas Arnold, lSl5.—Thovghts
on Population and Starvatic>n, by J. J. Mac-
intyre, London, 1841. — Letter on the Condition
\ of England, by R. Torreus, 1843.—^ View of
702
EMINENT DOMAIN
th^ Art of Colonisation, by E. Gibbon Wake-
field London, 1849.— An essay Ueber italumsche
Au^anderung und FeMarheU in ItaUenxsche
Gvps-Figv/rffn, you W. Kaden, Leipzic, 1891.]
C. A.
[For the effect on the country which receives
the emigrants, see Immigration.]
EMINENT DOMAIN. This term, in
constant use among American lawyers and
publicists, but still hardly familiar in England,
seems to be derived from a phrase of Grotius
(De Jure Belli ac Pads, 1. i. ch. iii. vi. § 2)
where, speaking of the attributes of supreme
public authority in a state, he says: "in
quibus comprehenditur et dominium eminens
quod civitas habet in cives et res civium ad
usum publicum." That is to say, there is in
every state a paramount authority over the
persons and property of its subjects for matters
of public advantage. It will be carefully
observed that this is not a right of property,
and is quite independent of the laws or doctrines
as to the tenure of any kind of property which
prevail in this or that state. Where the state,
or a public department, in a corporate capacity,
or as an ideal or "moral" person, is the
owner of any property, its rights are the
ordinary rights of an owner. The right or
power now in question is to supersede the
ordinary rights of the subject, whatever they
may be. In other passages Grotius calls it
"supereminent," as if to make this clear.
Being a power above ordinary legal rights, it
can be set in motion only by an exercise of
legal sovereignty ; in other words it can take
effect in a civilised state, except perhaps in
singular emergencies, only by express legislation
or under some authority conferred by express
legislation. This passage alone does not make
it clear whether Grotius contemplated the
right or power of "eminent domain" as some-
thing capable of being in frequent and normal
action, and having a settled place in the institu-
tions of public law. Perhaps he was here
thinking rather of impressing men for service
against an invader, entering on private land to
make fortifications (a power attributed to the
crown from ancient times by the common law
of England), taking horses and provisions for
urgent military needs, and the like. But in a
later chapter (1. iii. ch. xx. vii. § 1) he dis-
tinctly says that it is not merely an emergency
power, but exists for the sake of the public
weal in general. In modern usage we speak of
" eminent domain " only as exercisable with
regard to property. Experience has shown
that many objects of public utility and necessity
cannot be eflFected without overriding the
ordinary rights of owners, and especially the
right of parting with one's property, if at all,
only on such terms as one thinks fit to accept.
On the other hand it is found necessary or
expedient to make interference of this kind as
little burdensome to the individual as is con-
sistent with accomplishing the public objects in
view, and to avoid, both in fact and in appear-
ance, anything like arbitrary disturbance of
private rights. Hence the exercise of sove-
reignty in this kind is reduced to rule and
brought under legal and judicial categories.
Under names denoting either th^ power itself,
as "eminent domain" in America, or the
principal mode and eflect of its exercise, aa
" compulsory purchase " in England, "expro-
priation pour cause d'utilite publique" in
France, " Zwangsenteignung " in Germany
(where, however, " Expropriation " is in more
general use), we find the matter dealt with,
on substantially similar lines, in the legislation
and jurisprudence of most civilised countries.
The principles recognised, it is believed, in
all jurisdictions, though secured by various forms
of procedure, are that private property is not
to be taken by compulsion unless for some
object of which the public utility has been
proved, that it must not be taken without just
compensation, and that the compensation must
be paid or at least put in the way of impartial
ascertainment before possession can be required.
The enactment of the French Civil Code " Nul
ne peut 6tre contraint de ceder sa propriete, si
ce n'est pour cause d'utilite publique, et
moyennant une juste et prealable indemnite"
(art. 646) may be taken as a concise and typical
statement. It is copied or translated in many
other codes {e.g. Civil Code of Lower Canada,
art. 407). The exercise of eminent domain on
terms of just compensation goes back, in France,
to the early 14th century (see Philippe le Bel's
ordinance quoted. Law Quart. Rev., iii. 316).
A law of 1841 (to be found in the collections
of Lois usuelles) now regulates the procedure in
France ; it has probably served as a model for
similar legislation in many of the countries
which have adopted the Napoleonic codes or
come under their influence. In England the
method has been for promoters of public works,
such as canals, bridges over navigable rivers,
and in later times railways, to apply to parlia-
ment for incorporation, and at the same time
to seek the grant of compulsory powers. Parlia-
ment cannot of course be bound by any positive
law in the exercise of its supreme power of
law-making, but the settled practice of Parlia-
ment in dealing with private bills embodies
all the essential safeguards. What is called
"proving the preamble" of a private bill is
really a quasi-judicial process of establishing,
by full and often keenly-contested argument,
the utility of the proposed undertaking. Com-
pensation used to be separately provided for in
every Act granting compulsory powers to take
land: at length "the multiplicity of such
statutes and the general similarity of their
provisions led to the enactment of various
general laws, notably the Lands Clauses Con-
EMMERY— EMPIRICISM
703
solidation Act of 1845, which," together with
later amending Acts dealing with particular
matters of procedure, "is really a code regulating
the law and practice of the eminent domain."
(Mr. Carman F. Randolph in Law Quarterly
Eeview, iii. 323). ''Lands Clauses Acts" and
** Compensation " are the English lawyer's
practical catch - words on the subject. The
ultimate feudal superiority of the crown has
nothing to do with eminent domain, although
the two things have sometimes been confused
even by able writers. It is sufficient to say
that the principles are the same, and the
practice alike in all essential matters, in France,
where feudal tenures have long been abolished,
and in the United States, where they never had
any effective existence.
Eminent domain has been described by the
highest American authority, the Supreme Court
of the United States, as "the right which
belongs to the society or to the sovereign of
disposing in cases of necessity, and for the
public safety, of all the wealth contained in
the State" — Pollard' s lessee v. Hagan (1844),
15 Curtis, 391, 395, s.c. 3 How. 212. It is
carefully distinguished by American publicists
from the right, which they call the police
power, of restraining the use of private
property in ways which may be dangerous,
offensive, or otherwise injurious to the public
weal. The specially full discussion and defini-
tion of these topics in the United States
proceeds from the fact that the legislative
power, both of the federal and of the state
governments, is not unlimited, but must be
exercised in conformity with the constitutions
of the United States and of the respective
states of the union.
[American treatises on Constitutional Law ;
Kent's Comm., ii. 339, and eh. xv. of Cooley on
Constitutional Limitations will suffice for most
general purposes ; also recent works on Eminent
Domain by Lewis, 1888 ; and Mill, 2nd ed. same
date. — In England, Cripps on the Principles of
the Law of Compensation, 3rd ed. 1892. Mr.
Randolph's article above cited, L.Q.R., iii. 314,
gives a convenient general view.] F. P.
EMMERY DE Sept Fontaines, Henri
Charles (1789-1842), was chief engineer of
the Fonts et Cliaussies. He superintended the
construction of the canal of Saint Maur, and of
the bridge over the Seine at Ivry, and about
five miles of sewers and six miles of water-
conduits were laid by him in Paris between 1832
and 1840. He principally wrote on subjects
connected with his profession, but published in
1837 a short pamphlet of thirty-two pages,
Amelioration da sort des Ouvriers dans les
Travaux Publics, in which he condensed the
results of his own experience of the state of
workmen employed in extensive public works.
He strongly advocated the arbitration of the
State Ingenietirs in all contentions arising be-
tween contractors for the State and their work-
men, and the responsibility, according to the
case, of the State or of the head contractors for
accidents or ill-health resulting from unhealthi-
ness of work. He gives some interesting statis-
tical details on the amount of indemnities al-
lowed under these heads of the principal works
he had superintended. On an average, they
amounted to 35 francs (say £1 : 8s.) per case, and
to the proportion of 3, 2*25, and 0*50 francs per
1000 francs (2s. 5d., Is. 10|d. and 5d. per £40)
of the gross cost of works performed. e. Ca.
EMPANEL. To put the names of jurymen
on a list which is called the panel. e. s.
EMPHYTEUSIS. An expression of Roman
law, for the permanent letting of land at a
chief rent, called pcnsio. The tenant was, for
all practical purposes, the owner of the land
(cp. Feu). e. s.
EMPIRICISM. Empiricism is a term of
somewhat vague import. Perhaps it is oftenest
used in an unfavourable sense to describe the
frame of mind of one who cannot or will not
reason from general principles, but guides him-
self in every emergency by reference to particu-
lar experiences. Consistent empiricism in this
sense is, strictly speaking, impossible. The
empiric who most loudly disclaims recourse to
general propositions must employ them as soon
as he begins to apply his empirical wisdom.
He must reflect somewhat after this fashion : —
The present case resembles, or does not re-
semble, certain cases which I have known.
Therefore certain results which followed in
those cases are likely, or are unlikely, to ensue
in this case. Therefore I ought, or I ought
not, to take such and such measures. Here
the most scrupulous empiric is reduced to em-
ploy both induction and deduction, to form a
theory applicable to more than the single case
before him ; in a word, to have recourse to
general reasoning. It is true that he may not
utter his argument aloud, that he may be him-
self unconscious that he is argiiing. Men of
practical genius, whether soldiers or statesmen,
men of business, or medical men, often carry out
extremely complicated and subtle processes of
reasoning which they have no time to note,
which language is hardly adequate to express,
and which produce upon bystanders the effect
of a happy unaccountable knack. Such men
are often mistaken for mere empirics, but that
is only because they theorise so rapidly and so
weU.
Empiricism, in so far as it is serious, may be
described as an illogical protest against the
abuse of logic. Most persons of systematic
mind are in such a hiu-ry to complete a system
that they wiQ not take time either to ascertain
all the facts important to be known or to give
to each known fact its due place and signifi-
cance. Accordingly they make wild work when
they apply their systems to the facts of life.
704
EMPLOYERS AND EMPLOYED
The mischief thus occasioned has often led men
ot real sagacity to express themselves as though
all reasoning were useless in practice, whilst
they only meant to say that any reasoning
which is to be of use in practice must be
difficult. . , ^ •
The empiric and the theorist have by turns
exerted a dominating influence upon the study
of political economy among all nations. Until
the 18th century books of economic theory were
comparatively few, and their practical influence
was comparatively small. Statesmen and the
public sought economic guidance chiefly from
persons actually engaged in industry and com-
merce. Of this empirical wisdom Sir Thomas
Gresham may be taken as a favourable instance.
If its admonitions were now and then disre-
garded, this was less in deference to the opinion
of economic theorists than in deference to a
supposed interest of government or doctrine of
religion or morals. But in the course of the
18th century theoretical writers upon political
economy began to acquire an unprecedented
authority. To their teaching chiefly was due
the revolution in favour of individual freedom
and unrestrained competition which filled the
first lialf of the 1 9th century. Since the middle
of the century empiricism has perhaps regained
some of its former power. The views of Adam
Smith and his immediate successors were per-
haps more deeply coloured by the circumstances
of their own age than they themselves could be
conscious of, or would have admitted at the
time, for nothing is more difficult even for the
deepest thinker than to clear himself of the influ-
ence of the atmosphere in which he moves and
has moved all his life. The correction of eco-
nomic doctrine by later students has made the
main theory enunciated at once more accurate
and comprehensive, and less easy of practical
application. Political power has passed to
classes who do not read political economy, and
politicians do not think it prudent to quote
economists. But political economy may regain
its former influence when it is more generally
studied and its lessons are enforced by the
stem teaching of actual experience. f. g. m.
EMPLOYERS AND EMPLOYED. During
recent years economic writers have been bring-
ing into greater prominence the functions of
the employer in industrial aflairs. The older
English economists regarded the agents con-
cerned in the production of wealth as three in
number, viz. land, labour, and capital ; and
in a similar way they considered that the
classes concerned in the distribution of wealth
were three in number also, viz. landlords,
labourers, and capitalists. The landlord received
rent, the labourer wages, and the capitalist
profits. They analysed indeed the share of the
capitalist or Profits into the constituent ele-
ments of interest on capital, insurance against
risk, and wages of superintendence or manage-
ment ; but they did not apparently establish
any distinct conception in their own minds —
nor did they endeavour to instil any such con-
ception into the minds of their readers— of the
employer as separate from the capitalist. And it
was natural that they should adopt this position;
for it is only with the modern development of
the Banking and Bill-Broking system, which
permits of the systematic lending of capital by
one man, or body of men, to another, and only
also with the modern growth of large indus-
tries (see Large and Small Trade) that the
functicns of the employer have acquired a
marked and separate importance of their own.
Under the Domestic System of Industry,
which previously prevailed, manufacture was
carried on mainly in the houses of craftsmen,
who were generally employers on a small scale,
working for the most part for a market near at
hand, the conditions of which varied but little,
and supplying in the main from their own
resources the capital needed for conducting
their business. But, with the changes conse-
quent on the Industrial Kevolution at
the close of the 18th and the opening of the
19th century, manufacturing industry passed
from villages to towns, and from the house of
the craftsman to the factory of the employer.
The functions of the employer as such became
important ; for he had to anticipate the fluctu-
ating demands of a world-wide market, and to
direct the operations of a multitude of workmen
who were engaged under an organised system
of minute Division of Labour on small
portions of work, all of which were necessary
to, and formed part of, a complete manufacture.
He now acquired also to some extent a separate
character from that of the capitalist ; for,
although he generally possessed some capital of
his own, he could, through the agency of
bankers and others, obtain the loan of further
capital from those who did not wish to enter
on active business for themselves, but were
glad to receive interest for the use of their
surplus wealth. And hence at the present
time, while it is recognised that the functions
of the employer and of the capitalist are to
some extent as a general rule combined in one
person, and while it is still held by most writers
that the term profits should be understood as
including interest on capital as well as wages
or earnings of superintendence or management,
it is also considered that an adequate classifica-
tion of those among whom the wealth produced
in a country is distributed should assign a
distinct place to employers as such, and by
some writers it is urged that the term ** profits "
should be confined to that part of the employer's
receipts which belong to him as such, that
is, to his earnings or wages of management or
superintendence, and should not be extended to
the interest which he obtains as a capitalist for
himself, or hands over to some one else from
EMPLOYERS AND EMPLOYED
705
whom he has procured a loan. This last view
is held, amongst others, by the American econo-
mist, General F. A. Walker, who, together with
Bagehot in England, has been specially instru-
mental in bringing the importance and distinc-
tive character of the functions of the employer
into due prominence. He has even adopted
{Political Economy, pt. iv. ch. iv.) a theory
which regards the profits of the employer, using
the term profits in this narrow sense, as being
of the nature of Rent, and depending for
amount on the natural ability possessed, and
the opportunity enjoyed, by different employers,
in the same way as the economic rent of land
depends on its fertility and situation. But
among English writers, at any rate, the term
profits is generally employed in the wider sense ;
although there is a growing tendency to regard
that part of them which represents earnings or
wages of management or superintendence, as
governed by similar laws to those which deter-
mine the earnings of labour generally.
The employer's labour, it is held, is labour of
a high, and indeed of a special class, but it is
none the less labour, and it must not be con-
founded in any way with interest on capital
(see Earnings and Interest Fund). Bagehot
has compared {Economic Studies, pp. 53, etc.)
the modern employer to the editor of a news-
paper, or the general of an army, and has
remarked in a striking passage that just as the
general of an army is " nowadays a man at the
far end of a telegraph — a Count Moltke with
his head over some papers — who sees that the
proper persons are slain, and who secures the
victory," so in commerce the "whole" is now
"an affair of money and management — of a
thinking man in a dark office comj)uting the
prices of guns or worsteds." The employer
" settles what goods shall be made, and what
not ; what brought to market, and what not.
He is the general of the army ; he fixes on the
plan of operations, organises its means, and
superintends its execution. If he does this
well, the business succeeds and continues ; if
he does it ill, the business fails and ceases.
Everything depends on the correctness of the
unseen decisions, on the secret sagacity of the
determining mind." In a similar way General
Walker ( Wages Question, ch. xiv. ), after remark-
ing that the conditions of admission to the
employing class are a "long self-initiation, a
high premium of immediate loss, and a great
degree of uncertainty as to ultimate success,"
quotes from M. Courcelle-Seneuil's Operations
de Banque (p. 392) an enumeration of the
qualities which an employer should possess.
They are "du jugement, du bon sens, de la
fermete, de la decision, une appreciation froide
et calme, une intelligence ouverte et vigilante,
pen d'imagination, beaucoup de memoire et
d'application " (judgment, good sense, firmness,
decision, a calm and cool temper, an open and
VOL. 1.
alert mind, little power of imagination, great
power of memory and of application). Professor
and Mrs. Marshall {Economics of Industry, bk. iii.
ch. ix. § 4, old edition) regard the work of the
employer as consisting of two main varieties.
' ' The first is that of organising the production ;
of determining what shall be made, and how it
shall be made ; and of deciding where and
when to buy and sell. We may," they remark,
" adopt an American term and call this engineer-
ing the business. The second part of his work,
which may be called that of superintendence,
consists in providing for the proper carrying
out of his instructions." As the size of the
business increases, the employer tends more
and more to depute the duties of superintend-
ence to subordinate managers and foremen, and
to concentrate his own thought and attention
on the engineering of the business. To some
extent he becomes, as Bagehot has aptly ex-
pressed it {Economic Studies, p. 59), like a
cabinet minister, who may be shifted from
one department of state to another in successful
reliance on the specialised knowledge of the
subordinate permanent officials. He ceases
indeed to be personally acquainted with his
actual workmen, but he is able to bring his
ability and experience to bear more exchisively
on the work of management. ' ' The highest
class of employers," writes General Walker
{Political Economy, pt. iv. ch. iv.) consists of
those "rarely-gifted persons who, in common
phrase, seem to turn everything they touch
into gold ; whose commercial dealings have the
air of magic ; who have such power of insight
as almost to seem to have the power of fore-
sight ; who are so resolute and firm in temper
that apprehensions and alarms, and repeated
shocks of disaster, never cause them to relax
their hold or change their course ; who have
such command over men that all with whom
they have to do acquire vigour from the contact,
and work for them as they would not, jierhaps
could not, work for others, just as great
captains (see Industry, Captains of) inspire
their armies with a confidence which alone
goes far to make them invincible." Below
these men come a "much larger" class of a
"high order of talent, though without genius
or anything savouring of magic" — "men of
natural mastery, sagacious, prompt, and resolute
in their "avocations." Then come the "men
who, on the whole, do well, or pretty well, in
business ; " and lower down come a " multitude
of men who are found in the control of business
enterprises for no very good reason that can be
seen by those who know them." The passages
which have been quoted will sufficiently indi-
cate the nature of the work and qualities
required of a modern employer, and will explain
the high remuneration which he often com-
mands. The average earnings, indeed, of
employers seem now to be falling, with the
2 z
706
EMPLOYERS AND EMPLOYED— EMPLOYERS' LIABILITY ACT
general diffusion of education and the rapid
spread of inventive discovery. But the modem
world of business offers greater opportunities for
exceptional talent and extraordinary luck than
have perhaps ever before been afforded ; and
tbe amount of capital and of labour plaoed at
the disposal of a single employer is frequently
very considerable. The employer is in a^ sense
the pivot on which the modem world of indus-
try revolves, and the distinctive prominence
into which he has been brought in more recent
economic literature has conduced to greater
definiteness in questions of distribution gener-
ally, and in particular in the consideration of
three matters of the first importance. The
conception that a conflict between labour and
capital is involved in the relations of employers
to employed is shown to be somewhat mislead-
ing ; for the employer is in a sense a labourer
as well as the employed, and h6 often does not
furnish himself the whole of the capital which
he uses. It may even be supplied by indi-
viduals who are themselves employed in his
own or in other trades. The employer is in
reality a middleman, a kind of "buffer" inter-
vening between one set of individuals and
another ; and, while he may have to bear the
first brunt of the conflict, he may also shift
part of the burden on to others. The conflict
is not then entirely, though it may be partly,
between labom- and capital ; but it is in some
degree between one class of labourers and
another, who are both interested in obtaining
the supply of capital on advantageous terms,
and are on the other hand respectively anxious
to secure for themselves the larger share of the
produce remaining when the claims of capital
have been met. Another question, on which
considerable light is thrown by the modern
analyses of distribution, is the question of
co-operative production (see Co-operation).
This has sometimes been represented as a
question of combining the functions of capital
and labour in the persons of the same indi-
viduals ; but in reality, as General Walker has
shown (Wages Question, ch. xv.), it involves
the elimination of the employer. The work-
men wish to take the responsibilities of manage-
ment upon themselves, and to secure for their
own benefit the profits of the employer. They
are unable to dispense with capital, even if
they entertain such a wish ; and they may
acquire capital, and become capitalists, without
co-operative production. But the object, at
which they really aim, is more difficult, for the
functions of the employer are very important,
and they are making an attempt to undertake
them themselves. A third and last question,
which is affected by the distinctive importance
of these functions, is that of Socialism (q.v.)
Modern socialist writers represent the products
of manufacture as due entirely to the labour of
the actual workmen, and therefore as belonging
of right to them. They regard the employer
as an exploiter and robber of labour, and they
consider profits as the outcome of the surplus
value (cp. Value) of what the labourer produces
over what is required for his subsistence. This
theory of surplus value is fallacious in other
respects ; but part of its error may be traced to
a failure to distinguish the functions of the
employer as such from those of the capitalist as
such, and to separate that portion of profits
which forms the reward or earnings of the
difficult work of management from that which
is simply and solely interest on capital.
[In addition to the books mentioned above the
student should consult J. S. Mill, Political Econ-
omy, bk. ii. ch. XV. for the older definition of
profits, and the Boston Quarterly Journal of Econo-
mics for 1888 and 1893 for the controversy raised
by General Walker's Tlieory of Business Profits.
Reference should be made to Marshall's Principles
of Economics, bk. iv. ch. xii., bk. vi. chs. vii. and
viii., and Sidgwick's Political Economy, bk. ii.
chs. i. and viii., for the disposition to regard the
labour of employers as subject to the laws affect-
ing labour generally. For the tendency to a fall
in average profits Leroy-Beaulieu's " Essai sur la
repartition des richesses, ch. xi. and the Report of
the Industrial Remuneration Conference, 1887,
pp. 4, etc. and 186, etc., should be studied.
Pierstorff, UntemehmergeTmnn. — H. v. Mangoldt,
Die Lehre vom Unternehmergeunnn. — Loria, La
rendita fondiaria e la sua elisione naturale (see
also Entrepreneur). ] l. l. p.
EMPLOYERS' LIABILITY ACT, 1880,
43 & 44 Vict. c. 42, extends and regulates the
liability of employers to make compensation
for personal injuries suff"ered by workmen in
their service. At common law the liability
of an employer differed with respect to
persons in his employment, from that with
respect to persons not in his employment (see
Common Employment, Doctrine of). He
was not liable to his servants for the conse-
quences of acts done by fellow-servants in the
course of their service. He was, however,
liable to them for injuries resulting from the
negligence of himself or his partner. Thus he
was bound to take reasonable care that his
plant and machinery were in a safe condition,
and that servants selected by him were com-
petent to their work. But his liability to
persons not in his service was far more exten-
sive. He was liable for injuries caused to
them by his servants, even when he had not
been guilty of any negligence, even when
he had expressly forbidden the act producing
injurious consequences. The difference of the
employer's liability towards his servants and
towards the public might conceivably be justi-
fied by the fact that the public has no choice
as to incurring the danger which may result
from his undertaking, whilst a workman can
choose whether or no he will take service with
any particular employer. But the distinction
EMPLOYING CLASS— EMPLOYMENT
707
came to be more oppressively felt as industry
was more and more concentrated in huge con-
cerns, such as railways and factories, where
the range of choice between employers is limited,
and service involves co-operation with a multi-
tude of other "hands" about whose individual
care or dexterity nobody can learn much. The
influence of the working class was exerted to
obtain a modification of the common law, and
the Employers' Liability Act embodies a com-
promise on the subject. It provides that in
five specified cases the workman who has sus-
tained injury through the action of a fellow-
workman may bring an action for redress as
though he were not in the same employment.
Where the injury arises from (1) any defect in
the works, plant, or machinery ; (2) the neglect
of any person superintending ; (3) the neglect
of any person whose orders the workman was
bound to obey when the injury took place ; (4)
the act of any fellow-servant done in obedience
to the rules, by-laws, or instructions (if improper
or defective) of the employer or his delegate ;
(5) the negligence of any signalman, pointsman,
or person having charge of a locomotive on a
railway, the workman is put on the same footing
with the public. The act excluded seamen,
domestic servants, and any servant not employed
in manual labour. Notice of an injury had to
be given, and the action brought within a limited
time, and the amount of the compensation did
not exceed three years' earnings. If the injury
proved fatal, the right of action passed to the
dead man's representative. A new principle
with regard to Employers' Liability was intro-
duced by the Workmen's Compensation Act,
1897, by which, in certain employments, work-
men had the right to compensation for all injuries
received while in the performance of their duties
entirely irrespective of negligence. The Work-
men's Compensation Act, 1906, extended this
right to all persons in service including seamen,
but excluding the naval, military, and police
services, persons earning more than £250 a
year, casual labourers, etc. The conditions of
claim are (1) personal injury by accident, —
wilful injury excluded except when resulting in
death or permanent disablement, but including
death or disablement from industrial diseases ;
(2) the accident must arise from and during
employment ; (3) the period of complete dis-
ablement must be at least one week ; (4) notice
of the accident must be given as soon as practic-
able ; (5) medical examination is required. The
serious and wilful misconduct of the workman
forfeits all claim.
[See Workmen's Compensation Act, 1906,
6 Edw. 7, ch. 58. For the previous state of
the law see Macdonell, The Law of Master and
Servant. For a discussion of the principles
involved, see Sir Frederick Pollock, Essays on
Jurisprudence and Ethics (essay v., " Employers'
Liability '').]
EMPLOYING CLASS. General F. A.
Walker, who has contributed greatly to bring
into due prominence the functions discharged
by the employer (see Employers and Em-
ployed) in the modern world of industry,
draws a distinction {Wages Question, ch. xiv.)
between what he calls a "false employing
class" and the "real employing class," to
the latter of which alone these functions in his
opinion properly belong. The " false employ-
ing class " includes, in the first place, those
who hire servants who help their employers
rather to consume the wealth they have previ-
ously produced than to produce fresh wealth.
In the second place it includes artisans who
are employers on so small a scale that they
have only single apprentices ; and in the third
place it comprises those who are nominally
employers, but practically are partners of the
employed ; and, fourthly and lastly, it contains
those who "cling to the skirts" of the profes-
sion. The "real employing class," therefore,
is the "comparatively small body of men"
which is reached by eliminating these various
kinds of " false " employers. l. l. p.
EMPLOYMENT. The number of persons
employed in the performance of labour in a
country obviously cannot exceed the number of
persons capable of labour existing in the country,
and, as a matter of fact, it is never for any length
of time very much below this number ; in all
countries the able-bodied unemployed, includ-
ing not only the men "out of work," but all
others who from whatever cause are not engaged
in labour, are but a minute fraction of the whole
able-bodied population. This is sufficient to
show that, broadly speaking, the number of
persons employed is regulated in the main by
the number of persons seeking employment, or
in other words, desirous of earning a livelihood
by labour. In a small community, say of ten
or twelve persons, living in entire isolation from
their fellows, every one would find it easy
enough to obtain employment, though he might
find that a great deal of employment produced
very little food. In a great community where
co-operation in the production of wealth is
eff'ected by means of exchange, the fact that
there is always a certain small proportion of
persons seeking employment who are unable to
find it is chiefly due to the circumstance that,
owing to the division of employments, every
kind of production comes to be carried on by
people who have by training and experience
acquired particular skill in that kind of pro-
duction, so that when the demand for any one
commodity slackens and the number of those
who produce it has to be reduced, or at any rate
not increased at its normal rate, the persona
deprived of this employment are not
mediately absorbed in other employments
[Marshall, Elements of Economics of IM^ry,
pp. 368, 369.]
■^LIBRARY
^^S^'
708
EMPLOYMENT— EMULATION
EMPLOYMENT OF WOMEN AND
CHILDREN IN AGRICULTURE. See Fe-
male Labour.
EMPLOYMENTS. See articles on Laboub.
EMPTION. The right of the crown, exer-
cised from time immemorial, to take arid buy
"at its need" or "for its use" an indefinite
amount of commodities, at such price or on such
terms of payment as the circumstances of the
cage might warrant. It was claimed by Edward
I. in 1297 that the king was "free to buy and
sell like another " ; the advantage to the crown
being that such purchases were paid for by
tallies, and the amount of the maltolte de-
ducted from the purchase-money (see Mala-
tolta). Hall, History of Custom Revenue,
vol. i. pp. 62, 64 ; (see also Preemption and
Purveyance). h. na.
EMPTIO-VENDITIO. The Roman contract
of sale, or of buying and selling as it is called
in order to denote its bilateral character, is
formed by one contracting party promising to
pay a sum of money or price (jpretium), and the
other party promising to deliver a thing (vurx)
in return. The contract is binding by mere
agreement between the parties, neither requir-
ing any formality nor delivery on one side, and
30 belonging to the class of contracts called con-
sensual. Arrha (see Arles ; Earnest Money),
a sum of money or other object of value fre-
quently given by a contracting party to afford
evidence of the contract, and a security for its
fulfilment, is not a requisite of the contract itself.
There can be no contract of emptio-venditio un-
less a determinate price, or a price which can be
made so {id certum est quod certum reddi potest),
is made part of the agreement. It was at one
time a subject of dispute whether the price must
necessarily be in money ; thus the Sabinian
school of jurists maintained that exchange was
a species, and the oldest species, of sale, citing
in support of their view the lines of Homer —
" Here touched Achaean barks in quest of wine.
They purchased it with copper and with steel,
With hides, with horned cattle, and with slaves."
(Poste's G?atw5, III. § 141.)
But the view prevailed that sale was a contract
distinguished from barter or exchange by the
fact that it had for its object the payment of
a sum of money for a thing.
When the contract of emptio-venditio is com-
plete the vendor is bound to deliver the thing
to the purchaser and the purchaser to pay the
price of the thing, but one party cannot be
compelled to perform his part if the other will
not perform on his side. The obligation of
the vendor is not to make the purchaser owner
of the thing, but only to give him possession
of it. If, however, the purchaser is evicted by
a third party who has a superior title, the
vendor is obliged to make good to him the loss.
Ownership of the thing does not pass to the
purchaser until possession of it has been de-
livered to him and he has paid the price, if it
is a ready-money transaction. But though the
property has not passed to the purchaser, he is
subject to the risk (joericuluvi) of its accidental
loss, i.e. of loss which cannot be attributed to
the negligence of the vendor from the time of
entering into the contract [respuit emptori).
This rule is only applicable where there is a
specific object appropriated to the contract. If
the thing is determined only by its genus or
kind, the risk does not attach to the purchaser
until the thing has been weighed, measured, or
counted, and the purchaser has had notice of
this having been done. The purchaser, on the
other hand, could claim all accessions and
profits of the thing bought arising between the
making of the contract and the date of delivery.
The vendor is liable on account of defects in
the thing sold, not only when he represents
that they are absent, or fraudulently conceals
their existence, but, according to the law estab-
lished by the edict of the curule ^diles, who
had jurisdiction over the market, even on
account of latent defects of the existence of
which he was unaware. Thus in the Roman
contract of sale there is an implied warranty
that the thing sold is free from defects. Such,
in brief outline, are the main features of the
contract of emptio-venditio, with which those
of the English contract of sale of goods may be
usefully compared. e. a. w.
EMIJLATION, Effects of, on Society.
The feeling of emulation may be defined as the
desire to excel one's fellow - creatures in any
respect whatsoever. It thus admits of infinite
variations, produces the most dissimilar conse-
quences, and gives rise to the most contradictory
judgments. At its best the spirit of emulation
is hardly distinguishable from the desire to
achieve greatness or perfection, at its worst the
spirit of emulation is hardly distinguishable
from envy and uncharitableness. It is, however,
an indestructible instinct, which maybe schooled
but cannot be extirpated, and which is most
powerful in the most vigorous natures. Further,
it prompts to unceasing effort because it is
insatiable. The plain animal appetites may
be sated ; but emulation incessantly creates
anew its object of desire, and, the more it has
accomplished, finds the more to be done. Next
to the instinct of self-preservation and the
instinct of sex, the instinct of emulation has
probably had greater effects than any other
upon the economic history of mankind. We
may consider its effects shortly under three
heads : (1) Emulation in accumulating wealth,
(2) Emulation in expending wealth, (3) Emula-
tion in other directions.
(1) Emulation in accumulating wealth. The
desire to be richer than one's neighbour, to
excel him in the power and consideration given
by wealth, has been a prime factor in accumula-
tion. Its force has varied chiefly with two
EMULATION— ENCLOSURES
709
I
circumstances : with the degree of desire for
wealth characterising any given society, and
with the proportion of persons who have had a
chance of acquiring riches. As to the former
circumstance, societies have differed consider-
ably in the value which they assign to wealth
in comparison with the other goods of life.
The causes of this difference are too many and
too subtle to be enumerated here ; but among
the most influential are different moral and
religious ideals, different stages of political
development, different degrees of command
over the resources of nature. As to the latter
circumstance — the proportion of persons who
can indulge a spirit of emulation in the pursuit
of riches is exceedingly variable. In many
societies a small proportion has been above, and
a large part has been below, any active emula-
tion in wealth. Sometimes a class of nobles
has owed its pre-eminence rather to birth and to
military prowess than to riches, and has there-
fore been less emulous of riches. Often a class
of slaves who were legally incompetent to hold
property, or of serfs who were not adequately
protected by law in the enjoyment of their
property, or a class of underpaid free labourers
who could barely earn their daily bread and
nothing more, has found it difficult or im-
possible to rise into a more comfortable condi-
tion, still more to compete in a rivalry of riches.
In such a case the spirit of emulation dies out,
because not fed with hope. These remarks
might be illustrated from the history of mediaeval
Europe, in which the emulation of riches ap-
pears as a great force only in certain classes and
in certain places. But in such communities as
our colonies and the United States of America,
in which material well-being is the accepted
ideal, in which every citizen has hopes of realis-
ing this ideal, and in which the command over
natural resources is almost unbounded, the
emulation of wealth becomes a passion as uni-
versal as it is intense, and impels to an amazing
economic development.
It is conceivable, indeed, that emulation in
the pursuit of wealth might become so intense
as to lessen, not to augment, the wealth of
society. Thus a community of men so zealous
in the pursuit of wealth that they grudged
time, trouble, and money for national defence, or
for alleviating social evils, might end in sub-
jection to a foreign power or in mere anarchy ;
and would in either case be reduced to com-
parative poverty. The same result might
foUow if emulation in the pursuit of riches led
to a universal disregard of commercial integrity
or to a neglect of all liberal culture. For there
is no instinct which, if left to itself, will not
sometimes defeat itself.
(2) Emulation in expending wealth must be
taken to mean emulation in expenditure which
is not directly productive. The immediate
result of such emulation is to lessen wealth.
Its ultimate result will depend on many con-
siderations. Thus the wealthy citizens ol
Rome rivalled each other in expenditure on
public works intended for the health and
recreation of the public ; the burghers of
mediaeval Europe in building and endowing
churches ; the nobles of France in display at
Versailles. Clearly each of these modes of
emulation in expense differed from the rest in
its ultimate economic effects, although each
was in the first instance non-productive. Again,
emulation in expense has different economic
results accordingly as it is the emulation of a
productive or of a non-productive class. The
courtier of Versailles, when he had squandered
his fortune, remained poor or had to squeeze
his dependents. The American, when he has
spent lavishly in Europe, goes back to his
country and works yet harder to make another
fortune.
(3) Emulation in other directions. Every
form of emulation soon or late produces economic
consequences. In all ages wealth has followed
power, and has been kept by strength. Few
nations have got wealth and none have kept it
unless there was an emulation of public spirit
and military vu'tue among their citizens. In-
tellectual emulation, emulation in knowledge and
culture, has always stimulated economic and in-
dustrial development, and often most effectually
when it has been most free from sordid motives.
Thus the wealth of modern Germany is directly
due to the intelligence of the age of Goethe and
the public virtue of the age of Bismarck. Again,
the economic condition of the later Roman
empire and of the middle ages must have been
considerably affected by the emulation of ascetic
piety which withdrew so many of the strongest
wills and keenest intellects from the world to
the cloister. The immediate result was an
economic loss, although this may have been
partially countervailed by the civilising influ-
ence of many monastic bodies. Even emulation
in mere sjJorts and pastimes would be found to
influence occasionally the economic state of
society. f. c. m.
ENCABEZAMIENTO, a contract between
the Spanish treasury and the local authorities,
by which, after a preliminary estimate of the
taxes to be levied, the latter engaged to collect
and remit the amount. The first known
encabezamiento goes back to 1494. e, ca.
ENCLOSURES. Of "enclosing," i.e. the
fencing round of land which had previously
lain open, whether as common field or as
common waste, we hear but little before the
13th century, when the necessity for statutory
regulation points to the existence of the custom
and of differences between the lords of manors
and their tenants. About the origin of those
conmion rights of pasture which play so im-
portant a part in the history of enclosures,
there has been much controversy ; but there is
710
ENCLOSURES
an increasing consensus of opinion as to the
main legal points. Although in strict feudal
theory the laud belonged to the king as the
supreme landlord, the lords of manors came in
course of time to be treated as owners of the
soQ within the manor, who in various "ways
granted certain rights over it to their tenants.
Land might be cultivated by the tenants for
their lord or for themselves according to a com-
mon system of husbandry, upon certain terms
which in many cases included certain pasture
rights. These might be (1) rights over the
arable land during the year, when under the
three-field system it was lying fallow, or during
the period between harvest and the sowing of
seed ; or (2) the right of herding a certain
number of animals in a common close ; or (3)
rights over the wastes and woods belonging to
the manor. "Whether the lord could from the
earliest times enclose at will is a matter of some
controversy, but, by the statute of Merton, 1236
(20 Hen. III. c. 4), a parliamentary sanction was
given to the enclosure of wastes by the lord of
a manor, provided that sufficient pasture was
left for the requirements of his freehold tenants ;
while by the Statute of Westminster, II., 1285
(13 Edw. I. c. 46), enclosure was permitted as
against commoners who, without being tenants,
possessed pasture rights by a special grant.
Until the middle of the 14th century the en-
closure of open fields in the interests of tillage
continued, and many agreements were made
between lords and commoners destroying the
common rights over the arable land between
harvest and seed-time, and sometimes involving
exchange of laud. Since such enclosure simply
implied the rearrangement of estates, and
required the same resident population as before,
while the conversion from wood and waste into
arable land — another feature of the time — found
employment for a larger population, no grievance
could arise, and the agricultural gain was great.
But owing to the scarcity of labour after the
ravages of the Black Death (1349), and the conse-
quent introduction of the lease system, atten-
tion was turned to the advantages of pasture
farming over tillage. When to these influ-
ences there was added, in the 15th century, a
desire to promote commercial interests by
increasing the supply of wool for exportation,
pasture farming was still more widely intro-
duced. Sheep could not be properly reared
upon open commons, or upon the small scat-
tered strips, and thus arose the policy of
enclosing commons wherever this was possible,
either by force, or by voluntary agreement ;
while the profits of sheep- farming led to the
conversion of much arable into pasture land.
Tenants were encouraged to consolidate their
holdings, to exchange their strips in the open
fields for separate farms, and to divide the
common pasture with the lord, or in some way
to make an agreement with him. The economic
advantage of enclosure for grazing purposes
was doubtless great, but the social and political
dangers were considerable, as was pointed out
by many contemporaiy writers who dwelt upon
the depopulation of vast tracts, the diminished
sphere for employment, the iikcrease of pauperism,
the pressure of evictions, and the loss of custom-
ary rights. These evils became more apparent
after the dissolution of the monasteries ; the
earlier agricultural system had been retained
on many estates which were confiscated, and
thus passed under the new system, while the
customary rights of the tenants were held to
be overridden by the royal grant. Various
statutes were enacted throughout the 16th
century for the encouragement of tillage, but it
was not until its close that the danger passed
away. Edward VI. issued a commission in
1548, to investigate the matter throughout the
country, but it was unable to put an end to the
social discontent, which found an expression in
Rett's Rebellion in 1549. The subject was
summarised in the charge read by John Hales
at the opening of the commission, and in the
Brief Conceipt of English Policy (see ed. 1893
under the title of A Discourse of the Common-
weal of this Realm of England, and article by
Miss E. Lamond, English Historical Heview,
1891). By the close of Elizabeth's reign com-
plaints about enclosures in the interest of pasture
farming seem to have ceased ; this was partly
due to the encouragement given to the growth
and export of corn, a course which had a more
beneficial effect in reviving tillage than the
many statutes passed with that object. From
this time onwards enclosure of waste and
common fields alike is chiefly advocated in the
interest of tillage, not of pastm*e. In the 1 7th
century many writers advocated enclosures of
common fields for the improvement of tillage.
Steps were taken for the draining and enclosing
of the fens under the direction of Cornelius
Vermiiyden, a Zealander, while the Earl of
Bedford headed an enterprise for enclosing the
level which bears his name. In each case the
undertakers were rewarded with a portion of
the lands thus reclaimed, and this led under
the Commonwealth to serious riots on the part
of the fen men, whose customary rights were
thus set aside. The only other noteworthy
feature in the history of 17th-century enclosing,
was occasioned by the financial necessities
of Charles L, which led him to institute pro-
ceedings against those who had encroached upon
the royal forests. Heavy fines were imposed
upon offenders who had thus enclosed, but it
is doubtful whether the king derived as much
profit from this source of revenue as he had
anticipated.
Until the reign of Charles II. enclosures were
effected by agreement between the owners of
land and those who possessed rights of common,
commissioners beinii appointed to allot the
ENCLOSURES
711
lands ; the agreement was ratified by the court
of chancery, or by royal licence where crown
interests were concerned, but from the reign of
Charles II. a parliamentary sanction was
required. This was only given after the con-
sent of the landlord, the tithe owner, and four-
fifths of the commoners had been obtained in
favour of enclosure. During the first half of
the 18th century enclosing continued slowly ;
but the rise of a moneyed class interested in agri-
culture and willing to spend money on agricul-
tural improvements, the increased use of green
crops, which raised the profits of tillage, but
which could not be profitably worked under the
open-field system, the increase of population
together with the withdrawal of a large portion
from agricultural labour, the difficulty of pro-
viding a sufficient food-supply and the danger
of dependence upon foreign countries, together
with the famine prices produced by the French
wars — all these various causes combined necessi-
tated the utmost development of natural
resources, and gave an enormous impetus to
enclosure both of open fields and of common
wastes from about 1760 onwards. The rate of
progress is most easily shown by a few figures.
In the reign of Anne there were three private
bills for enclosure, in that of George I. 16, and
imder George II. 226, a total of 245 in fifty-
eight years, while the sixty years of George III. 's
reign show the astounding number of 3209
private bills as well as the general enclosing
act of 1801. Unlike the enclosures of Tudor
times, those of the 18th century were entirely
in the interests of tillage. It is hard to esti-
mate by how much the actual area brought
under tillage was extended, since a great many
enclosures aff"ected open fields already under
cultivation. In 1797, when over 1720 private
bills had been passed, the select committee on
enclosures reported that of the 46,000,000
acres which England was supposed to contain,
about 7,800,000 were uncultivated wastes,
while 1,200,000 were in the state of common
fields, and it has been estimated that about
4000 parishes, containing open fields, chiefly
in the eastern and some of the midland counties,
out of a rough total of 8500, were enclosed
between 1760 and 1844. Where such en-
closures took place with due regard to common
rights the gain was great, as the customary
course of agiiculture, and the difficulty of
introducing changes such as machinery or a
better rotation of crops, were almost insuper-
able obstacles to improvement. The enclosure
of the wastes was also an economic gain, for in
many cases they were previously worthless, the
cattle reared on them were of an inferior kind,
and, as Sir John Sinclair pointed out in an
address incorporated in the report of the select
committee of 1795, it was found more profit-
able to hire land for the breeding of sheep of a
more valuable sort than to turn them on to a
common for nothing. Nor must it be forgotten
that though much suffering was probably
inflicted, still it was a social gain to clear some
districts of an idle and lawless population — the
haunts of thieves who, more especially near the
capital, were a public nuisance, — while the drain-
ing of vast tracts was not without beneficial
eff'ects upon the public health. In many cases
the enclosures, as carried out, were hurtful to
the labourers, whose cottages had been on the
commons, and who had been able to keep a
cow, which was no longer possible when enclos-
ure of the open fields and of the waste deprived
them of customary pasture rights — often with-
out compensation. The expense of enclosing
and the loss of pasture rights is one of the
many causes which contributed to the dis-
appearance of the yeomanry during this period.
The force of the argument against enclosures
lies in the fact that the poor did not in many
cases receive compensation for the loss of
traditional rights. The enclosure bills did in-
deed provide that all legal rights should be
regarded, and on the whole the commissioners
tried to act fairly, but the expense of enclosing
was very great ; much of the money compensa-
tion paid to the commoner was swallowed up
in legal expenses, and the poor man was doubt-
less at a disadvantage in contesting the rival
interests of a wealthy neighbour. After receiv-
ing reports from various select committees
which had communicated with the board of
agriculture, parliament in 1801 passed a general
enclosing act (41 Geo. III. c. 109) with the
object of cheapening and facilitating the pro-
cess of enclosure, and of thus protecting the
interests of the poor. By the act certain
general provisions were laid down, which
rendered the private acts shorter, though the
expense of an application to parliament, and
of referring contested cases to a parliamentary
committee, still remained.
In 1836 an act (6 & 7 WiU. IV. c. 115)
was passed by which enclosure of common fields
was facilitated. Possessors of common rights
to the number and value of two-thirds might
nominate commissioners to carry out enclosure
of common fields, provided that these were
beyond certain distances of the larger towns.
By the general enclosure act of 1845 (8 & 9
Vict. c. 118) this method was extended to the
common wastes. An enclosure commission
was appointed to deal with land of various
kinds in England and Wales. (1) All lands
held in severalty, or subject to definite common
rights, could be enclosed by the authority of
the commissioners without parliamentary sanc-
tion. By 15 & 16 Vict. c. 79, the commissioners
were, however, forced to submit proposals deal-
ing with land as above described to parliament.
(2) All lands over which imdefined rights of
common existed — and all wastes within 16 miles
of London, or within certain distances of other
712
ENCOMIENDA— ENCYCLICAL
towns In such cases the commissioners held
an inquiry, and then drew a scheme ; aU the
schemes for the year being presented to parlia-
ment in one general act. The commissioners
were thus substituted for the parliamentary
committee, and it was hoped by the pronfoters
of the measure that examination on the spot
would prove a security to the poor, whose
interests were directly protected by clauses
empowering the commissioners to make allot-
ments and recreation grounds. (3) Village and
town greens, as well as the New Forest, and the
Forest of Dean, were excluded from the opera-
tion of the act.
In 1852 parliamentary sanction was made
compulsory for the enclosure of land held in
severalty without definite common rights. In
1893 the statute of Merton, though not re-
pealed, was greatly modified ; and no enclosure
may henceforth be made imder that act with-
out the consent of the board of agriculture,
which in dealing with such proposals is in-
structed to carry out the requirements of the
Commons Act of 1876, when considering appli-
cations for the general enclosure of a common.
[T. E. Scrutton, Commons and Common Fields
(1887).— R. E. Prothero, Pioneers and Progress of
English Farming {1^%%).— Reports from Com-
mittees of the House of Commons, IX., 1774-1802.
—Reports of the Board of Agriculture— General
Report on Enclosures (1805).— Notice of enclos-
ures in Bacon's History of Henry VII., p. 93, vol.
vL , Bacon's Works, Ellis and Speddiiig's edition.
— LeadaiT), Inquisition of 1517 in Transactions
of Royal Historical Society, N.S., vi. 169]. w. c.
ENCOMIENDA, the name of the estates,
comprising both land and its Indian inhabitants,
granted by the Spanish crown to the con-
quistadores or military adventurers in America.
E. oa.
ENCROACHMENT. See Trespass.
ENCYCLICAL. The encyclical of Pope Leo
XIII. on the condition of labour, dated 15th
May 1891, which is the subject of this notice,
receives its name from its opening words
Berum novarum. Here, as in previous encycli-
cals, notably the one Quod Apostolici Muneris,
issued in the first year of Leo XIII. (1878),
the question of capital and labour is considered
mainly in its connection with the recent ad-
vances of socialism. It offers us, as M. Charles
Perin, emeritus-professor of the University of
Louvain, puts it, a "synthesis of the economic
order according to the divine laws which regu-
late human conduct," and it is important as
constituting "la verite catholique pour I'ordre
economique," or, as we should put it, an
authoritative statement on the part of the
Roman Catholic Church on the economics of
labour. Its distinguishing feature is the intro-
duction of the principles of justice and charity
in the solution of economic questions. The en-
cyclical opens with an allusion to the "spirit of
revolutionary change," and the influence of this
in the " field of practical economy " ; it dwells
on the danger of social agitation in the presence
of real grievances such as "the misery and
wretchedness which press so heavily at this
moment on the larger majority of the very poor,"
and the isolated and defenceless condition of
working men, "the callousness of employers,
and the gi-eed of unrestrained competition"
{Encyclical Letter, ofl[icial translation, p. 4). It
then proceeds to examine the remedies proposed
on the one hand by socialists, which it condemns,
and those which are within the province of the
church and state, which it recommends, dwell-
ing in conclusion on self-help by means of asso-
ciation and the importance of a wider diffusion
of Christian charity in all human relationships
which strikes at the root of all social evils.
(1) The socialistic proposals are characterised
as unjust and tending to rob lawful possessors,
and putting the state into "a sphere that is
not its own" (p. 5), and thus depriving the
labourer of the liberty of choosing his own em-
ployer and using the proceeds of his work.
Private property is defended, as against the
socialistic recommendation of collective owner-
ship as being "according to nature's law,"
whilst, "the authority of the divine law adds
its sanction " (pp. 7, 8) ; and, considering the
rights of the family as co-ordinate with those
of the state "our first and fundamental prin-
ciple, therefore, when we undertake to alleviate
the condition of the masses, must be the in-
violability of private property" (p. 11). The
pope here falls into the common error of sup-
posing that all private property is excluded in
the schemes of modern socialism, whereas it is
only instruments of production — private owner-
ship in lands, capital, and machinery — which
are to be abolished and become state property,
the state directing the process of production,
with the disappearance of the wages system in
the socialistic state. (2) The encyclical de-
clares inequality as in the nature of things
permanent, and points out the methods of
the church under these circumstances for
remedying the evils arising therefrom. It
is the duty of the church to teach and to
train men in the principles of social ethics
(pp. 18, 19), whereby the poor may learn "to
sutfer and endure " and to abstain from
violent measures in compassing their ends,
whilst the rich are taught to ' ' religiously re-
frain from cutting down the workman's earnings,
either by force, by fraud, or by usurious deal-
ing" (pp. 13, 14). The church, too, in her
institutions, as in the past, guards the "patri-
mony of the poor" by means of "deposits of
piety " flowing from Christian self-sacrifice and
charity. (3) The state as the organ of dis-
tributive justice protects each class with a view
to the common good ; all well- constituted states
are bound "to provide those bodily and ex
ENDORSEMENT— ENDOWMENTS
713
ternal commodities the use of which is necessary
to virtuous action." " It is only by the labour
of the working man that states grow rich.
Justice, therefore, demands that the interests
of the poorer population be carefully watched
over by the administration" (pp. 22, 23).
Sunday rest, and the protection of health and
the prevention of excessive labour of children
and females being among the subjects demand-
ing state interference, as also the restraint of
the disturbers of social peace, "to save the
workman from their seditious arts, and to protect
lawful owners from spoliation" (p. 25). On
the wages question Leo XIII. proves himself to
be "le paj)e des proletaires" in demanding of
the state protection against unscrupulous em-
ployers, who under a semblance of free contract
deprive the labourer of his due. Distinguishing
between this theory and facts, between normal
wages and fair wages, he points out that the
working man, having nothing but his wage to
fall back upon for a livelihood, is bound to
come to terms with the master even to his own
disadvantage, unless he is protected by the
state or boards of conciliation authorised by
the state to secure the rights of both parties of
the contract, and this on the equitable principle
that "each one has a right to procure what is
required in order to live" (p. 28). (4) In the
last place the pope recommends association and
corporation as after the pattern of Christian
confraternities under the fostering influence,
though without undue controlling power, of the
state as means of mutual support and protection
against encroachments ; but it is by a return to
Christian faith and charity alone that the evils
of society can be cured in the end, — so concludes
the encyclical which thus becomes what Anatole
Leroy-Beaulieu, in his appreciative study of La
Papaut^, le Socialisme, et la Democratie, calls
"un code de morale sociale" (see pp. QQ, 67).
But also, as the same writer points out, so far
from coming into conflict with the principles of
political economy, as now understood, the en-
cyclical is on a line with its most recent de-
velopments {ib. p. 50), adding to the moral
factor the religious forces without which selfish-
ness and greed would be the only prompting
motives of economic action.
[Charles Perin, L'£conomie Politique d'apres
V Encyclique sur la condition des ouvriers, Paris,
1891. — Note sur le juste Salaire d'aprds I'En-
cycUque rerum novarum by the same. — Henri Joly,
Le Socialisme Chretien under the head, Les der-
niires ecoles. — Anatole Leroy-Beaulieu, Papacy,
Socialism, and Democracy, trans, from the French
by B. L. O'Domiell, Chapman and Hall, 1892,
gives the text of the encyclical in an appendix. —
Henry George, On the Condition of Labour, 1891.
—Also W. T. Stead, The Pope and the New Era,
1890.] M. K.
ENDORSEMENT. See Bill of Exchange.
ENDOWMENTS. Adam Smith in a well-
known passage^ has vn'itten strongly on the
subject of endowments. In his eyes they tend
to hinder capital and labour from taking their
natural course. In certain professions, notably
that of holy orders, the existence of endow-
ments, to encourage and support those who are
preparing for them, has attracted large numbers
of men who would otherwise have carried their
energies into different fields. Hence a depres-
sion of incomes in those professions, for the
number applying for employment in them is
greater than the work requires. A change in
circumstances since Adam Smith wrote has
robbed his particular instance of much of its
force, for the endowments in question have, as
a rule, been diverted, and the growth of popu-
lation coupled with well-defined religious re-
vivals has greatly increased the work of the
clergy. But Adam Smith goes farther, and
maintains that, tested by experience, endow-
ments have failed to secure any good object.
The universities, he says, are largely endowed,
and have failed to make any great additions to
the learning of the country, which is no more
than might have been expected d priori, for the
motive to exertion being removed by the cer-
tainty of income independent of it, exertion
itself would tend to diminish. Dr. Johnson,^
though not accepting Adam Smith's con-
clusions, put the same argument in a popular
form when he says, "Why, sir, we would all
be idle if we could."
As the growing tendency of the present time
is to employ endowments for the advancement
of learning or the furtherance of education, it
may be worth while to examine the reasoning
at greater length. The objections to endow-
ments may be put in the form of a dilemma —
either a given result is worth having, and then
the public are ready to pay for it, or the public
is not ready to pay for it, and then it is not
worth having ; in the one case endowments
are superfluous and cripple energy, in the other
they are wasted. It will be observed that this
argument is based on the assumption that the
public are the best judges in such matters. To
this it is objected that although the common
exchanges of life may safely be left to competi-
tion, and the public are able to judge of quality
in the matter of tea, sugar, etc. , the case is very
difierent when learning and the higher forms
of education are involved. The public, or at
least the English public, are not qualified to
discern good and bad in such matters. The
demand for books and teaching in the highest
subjects is never likely to be sufficient to make
it worth any one's while to wi'ite upon or teach
such subjects as a profession, and many persons
who have the ability and the taste requisite are
powerless to pursue the subjects for want of
1 Wealth of Nations, bk. i. chap. x. ; cp. bk. v. cliap
i., art. ii.
2 Boswell's Life of Johnson, a.d. 1776.
714
ENDOWMENTS— ENEMY GOODS
^^^^. In such cases endowments, it is argued,
may"profitably be used to provide the means of
subsistence for men who are in reaHty great
public benefactors. Certain chairs, for instance,
at the universities need endowments to support
their holders in the absence of a sufficient
number of students ready to pay fees to main-
tain their teacher. Certain forms of study and
research are never Hkely to be sufficiently
remunerative to provide those who pursue them
with the means of livelihood, and must conse-
quently be endowed. Outside these special
cases it is readily granted that endowments, by
making men independent of their exertions,
tend to weaken their industry ; but unless these
particular subjects are endowed, the level of
learning and of teaching is likely to be lowered,
for the subjects studied and taught will be
those, and those only, which bear directly on
practical life. The question is not, perhaps,
one which admits of a final answer. The
enthusiasm which leads a man to adopt an
impopular subject may in many cases be trusted
to keep him industrious, independently of
reward. A certain habit of mind is observable
in those who are mainly supported by endow-
ments, a tendency to delay publication, an
excessive self-criticism, a want of definiteness —
all these go far to postpone, if not to destroy
the realisation of the results of their work. It
has been remarked that in this country a large
amount of the best work has been done by men
who have a regular employment, and with whom
the advancement of learning is a secondary
occupation. J. S. Mill, e.g., wrote his princi-
pal treatises in the intervals of his work as a
clerk in the India House. Grote's History of
Greece was the work of a banker, and other
instances might be quoted. In the great
majority of cases a certain amount of teaching
is a help and not a hindrance to research.
The most successful use of endowments has,
perhaps, been in cases where they have been
employed to support men who have already
made themselves a name in a subject, and who
have been set free from the necessity of working
for their daily bread at some occupation which
they have hitherto practised. But the method
of distributing endowments is distinct from the
question of their inherent advantages or draw-
backs. In German universities endowments
are, as a rule, only a part of the income of a
professor, the proportion that he earns by fees
being gi-eater or less as his subject is popular
or the reverse.
Apart from the encouragement of research,
endowments are largely used to forward the
higher education of the country. The univer-
sities expend large sums annually in scholar-
ships to attract students ; and fellowships, being
now largely used as prizes at the end of a
university course, are additional inducements
to students to undertake it. The consideration
of poverty enters but little into their distribu
tion. Here again a question may be raised as
to the wisdom of such a policy. Studies, it
will be urged, which are not self-supporting in
the sense of attracting students by their own ;
charms, are not worth supporting at all.
Others will hold that studies which do not bear j
directly on practical life (in German phrase
not " bread studies ") have a value of their own,!
of which the public are not the best judges, but]
which make it worth while to support them bj
endowments ; and that while studies whicl
are a direct preparation for business may safely]
be left to themselves, it is the interest of
country to preserve others from extinction,]
We have in England no logical principle applied
to the graduation of studies or their mutus'
relation ; but the tendency of the present day i|
to use endowments largely to facilitate
passing from the lower to the higher grade
Instances are not wanting of those who by the
means have risen from elementary schools
high places in the universities. In practice il
must be owned that endowments often (1]
cheapen education for a class who can perfectlj
well afford to pay for it, by providing plant
etc., for the great public schools and the uni^
versities ; (2) enable poor men to live at a need^
lessly expensive rate, which is determined b]
the standard of comfort set by more wealth]
companions.
Two subsidiary points may be mentioned.
1. The system of confining the advantage
of endowments to certain localities is bein|
gradually modified. It is argued that migra-
tory habits and facilities of communication have
greatly lessened the reality of local divisions ;
that, on the whole, every locality gains by the^
process ; that waste is avoided, and the supplj
of endowments made to correspond more nearly
to the number of persons qualified to make
good use of them.
2. The abolition of any poverty qualificatioi
mentioned above, has been severely criticised<]
It may be defended on the ground that it
almost impossible to make such a qualificatioi
real. Poverty is difficult to define, and it
impossible to formulate any system of compenJ
sation as between ability and want of means
Moreover, on the whole, the present tendency
to distribute endowments by competition, mak'^
ing ability and not poverty the test, tends
raise the whole level of education, and so
benefit the poor ; whilst the spur of poverty il
sufficient to ensure industry, and the temptatioi
to idleness which go with wealth are, in the
great majority of cases, strong enough to pi
vent members of the wealthy class from com-
peting successfully.
[Mill, Pol. Econ., bk. v. chap. xi. § 15.— Turgot
Fondation et Fondations, (Euvres, vol. iii., ec'
1808.] L. R. P.
ENEMY GOODS. In early times the pr
ENFACED PAPER— ENFANTIN
715
perty of the enemy, wherever found, was liable
to capture. By custom and treaty the harsh-
ness of this rule has been modified, and the
modem practice may be summed up as fol-
lows : — (1) Movable property belonging to an
enemy state may be appropriated ; immovable
property may be occupied but not alienated.
(2) Movable private property is liable to con-
tribute to the support of the invading army,
contributions and requisitions bemg levied for
that purpose ; immovable private property is
exempt from appropriation. (3) Private pro-
perty on the high seas is liable to capture
except where it is on board a neutral vessel.
(4) Private property within the jurisdiction of
the belligerent is not as a rule liable to capture.
[International Law, by W. E. Hall, Oxford,
1890. Many writers advocate the exemption of
private property at sea from capture. The
United States has more than once made this pro-
posal, and in some modern wars this principle
has been followed. See De Laveleye, Du Respect
de la Propriete Priv^e en Temps de Guerre. —
Bluntschli, " Du droit de Butin," Rev. de Droit
International, torn. ix. and x., and articles in the
same review by M. Vidari, torn. iii. (1871). —
M. Gessner, torn. vii. (1875), and the reports pre-
sented to the Institute of International Law,
torn, viii. (1875).] j. e. c. m.
ENFACED PAPER or RUPEE PAPER.
The title applied by stock exchange custom
to Indian government securities, the interest
on which is payable in silver rupees. The
capital also is expressed, or enfaced, on the
certificate as being so many silver rupees, the
value of which in the London market varies
according to the value of silver in relation to
gold. The word "enfaced" might almost as
well be applied to any other kind of security,
inasmuch as all have more or less on their
face a description of the security represented.
Custom, however, has lent the word simply to
those Indian rupee stocks which bear interest
at 4 per cent and upwards, the interest of
course being payable in silver, and subject to
an increase or decrease in sterling value accord-
ing to the value of silver in the bullion market.
The Indian government cannot borrow so easily
or at so low a rate of interest in silver as it
can in gold, the mass of investors having been
repelled by the possibility of fluctuations in
' the sterling value of the interest receivable.
At the same time it has been thought well
by Indian statesmen to avoid accumulating a
large sterling debt, lest the Indian government
should some day encounter a heavy fall in
the value of silver, which would compel it
to tax the natives of India to the extent that
more rupees would be required to provide each
pound sterling. A. E.
ENFACEMENT is the converse to endorse-
ment (see Bill of Exchange). The word
does not appear to have been in use before the
year 1858, when the Indian Government de-
cided to pay the interest on the Indian home
debt in London by means of drafts at sight on
India, and issued the following notification : —
' ' When holders of notes in Calcutta desire
that the interest thereon should be made pay-
able by bills issued in London, they must
present their notes at the office of the Account-
ant-General to the Government of India,
where an enfacement will be made on each of
the notes in question as follows : Interest pay-
able in London hy draft on Calcutta (or Madras,
as the case may be)."
[Geo. Clare, " Stock Exchange Securities," Jour-
nal of the Institute qf Bankers, vol. xiv. p. 226.]
ENFANTIN, Prosper, called " Le Pere"
(1796-1864), was born at Paris and died in the
same city. Having first been, in conjunction with
Bazard {q.v.), a leader, he became, after Bazard
retired, the sole chief of the St. Simonians,
and did his utmost to promote the success of
that economico-religious sect, up to the date of
its fall. Commencing as a devotee of mysti-
cism, Enfantin finally adopted the doctrine of
"free love"; this brought him into trouble
with most of his fellow-religionists. He was
condemned on 28th August 1832 by the assize
court of the department of the Seine, in com-
pany with Charles Duveyrier and Michel
Chevalier, to a year's imprisonment and a
fine of 100 francs, for having assisted, without
previously obtaining permission, in the forma-
tion of an association consisting of more than
twenty members, and in the promulgation of
articles injurious to public morality.
The penalty was before long commuted, and
Enfantin made his way to Egypt, where he
studied the question, now long since settled, of
piercing the Isthmus of Suez.
Subsequently, after remaining for several
years at Tain (Dr6me), he returned to Paris,
and was appointed, in 1845, a director of the
first company for constructing a railway from
Paris to Lyons.
After the revolution of 1848 he founded, in
conjunction with Charles Duveyrier, the journal
Le Credit, which continued to appear till 1850.
Finally Enfantin became the administrator of
the second Paris, Lyons, and Mediterranean
Railway Company — a post which he continued
to hold till his death.
Before the fall of the St. Simonian School,
Enfantin published, in conjunction with others,
Doctrine de St. Siinon, Exposition, 2 vols. 8vo,
1830-32 ; afterwards^ in his own name, ^co-
nomie politique et Politique, 1 vol. 8vo ; Morale,
1 vol. 8vo, etc. After the dispersion of the St.
Simonian School, Enfantin wrote a volume.
Colonisation de I'Algerie, 1843, 8vo, in this,
across a web of original ideas and among pas-
sages which show deep historical study, may be
traced the opinions of the early socialists.
His works were collected by zealous disciples,
and printed in 9 vols. Svo, 1866-73. A. c. f.
716
ENFRANCHISEMENT
ENFRANCHISEMENT, the Uberation of
the serf from his forced astriction to his lord's
estate, and his forced labour for his lord's
behoof. Though not liable, like the slave, to be
sold from master to master, or to give his whole
time to his master's work, the serf was still
practicallj chained to the estate to which the
right to his labour was legally appendant, and
he could still be compelled to his work by
whips or imprisonment at his master's will.
There was a third strand in his bondage — his
subjection to his lord's civil and criminal juris-
diction, which left him defenceless against
arbitrary exactions, and therefore operated often
quite as injuriously on his economic position as
the other two, but it was not felt to involve
the same personal indignity as they did, and
the serf is commonly considered enfranchised
when he is released from them, although he
may continue subject to his lord's general
authority. Enfranchisement has proceeded
perhaps more generally from moral than from
economic motives, but it has usually justified
itself immediately, and always eventually, by
bringing with it a decided economic advance.
The pinch of serfdom was the forced labour ;
when that was commuted to a money payment
the astriction to the estate fell away of itself,
for want of any practical reason for enforcing it
longer. But though the astriction to the spot
was less grievous to individuals — except indeed
among the Russian peasantry, whose chief com-
plaint, Haxthausen tells us, always was that it
restrained their idle propensity to rove — it was
always most pernicious to the progress of the
community, because it stopped all division of
labour, limiting occupations to the little round
of work in a rural village, and preventing the
rise of towns, and trade, and manufactures.
Russia consequently, where serfdom was only
abolished in 1861, is still, in spite of the ac-
knowledged industrial gifts of its people, little
more than a vast nation of crofters, every man
half indiflFerent agriculturist and half indifferent
tradesman ; and even in agriculture, though it is
now one of the largest exporters of grain in the
world, its system of husbandry continues almost
primitive, and there has never arisen a modern
farming class ^^'ith the requisite skill and capital
for practising improved methods. The ill effects
of the forced labour were always more directly
obvious. The serf who got a small holding to
cultivate for his own support, but was obliged
to give three days a week (the usual quota) to
his lord's work, could neither do justice to his
own fields nor to his lord's,— not to his own
because he was called away from them precisely
when he most required to be upon them, and
not to his lord's because he gave his labour re-
luctantly, sometimes with bitter ill-will, and
he had no interest except to give as little of it as
he dared. His holding is sometimes called the
wages for hia labom-, and his labour the rent for
his holding ; but that was a bad form of wages,
because it repressed instead of encouraging the
labour it was supposed to reward, and this was a
bad form of rent, because it interfered with the
proper cultivation of the land which was supposed
to yield it. Serf labour, like aU discouraged
labour, was habitually indolent. Professor R.
Jones was informed by the English engineer
who superintended the making of the road from
Hamburg to Berlin in 1830, that the Prussian
free labourers he employed broke thrice as much
granite in the day as the Mecklenburg serfs, and
that when he tried to animate the latter by
mixing them in the same gangs with the former,
the experiment failed because it had exactly
the contrary effect of making the free labourers
slacken their exertions to the bond pace {Dis-
tribution of Wealth, p. 52). The peasants on
Russian state lands, whose labour rents were
commuted into money rents long before the
universal emancipation, are much more energetic,
enterprising, and prosperous than the recently-
emancipated serfs (Thun, Landwirthschaft u.
Gewerbe in Mittelrussland, p. 43). Roscher
quotes two authorities who made personal in-
vestigations into the relative industrial capacity
of serf and free labourer in the same com-
munities, and one — Jakob — counted two free
labourers equal to three serfs, while the other
— V. Flotow — counted three free labourers
equal to four serfs {System d. Volkswirthschaft,
i. 152). The difference is still more strikingly
shown by Hanssen, who mentions that on the
estate of Rixdorf in E. Holstein, where labour
rents were commuted in 1780, it required
ninety-two horses and seventy-five men to work
the home farm before the commutation, and
only thirty-six horses and fourteen men after it
{AufhebuTig der Leibeigenschaft in Schleswig u.
Holstein, p. 39). Usually, too, though the
labourers were fewer the harvest was greater.
The eminent Danish statesman, Count J. H. E.
von . Bemstorflf, finding he could not with serf
labour make his property yield enough to pay
the taxes, freed the serfs in 1767, paid them
wages for the work they did, and obtained a
net return of £150 a year (Sugenheim, Gesch.
d. Aufhebung d. Leibeigenschaft, p. 500).
Storch mentions that he nearly tripled the pro-
duction of his estate by this enfranchisement,
raising his product of rye in the ratio of from 3
to 8^, of barley from 4 to 9^, and of oats from
2|- to 8 {Cours d' J^conomie polit. , iv. 306).
In factory work it has been generally found
impossible to employ serf labour remuneratively
at all. Haxthausen found some old serf factories
in Russia during his visit, but they were in a
very languishing condition, and most of the
Russian manufacturers, though they had gener-
ally begun with their unemployed domestic
serfs, and then changed them for some of their
agricultural serfs who were stronger, had all in
the end to learn the same secret — that the
ENFRANCHISEMENT OF LAND
717
Russian was a bad workman when he worked
on compulsion, but became an excellent work-
man when he worked for hire. Force extorts but
the minimum of effect ; it is hope that draws
out the maximum. They consequently set
their serfs free, imposed a small annual charge
as commutation duty, and engaged them in the
ordinary way for wages {Russian JSmjnre, i. 110),
precisely as Storch says had been done in
Moscow factories as far back as 1805 (Cours,
iv. 30).
Enfranchisement has occasionally resulted
ill, but that has been due either to moral defects
in the particular individuals or groups enfran-
chised, or to the excessive burden of the com-
pensation dues or other conditions of the en-
franchisement. Freedom necessarily contains
the possibility of doing worse as well as the
possibility of doing better. J. G. Kohl re-
peatedly came across villages in Little Russia
with free peasants living on one side and serfs
living on the other, and he always found that
while the most prosperous inhabitants of the
village were among the free peasants, so also
were the most miserable {Reisen im Innern von
Russland, ii. 300). On the Zamoiski estates in
Poland, enfranchisement seems to have had a
curious double action ; it trijDled the production
on the proprietor's fields (Cox, Travels in
Poland, i. 22), but it had a bad effect on the
serfs' own, because they became drunken and
neglected their work (Burnett, Present view of
Poland, 106). The gi-eat Russian emancipation
of 1861 is the most notable example of the
natural and good operation of enfranchisement
being vitiated by concomitant economic and
social conditions. j. r.
ENFRANCHISEMENT OF LAND FROM
COPYHOLD AND SIMILAR TENURES,
History of. The enfranchisement of copy-
hold lands in England has passed through three
stages. It is necessary for the purpose of
tracing its history to consider (1) enfranchise-
ment at common law ; (2) voluntary enfran-
chisement under the copyhold acts 1841-
1887; (3) compulsory enfranchisement under
the copyhold acts 1852-1887.
1, Enfranchisement at common law. Copy-
hold lands and lands of similar tenure must,
according to the law of England, be "parcel"
of a manor, or in other words, wherever lands
are held by copy of court roll, the freehold in
those lands is in other hands than those which
hold the "copy." The process of enfranchise-
ment unites, in the hands of the copyholder,
the freehold and the copyhold interest. It is
evident that nothing short of the whole freehold
interest will suflBee to clear the land of all its
copyhold incidents, and therefore an enfran-
chisement at common law may be effected "by j
any lord entitled to the manor in fee simple,
or who has a power to enfranchise or a power of
sale and exchange," but it cannot be effected
by a lord with a more limited interest or less
extensive powers. An enfranchisement, there-
fore, before the year 1841, was carried out
through a conveyance of the fee simple of the
copyhold in question, from the lord of the
manor to the tenant for an agreed price. The
fact that the tenant himself had only a limited
interest in his copyhold estate did not affect
the validity of the enfranchisement, which
would enure for the benefit of the estates of
those who succeeded him. Unless special pro-
visions were inserted in the conveyance, three
somewhat unexpected results would follow from
the enfranchisement. (1) That the mines and
minerals would pass from the lord to the copy-
holder ; (2) that the copyholder's rights of
common in the "waste" of the manor would
be extinguished ; (3) that all mortgages, or
other incumbrances affecting the lord's title,
would affect the enfranchised lands in the
hands of the quondam copyholder. It will be
readily understood that the difliculties attend-
ing enfranchisement, under such conditions,
rendered the conversion of copyholds into free-
holds a cumbrous and costly process.
In 1802 we find, in the Land Tax Redemp-
tion Act, provisions which enable owners of
limited estates in manors to make enfranchise-
ments for the purpose of obtaining money for
redeeming the land tax. This apj)ears to be
the first indication of the principle subsequently
worked out in the copyhold acts.
2. In the year 1841 was passed the first of
the acts which "provide the means for an
adequate compensation for the rents, fines, and
heriots payable to the lords of manors, in re-
spect of lands of copyhold and customary
tenure, and for facilitating the voluntary
enfranchisement of sucli lands, and for im-
proving such tenure." This act created a
body of commissioners called the copyhold
commissioners, now the land commissioners,
whose consent and approval must be obtained
to enfranchisements made under the act.
Under this protection the legislature felt itself
enabled to give authority to the lord of any
manor, "whatever may be his estate or
interests therein," to enfranchise "all or any
of the lands holden of his manor," and to any
tenant, "whatever may be his estate and
interest," to accept such enfranchisement. The
consideration was payable in money, but by
agreement such money might be made payable
at a future time. Whenever the lord who
enfranchised had a limited interest only, the
money, so soon as it was paid over, was to be
invested, and to be subject to the same trusts
as those affecting the manor to which the
enfranchised copyhold had previously belonged.
It was now enacted that any rights of common
belonging to the land enfranchised should
continue to be attached thereto after it had
become freehold, and that the lord's right to
718
ENFEANCHISEMENT OF LAND
mines and minerals, under the enfranchised
land, should not pass upon the enfranchisement
unless expressly commuted. Upon payment of
the sum payable for enfranchisement, the
tenant was authorised to charge it upon the
lands enfranchised, with aU the power^ and
rights of a first mortgagee. Finally, the title
to" the enfranchised copyholds was to be sepa-
rated for ever from the title to the manor.
By this act, therefore, three of the main
impediments to general enfranchisement were
done away with; for (1) it was no longer
necessary to obtain the conveyance from an
absolute owner ; (2) it was no longer necessary
expressly to reserve the lord's mines and
minerals and the tenant's rights of common ;
and (3) the enfranchised copyholder had
nothing to fear from any encumbrances clog-
ging the estate of his former lord. But
enfranchisement still remained a matter of
agreement, and could not be forced upon an
tm willing lord. Amending acts are a sure
sign that a statute is not a dead letter, and
the Copyhold Act of 1841 was followed by
those of 1843 and 1844. The act of 1843
provided that the consideration for enfranchise-
ment, which under the act of 1841 was a
lump sum of money, might in future be paid
wholly or in part by an annual rent charge,
or might take the shape of a conveyance of
lands forming part of the manor to which the
enfranchised lands had previously belonged.
The act of 1844 extended the last-mentioned
provision to any lands which, in the opinion
of the copyhold commissioners, could be con-
veniently held with the manor to which the
enfranchised lands had previously belonged,
although themselves not belonging to such
manor.
These three acts of 1841, 1843, and 1844,
constituted a short code under which volun-
tary enfranchisement could be satisfactorily
carried through. But it was not until 1852
that compulsory enfranchisement became pos-
sible for either lord or tenant.
3. The system of compulsory enfranchise-
ment, which was inaugurated by the Copyhold
Act of 1852, was applied in the first instance
to those copyholds only to which a new
tenant was admitted on or after 1st July 1853,
or in other words, so long as an existing estate
in the copyhold continued to subsist, neither
lord nor tenant could force an enfranchisement
upon tenant or lord. But six years' experience
of the act of 1852 enabled the legislature to
extend its provisions to all copyholds whenever
the last admission had been made to them.
The key-note to the system of compulsory
enfranchisement is valuation of the lord's
interest by independent valuers, under the
supervision of the copyhold commissioners.
The difficulty which compulsory enfranchise-
ment had to deal with was the amount of
compensation to be paid to the lord in respect
of fines and other sources of profit to which,
if the copyhold interest continued, he wouldJ
become entitled at uncertain intervals, audi
which, upon enfranchisement, required to be
turned into money once and for all. Without
going into the meaning as to " the lord's fine,'
it may be sufficient to say that such fines are
payable when a new tenant is admitted, that
is, entered upon the court rolls as the person
holding the copyhold tenement "according to
the custom of the manor." Originally the
price given to induce the lord to accept the
new tenant, the fine, was in its nature arbitrary
and uncertain, and depended in each manor
upon the custom of that particular manor.
But the courts of the king had, at an early
date, established that the courts of the manorial
lords could not by custom give efficacy to
unreasonable fines, and in course of time de-
veloped the working rule that "two years'
improved value of the land, after deducting
quit-rents," was the maximum amount which
the lord of a manor should be entitled to receive
upon the admission of a new tenant.
How then does the act of 1852 meet this
problem ? In the first place all fines and ofher
manorial dues, payable upon the admission,
which under that act supplies the opportunity
for enfranchisement, are to be discharged before
any further step is taken. Then the valuers,
or their umpire, or the single valuer agreed upon
by lord and tenant, must ascertain the value
of the manorial rights now exercised for the last
time. The valuation, when made, must take
the form of an award, must be confirmed by the
copyhold commissioners, must be registered at
the office of the commissioners, and must be
entered upon the court rolls. The amount of
the valuation, failing agreement, is to be paid
by the tenant in a lump sum, if he has claimed
the enfranchisement ; but if the lord has
insisted on the change of tenure, the compensa-
tion will, in the absence of express agreement,
take the form of an annual rent-charge. In
either case the "enfranchisement considera-
tion" is a first charge upon the lands en-
franchised.
Two provisions of this act are noteworthy,
as showing the caution with which the legis-
lature introduced compulsory enfranchisement.
Firstly, power is given to the lord to buy out
the copyholder compulsorily if he can show, to
the satisfaction of the commissioners, that his
"mansion-house, park, garden, or pleasure
grounds," may suffer from the tenant's enlarged
powers of dealing with the lands which are
ceasing to be copyhold. Such a power might
well be granted to the lord if the tenant
threatened to open a marl pit or cut down
standing timber upon land with which he could
not so deal whilst still a copyholder. Secondly,
if it be found at any time that the person who
(
ENGLISH EARLY ECONOMIC HISTORY
719
purported to enfrancliise was not the lord at^
all, it is provided that the true lord is to re-
cover the consideration for the enfranchisement
from the person who wrongfully received it,
instead of forcing the tenant to pay the money
again and look to the wrong-doer for com-
pensation.
Valuers acting under the Copyhold Act
1852 must take into consideration "facilities
for improvement," as, for example, the possi-
bility that the land may become building land,
and the hindrances to such improvement, as,
for example, the probability that it will not
become buUding land for some years.
The Copyhold Act 1858 is to the Copyhold
Act 1852 what the Copyhold Acts 1843 and
1844 are to the Copyhold Act 1841. It con-
tains such improvements as the working of the
principal act had suggested. Thus for the
deed of enfranchisement specified by the act
of 1852, which the parties would execute, was
substituted an award of enfranchisement to be
made by the copyhold commissioners ; owners
of at least two-thirds of the value of copyholds
held in undivided shares, obtained the power
to insist on an enfranchisement whatever their
co-tenants might desire ; and one form of certifi-
cate of charge was provided for securing the
payment of consideration money, compensation
money, and expenses of enfranchisement, as
the case might be.
Speaking generally, the costs of a voluntary
enfranchisement are paid in manner agreed by
the parties, or, failing agreement, are paid as
directed by the commissioners ; while the costs
of a compulsory enfranchisement are to be paid
by the party who has insisted upon abolishing
the copyhold tenure.
In 1887, after an interval of thirty years,
an act was passed "to make further provisions
for enfranchisement" of copyhold lands. An
important provision of this act is that the
steward of any manor, when a new tenant
comes for admission to a copyhold, must hand
to such tenant a notice stating that he is
entitled, if he desires, to enfranchise the copy-
hold. A further provision of great import-
ance prevents the lords of manors from making
grants of portions of the "waste" of their
manors. Again, the tenant may pay the com-
pensation for an enfranchisement on which he
has insisted by means of a rent-cliarge of 4 per
cent of the amount of compensation. Finally,
the compensation to the steward of the manor
is fixed by a schedule to the act, and the land
commissioners are directed to " frame a scale of
compensation" such as "will facilitate enfran-
chisement." The scale published in conformity
with this act comprises a table in which is cal-
culated the number of years' annual value pay-
able to the lord, according to the age of the
tenant, as compensation for the loss of future
fines. An act, consolidating all earlier legisla-
tion, was passed in 1894, under which both
compulsory and voluntary enfranchisements are
now effected. The powers formerly in the hands
of the land commissioners are now exercised by
the Board of Agriculture, whose consent must be
obtained both for voluntary and compulsory
enfranchisements. The latter are effected by
an award made by the Board, and the Board
directs the valuation for compensation. The
party demanding the enfranchisement must
bear the expense. The tenant has in all cases
the choice of paying the compensation either in
a gross sum or as an annual rent charge, but
when the lord is the compelling party, the
compensation is paid as a rent charge unless
the tenant desires otherwise.
Enfranchisements on crown lands, church-
lands, and university and college lands, are
the subject of special statutes.
[Brown, Qopyhold Enfranchisement Acts, 1888.
— Scriven, On Copyholds, 6th edition, 1882. —
Elton, Law of Copyholds, 1898,]
ENGLISH EARLY ECONOMIC HISTORY.
— In the present state of historical investigation,
it is difficult to give a complete account of the
development of political economy in England.
Many writers have devoted attention to the
subject, and reached important conclusions, but
comparatively little use has been made of the
v^ast stores of material relating to the later
middle ages, and the rise and fall of the mer-
cantile system. Particular movements have
indeed been carefully investigated, and we are
not without indications of the general course
of development. To take an illustration from
mathematics, certain points on the curve of
development have been ascertained ; we have
some idea of its shape ; we know also that the
English curve is only one of a large family of
curves, other members of which may be found on
the continent. But of its direction between the
points ascertained, and of the ditterences be-
tween it and others of the same class, we know
little.
The subject may be best approached by con-
sidering the influence of the mediseval church.
Before the conversion of the Anglo-Saxons to
Christianity there was little commerce, but
Christian merchants resorted to England while
the inhabitants were still pagans, and so brought
them into contact with a more highly developed
economy than their own. Many of the prin-
ciples which we find in mediseval economic
teaching may probably be traced back to this
or an earlier period ; for example, the idea
of money as a pledge, which exercised an im-
portant influence on economic doctrine in
England far into the 17th century. Neither
the condemnation of avarice nor hostility to
usury was peculiar to Christianity. The social
system of the middle ages, greatly modified as
it was by Christian teaching, had its foundations
in a pre-Christian state of society. But making
720
ENGLISH EARLY ECONOMIC HISTORY
every allowance for the influence of ideas and
customs derived from earlier times, the fact
that the new religion obtained a linn hold on
the jjopulation while industry and commerce
were still in their infancy, is of primary im-
portance in tracing the development of p<jlitical
economy. Early economic institutions and laws
are stamped with the teaching of the church.
Subsequent modifications of doctrine are largely
the outcome of the struggle, on the part of the
church, to guide or control new economic forces
as they gradually came into operation. To
follow rightly the course of development it is
firat of all necessary to understand the position of
the church with regard to trade and industry.
From the earliest times the church had had
forced upon it the duty of applying the prin-
ciples of Christianity to social life. Outside
Palestine the earliest converts were found in
the busy trading centres of Asia Minor ; and the
first persecutions were probably due to the fact
that the new religion threatened various trading
interests, and tended to the overthrow of the
existing social system (Ramsay's Church in the
Roman Empire, pp. 12, 199, 200, etc.). But
the church was hostile to the ordinary usages of
the world only in so far as they were in conflict
with the ideal of Christianity, which supplied a
standard by which all actions in the economic
sphere could be tested. Everything incon-
sistent with the profession of Christianity was
condemned, and uncompromising obedience to its
precepts was enjoined. The process of applying
Christianity, in changing or widely differing
social conditions, went on in the earlier centuries
of the Christian era and throughout the middle
ages. The work of the church was not so much
to introduce new principles of action as to test
those already known, assimilating those which
were not hostile to Christianity, and giving them
new significance when considered in the light of
the Christian faith.
The pursuit of gain as an end in itself was
obviously inconsistent with Christianity, and
the condemnation of avarice in every form is
one of the most striking characteristics of the
teaching of the church. This may be regarded
as the fundamental principle of mediaeval econ-
omics. Its different parts are so closely inter-
woven with each other that we can without
much difficulty reconstruct the whole system
from any one of its elements. Closely bound
up with the condemnation of avarice was hos-
tility to many methods of acquiring wealth
which have since been adopted by civilised com-
munities, and chief amongst those forbidden
methodswas Usury (5'. -y.), the objection to which
extended to aU forms of investment for the sake
of gain. But the general teaching of the church
would have had comparatively little influence
but for its wide and far-reaching application of
the principle of association. The interests of
the individual were subordinated to those of the
community. The duty of helping those in need,
and the brotherhood of all Christians, were in-
sisted on. It was this side of the teaching of
the church (see Christianity and Economics ;
Church, the Me DiiEVAL) which accelerated, if it
did not initiate, the formation of gilds and other
associations, and ultimately led to the creation
of the elaborate system of the middle ages for
the regulation of trade and the restraint of com-
petition. Insistence also on a just or reasonable
price for commodities, the approximate deter-
mination of which was easier in this early stage
of industrial development than it would be in
modern times, led to numerous laws framed
with a view to realising that object. It may be
noticed as evidence of the hold which mediaeval
doctrines obtained, that the expression ''just
price " (JusTUM Pretium), interpreted to mean
that price which most closely approximated to
cost of production, was used as a synonym for
"cost price "as late as the end of the 16 th
century.
{Vide R. Recordb's Orounde of Aries, 1543,
frequently reprinted and edited by Dr. Dee, Jolm
Mel lis, Eobert Norton, and others.)
The early hostility of the church to usury was
based on the biblical records and on the authori-
tative declarations of the Christian fathers and
the councUs. Had the church maintained its
original attitude there can be no doubt that its
influence would have seriously hampered econo-
mic development. It became impossible, how-
ever, to regard with hostility many of the new
methods of acquiring wealth which appeared
with the extension of trade and commerce, and
thus began one of the most interesting move-
ments of thought of the middle ages, viz. the
adaptation of the principles of Christian teach-
ing on the subject of lending and borrowing to
the needs of a changing environment. This
process begins about the twelfth century. The
canonist writers, on the one hand, endeavoured
to separate the essential from the non-essential
elements of the doctrine of usury, and to apply
it to mercantile transactions, strengthening
their position by appeals to Aristotle's doctrine
of the barrenness of money, the conception of
natv/ral law, and other arguments ; while, on
the other hand, merchants and traders, anxious
to escape the "censure of usury," appear to
have been not unwilling to submit to decisions
which, on the whole, did not seriously hamper
freedom of investment. Bond fide credit agencies,
bills of exchange, loans for trading purposes, the
payment of interest whenever the lender could
show that the loan would result in " certain gain
lost" or "actual loss incurred," rent charges,
partnership, loans on bottomry, and other ex-
pedients for securing a return for the invest-
ment of capital, were gradually approved by the
canonist writers, and the outcome of the move-
ment was that the doctrine of usury was stripped
ENGLISH EARLY ECONOMIC HISTORY
721
of everything likely to prove an obstacle to the
practice of ordinary business methods.
Such was the course of movement on the
continent. But for the present we are only
entitled to say that there was a general similar-
ity between English and continental opinion
during this period. No doubt many passages
may be quoted from English statutes which
appear to be suggested by the canon law. The
influence of the church was great, and the trading
classes would not lightly risk excommunication
for the sake of gain. "Goods lost, nothing lost ;
credit lost, much lost; soul lost, all lost," is an
old proverb ; and even as late as 1486 Pope
Sixtus IV. thought it worth while granting to
the inhabitants of the Channel Islands "the
help and authority of the church by interdict,
anathema, and other forms of censure, for the
repression of piracy, robbery, and violence "
{Materials for history of the reign of Henry VII.
(Rolls series) i. 280). The ordinary teaching of
the church, whatever may have been its practice,
was hostile to avarice and covetousness (vide,
for example, the homily in Ashm. MSS. 750),
and occasionally the influence of the Gilds
{q.v.) may have been favourable to the rule of
the Canon Lavs^ {I-v.) [Ordinances of the Gild of
St. Leonard, Lynn, Toulmin Smith's collection,
p. 50]. The usury laws also were enforced and
had the support of the trading classes (Liber
Alhus, ed. 1861, 318, 319, 339). But such
evidence enables us to say only that there was a
general similarity, which indeed we should
expect, between England and the continent ; and
in the development of economic doctrine the
points of difference are of equal if not of greater
importance. The backwardness of investigation
prevents us from dealing with the latter with
any completeness of detail. The following,
however, may be noted. Neither the canon law
nor the civil law was received in England as
authoritative "except educationally, and as
furnishing scientific confirmation for empiric
argument." (Stubbs, Lectures on Mediceval and
Modern History, 307.) The canonists, however,
claimed that "a suit might be brought in the
ecclesiastical courts for every matter which was
not cognisable in the courts of secular law, and for
a great many matters which were so cognisable "
{ib. 316), and there was a long conflict on the
subject. The system of rent charges was not gene-
rally prevalent in England, and montes pietatis
were never established (see Mont de Vitrt). An
attempt to introduce the latter was made without
success, by Gerard Malynes, early in the 17th
century {Lex Mercatoria, 1622). The economic
legislation of the 14th and 15th centuries was
largely empirical. In the regulation of foreign
trade especially, and in the organisation of the
customs, the measures adopted were mainly de-
termined by the fiscal necessities of the govern-
ment, and we can see very early the tendency to
subordinate trade to the exigencies of foreign
VOL. I.
diplomacy (e. 9'. in the relations between England
and Flanders) which became so prominent a
feature of later commercial development.
Councils of merchants were summoned by
Edward I. and Edward III. to advise with them
on questions of trade (see Rymer, Foedera (1821)
vol. ii. pt. V. 1057). The general impression we
get from a study of the legislation of this period
and from such arguments as are recorded in the
Rolls of Parliament, is that many of the meas-
ures adopted were tentative and experimental.
To understand therefore the economic ideas of
the time we must examine closely the statutes
and institutions in which they were embodied.
Such were the statutes regulating wages and
prices, the organisation of the crafts, the staple
system, restraints on the exportation of bullion,
statutes of employment, and usury laws. We
may notice the following points: (1) The move-
ment of thought on the subject of usury was
slower in England than on the continent. (2)
Financial methods well known on the continent
were not introduced into England until com-
paratively recent times. The discussion, there-
fore, of various credit agencies which did so much
to modify continental opinion was scarcely pos-
sible in England. (3) The impression prevailed
— with what reason it is unnecessary here to
discuss — that the staple system, while imposing
certain regulations on all merchants alike,
was not imfavourable to freedom of enter-
prise. (4) Money, so far from being subject
to the same laws as other commodities, was
supposed to be essentially different from them.
It was, in fact, not a commodity at all, but a
pledge, a medium of exchange, circulating under
the authority of the prince or commonwealth,
its value determined solely by that authority.
The first appearance of those forces which were
destined to break up the mediseval system
should be noted. In the reign of Richard II. we
have the first navigation act ; then the begin-
ning of various trading companies, especially
that of the merchant adventurers (see Adven-
turers, Merchants ; Navigation Laws).
We are now in a position to trace the subse-
quent development of economic doctrine in
England. The reign of Henry VII. was of
great importance in the economic history of the
country, and its industrial and commercial pro-
gress very soon brought about far-reaching
changes in' economic ideas. From the middle
of the 16th century onwards there were few
years in which some book or pamphlet was not
published on subjects of economic interest,
and such works may be reckoned by thousands.
It is diflBcult to draw a sharp line of division
between economic and non-economic publica-
tions. We shall, however, keep as closely as
possible to the main line of development of
doctrine, and in a later section indicate the
relation to it of other currents of thought.
English statesmen and writers in the middle
3 a
722
ENGLISH EARLY ECOI^OMIC HISTORY
of the 16th century had to face the most diffi-
cult economic problems which could possibly be
submitted to them. The mediaeval system for
the municipal control of trade was unsuitable
for the regulation of the new economic forces
which the extension of the domestic system,
especially in the woollen industry, brought into
deration. The decay of tillage, and the growth
of enclosures, appeared to threaten the country
with the evils of depopulation, as well as a
great increase in poverty. The social changes
induced by the reformation seemed to be equally
momentous. In relation to foreign trade, the
loss of Calais inflicted a death-blow on the staple
system, and the withdrawal of the privileges of
the Hanse merchants injured the interests of a
section of English merchants, although it left
the way clear for the development of a national
foreign trade by the merchant adventurers.
In the growth of industry and commerce these
difficulties were inevitable. There must have
been great disturbance and loss to some classes,
but in time the country would have settled down
to the new conditions. The evils, however, of
the period of transition were aggravated by a
currency problem of the first magnitude. The
debasement of the coinage under Henry VIII.
and Edward VI. , coupled later on with the influx
of the new silver from the American mines, led
to a rise of prices without parallel in the history
of the country. The evils of the debasement
were felt especially by the landed interest, the
government, and the working classes. It is im-
portant to keep these facts in mind, for they
formed the subject-matter of the earliest economic
literature. One treatise — the Brief e Conceit
of English Policy, attributed to William Staff"ord,
and published in 1581, but really written by
John Hales about 1549 {Eng. Hist. Review, vi.
284) — deals with these questions as a whole, and
sums up the aims of the government at this
time. The writer shows a clear insight into
the causes of the high prices ; his work is in-
valuable as a storehouse of information, and in
it we have a broad outline of the theory of the
balance of trade, which was elaborated in the
following years. The Brief e Conceit, however,
scarcely enables us to trace distinctly the relation
between the opinions which have already been
described, and later economic doctrine. To do
that we must go to the history of the merchant
adventurers.
With the growth of their trade, the merchant
adventurers naturally adopted means of avoid-
ing the transmission of bullion, such as bills of
exchange, which had long been in use for certain
transactions. Until the middle of the 16th
century aU went weU, but then the fluctuations
in the ratio of exchange between London and
Antwerp, and other places, brought into pro-
minence the usurious aspects of bill discounting,
and the opponents of the merchant adventurers
attributed the rise in prices to their practices.
It was commonly believed that it was within
the power and the exclusive right of the govern-
ment to fix the rate of exchange, and thus
determine the prices of commodities. We can-
not here detail the circumstances which gave
rise to this theory. It must suffice to say that
when it arose it was not altogether absurd ;
there was much in the ordinary practice of
merchants to give some show of truth to the
theory ; and it was closely bound up with the
doctrine of usury. From the middle of the
16th century until late in the 17 th it was
advocated in pamphlets, and pressed upon the
attention of the government, which was really
uncertain how to act. It was the basis of the
charge of usury, which was one of the most
usual arguments against the merchant adven-
turers {vide the Treatise on Exchange, 1564,
printed in Milles's Customers Replie, 1604), and
the economic world was divided into two opposite
camps — the buUionists, represented by the
advocates of the Staple System {q.v.), and the
newer mercantile school represented by the
merchant adventurers and their supporters. In
his economic works, nine in number, though
only five survive, Thomas Milles, head
customer of Sandwich, undertook the defence
of the staple system, and denounced the mono-
polising tendency of the merchant adventurers.
In his Customers Apology (1601), we have a
curious anticipation of Adam Smith's canons of
taxation, and one of the earliest instances of
the claim for free trade based upon the theory
of natural rights (cp. Report from the Committee
on the Free Trade Bills, 1604, JouvTials of the
House of Commons, ii. 218-221. The monopoly
of the merchant adventurers was "against the
natural right and liberty of the subjects of
England.") The attacks on the company called
forth John Wheeler's Treatise of Commerce
(1601). Wheeler was secretary to the mer-
chant adventurers, and his statements are not
free from bias and inaccuracy, but his book is a
good defence of their policy and aims. Wheeler's
reply to Milles provoked another attack from
the latter, in the Customers Replie (1604), in
which he added to the force of his own argu-
ments by reprinting the Treatise on Exchange in
Merchandise and Merchandising Exchange men-
tioned above. We need not, however, follow
him through his other works. His mantle fell on
Gerard Malynes, who was more moderate in his
views, and had more knowledge and experience
than Milles. Meanwhile, the East India Com-
pany had obtained their charter, and in it a
clause allowing them to export bullion. In con-
sequence of this, the controversy on the foreign
exchanges, the brunt of which had been borne
by the merchant adventurers, was turned against
the East India Company. Matters were also
complicated by the introduction of a new element
into the discussion, viz. the relative advantages
of joint -stock and regulated companies for
ENGLISH EARLY ECONOMIC HISTORY
723
carrying on distant trade, the East India Com-
pany being an example of the former, and the
merchant adventurers of the latter. It must
also be pointed out that the state of trade in
the reign of James I. caused, reasonably or un-
reasonably, much anxiety ; and the currency, the
privileges of the trading companies, the price
of wool, the navigation acts, etc., formed from
time to time the subject of government inquiry.
We shall deal with these issues later on ; they
are mentioned now to show how impossible it
becomes with the growing complexity of economic
questions to separate the writers of this period
into well-defined gi'oups. Early in the reign of
James I. there was some possibility of the
revival of the old machinery for the regula-
tion of the foreign exchanges. The controversy
burst into new life in 1622. To meet the
charges brought against the East India Com-
pany, Thomas MuN published, in 1621, his
Discourse of Trade from England to the East
Indies, which was devoted partly to showing
the advantages of the exportation of bullion.
It is interesting to notice, however, that as yet
Mun had not entirely broken away from the
old school, for in this work he approved of the
statutes of employment. Edward Misselden,
for some time deputy governor of the mer-
chant adventurers at Delft, had long devoted
attention to the woollen trade, and in 1622 he
published his Free Trade, or the means to make
Trade flourish. In this work he discusses the
reasons for the backwardness of the English
cloth trade, and defends the company organisa-
tion. But for some cause he appears to have
been not unwilling to disarm the opposition
to the merchant adventurers and to turn it
against the East India Company ; and amongst
the causes of the decay of trade he enumerates
the exportation of bullion by the latter.
Now Malynes had already, in his earlier
pamphlets, found a sufficient cause not only for
depression of trade, but for all social evils, in the
theory of the foreign exchanges which we have
already noticed. To his mind the only remedy
likely to prove efficacious was the revival of
the staple system. Naturally, therefore, he
thought Misselden completely mistaken in the
causes to which he attributed the supposed
decay of trade, and he approved of a joint-
stock company for the East India trade. He
therefore replied to Misselden in his Mainten-
ance of Free Trade (1622), in which he re-
iterated his theory of the foreign exchanges.
This pamphlet was almost immediately followed
by his great folio Lex Mercatoria, in which he
expressed the same views.
We may digress for a moment to point out
that we probably owe to Malynes the introduc-
tion of the word "capital" into England. At
the beginning of the 17th century this word was
unknown, or at any rate not in use in England.
In his Lex Mercatoria, Malynes endeavours to
popularise the Italian and Dutch method of
keeping accounts, and he describes the capital
or stock of a merchant as consisting of the goods
in his warehouse, his ready money, debts due
to him, houses and lands in his possession,
and his "plate, apparell, and household stuff."
"Capital," as used by Malynes, was derived
from capitale, very numerous instances of which
may be given from continental treatises on
mercantile law.
To return to the controversy of 1622,
Malynes's work was not allowed to pass unques-
tioned. In 1623, Misselden replied in his
Circle of Commerce, or the Ballance of Trade,
in which he completely refuted Malynes's theory
of the foreign exchanges, and, taking up the
defence of the East India Company, pointed
out the advantages of the exportation of bullion,
and sketched the theory of the balance of trade.
Malynes again replied, but his theory had been
completely demolished. Thus the mercantilists
not only arrived at a truer doctrine of inter-
national trade, but in doing so destroyed a
theory with which the old views with regard
to usury were closely bound up. In 1628
Thomas Mun further developed the argument
for the exportation of bullion in the Petition and
Remonstrance of the East India Covipany, which
was republished in 1641. Meanwhile, Sir
Ralph Maddison had been devoting attention
to the subject. He had sat, with Mun and
others, on the royal commission of 1622,
though for some reason his name was omitted
on the reappointment of the commission in
1625. Under the commonwealth and the pro-
tectorate he was regarded as a great authority
on currency questions. He gave a clear state-
ment of the theory of the balance of trade in
England's looking in and out, 1640, a work
which was reprinted in 1641, and again, with
a few verbal changes and additions, in 1655
under the title of Great Britain's liemembrancer.
Maddison, however, holds a middle position
between Malynes and Mun, for his views on
currency and the foreign exchanges appear to
be based upon the works of the former. Mun
incorporated the arguments of tlie Petition and
Remonstrance in England's Treasure by Foreign
Trade, published in 1664, some years after his
death, and this work became the chief bulwark
of the mercantile system in England. It passed
through many editions and exercised an in-
fluence almost incredible at the present time.
Thus the great system of which we find the
general outline in the Brief e Conceit of English
Policy was furnished with an economic basis.
But before we describe the principal character-
istics of Mun's work, it is desirable to trace
the development of the other lines of thought
which his book brought to a focus.
The economic writers of the 16 th and the
17th centuries agreed in maintaining that the
unrestricted operation of the motive of self-
724
ENGLISH EARLY ECONOMIC HISTORY
interest led to disorders in the state, and that an
eflBcient system of industrial and trade organ-
isation was necessary to direct the economic
activities of the country into the right channels.
They set before themselves a definite object,
the "public good," by which they mea»t the
creation of a ''commonwealth," in which the
various trading interests should be so balanced
as to secure the greatest economic efficiency of the
various elements consistent with the self-suffi-
ciency of the nation as a whole ; and considerable
prominence is given to this idea as an "economic
motive " in the works of the best writers. Thus
Mun distinguishes between three sorts of gain, (i)
that of the commonwealth, which was sometimes
the merchant's loss ; (ii) that of the merchant,
"which he doth sometimes justly and worthily
effect, although the commonwealth be a loser" ;
and (iii) that of the king, "whereof he is ever
certain" (Bnglaiid's Treasure, etc., p. 64), but
he had previously stated the rule that, in com-
merce, "private gain was ever to accompany
the publique good " {ih. p. 3). The pursuit of
the public good, interpreted in the sense given
to it above, was a real force in the economic
world, and the suppression of a trade "hurtful
to the commonwealth " was generally approved.
Taking the mercantile system at its best, it
shows a distinct advance on mediseval ideas in
the substitution of the wider interests of the
nation for those of the craft or the munici-
pality. On the other hand, it must be admitted
that the majority of the writers show little or
no consciousness of a high national aim. The
" hurtful " trade generally happened to be that
of a rival company, a dependency, or a neigh-
bouring nation. The mercantilists differed too
from the laisser faire school in the views they
held on the relation of economic questions to
religion, politics, and other subjects. Economic
interests could not be isolated. Prosperity was
the result of various economic, political, and re-
ligious forces mutually interdependent. Thus
Sir William Temple remarks of Holland :
" The trade of this country is discovered to be
no effect of common contrivances, of natural
dispositions or situation, or of trivial accidents,
but of a great concurrence of circumstances,"
amongst which he enumerates the immigration
of aliens, the constitution and credit of the
government, liberty of conscience, security of
life and property, and the interest of the people
in their government, as well as causes of a
more strictly economic character {Observations
upon the United Provinces, Collected Works,
1723, i. 65). One of the mercantilist tests of
economic prosperity separates them so sharply
from more modern schools, that it deserves to
rank as a fundamental principle of their teach-
ing. This was the quantity of the precious
metals which the country contained. A thorough
examination of mercantile doctrines in relation
to the circumstances of the time does not exoner-
ate the writers from the charge of confusion of
thought on this subject. There is no evidence
that this led to any evils in the ordinary economic
life of the community. But on foreign trade
as a whole, and on the popular estimation in
which different branches of foreign trade were
held, it had enormous influence : " The ordinary
means to increase our wealth and treasure,"
says Mun, "is by Forraign Trade, wherein we
must ever observe this rule : to sell more to
strangers yearly than we consume of theirs in
value." The economic pamphlets of the period
abound with similar statements. They cer-
tainly mean that the benefit of foreign trade
is measured by the excess in value of exports
over imports, and that branches of commerce
which can not bear this test should be dis-
couraged, or even suppressed altogether. Al-
though there is no "historical justification"
for this doctrine, we can see how it arose. We
may dismiss the idea that the mercantilists
thought "wealth" and "money" identical.
No man could believe more firmly than Gerard
Malynes in the necessity of securing a constant
influx of bullion, yet we owe to him the first
clear definition of capital in the English lan-
guage. His book, bound up with Daffome's
Merchants' Mirrour, one of the most complete
works on book-keeping then in existence, was
very generally used as the chief authority on
mercantile affairs. The strongest advocates of
the theory of the balance of trade were success-
ful business men. Mun was one of the ablest
East India merchants of his time. There is
no trace of any confusion of wealth with money
in their business transactions, and they exported
bullion like any other commodity. We must
therefore seek some other explanation of the
fallacy. Although the old bullionist theory of
the foreign exchanges had been refuted, the
writers of the 17th century could not free them-
selves from the conceptions on which it was
based, and such works as Roberts's Mappe of
Commerce (1638), or even Alexander Justice's
General Treatise of Monies and Exchanges
(1707), in which the ratios and methods of
exchange between London and other trading
centres are given in great detail, show that
international transactions were still carried on
in much the same manner as under the staple
system. The king's Exchanger {q.v.) had
disappeared, but the cambists and goldsmiths
performed his functions with great profit to
themselves. Communication between one
country and another was slow and difficult ;
credit agencies were little developed ; and in
such circumstances the old view of the precious
metals was not easily eradicated. It remained
firmly fixed in the popular mind. It was
more natural to regard the changes which
lapse of time, expanding commerce, and the
rise in prices had brought about, as modifica-
tions of an old tlieory, than to invent a new
ENGLISH EARLY ECONOMIC HISTORY
725
and more accurate one. The strict analogy-
drawn by the writers of this period between
the business transactions of an individual and
the foreign commerce of the nation as a whole
gave to the old theory a greater persistence.
The fact that during the 17th century imports
and exports were a fairly good test of inter-
national indebtedness had the same influence.
It may also be pointed out that English imports
consisted of a greater proportion of luxuries,
such as spices, wines, silks, and fine linen, and
a smaller proportion of necessaries and raw
materials than at the present day, while bullion
was indispensable for trade with the east, in
the then backward state of English manufac-
tures. So the mercantilists tried to keep down
the importation of commodities which in their
opinion sapped the vitality of the nation, and
to secure the bullion which they required (see
Mercantile System).
We are now in a position to understand the
attitude of the school of which Mun was the
typical representative to the economic questions
of the 16th and the 17th centuries. It is
obvious that the mercantilists were not likely
to take much theoretical interest in the finely -
drawn distinctions of the canonist writers on the
subject of usury. Theological influences were not
strong in this country ; and true to the English
tradition, the mercantilists preferred expediency
to metaphysics. It is probable that the views
of the later canonists were never thoroughly
popularised in England. During the refor-
mation period there was much controversy, and
towards the end of the 16tli century many
pamphlets were written, amongst which we may
mention Nicholas Sanders's Briefe Treatise of
Usury (1568), Thomas Wilson's Discourse of
Usurie(l5Q9), Rogers's translations of the works
of M. P. Cajsar and N. Hemming (1578), H.
Smith's Examination of Usury (1592), and Miles
Mosse's Arraignment and Conviction of Usury
(1595). But the development of trade and com-
merce, which at an earlier period might have
imparted great vitality to such discussions, took
place subsequent to the reformation, and though
the influence of the contending schools may be
traced in the legislation of the period, English
writers appear to have regarded the subject
mainly as one of practical expediency.
Malynes was indebted to Wilson's Discourse for
some of his arguments and illustrations, but
even those who were willing to prejudice the
merchant adventurers by attributing their
"usurious" practices to the influence of Rome,
were on the whole hostile to the prohibition of
usury. The doctrine was important only as a
support to an erroneous theory of the foreign
exchanges, and, with the refutation of the latter,
interest in the former disappeared. The Cul-
PEPERS, father and son, Thomas Manley, and
other writers from time to time engaged in the
controversy. The average English position is
stated in Sir J. Child's Brief observations con-
cerning Trade and the interest of Money (1668).
In T?ie Interest of Money mistaken, or a treatise
proving that the Abatement of Interest is the
Effect and not the Cause of the Riches of a Nation,
published in the same year, an attempt is made
to correct a current popular fallacy. Mun's view
was the ordinary view of the time ; favourable
to usury, he held that **this course in the rich
giveth opportunity presently to the younger and
poorer merchants to rise in the world, and to
enlarge their dealings ; to the performance
whereof, if they want means of their own, they
may and do take it up at interest : so that our
money lies not dead ; it is still traded "...
"usury and trade rise and fall together" (^Eng-
land's Treasure, etc. 144, 146). With the views
of Locke and the other writers of the end
of the 17th century we shall deal in a later
section.
While the theoretical discussion of interest
and usury attracted few writers, the constitu-
tion of the trading companies assumed great
importance in economic controversy. This
was inevitable, for at the beginning of the reign
of James I. the whole of the foreign trade of
the country except that carried on with France
was monopolised by one or another of the com-
panies, and they were one of the most import-
ant factors in economic development from the
beginning of the 16th to the middle of the
18th century. During the period which we
are now considering, viz. from the beginning of
the 16th century until the publication of Mun's
work (1664), there were, roughly speaking, two
stages in the controversy on this subject. In
the first stage the Merchant Adventurers Com-
pany was the most powerful of the associations
then in existence. The controversy naturally
took the form of a struggle between the mer
chant adventurers and those who looked for
a solution of the great problem of the organisa-
tion of foreign commerce to a revival in some
form of the staple system. The first stage may
be said to terminate with the free-trade bills of
1604, to which reference has already been made.
After the failure of these bills the position of the
companies was assured, although hostility to
them in one form or another is a most marked
feature of 17th century history, and Cromwell
tried the experiment of a free and open trade
with the East Indies in 1653. The case for
the merchant adventurers is stated with gi-eat
moderation in an anonymous treatise, Towch-
inge the Multitude of Marchantes for ventinge of
Eng. clothes {Rawl. MSS., D. 23). After point-
ing out that the government should provide
for only so many merchants " as have acquaint-
ance, and as have polycy and understandinge to
trade together to buy up all clothes vendyble
for raarchant venturers, and to carry them
together, by one consorte of Marchants, unto
one certen marte," the writer goes on to say*
726
ENGLISH EARLY ECONOMIC HISTORY
'« I do also suppose y* it is not profy table for the
realme to have a multytude of Marchante Ven-
terers, y' have but small stockes, and thereby
they have but small credytt, and suche march-
antes can not convenyently tary for theyre sales,
nor yet keepe necessarye order. " The opponents
of the companies, as we have seen, claimed
free trade as their natural right and inheritance,
but " this generall lybertye . . . would cause
a greate confusion, and a greate dysorderto growe
in the ventyng of Englyshe clothes, whereby
would follow yt or Englyshe clothes would
be soulde at a lower pryce, then is fytte for the
benefytte of o^ realme, and strange wares for
England would be boughte at a dearer pryce than
is convenyent for our commonweale of Eng-
lande." On the other side the arguments, in
addition to the one mentioned above, were very
strong. It was urged that freedom of trade
would lead to the increase of wealth and ship-
ping, the more equal distribution of wealth,
and the increase of revenue. It was further
maintained that the company organisation was
no longer necessary, and that if trade were
free, commerce might be extended beyond its
present limits.
The growth of the East India Company,
which was incorporated on the last day of the
16th century, led to the second stage of the
controversy. The merchant adventurers were
what was called a regulated company ; the
East India Company was organised on the
joint-stock principle {vide Companies). Now
many people who objected to monopoly in every
form were of opinion that the former was less
injurious to trade than the latter, and the East
India Company had a long and arduous struggle
before it won the victory. The conflict had to be
waged Avith the Turkey Company, whose trade
in raw silk was ruined by the enterprise of the
East India merchants, with those who were
alarmed at the exportation of bullion, with the
free traders and interlopers, and with those
who thought the East India trade disastrous to
the growth of the navy. The last-mentioned
cause of hostility gave rise to a sharp con-
troversy between Sir Dudley Digges and
an anonymous writer, J. R., in 1615. "The
East India men," says the latter, "not able
to furnish those places they resort to, keep out
others from coming amongst them. . . . Besides,
how tedious and costly they, and all other
companies, make it to their own associates,
whereas out of orders, and cause of upholding
their trade, men can neither dispose of their
own as they would nor have the benefit under
a long time ? How private do they and other
companies make it when . . . how plentifully
soever the commodities are brought in and at
what advantage soever they buy them, they
will be sure to keep up. the price, either by
sending most part of the commodities abroad,
or else by buying all others into their hands ? "
Digges's reply, The Defence of Trade, on behalf
of the company, probably derived more force
from the position of the author than from the
arguments he employed. The company of
course could point to the fact that the prices
of eastern produce had fallen since their incor-
poration, and they made as much as possible
of this argument, which was further elaborated
by Mun in his Discourse of Trade to the East
Indies (2nd ed. 1623). The company and its ad-
vocates, however, appear to have evaded rather
than answered the objections of their opponents.
No one during the 17th century wanted freedom
of trade in the modern sense of the words. It
was universally recognised that some form of
regulation was necessary, and most people would
have chosen the company organisation. The
object of the free-trade bills (1604) was not to
break down all restraints on free competition,
but to throw the companies open to all who
cared to join them, imposing by government
authority such charges as were necessary to
keep up their official establishments in foreign
ports. It was the monopoly of the companies
which roused the hostility of the outsiders.
The companies seem to have imagined that
when they had shown the advantages of the
trades they monopolised, and proved the neces-
sity for regulation, they had answered their
opponents. Mun wrote England's Treasure
long before the end of the struggle. But his
book did good service to the company. Their
exportation of bullion could no longer be urged
as a reasonable ground of objection, and the
East India trade had been proved to be favour-
able to the growth of the navy.
It has become a commonplace to regard the
navigation acts as the natural outcome of
mercantile doctrine. The political circimi-
stances of the time, the growth of foreign
commerce, and along with it the necessity of
providing adequate means for its defence, and
the foundation of colonies, showed the great
importance of a powerful navy. The economic
writers of the period were naturally influenced
by the general movement, and they urged the
encouragement of trades, especially the fisheries,
which were favourable to the growth of the
navy. The vast increase in the wealth of the
country, and the greater ease with which large
sums can be raised by taxation, have made
inapplicable to the present age the practical
suggestions of the mercantilist writers. But
the importance of a mercantile marine as a
naval reserve is felt as keenly now, especially in
times of danger, as in the period under discus-
sion. The economic arguments, however, by
which the navigation acts were defended, give
to those measures a peculiar character. There
were navigation acts in the reign of Richard
II. Those, however, we need not djLscuss. It
is the series of acts commencing in the reign of
Elizabeth, and culminating in the great act of
ENGLISH EARLY ECONOMIC HISTORY
727
the Long Parliament (1651), re-enacted at the
restoration, to which we shaU devote our atten-
tion {vide Navigation Acts). The Merchant
Adventurers Company, which as we have seen
played such an important part in the develop-
ment of the mercantile system, early associated
itself with this naval policy. Thus we find
them advocating it in 1551. One of their
Articles and Allegations . . . against the
Hanse Merchants {Rawl. MSS. C. 394, flF. 37,
38) was to the effect that whereas they " have
and by all waies do indevoure themself to
supporte and maignteigne to their power, the
whole Navie of this your Ma*®' realme, by
fraightinge and ladinge of the same and to
contynue a greate nomber of your Ma*^ sub-
jects in maroners crafte : the said Esterlinges
to the intollerable decay therof, both inwardes
and also outwardes do contynuelly lade, fraight
and shippe their goodes, wares and marchandises
in foreyne and strange bottomes, and vessells."
They then point out the loss to the country
of the money paid for freight and insurance.
This is an argument which recurs over and
over again, and it is evident that the writers
of the period attached great importance to it.
Mun argues that we must "use our own shipping
and so get the merchant's gains, insurance and
freight," though generally speaking "commerce
should be free to strangers to bring in and
carry out at their pleasure " {England's Treasure,
p. 22). The influence of the navigation acts
was made the subject of government inquiry,
and much attention was given to the subject
throughout the 17th century. The Advocate
(1651), which was published to allay the dis-
content caused amongst some classes by the
act of 1651, and which we find reflected later
on in the writings of Roger Coke, shows
how these acts were regarded as part of a
general scheme of economic policy. This work
points out that it was the design of the Dutch
* ' to engross universal trade that so they might
poiz the affairs of any other state about them
and make their own considerable." The ad-
vantages which Holland has over England are
then enumerated. Their ships are built, pro-
visioned, and convoyed at less cost than those
of England. Their "cheapness of freight,"
which is an advantage of 20, 15, and 10 per
cent over England, has forced English merchants
to hire and freight Dutch ships. They employ
a "great stock"; give "prudent care to their
manufactures " ; make the negotiation of com-
mercial treaties their "interest of state"; im-
pose small customs ; encourage inventions ;
have a low rate of interest ; facilitate their
trade by a bank; and pursue an enlightened
land policy. Some " unalterable laws in manu-
factures" are enunciated. (1) There is no
manufacture or artificial commodity which
cannot be transplanted into any country.
(2) All manufactures, if they are of a certain
goodness, are of a certain value and price also.
(3) Two persons selling or making commodities
of a like goodness, he shall have the preference
of the market that will sell them the cheapest.
And so in international trade. (4) The cheap-
ness of manufactures and artificial commodities
depends upon the plenty and cheapness of the
raw material, and upon the price of labour.
The price of labour depends upon the price
of victuals, house-rent, and other things neces-
sary. The Dutch have no extraordinary ad-
vantages over England. Such as they are, they
are due to the carelessness of England. By
trade alone can wealth and shipjiing be increased,
and so the power of any nation sustained. A
commonwealth can only be enriched by reducing
into general practice the courses used by private
men for that purpose. Hence England should
encourage native manufactures ; and weaken
Dutch shipping. Commodities must be imported
from the immediate places of their production
or growth, or as near as conveniently may be.
Exports, native or other commodities, must be
sent to the farthest market, where they will
yield the greatest price and have the quickest
sale. After these reasons, it is hoped that
little or no dissatisfaction with the navigation
acts will remain.
The examples we have given show the man-
ner in which the mercantilists approached the
questions of their time, and it is unnecessary
to trace in detail the economic policy which
found expression in the corn laws and bounties,
in the commercial treaties, and the foundation
of colonies. We have said "policy," for the
mercantile system was a collection of practical
expedients, based indeed on the fundamental
principles we have noticed, but never elaborated
into a scientific economic system. Such was
the state of economic thought when Mun's book
was published, and we can now understand the
popularity with which it was received. As
a scientific work it has no merit whatever.
But it appealed to a very strong and growing
sentiment, and put into words what most
people believed at the time of its publication.
Mun's work, with its sequel the British Mer-
chant, the name given to the series of papers
written in opposition to De Foe's Mercator,
during the controversy on the free- trade clauses
of the Treaty of Utrecht (1713), gives the best
idea of mercantilism as an economic system.
But before the time of its greatest influence
forces had been set in operation which ulti-
mately overthrew it, and we must now briefly
sketch this movement.
We have already seen the character of the
early opposition to the trading companies, and
the appeals to natural right as the basis of free
trade. The companies won the victory, for in
the relation of the government to trade, and
the unsettled state of the countries to which the
companies traded, their organisation was neces-
728
ENGLISH EARLY ECONOMIC HISTORY
sary, and they included amongst their niimbers
the wealthiest and most influential of the mer-
chants. The outsiders on the other hand were
weak and disunited. But with the extension of
commerce the number and influence of the latter
grew ; and it became clear that the exclusive
privileges of the companies were an anomaly.
The great statute of monopolies (1625) was a
step towards freedom of trade ; for although
many of the evils complained of remained un-
checked, it established the principle that none
should monopolise for private gain what was
the equal right of all English citizens ; and it
restricted the royal prerogative in the regula-
tion of trade. The agitation against the trading
companies was not without important results,
for the most powerful of them, the East India
Company, was reorganised ou a broad national
basis (1692-1702). In the 18th century we
find little discussion of a subject which had
been of such importance in the century before,
and Tucker's pamphlet on the Turkey Company
{Reflections on the expediency of opening the
trade to Turkey, 1753) only expressed what was
true of all the companies then in existence.
It is doubtful whether at this time they were a
serious restriction on trade, but they had per-
formed the useful functions they once had, and
it was absurd to continue their privileges. In
other directions also, e.g. in Walpole's colonial
policy, and the decay of the Elizabethan system
for the regulation of wages and industry, we
can see a movement towards free trade.
Meanwhile the theory of natural right was
shattering the philosophical basis on which the
mercantile system rested. The instances we
have given from the history of the trading
companies may probably be referred to popular
sentiment, or to conceptions derived from
English common law. At any rate, the latter
was appealed to in the Commons debates of
1601 (Townshend's Historical Memorials;
D'Ewes's Journals.) But the theory grew in
influence and the range of subjects to which it
was applied ; and the levellers claimed universal
suffrage and other measui-es as the natural right
of all men {Clarke Papers, edited by C. H. Firth
for the Camden Society, Introduction). Economic
and popular sentiment coalesced with the philo-
sophical movement, and with the development
of the theory of the social contract the way was
paved for an individualist system of political
economy. Philosophical conceptions, however,
derived from this source, had little or no influence
on economic theory until the time of Hume.
HoBBES and Locke took the economic ideas of
their age as they found them ready made by
the pamphleteers of the 17th century, and
merely stated them with greater clearness.
During the period with which we have to deal,
the economic is of greater importance than the
philosophical movement. The attempt to deal
witli the practical difficulties of the l7th and
the 18th centuries supplied those fundamental
economic conceptions without which the science
could have made no progress.
We have seen that one of the chief sources of
error in the works of the mercantilist writers wa?
their confusion of thought on the nature and
functions of money. The foundation of the
Bank of England (1694) and the recoinage
(1696) called forth an immense number of
pamphlets dealing directly or indirectly with
this subject. It is from this period that we
can date the theoretical discussion of economic
questions, and the attempt to work out a
scientific system. English writers had dis-
cussed continental banks many years before
the foundation of the Bank of England. We
may mention, for example, the Treatise on
Exchange (1564), to which reference has already
been made. In works intended for the guid-
ance of merchants, such as Malynes's Lex
Mercatoria (1622) and Lewis Roberts' Merchants
Mappe of Commerce (1638), it was natural that
the writers should explain so important a
feature of continental practice. The superi-
ority of the Dutch was, as we have seen, partly
attributed to their banking system, and during
the 17th century the advisability of adopting
it in England was frequently urged upon the
government {e.g. Hugh Morrell to William
Lenthall, ii. Jan. 1646-47, Portland MSS., vol.
i. p. 405). Generally the establishment of a
bank was advocated in pamphlets in which its
advantages were discussed. Amongst these we
may mention Thomas Violet's Advancement of
Merchandise, 1651; Sir Ralph Maddison's Great
Britain's Remembrancer, 1655 ; Samuel Lambe's
Seasonable Observations, 1657 ; W. Potter's
Tradesman's Jewel, 1659 ; Francis Cradocke's
Wealth Discovered, 1661 ; Sir Edward Ford's
Experimental Proposals, etc. 1666, etc., which
show that for some years before the great
experiment people's minds were much occupied
with the subject. As these proposals took a
more definite shape the number of books pub-
lished became larger. The banking question
was associated with the coinage, the public debt,
and general questions of trade and commerce.
Sir Dudley North, Sir William Petty, John
Locke, Nicholas Barbox, Michael Godfrey,
William Lowndes, William Paterson, Robert
Murray, John Asgill, Simon Clement, are
some among the many names which may
be found in English controversy during these
years. One pamphlet followed another with
such rapidity, and discussion was so general,
that it is difficult to single out any one author
as the representative of the others. North's
Discourses (1691), however, should be noticed,
and the works of N. Barbon show a deeper
insight into economics than those of his con-
temporaries. Locke's Consideratiotis of the
Lowering of Interest and Raising tJie Valu^ oj
Money (1691), followed by his Further Cm-
ENGLISH EAELY ECONOMIC HISTORY
729
siderations (1695), not only refuted tlie argu-
ments advanced by William Lowndes and
others, in favour of his scheme for restoring
the coinage, and so saved the country from a
great disaster, but contributed much that was
of permanent value in economic science. In
spite of these merits, however, Locke was
strongly under the influence of the mercantile
doctiine. The great controversy of 1691 to
1696 finally disposed of the theory of money
which underlaid the mercantile system, and
the relaxation of its influence was now only a
question of time. The persistence of an old
theory, long after its refutation, is a common
phenomenon in the history of human thought.
While the discussion of currency, banking, and
credit undermined the theoretical framework
of the mercantile system, and the growth of
statistics threw doubt upon the balance of
trade as a test of economic prosperity, the
accumulation of capital and the development
of commerce were removing the conditions of
which the mercantile system was partly the
reflex. During the first fifty years of the 18th
centmy economic progress was slow. Defoe
indeed in his Mercator had urged a principle
which would have led to important results if
it had been acted upon. He recommended no
less than the isolation of economic questions.
"Gain is the desire of merchandise: trade is
a commutation of merchantable commodities
between one country and another, and for the
mutual profit of the traders. The language of
nations one to another is, / let thee gain hy mc,
that I Tnay gain hy thee . . . Trading is a matter
entirely independent in its nature, and neither
consults other interests, nor depends on any
interests, but what relate to itself" {Mercator,
No. 21). But it was the British Merchant
and not Mercator that was sent to every parlia-
mentary borough for the use of the inliabitants.
Why is it, we may ask, that for so great
a length of time little progi-ess in economic
science has to be recorded ? Certainly it was not
due to lack of interest in economic subjects.
There seems to have been no difficulty in obtain-
ing a hearing. There are literally hundreds of
economic writers in England between 1500 and
1762, and every trade crisis or controversy pro-
duced its score or so of pamphlets. The reasons
for the slow gi*owth of the science seem to have
been as follows : — (1) With few exceptions the
economic works of this period were written
merely to advocate some definite object, —
to urge the adoption of some scheme for the
improvement of trade, to defend those whose
interests were threatened by new develop-
ments, e.g, the numerous pamphlets on the
East India Company, and their relations with
the Levant Company, or to protest against some
abuse and to suggest a remedy, e.g. the pam-
phlets on the poor laws, the coinage, public credit,
etc. This close relation between economic
literature and the practical life of the nation
was unfavourable to the development of a
system of economic doctrine. Mun {England' i
Treasure hy Foreign IVade, 1664) expressly
states that his work was not intended as an
exhaustive and systematic treatise on the econo-
mics of the 1 7th century. He proposed to dis-
cuss only ''so much of the merchant's practice
as concerned the bringing of treasure into the
kingdom." (2) Such being the objects of the
Avriters, there is a strong bias in most of them
in favour of the organisation or project with
which they happened to be identified. The
biogi-aphies of the earlier writers are therefore
of importance, for their personal relations with
hostile organisations or individuals, and events
in their lives, aff"ected their views to a great
extent. (3) When once a controversy was con-
cluded, no one endeavom-ed to develop and
apply the general principles which may have
been stated in the course of it. Thus the
currency contioversy in 1694, and the defence
of the East India Company, led to a statement
of the main outlines of the principle of the
division of labour (Simon Clement ; Discourse
of General Notions, etc., 1695 ; Considerations on
the East India Company, etc.). Other writers
such as Petty, Berkeley, Addison, etc. , also enun-
ciate this principle. But it lay unregarded until
Adam Smith made it one of the fundamental
principles of the Wealth of Hat ions. (4) The
early writers had to depend, for the most part,
on their own knowledge and experience to sug-
gest or illustrate their arguments ; trustworthy
information on economic subjects was neither so
copious nor so widely diffused as it is at the
present time. Sir William Petty, John Gkaunt,
Gregory King, and Charles Davenant, who laid
the foundations of statistical science, all lived
in the latter half of the 17th century. So late
as 1699 Davenant complains {Essays on Trade),
that "the aids and lights which might be
gathered from the public accompts and offices
have been industriously withheld from all who
are not servile applauders of the wild and de-
structive conduct ... of some persons of no
small power in the management of affairs."
He and Gregory King are "beginners of an art
not yet polished, and which time may bring to
more perfection." (5) The early writers em^
ployed in their works the language of ordinary
business. ' They had no scientific terminology.
Now the language of the market-place is not
characterised by scientific precision, and their
looseness of phrase gave rise to endless misunder-
standing.
The point of view from which early economic
literature should be regarded becomes therefore
quite clear. It must be studied along with the
history of the times at which it was written.
This must be carefully borne in mind, or we
shall form an erroneous estimate of the value of
these early works and the ability of the writers.
730
ENGLISH SCHOOL OF POLITICAL ECONOMY— Before A. Smith
We must not expect a uniformity, consistency,
and completeness of doctrine and practice which
are not to be found. Nothing could be more
fatal to the right appreciation of this period than
to investigate it with the idea that we shall
find in it only illustrations of a well-rotfnded
set of general propositions.
[Much has been written on the history of econo-
mics. Vide especially Ashley, Economic History,
vol. i. pts. L and ii. — Cunningham, English Industry
and Commerce. — Endemanu, Die NaiionaloJcono-
mischen Grundsatze der Canonistischen Lehre. —
Hewius, English Trade and Finance. — Heyking,
Handetshilanztlieorie. — Knies, Politische (Ekono-
mie. — Roscher, Geschichte der Nationalokonomik in
Deutschland. — Political Economy (trans. Lalor),
Geschichte der engliscJten Volkswirtschaftslehre. —
Schanz, Englische Handelsjpolitik.] w. a. s. H.
ENGLISH SCHOOL OF POLITICAL
ECONOMY.
Before Adam Smith, p. 730 ; Modern Economics, p. 733.
Before Adam Smith. — The English writers
on political economy before Adam Smith do not
at any time present the marks of a "school,"
properly so called. The nearest approach to a
"school," so far as community of doctrine is
concerned, is found among the mercantilists ;
but even these writers owe no allegiance to any
personal authority. Their views are individual
and independent ; and it is only with Adam
Smith that the English school par excellence
begins. The rise of that school was affected
by many influences, English and foreign. Of
these the genesis of economic theory in England
must be sought chiefly through the writings of
the authors whose names are mentioned in the
rapidly-connected sketch which follows.
There is much that is of interest not only to
the economic historian but also to the student
of economic theory in the early statutes and the
records of the social history of England, but few
English writers earlier than the 17th century
call for special mention in this article. Lang-
land, in his Visions of Piers the Plowman (14th
century), and the writer of the Libell of Englishe
Policy e (15 th century) incidentally supply some
interesting illustrations of the course of life in
England during those periods. The writings
of Walter of Henley (13th century), Fitz-
HERBERT (16th ccntury), and Tusser's Five
hundreth pointes of good husbandrie (Tottel's
edition, 1573), throw light on the state of
agriculture and the condition of the people.
" W.S." (see Hales, John) in his Discourse of
the Common Weal of this Realm of England
(written 1549, printed 1581), acutely discusses
the contemporary depression of agriculture and
industry. His attempts to show that the
"alteration of the coyne is the cheifest and
principall cause of this universall dearthe " are
highly interesting examples of early economic
argument and analysis. More's Utopia, 1518,
imbued as it is with the ideas of classical anti-
quity, has more affinity with the Repuhlic oi
Plato than with the industrial Utopias of later
writers. The chief impetus to the publication
of Discourses upon Trade, was afforded by the
problems of policy in colonial trade by which
the commercial activity of the English people,
following upon the enterprise of navigators and
adventurers, found itself confronted. This is
noticeable as early as the essays of Bacon, 1597
( " Of Plantations "), and the writings of Raleigh.
From the incorporation of the East India Com-
pany, 1600, there is a continuous succession of
writers on the theory of foreign trade which
formed the kernel of the old Mercantile
System. The mercantile school may indeed be
said to continue its existence in quite different
forms from this time to the days of Steuart.
The traffic in the precious metals naturally
attracted the attention of statesmen and of
merchants alike ; and from the reign of Edward
III. onward, attempts were made to regulate
its exchange for imported commodities. The
inevitable export of bullion for the East India
trade found an ingenious apologist in Mun,
who, in his Discourse of Trade from England
into the East Indies, 1621, and England's
Treasure by Forraign Trade, published 1664,
shifted the gi'ound of the Balance of Trade
from the position which it holds in the writings
of Armstrong (1530) and Malynes (1601),
He argued that this export, like the seed cast
away by the husbandman, was in the long run
amply repaid in kind, and that the raw material
which the precious metals purchased, when
worked up and sold to foreign countries, caused
the national stock of bullion to be increased and
not diminished. "The title of Mun's book,
England's Treasure in Foreign Trade, became a
fundamental maxim in the political economy,
not of England only, but of all other commercial
countries" {Wealth of Nations, bk. iv. ch. i.).
Malynes, The Canker of Ihigland's Common-
wealth, 1601, and Lex Mercatoria, 1622, de-
scribes the Ancient Law Merchant as well as
the contemporary habits and institutions of
trade ; and Lewes Roberts, Merchants Mappe
of Commerce, 1638, Treasure of Trafficke, 1641,
explains the operations of commerce, and recom-
mends practical measures, — e.g. free export of
gold and silver, and low customs, — for its pro-
motion. His Mappe of Commerce is a mercan-
tile geography, showing the situation, ex-
changes, and commodities of trade of different
places. Misselden (Free Trade, 1622, Circle
of Commerce, 1623) exhibits the Spaniards as
warnings, the Dutch as models in mercantile
policy, and disputes with Malynes the causes
and consequences of an unfavourable balance
of trade. The examjale of the low rate of
interest in Holland further stimulated the
Culpepers, father and son, to urge the reduc.
tion by parliament of the legal rate of interest —
a demand supported with much weight by
ENGLISH SCHOOL OF POLITICAL ECONOMY— Before A. Smith 731
Child (1668), whose business instincts, superior
to his scientific theory, were probably not at
fault when he supposed such a measure would
redound to the encouragement of English
commerce. The unsoundness of some of the
arguments which he employs was pointed out in
The Interest of Money Mistaken, 1668.
Passing by the utopia of Harrington
{Oceana, 1658), and such agi-i cultural writings as
those of Blith, The English Improver Improved,
1652, Hartlib, Legacy of Husbandry, 1655,
WoRLiDGE, Sy sterna Agricalturae, 1668, and
John Smith, England's Iviprovement Revived,
1670, we come to the speculations of Hobbes,
1670, and Asa ill, 1696, on the nature and causes
of wealth. Particular recommendations for the
improvement of trade by the naturalisation of
aliens, and in favour of the policy of enclosures,
are found in Fortrey, England's Interest and
Improvement, 1663, and Coke, 1671. Portrey's
statement that the country "lost" £1,600,000
a year by its trade with France, long had a dis-
couraging effect. The despondent tone of most
writers of this time is echoed in the title of
Britannia Languens, 1680, and in the argu-
ments of its pseudonymous author (Philanglus),
that the importation of foreign luxuries was a
" consumptive trade " which threatened to bring
about the decay of the nation while money was
exported for them. The^ s^e writer urges the
"legal regulation" of trade, to prevent its
destruction by "private interest "and by the
"cloggs" of navigation acts, companies, mono-
polies, etc. Similar views with regard to
the eastern trade are found in Pollexfen's
England and East India Inconsistent in their
Manufactures, 1697 — a reply to Davex ant's
Essay on the East Indian Trade, 1696-97. A
more hopeful note is struck in England's Great
Happiness: wherein it is demonstrated that a
great part of our Complaints are Causeless, 1677,
and in the optimistic preface of Petty's Political
Arithmetic, 1682, which opposed to vain imagin-
ings and timid surmises the positive conclusions
of comparative statistics, and drily observed
that the price of food was "so reasonable, as
that men refuse to have it cheaper, by admitting
of Irish cattle." The best thought of the time
had now for many years been directed into the
channels of trade, and produced, as was natural,
an abundant crop of pamphlet literature on all
questions connected with "the Science of the
Great Commerce." Comparative study of other
nations, especially of France, Holland, and Spain,
was one main source of the inspiration of these
writings, and numerous proposals sprung up for
establishing banks (see Asgill, Briscoe, Gary,
Chamberlain, Cradocke, Lewis, Murray,
Paterson) and for emulating Holland in other
matters. This spirit is shown in Yarranton's
England's Improvement by Sea and Land: To
outdo the Dutch urithout fighting, etc. (pt. i.-1677 ;
pt. ii. 1681), in Sir Wm. Temple's Observations
on the Netherlands^ 1693, and in the popularity
of the translations of "John de Witt's" True
Interest and Political Maxims of Holland, 1702,
etc. (see Dutch School).
An important epoch is marked by Graunt's
Natural and Political Observations upon the Bills
of Mortality, 1662, with which begins the science
of Demography, as statistics, and the theory
of taxation may be said to commence with
Graunt's more famous friend Sir Wm. Petty,
whose remarkable treatises on Taxes and Con-
tributions, 1662, Political Arithmetic, 1682,
and the Political Anatomy of Ireland, 1691,
exhibit an ingenuity of method and grasp of
principle rarely if ever shown by his prede-
cessors. The first table of mortality was pub-
lished by Halley in 1693. Davenant (1699)
and Gregory King (in 1696) continued the
work of statistics (see Arithmetic, Political) ;
while the current views on the balance of trade
found an able opponent in Barbon (1690), who
was soon to cross swords with Locke on the
subject of money.
The proposals of Lownd]':s, tlien secretary to
the treasury (1695), to coin the new (silver)
money lighter, provoked the opposition of Locke,
whose able writings on money at this critical
period of the great recoinage (see Pecoinages)
are still appealed to in controversies of to-day
upon the history of the currency. The earlier
work of Vaughan, Discourse of Coin and Coinage,
1675, should also be mentioned here. Mingled
with the discussions of semi-political questions by
earlier authors are many glimpses of a broader
consistent theory, general principles of which now
begin more clearly to emerge. The close of the
17th century is indeed a time conspicuous for the
ability of English economic writers. Barbon's
Discourse of Trade, 1690, contains some striking
analyses of value, price, interest, and rent.
North's Discourse of Trade, 1691, is an admir-
able exposition of the merits of free exchange.
Fleetwood's Sermons against Clipping and
Sweating of the Precious Metals, 1694, precede
by thirteen years his Chronicon Preciosiun or
history of prices, familiar to students of Adam
Smith. The problem of the conditions of the
poor which had fitfully occupied statesmen since
the date of Richard XL, in whose reign the
earliest legislation for dealing with impotent
beggars took place, seriously engaged the atten-
tion of Firmin (1678), Hale (1683), Child (who
proposed the appointment of poor-law guardians
or "fathers of the poor"), Gary (1695) and
Bellers, Proposals for Raising a Colledge of
Industry of all Useful Trades, etc. 1695-1696.
From Defoe's lively and prolific pen came, in
1704, the vigorous essay, Giving Alms no Charity
and Employing the Poor a Grievance to the
Nation, in which it was contended that work-
house labour should not be employed in com-
petition with outside industry. The same
writer's Compleat English Tradesman, 1725-27,
732 ENGLISH SCHOOL OF POLITICAL ECONOMY— Before A. Smith
and Plan of the English Cmnmerce, 1728, are the
chief of his other numerous works on subjects
relating to trade. John Houghton, F.K.S.,
Collection for the Improvement of Husbandry and
Trade, 1692-1703 (particulars of prices of corn,
cattle, coal, hops, wool, etc.) ; The British
MereJiant; or Commerce Preserved, 1713 (papers
collected and published by Charles King, 1721) ;
and Defoe's Mo'cator, or Commerce Revived, 1713,
1714 (an opposition paper to The British
Merchant), aflbrd useful details for the history
of commerce.
Law's Money and Trade considered, 1705,
exhibits at once the power and the defects of
his erratic genius ; original, daring, and acute,
he admits no limit to the bounds of credit, and
has little thought of its contraction. His book
marks, however, a real advance in the study of
money and credit. Wood's Survey of Trade,
1718, also deals with money and bullion.
Madox is an invaluable source of information for
the economic historian in his Antiquities of tJie
Exchequer, 1711, and Firma Biirgi, 1726. In
Ireland appeared about the same time the well-
known Drapier's Letters, 1725, in which Swift
inflamed the anger of his countrymen against
Wood's copper halfpence ; Dobbs' essay on
"The Trade and Improvement of Ireland,"
1729-31 ; and Berkeley's Querist, 1735, a
collection of searching and suggestive inquiries
in economics, revealing at once the author's
mind and the degree of development which the
science had then attained. Swift's Modest Pro-
posal for preventing the Children of Poor People
from being a burden to th^ir Parents or the
Country, 1730, is an elaborate joke framed in
a tone of ironical and pseudo-economic savagery.
Gee's Trade and Nam.gation of Great Britain
considered, 1729, is a despondent treatise of
mercantilism, affecting to show ' ' that the surest
way for a nation to increase in riches is to pre-
vent the importation of such foreign commodi-
ties as may be raised at home." Vanderlint's
Money Answers all Things, 1734, on the other
hand ably argues for free trade, while Mande-
ville's Fable of the Bees, or Private Vices,
PuMick Benefits, 1706, 1714, 1723, etc., urges
the social advantages of individual liberty.
Both books mark a movement in the direction
of Laissez-Faire. Decker's Proposals, 1743,
for raising the whole revenue by a single tax on
houses, and the Essay on the Causes of the Decline
of the Foreign Trade, 1744, show much ingenuity
in the study of taxation. John Smith's Chroni-
con Busticum Commerciale, or Memoirs on Wool,
1747, is an industrious compilation of standard
value upon this great branch in the history of
EngHsh trade. Equally laborious but less praise-
worthy are the Dictionaries of Trade and Com-
merce of Postlethwayt (1751), Rolt (1761)
and Mortimer (1766). Postlethwayfs, the
best of the three, was founded mainly upon the
French dictionary of Savary. In 1761 and
1753 appeared translations from the Spanish oi • '2
UsTARiTZ and Ulloa of the history of trade in
Spain, and in 1753 a translation from the
German of Magens' Universal Merchant (post-
script 1756). The last two writers are men-
tioned by Adam Smith. Franklin's Observa-
tions concerning tlie Increase of Mankind, 1751 ;
Hume's essay of " The Populousness of Ancient
Nations" in his Political Essays, 1752; and
Wallace's Dissertation on the Numbers of Man-
kind in Ancient and Modern Times, 1753, show
an interest in the progress of population, its
causes and limits, nearly half a century before
Malthus. The middle of the 18 th century
recalls the end of the 1 7th by the fertile ability
of its economic writers. Hume's Essays contri-
buted powerfully to the development of sounder
views on money and the balance of trade.
Wallace, in his Characteristics, 1758, discusses
the functions of paper money and credit. The
essays of Patrick Lord Elibank, on Tlie Public
Debt were published in the same year (1753)
as Fielding's Proposal for making an Effectual
Provision for the Poor. The most important
writings appearing at this time were, however,
those of Cantillon, Massie, and Tucker,
Cantillon's posthumous Essai (published
1755) is the earliest approach to a complete
presentation of economic principles, tracing the
distribution of wealth JDy the guiding thread of
a central theory of value. Its influence was
gi'eatly felt in the French School, but is also
clearly seen in the Essay on Money and Coins
of Harris (1755-58). Massie (see infra),
though best known by his criticisms of Decker's
and Fauquier's proposals in taxation and by
his Essay on the Governing Causes of the Natural
Rate of Interest (1750), has been shown by Dr.
Cunningham to have left a bibliography of
economic literature of the highest value {Eco-
n/miic Journal, vol. i. No. 1). Tucker (see
infra), dean of Gloucester, is remarkable for
the breadth and liberality of view with which
he regards the economic aspect of colonial and
foreign politics. Tucker accepted with pride
the sarcasm of Warburton, that he made a
religion of trade as other ecclesiastics had been
known to make a trade of religion. The dignity
of economic study did not much longer need
vindication. His Reflections on the Expediency
of a Law for the Naturdlisation of Foreign Pro-
testants, 1751, were translated into French by
Turgot (1755). His Brief Essay on the Advan-
tages and Disadvantages which respectively attend
France and Great Britain with regard to Trade,
1750, is said by Blanqui to show the influence
upon Tucker of the French economists with
whom he was in close correspondence. But
there can be little doubt that in their relations
with Tucker at this time they were rather
disciples than masters.
The high esteem in which the early English
writings was held abroad was no doubt ]arge])i
ENGLISH SCHOOL OF POLITICAL ECONOMY— Modern Economics 733
due to the superiority of English commerce
which gave them birth. It was felt with justice
that a natioji of successful merchants were
worth listening to on matters of trade. The
French in particular richly repaid their debt to
us through Adam Smith, upon whose mind they
impressed their systematic and logical views ;
but it should not be forgotten that those views
were largely founded on the practical judgments
of English Avriters. Nor can the diligent student
of the Wealth of Nations fail to be struck by the
extent to which that work is rooted upon the
earlier English writings. And though in the
crucible of Adam Smith's mind the materials of
his predecessors are often refined, they still do
not defy recognition, but testify to the close
continuity of the English school.
It has not been possible in this slight account
to do more than enumerate some of the writers
who preceded Adam Smith. For fuller notices
the student is referred to the separate articles
under the names of the authors. Contempor-
aries of Adam Smith are dealt with in a later
portion of this article. It is only necessary to
mention as appearing before 1776, the Three
Tracts on the Corn Trade and Corn Laws, 1758,
by Charles Smith, whom Adam Smith has
described as "ingenious and well-informed" ;
the important Inquiry into the Principles of
Political Economy oi^'TY.VA.'KT, 1767 (see infra) ;
Anderson's History of Commerce, 1764 ; Fer-
guson's History of Civil Society, 1767 ; Price
on Reversionary Paymenis, 1769, and on the
National Debt, 1774 ; and Arthur Young's
Farmer's Letters, 1771, Rural Economy, 1773,
and Political Arithmetic, 1774, with some of his
earlier Tours in the English counties, h. h.
Modern Economics. Period I. Adam
Smith. — After the Union of 1707, Scotland
began to play a part in English economic
study. Francis Hutcheson (professor of moral
philosophy at Glasgow, died 1747) turned the
attention of Scottish philosophers to economic
questions, on which he himself touches, though
briefly, in his published works (e.g. in his In-
quiry into the Original of our Ideas of Beauty
and Virtue, etc., 1st ed. 1725). The notion of
the "greatest happiness of the gi-eatest mmaber"
appears in Hutcheson, and he also lays stress
on the connection between industry and self-
interest, industry and property, thus carrying
on the discussion raised by Mandeville {Fable of
the Bees, etc., 1706, and later eds.), on the nature
of the motives to economic action. The activity
of the Scotch press (Foulis, Urie, etc.) in the
publication and reprinting of economic treatises
becomes noticeable about this time (say 1750 to
1770). Adam Ferguson in the 4th ed. of his
History of Civil Society (1773), announced the
forthcoming work of Adam Smith, which was to
be "a complete theory of national oeconomy "4
but Ferguson's own economicalviews(e.^. on divi-
sion of labour) are given incidentally along with
his political philosophy, and not in a separate
treatise. In his Institutes of Moral Philosophy
(1769), where he treats of economical questions,
he borrows to some extent from Joseph Harris
{Essay on Mon^y and Coins, 1757). To much
greater effect David Hume, who had learned
from Hutcheson, had prepared the way for his
friend Adam Smith by his keen criticism of the
cun-ent views of the balance of trade, to say
nothing of his pregnant remarks on the other
subjects embraced by the "Mercantile Theory"
{Essays on Comynercc, Money, Interest, etc.,
1752). Economical subjects receive separate
consideration, and Hume's reasonings upon
currency, credit, and population were of special
influence. In the controversy as to the
populousness of ancient nations he took the
side of the moderns. In the matter of public
credit, or national debts, he took the view that
national debt would eventually prove the ruin
of modern nations. He points out that the
quantity of metallic money in a country does
not determine the rate of interest, also that a
time of increasing currency is a time of lively
trade. He thinks that commercial jealousy
rests on a false idea that one party must
always be the loser, in a bargain. He goes,
if not as far as Adam Smith, nearly as far as
Josiah Tucker {Advantages and Disadvantages
which respectively attend France and Great Britain
uith regard to Trade, 1750). But it was left to
Sir James Steuart and Adam Smith to recognise
for their own country what had already been
made good by the pliysiocrats in France (see
Physiocrats and French School), that
economical subjects must be a study by them-
selves. Sir James Steuart's book {An Inquiry
into the Principles of Political Economy, being an
Essay on the Science of Domestic Policy in Free
Nations), written in exile in Germany, and first
published (in Edinburgh) in 1767, made no
impression on the public to be compared with
that of Adam Smitli's Inquiry into the Nature
and Causes of the Wealth of Nations (1776) ;
and was rather a revised edition of the mer-
cantile theory than a new departure. The im-
mediate popularity of Adam Smith's work, on
the other hand, was largely due to its crush-
ing criticisms (especially in bk. iv.) of the
"commercial system," which was tracked
out and destroyed in all its logical ramifica-
tions, however tenaciously it might afterwards
survive in political practice. The idea of
"natural liberty" organising industry, and
transforming society "of its own accord," was
stated by Adam Smith even more boldly than
by the French economists, and he avoided their
mistake of restricting productiveness to agri-
culture (bks. iv. ix.) In his chapters " On the
Revenue of the Sovereign or Commonwealth "
(bk. V. ), he came out as * ' the greatest of theorists
on finance " (Bastable) ; and no economical
treatise ever exerted greater political influence.
734
ENGLISH SCHOOL OF POLITICAL ECONOMY— Modern Economics
On economic theory its influence has been also
very gi-eat, though it was not so immediately
visible, and is now partly spent. The defini-
tion of wealth, the discussions on labour, wages,
rent, interest, and the short remarks on value,
served as starting-points for more thorough
and satisfactory consideration of these maf,ters.
Adam Smith's method of reasoning, though fre-
quently deductive, involves so full an illustra-
tion from facts and statistics, where such were
accessible, that he has often been claimed as
an inductive economist. The industrial changes
then taking place in England gave his treatise
a peculiar historical importance, if they were
not indeed responsible for its creation. Simi-
larly, if we pass by Bentham's correction of one
false concession in "the Wealth of Nations"
(see Bentham), the next contribution to Eng-
lish political economy was largely occasioned
by a change in the condition of the people.
Period II. Malthus and Ricardo. — The
poor law of W. Pitt, proposing a bounty on large
families, and the popularity of Godwin's political
theories, led Malthus to bring forward in his
Essay on Population, 1798, a clear-cut theory of
' ' the principle of population. " He inquired into
the nature and causes of poverty, as Adam Smith
into those of wealth. The tendency of popu-
lation to increase up to the limits of the means
of subsistence was brought out more strongly
than the checks on this tendency, which were
not adequately stated till the book had emerged
from the floods of criticism into a second edition
(1803). The views of Malthus on general
economic theory were not elaborated with such
perfect lucidity as his doctrine of population ;
he tended either to fall back on physiocratic
views, or to theorise, as on the measure of value
and the corn laws, with a subtlety inconsistent
with clearness. He maintained views on over-
production which brought on him the damaging
criticisms of J. B. Say. On the other hand,
he shares with James Anderson, and Sir E.
West, the credit of first stating what is usually
called the Ricardian theory of agricultural
rent, that rent is the eff'ect not the cause of
price, and that it depends on the graduated
fertility of lands. Ricardo, who first ob-
tained fame by his Letters on the High Price
of Oold Bullion (1809), and made an enduring
mark on the theory of currency, owes his prom-
inence in economic literature to his Principles of
Political Economy and Taxation (1817). In
this book he pushed the theory of rent farther
than its discoverers, and made it, together
with a new theory of value, the centre of a
theory of the distribution of wealth between
the three parties concerned in its production
the labourers, the employers, and the landlords.
The value of manufactured articles is deter-
mined mainly by the quantity of labour neces-
sary to the production of them, and of agri-
cultural products by the quantity of labour |
necessary to the cultivation of the worst land
actually cultivated. The height of this
" margin," to use the phrase of Dr. Chalmers,
determines the amount of profits to the
employers, and the amount of rent to the
owners of all land above the worst. Ricardo's
qualifications of this theory were neither
numerous enough nor clearly enough stated ;
and, even if the theory had not been reproduced,
as by M'CuLLOCH, without the qualifications, a
reaction against Ricardian political economy
could be only a matter of time. But it held
the field for nearly a generation after the
publication of the Principles. It found popu-
larisers both humble and eminent (Mrs. Marcei
and De Quincey) : James Mill followed it
wholly, and Senior with reservations that
seemed in those days unimportant, though in
after times the acuteness of Senior has been bettei
recognised. Torrens did not succeed in estab-
lishing his claims to independent authority, nor
did Chalmers restore the authority of Malthus.
Whately, Longfield, Lawson wrote clearly
but without making any decidedly new depar-
ture. Professor Richard Jones, in appealing
against Ricardo to the history of India, was
before his time. The minor writers (see below)
left fruitful hints, but made few converts among
students of the subject. Robert Ow^en and his
followers gained little hearing in the world oi
letters. The victory of Free Trade (1846), the
passing of the early Factory Acts, the rise of
Chartism, and the regulation of the paper
currency (see Banking), affected the course of
economic discussions ; and the French Revolu-
tion of 1848 played a part in England as well
as on the Continent French and German
writers began to acquire greater influence than
ever before.
Period III. John Stuart Mill. — Their in-
fluence was shown in John Stuart Mill's Politi-
cal Economy (1848). This book was an attempt
to combine abstract economical theory with the
modifications necessary for its application in
the concrete, and to view the whole of economics
in relation to other parts of the philosophy of
society. As Mill went beyond Bentham in his
ethics, he went beyond Ricardo in his economics.
Long before this time Mill had, like Senior, given
attention to the question of method, which was
afterwards to become an object of lively discussion.
The study of Comte and other foreign
writers had led Mill to doubt whether abstract
theory was allowable at all in social inquiry.
He retained it, however, for political economy ;
and in his chief economic book the abstract
theory is presented, along with the modifica-
tions, being little more than a careful re-state-
ment of Ricardian principles. He had wished
to do for his own day what Adam Smith had
done for his (see preface to Mill's Political
Economy) ; and the influence of his book was so
great that it seemed as if a new departure had
ENGLISH SCHOOL OF POLITICAL ECONOMY— Modern Economics 735
been taken and a new era begun. But Mill
was so far from overthrowing the old doctrines
that he really strengthened their hold at a time
when it had been loosened. Yet, by his em-
phasis on the relativity of abstract economics to
particular societies, and on the possibility of
far-reaching changes in the social system, he
showed an affinity with "historical economists,"
and ** scientific socialists." The former foimd
their earliest representatives in Cliffe Leslie and
Thorold Rogers ; and their views are now
energetically advocated by Ingram, Cunning-
ham, and Ashley. The Christian Socialism
(of Maurice, Kingsley, Ludlow, Nealb,
Hughes) grew out of Owen and Chartism ; and
its upholders, in advocating co-operative pro-
duction, appealed rather to philanthropy and
human brotherhood than to cool economic
theory. The scientific socialism of Marx,
avowedly based on the Ricardian theory of
value, can hardly be said to have representatives
in this country among professed economists. In
his views of Land Reform, Mill (like his father),
approached very near to socialism ; but his atti-
tude to socialism as a general policy is quite as
truly critical as sympathetic.
Period IV. W. S. Jevons. — This cool re-
ception of scientific socialism is mainly due
to the rejection, by Jevons and his closest
followers, or the serious modification, by Mar-
shall and Sidgwick, of the Ricardian theory
of value. The ideas of Jevons have had greater
power since his death than during his life.
He was too impatient at the almost universal
submission to Mill's authority to do Mill com-
plete justice. But he was one of the first
critics of Mill who attracted general attention
at all ; and, since his time, there has been less
submission to authority of any kind. There has
no doubt been a line of \mters who follow the
older school very straitly (Fawcett, Cairnes,
Mallet) as among statesmen there has been a
line of supporters of the old economic policy
identified with Bright and Cobden. But
changed conditions have forced most leading
statesmen to go beyond laissez-faire ; and new
aspects of old problems have led theoretical
economists into deeper study of particular
questions (e.g. Consumption) than before. The
mathematical treatment of economical data has
practically fallen into the hands of a wing of
the school of final utility, which is often spoken
of as a school by itself, the mathematical school
(Edgeworth, Wicksteed). Amongst the many
writers who have taken part in discussions on
currency and banking, Mr. H. D. Macleod has
fallen back on Whately's view that economics
is simply catallactics, Bonamy Price has pro-
fessed to represent unaided common sense,
Bagehot has insisted on the need of formulating
deductive economics for "advanced " nations,
and on the impossibility of doing so for unci viUse'd
peoples. Bagehot's lucid writings on banking
and depreciation helped to keep these questions
before the minds of economists ; and the fall of
silver since 1870 has made bimetallism versus
monometallism an object of lively debate. The
dominant view among professed economists after
Jevons seems to be that bimetallism under
certain conditions is possible, but that the con-
ditions are difficult of fuUilment. The ques-
tion has been discussed in close connection with
the subject of the metallic reserves of our
English banks, and, in this as well as other con-
nections, the wisdom of the Bank Charter Act
of 1844 is not now upheld by the majority of
economists. A large part of the recent work
of economists in England has been the re-
statement of the older doctrines, with the
fresh light aff'orded by the theory of value laid
down in 1871 by Jevons in this country,
and substantially one with the theory of the
Austrian School of Economists. In connec-
tion with this, there has been practically a new
theory of wages and profits, towards which not
only Jevons but Walker has contributed very
essentially. The idea of a wages fund, as held
by Ricardo's immediate successors, and till 1869
by J. S. Mill, has been abandoned as Longe
and W. T. Thornton had foretold. The dis-
tinction of interest from, profits — -capitalist
from employer, has been better kept in view
— largely owing to the writings of Walker
The application to wages, interest, profits,
and even taxation, of the idea of final utility
has been pursued vigorously. Probably at no
time have questions of economic theory ever
been more ardently discussed in England than
at present ; and these discussions have hope
of greater fruitfulness than before, because
conducted now (a) with a much more adequate
knowledge of Avhat is written and said, about
the subjects concerned, on the Continent of
Europe, and in the United States of America,
and (b) with a closer regard to the facts of
everyday life, as the touchstone of all theories.
Economists are more conscious than at any
previous time of the importance of statistics for
the understanding of the phenomena of society.
They are also more keenly aware, partly from
the influence of Carlyle and Ruskin, of their
need of contact and sympathy with men and
associations of men in the surrounding world,
though they keep in mind the distinction of an
econoniic theory from a mere record of facts or
a mere utterance of philanthropic aspiration.
Even in this short sketch it would be wrong
to omit mention of the minor writers and
amateur economists. Every great industrial or
financial change, besides awaking a correspond-
ing movement of speculation among professed
economists, has been reflected in the fugitive
literature of the day ; and there has often been
a subordinate movement of social, political, and
economic theory, apparently quite aside from
the path of the classical economists. The
736 ENGLISH SCHOOL OF POLITICAL ECONOMY — Modern Economics
writings of the agriculturist, Arthur Yotjng,
and the financier and politician, Richard Price,
had a certain influence on economical study.
In tlie dark days of the French War the writings
of William Godwin maybe said to have given the
first impulse to the socialistic speculations after-
wards earned out by Charles Hall, Robert Owen,
Edmonds, Gray, J. F. Bray, and William
Thompson, With Thomas Spence begins the
movement for the nationalising of the land,
countenanced in theory at least by James Mill,
and advocated in later times by Dove, George,
and A, R, Wallace. The books of Paine include
not only deistic and political utterances, but
useful admonitions in regard to paper currency
in the early days of the suspension of cash
payments. Ld. Liverpool's Coins of the Realm
(1805), with the mass of pamphlets (see e.g.
H. Thornton, Lord King, Boyd, Baring, Bos-
anqttet, Huskisson, Trotter) called forth by
suspension and by the Bullion report, form a
considerable literature, in the face of which (and
often by the aid of it) the theories of economists
like Ricardo shaped themselves. Such books
as Thomas Tooke's History of Prices, ably con-
tinued by Newmarch, and in a less degree
Colqtthoun's book on theHesources oftheBritish
Empire, and (later) Porter's on the Progress of
the Nation, helped to point economists to the
more ample use of statistics ; and this service is
now rendered by ^vriters like Guy, Rawson, Pal-
grave, Booth, Giifen, and others in the journal of
the "Royal Statistical Society" (founded 1834).
The " refutations " of Mai thus on population
proceeded from all sorts and conditions of men.
Many m6n of the stamp of Cobbett and Per-
ronet Thompson took up every economic con-
troversy that had a conspicuous political side.
The new Com Law of 1815 gave birth to a
multitude of pamphlets and books on the corn
laws, and eventually, after Huskisson's reforms,
to the movement that took shape in the Anti-
Corn Law League, and was kept up vigorously
by the Manchester School of Free Traders.
Concurrently with this movement and later in
its political victory came the agitation for ex-
tension of the Factory Acts, with a literature of
its own. The discussions in regard to emigra-
tion (see Selkirk) and (later) colonisation (see
ToRRENs, Wakefield, and Hill-Burton) aa
well as in regard to the reform of the poor law,
produced not only small tracts but large volumes
in which economists still find useful materials.
The value of English blue books on such topics
can hardly be over-estimated, and since the estab-
lishment of a labour department (1893) their
usefulness in this particular field maybeexpected
to increase. Where economic policy has touched
closely the business of the City, as in the Bank
Charter Act, the repeal of protective duties, and
the repeal of the navigation act, commercial
men have taken the lead in the composition of
pamphlets contending for or against particular
measures by the aid, as a rule, of a populai
political economy. Yet on such matters as
banking and the foreign exchanges such pam-
phlets have not unfrequently achieved a per-
manent place in classical economic literature.
The great development in the last seventy
years or organisation among the working classes
has led to considerable modifications of economic
theory (see Wages Fund). This organisation
has shown itself most notably : (1) in trade
unions and other benefit societies among
skilled labourers ; (2) in co-operative societies
for sale of goods. The former are federated
somewhat loosely in the trade union congress,
the latter very compactly in the co-operative
union. Hitherto co-operative production in
the sense of partnerships of workmen has not
advanced rapidly. The latest phases of the
organisation of the working classes are : (1) the
growth of trades societies among women, and
especially (2) the "new unionism," which has
two chief features (a) the organisation of un-
skilled labom'ers, (h) the policy of united action
by all the organised groups when the interest
of perhaps only one is at stake. These move-
ments have undoubtedly influenced politics in
the direction of greater interference by the state
than was contemplated by our forefathers.
Indications that political economy has not lost
its attractiveness for the English mind may be seen
in the foundation of the British Economic Associa-
tion (1890), its organ the Econ. Journal (1891),
and indeed in the present Dictionary. The Econ.
Review (1891) covers partly the same ground,
though not so strictly economic as the Econ.
Journal. The Cobden Club is still on the watch
againstprotection and over-interference of the state.
The Statistical Society has a journal coeval with
the society, embodying its transactions, with much
other valuable matter. The Economist, under the
editorship of such men as Wilson, Bagehot, and
Palgrave, has done valuable service in presenting
clear, vigorous, and solid economic argument on
questions of the day. With the Statist it repre-
sents on the whole the views of the economists of
the City. The Bankers Magazine does the same
for the world of bankers. M any papers of a strictly
economical character (especially those of Jevons
and Giffen) have been published in journals like the
Contemporary Revieiv, not addressed to profes-
sional economists but to the educated public gener-
ally. It is to be regretted that fugitive economic
literature, whether in pamphlets or articles, has
not yet found its historian; J, R. M'Culloch
attempted the work in his Literature of Political
Economy (1845), with a fair measure of success.
The series of volumes edited by M'Culloch
(printed for the Political Economy Club and Lord
Overstone), in some degree supplement his work,
at least for the early part of the period above
treated ; their titles are : A Select Collection of Scarce.^
and Valuable 'Tracts on Money, London, printed]
for the Political Economy Club, 1856.—^ SelecV
Collection of Early English Tracts on Commerce,
London, printed for the Political Economy Club.
1856,—^ Select Collection of Scarce and Valuable
ENGROSSING— ENSENADA
737
Tracts and other Pvblications on Paper Currency
and Banking, printed by Lord Overstone, London,
1867. — A Select Collection of Scarce and Valuable
Tracts and other Publications on the National Debt
and the Sinking Fund, printed by Lord Overstone,
London, 1857. — A Select Collection of Scarce and
Valuable Tracts on Commerce, printed by Lord
Overstone, London, 1859. — A Select Collection of
Scarce arid Valuable Economical Tracts, printed
by Lord Overstone, London, 1859. — The Evidence
given by Lord Overstone before the Select Committee
of the House of Commons of 1857 on Bank Acts,
London, Longman, Brown and Co. 1857. — Tracts
and other Publications on Metallic and Paper
Currency, by the Right Hon. Lord Overstone,
London, Longman, Brown and Co., 1858.
[In addition to M'Culloch's Literature there
may be consulted : — Prof. Travers Twiss, View of
the Progress of Political Economy in Europe since
the 16th century, 1847.— Prof. Adolf Held, Zwei
B'dcher zur socialen Geschichte Englands (1881,
especially bk. i. , Sociale und politische lAt&ratwr
von 1776 bis 18S2).—^xot J. K. Ingram, A His-
tory of Political Economy (from Encycl. Britann. ),
1887.— Prof. H. S. Fox well, " The Economic Move-
ment in England " {Harvard Quarterly Journal of
Economics, vol. ii. 1887). — L. L. Price, A short
History of Political Economy in England from
Adam Smith to Toynbee, 1891. — Prof. L. Cossa,
Introduzione alio studio dell' economia politica,
1892. Eug. trans. (L. Dyer), 1893.— W. Cunning-
ham, Growth of English Industry and Commerce,
and List of Authorities, 2nd ed., 1892, and Christi-
anity and Economic Science, 1914. — Bohm Bawerk,
Capital and Interest, 1890 ; Positive Theory of
Capital, 1891 ; both trans, by Smart. — W. Smart,
An Introduction to the Theory of Value, 1891. —
Studies in Economics, 1895. — The Return to
Protection, 190i.— Economic Annals of the 19th
century, 1910. — M. Pantaleoni, Pure Economics,
trans, by T. B. Bruce, 1898.-^. S. Nicholson,
Principles of Political Economy, 3 vols., 1901. —
Elements of Political Economy, 1903. — A Project
of Empire, 1909. — H. Sidgwick, Principles of
Political Economy, 3rd ed., 1901. — N. G. Pierson,
Principles of Economics, 2 vols., trans, by A. A.
Wotzel, 1902-12.— The Right Hon. C. Booth,
lAfe and Labour of the People in London, 2nd ed. ,
1903. — J. B. Byles, Sophisms of Free Trade and
Popular Political Economy, examined, edited by
W. S. Lilly and C. S. Devas, 1903.— C. F. Dunbar,
Economic Essays, 1904. — F. List, The National
System of Political Economy, trans, by S. S. Lloyd,
introd. by J, S. Nicholson, 1904. — Goschen,
Essays and Addresses on Economic Questions {1866-
1893), 1905. — A. C. Pigou, Principles and Methods
of Industrial Peace, 1905. — Protective and Pre-
ferential Import Duties, 1906. — S. Leacock, Ele-
ments of Political Science, 1906. — Irving Fisher,
Nature of Capital and Income, 1906 — Rate of
Interest, 1907. — A. Marshall, Principles of
Economics, 5th ed. 1907. — E. R. A. Seligraan,
Principles of Economics, 1907. — C.Gide, Principles
of Political Economy, trans, by C. W. A. Veditz,
2nd ed. — B. S. Rowntree, Lafid and Labour,
Lessons from Belgium, 1910. — Sir Henry Wood,
Industrial England in the Middle of the 18th
Century, 1910. — For financial history, Prof. C.
VOL. I.
F. Bastable, Public Finance, 190S, — TJieary of
International Trade, 1903.— Prof. E. R, A. Selig-
man. Incidence of Taxation, 1892. — Anton
Menger, The Right to the Whole Produce of Labour^
1899, trans, by M. E. Tanner, good for early part
of the century and history of English socialism. —
Karl Marx, Capital, trans, from 2nd German
edition, 1907, good for history of factory legislation
and for references to the minor economic literature.
— The Political Economy of Dugald Stewart (2
vols., ed. SirWm. Hamilton, 1855) is a mine of refer-
ences to the pamphlet literature of the end of the
18tli century. — E. Cannan, History of the Theories
of Production and Distribution in English Political
Economy, 1776-1848, 8vo, 1893.— J. Bonar, Phil-
osophy and Political Economy, 1893. — ^Schulze
Gavernitz, Zum Socialen Frleden, 1890. j. b.
ENGROSSING. See Forestallers and
ENREGISTREMENT, Fr. One of the
principal divisions of the French finances, con-
sisting of a registration duty on all deeds and
documents, inchiding notarial acts, judgments,
contracts, sales, leases, indentures, wills, in-
surance policies, loans, articles of association,
successions, transfers of property, etc. The
registration dues have been frequently criticised
for their exaggeration. M. Leroy Beaulieii
describes them in his Traii6 de la Science des
FinavyCes, as a fiscal brigandage. He admits
the utility of registration as a record of trans-
actions in case of loss of the original deeds, but
adds that the tax is only justifiable provided
that it is of moderate amount, whereas as it is
established in France it frequently becomes a
confiscation of private fortunes by the state.
The effect of this heavy charge is to restrict the
free circulation of such property. T. l.
[^Oode annote de V enregistrement et du timbre,
par Dalloz et Verge, Paris, 1878. — Annuaire de
V administration de V enregistrement, P. Dupont.]
ENSENADA, Zenon de Somodevilla y
Bengoechea, Marquis de la (1702-1782), died
in Medina del Campo. Belonging to a noble
but poor family, through his personal merit, he
rapidly rose to the highest rank, made an
immense fortune, and received the title of marquis
in 1736 from the Infante Don Carlos, afterwards
Charles III. of Spain.
Ensenada was one of the most efficient finance
ministers of Spain. Under his administration,
the ordinary revenue rose in a few years from
211 to 360 millions of reales (say from 21 to
36 millions sterling), although he contrived to
alleviate the pressure of the enormous and vex-
atious taxation which oppressed the lower classes
of the population. He put an end to the scan-
dalous exactions of the farmers of the rentas
reales (royal taxes). He established registros or
register ships, which were allowed to trade with
America independently of the.^oteand galleons.
The flota was the annual fleet between Spain and
her American colonies, the galleons were the
3 B
738
ENTAIL, LAW OF
trading vessels escorted by the fleet. He formed
the design of doing away with the millones or
numerous minor excise taxes and tolls which
weighed on every transaction of daily life, and
of compensating the resulting deficiency by a
better management of the customs and of the
excise on salt and tobacco, and by establishing
in Castile the tmica contribucion or single tax,
which was to be of^ per cent on every species
of income and property. It had been suggested
for more than a century by the majority of
Spanish economic writers and introduced into
Catalonia in 1729. The preliminary survey
or catastro was begun under his direction.
Ensenada also abolished the internal duties,
which interfered with the transport of corn from
one province to another, and improved the
means of internal communication. The royal
navy, military ports, and arsenals were the
object of his incessant and successful exertions,
which were extended to almost every branch of
government.
Ensenada's views and plans are explained in
clear and straightforward language in the Repre-
scTdaciones, which he submitted to King Ferdi-
nand VI., and which have been given in full for
the first time in Don Antonio Villa's excellent
biographical essay {El Marques de Ensenada,
Madrid, 1878). One of them, written in 1751,
will be found, although not quite complete, in
the Semanario Erudito of Valladares (Madrid,
1788, vol. xii. p. 260), and in French in the
French translation of Coxe's Memoirs of Spain
under the Bourbon Kings, published by Andres
Muriel in Paris in 1827 (L'Espagne sous les rois
de la Maison de Bourbon, vol. iv. p. 282).
Coxe gives a very favourable account of the in-
ternal administration of Ensenada (ch. liv.) ;
which will be discussed in a special notice by
Count Feman Nunez in his Vida de Carlos III.,
now (1892) in the press. e. ca.
ENTAIL, Law of. An entail is de-
fined by Wliarton (Law Lexicon) as "an
estate settled with regard to the rule of its
descent." The object of legislators in recog-
nising entails has been to preserve estates
undiminished in the hands of successive
generations of the same family. This fixity
of landed property was essential to feudalism,
which based the political rights and duties as
well as the social consideration of each in-
dividual on his relation to the land. Feudal
law, therefore, regulated the disposition and
devolution of laud less with reference to the
wishes of the owner or to the increase of the
riches of the community, than with reference
to the permanence and efficiency of the feudal
organisation. Feelings of family pride deepened
by feudal ideas contributed in turn to per-
petuate the system of entails which had fostered
them. But in the main the system of entails
is a political institution.
In one form or another the system of entails
may be traced in every country where feudalism
established itself. In many of those countries
it disappeared in the series of political changes
which opened with the French Revolution. In
England, however, it has survived, but with
many modifications which have almost destroyed
its identity. The English law relating to entails
may be considered under three heads :
I. The doctrine of " estates " in land ; II. the
practice of making settlements of land ; IIL
the modifications recently made in the law
relating to land.
I. The unity of ownership, so prominent in
Roman law, is almost lost in the feudal land
law. In England land is not technically an
object of private ownership, since the crown
is supreme lord of all the land of England.
Private persons can only have estates, i.e.
interests more or less extensive in land. Many
different persons may have estates or interests
in the same piece of land. In freehold land
there are three diflferent estates : (a) estate in
fee simple, (6) estate tail, (c) estate for life.
Estate in fee simple or an estate to a man and
his heirs is practically, although not technically,
the same thing as full ownership. The tenant
in fee simple has the fullest power of enjoying
and disposing of the land. An estate tail is
an estate to a man and the heirs of his body,
i.e. to a man and his descendants. It may
be an estate in tail male, i.e. descending only
to male offspring, or an estate in tail female,
i.e. descending only to female offspring, or an
estate in tail special, i.e. descending only to
offspring by a particular wife. But estates in
tail special, are, in practice, very uncommon.
When the offspring of the tenant in tail are
all deceased, the estate tail is at an end and
the land reverts to the grantor of the estate
tail or to his representative. Thus an estate
tail is a smaller interest in the land carved out
of the fee simple estate. "When there is an
estate tail in one party there must be a
reversion in fee in another party. An estate
given to a man and the heirs of his body was
at first regarded as a fee simple estate given
conditionally upon the birth of issue. When
the tenant had issue he acquired the right
of alienating so as to defeat the rights of his
heirs and also of the reversioner. By the
statute De Donis Conditionalibus (13 Ed. I.
c. 1), the power of alienation was entirely taken
away. But within two centuries the lawyers
invented methods of evading the statute,
namely, the collusive actions known as Fines
or Recoveries, whereby the tenant in tail
could once more alienate his land, and defeat
the rights of heirs and reversioners. By the
Act for the Abolition of Fines and Recoveries
(3 & 4 Will. IV. c. 74), these actions were
superseded and the tenant in tail was enabled
to attain the same object by simply executing
a deed to that eflfect and having it enrolled in
ENTAIL, LAW OF
739
a public ofRce. Thus a tenant in tail can
tui-n Lis estate tail into an estate in fee simple,
and acquire virtually unrestricted ownership.
An estate for life does not descend to ofispring
of the tenant, and cannot be enlarged so as to
extinguish the rights of the reversioner. The
position of the tenant for life at common law,
and previously to certain modern statutes, was
that of a usufructuary, who might enjoy the
income, but might not change the character,
much less impair the capital value, of the
property. Thus he could not open mines, fell
timber, or plough up old meadow land. Nor
could he dispose of the land by way of gift,
sale, or exchange, or lease it for more than a
very limited period. He has been recently
invested with very wide powers which will
be explained later on.
II. The settlements of real estate in use
date from the 1 7th century. When a landowner
executes a settlement, he usually reserves a
life estate to himself and gives an estate in
tail to his eldest son with remainders in tail
to his other sons. The eldest son, when born,
acquires an estate in tail to take effect after
his father's death. Such a future estate in
tail cannot be banned without the consent of
the tenant for life, who is called the protector.
. If the son held out till his father's death, he
would become tenant in tail in possession, and
then could bar the entail and get an estate in
fee simple. But whilst his father lives he has
nothing. Therefore, when he wants an estab-
lishment of his own, he has every reason to
join with his father in making a new settlement
similar to the old one. Thus the perpetuation
of an estate in the same family is ensured.
But the powers of a tenant for life at common
law were not enough even for the proper
management of an estate. In every well-drawn
settlement there were appointed trustees, in-
vested with powers of selling, exchanging, or
leasing parts of the estate and of executing
permanent improvements and charging the
estate with the cost thereof These powers
the trustees were to exercise only with the
consent of the tenant for life and with a view
to the interest of all persons entitled under the
settlement.
III. The modifications recently made in the
law amount to bestowing upon the tenant for
life powers similar to those bestowed upon the
trustees by the settlement. A series of statutes
of the present reign ending with the Settled
Land Act of 1882 has annexed to the char-
acter of tenant for life the fullest powers of
alienating the whole or parts of the estate, and
of employing the proceeds either to buy other
land or to pay off encumbrances on the fee
simple, or to make permanent improvements,
or to invest in certain specified securities.
The tenant for life now combines two totally
distinct characters : his former character of
usufructuary, and his new character of trustee
for all parties (himself included) who have an
interest under the settlement. The settled
estate is now to be regarded not so much as
land, but as capital which happens to be
invested in land, but may be invested other-
wise at the discretion of the tenant for life.
It remains to notice the objections made by
economists against systems of entail generally,
and to consider how far they are applicable
to the system of entails now existing in
England. These objections are principally
two : I. entails check the improvement of
land ; II. entails restrict the transfer of land.
I. Entails check the improvement of land,
and so lessen the wealth of the community ;
because the limited owner, as compared with the
absolute owner, has (a) less motive to improve
and (b) less power of improving, (a) The limited
owner has less motive to improve his land,
because he cannot dispose of it by sale or testa-
ment, and because the property will all go to one
son, without affording a provision for the other
children. Hence the limited owner is exposed
to the temptation of desiring to apply the
whole income of the land, either to his own
purposes or to making a provision for daughters
and younger sons. The English tenant for life
cannot now be deprived of the power of selling
his land, but he can touch only the income
of the proceeds. This objection, therefore, is
lessened rather than removed by recent legis-
lation, (b) The limited owner lacks power to
improve the land, because (i) his freedom of
action has been narrowly regulated by law.
(ii) His land may have been encumbered with
charges created in favour of other members of
his family, which lessen the net income ; (iii)
he has to make provision for children other
than the heir, and is thus further straitened.
(i) The English tenant for life (see Settled
Land Act, 1882), has now the legal right to do
almost anything which the tenant in fee simple
could do. His means for permanent improve-
ment are now much greater than they were
formerly, since he can sell part of his land in
order to raise capital for improving the rest.
He can do this without impoverishing his
younger children, as the land which he sells
would under the settlement have gone to the
eldest son. (ii) The charges on the land to pro-
vide a jointure for the widow of the late tenant
for life, and portions for the younger brothers
and the sisters, are not affected by recent legisla-
tion. They form deductions from the gross
income of the tenant for life, and lessen his
means of improvement, (iii) The tenant for
life still has to provide for his younger children,
and may thus be tempted to set apart for them
money which might with advantage be spent
on improving the land. Kecent legislation,
therefore, whilst much enlarging the powers of
improvement possessed by a tenant for life, has
740
ENTAIL, LAW OF— ENTAIL (SCOTLAND)
not put him upon an equality in this respect
with the tenant in fee simple.
II. It is said that a system of entail deprives
landowners of (a) the power, (b) the motive to
sell their land, and thus produces the following
evils:— (i) the retention of land in the hands of
persons who may be .too impoverished to im-
prove it ; (ii) the exclusion of capital from
being employed in the improvement of land
which under a system of free sale would be
purchased by capitalists ; (iii) a restriction in
the number of landowners, which diminishes the
stability of society ; and (iv) the removal of a
strong motive to industry and economy in the
labouring class, namely, the hope of becoming
the owner of a piece of land.
That the power to sell is wanting, under a
complete system of entail, is clear. That it is
not wanting under the modified system of
entail now existing in England is also clear.
The motive to sell is still wanting to the
tenant for life, in so far as he cannot appro-
priate the capital sum paid by the purchaser.
But, since his income is much reduced by prior
charges, and by the necessity of saving for
children other than the heir, he has the
strongest inducement to exchange an invest-
ment like land, which at the present day rarely
pays more than 2 per cent, for investments like
railway debentures, which pay 3 per cent. For
the increase of return all goes to swell his
income, the charges upon it remaining the same.
Under the Settled Land Act, a good deal of
land has been sold in England. But hitherto
land has been offered for sale mostly in large
masses. For this there are several reasons : —
(i) the influence of habit upon those who con-
duct the sale of land ; (ii) the extravagant
expenses connected with making out a title,
which may be as heavy for a small piece of
ground as for a large estate, and so act as a
prohibitory tax on sales of small parcels ; (iii)
the present condition of the market for agiicul-
tural produce which represses any strong desire,
in the English middle or lower dass, to become
freeholders. Energetic persons engaged in
agriculture prefer to employ their capital in
working a large farm rather than in buying a
small one. Other small capitalists dislike so
risky and unproductive an investment as land
is at the present time. For all these reasons
the estates which have come into the market
have generally been bought undivided by
wealthy men who can afford to place great sums
in a sort of property which gives social con-
sideration and out-of-door amusement, but
yields only a paltry return in money. Thus
the sales which have taken place in England
are not believed to have much increased the
number of landowners. In Wales, the tenants
sometimes buy their farms when offered for
sale. In Ireland the tenants are almost the
only purchasers. In those countries the number
of landowners is thus increasing. Moreover,
as small owners rarely make family settle-
ments, an increasing part of the land in Wales
and Ireland is no longer subject to a system of
entails, but is Jield by tenants in fee simple.
[For the legal learning of entails, the reader may
consult Kenelm Digby's History of the English
Law of Real Projser^y.— Williams' Law of Real
Property. — Goodeve, Modern Law of Real Pro-
perty.—The Land Laws, by Sir Frederick Pollock
(English Citizen Series), and many other text-books,
together with the statutes and leading cases to
which they make reference. Some interesting ^
observations upon the rise of feudal systems of
tenure, upon entails and primogeniture, will be
found in Maine's Ancient Law, ch. vii., and
Early Law and Custom, ch. ix.
Of the writers who have considered entails in
their economic aspect, only a few can be men-
tioned here : Adam Smith, Wealth of Nations, bk.
iii. ch. ii., who dwells on the injustice to younger
children caused by entails, and asserts in terms
much too absolute the improbability of a
great proprietor executing great improvements. —
M 'Culloch, Principles of Political Economy, who
justifies primogeniture by its efi'ect in raising the
fashionable standard of living, and so giving an
impetus to the pursuit of wealth. — Mill, Principles
of Political Economy, bk. v. ch. ix., who condemns
entails partly as encouraging idleness and ex-
travagance, partly on the grounds above explained
at length. — Boyd-Kinnear, Principles of Property
in Land. — Cliff'e Leslie, Land Systems and In-
dustrial Economy. — A volume of the Cobden Club
Essays, entitled Systems of Land Tenure in various
Countries. — George Brodrick, English Land and
Landlords (also included in the Cobden Club
Essaj's), — Shaw Lefevre, English and Irish Land
Questions. — Arthur Arnold, Free Land. — Kay,
Free Trade in Land, etc. None of these writers
can be said to have fully considered the latest
stage of the English law relating to this subject,
and therefore many of their criticisms are partially
obsolete.] F. c. M.
[Refer for other sides of the question to
Bequest, power op ; Morcellbmbnt. ]
ENTAIL (Scotland) anciently and still
sometimes called tailzie, from Lat. talliaium,
cut off ; any deed by which the ordinary legal
course of succession is cut off and a fresh one
substituted. The power to create an entail,
previously doubtful in Scotland, was definitely
given by the act 1685 c. 22. Every proprietor
in fee since that date may grant a simple des-
tination which merely names a succession of
heirs, each one of whom may dispose of the
estate as he pleases, and whose successor in the
destination merely takes in default of such dis-
position, or he may protect the succession he
prescribes by restrictive clauses forbidding any
interference with the succession by selling,
alienating, or disposing of the lands, contracting
debt, or doing an}' deed whereby the succession
might be frustrated. These clauses must be
inserted in all title-deeds, and the entail with
the judicial authority of the court of session
ENTAIL (SCOTLAND)— ENTREPRENEUR
741
must be recorded. Every act or deed contra-
vening these restrictions was declared null, and
the real heir might, on contravention, take up
the estate. In 1770 the heir in possession of
entailed lands was allowed a modified power of
leasing, and of charging against future heirs a
proportion of the expense of improvements on
the property by the Montgomery Act, 10 Geo.
III. c. 51. Further relaxations were granted
in 1824 by the Aberdeen Act, 5 Geo. IV. c. 87,
enabling an heir of entail in possession to make
limited provisions in favour of a husband or
wife or children, which were payable by the
successors out of the yearly rents or proceeds,
but did not affect the fee of the entailed estates ;
by the Rutherfurd Act 1848 the fee may
now be charged in favour of younger children.
But no powers either under the Montgomery
Act or the Aberdeen Act could be exercised so
as to deprive the successors of more than two-
thirds of the free yearly rents. In 1836 the
Rosebery Act, 6 & 7 Will. IV. c. 42, gave
the heii' in possession a limited power to sell
parts of the estate for the entailer's debts under
the authority of the court of session. In 1848
the Rutherfurd Act, 11 & 12 Vict. c. 36, first
conferred on an heir of entail in possession the
power to disentail. Elaborate and intricate
provisions were made by the Rutherfurd Act
distinguishing between entails made before and
after its date, and heirs in possession who were
born before or after that date, with regard to
the consents required to disentail. Broadly
speaking, if the heir in possession was born
before the act and the entail was made before
the act, he requires the consent of all the heirs
if less than three, or of the next three heirs, or
of the heir apparent and two of the heirs who
would, including the heir apparent, be succes-
sively heirs apparent, provided the nearest heir
be twenty-one years old ; or if such consents be
refused by any heir, even, since 1882, the nearest
heir for the time, the court may assess the value
of the heir's interest and dispense with his con-
sent on the payment to him of the value of his
interest, or sufficient security for such payment.
The next heir in succession thus receives a lump
sum for his expectancy instead of getting, as in
England, the interest of the purchase money if
and when he succeeds in lieu of his interest in
the land. The distinction between old and new
entails is now removed. Other powers now
possessed by heirs in possession of entailed
estates are — to sell under the same conditions
as those of disentailing, to excamb, or exchange,
any portion of the entailed estate for an equiva-
lent in contiguous lands, without any consent,
taking or giving not more than £200 for
equality of exchange, to grant feus and leases,
to charge improvements, and to charge family
provisions in favour of the wives, husbands, or
children of heirs of entail in possession.
[Rankine, Land Ownership, chap, xxxiv. — Bell's
Principles, § 1716, et seq. — Duff ou Entails. —
Duncan on Entail Procedure.] J. w. b. i.
ENTREpStS. a term applied in France
and other countries to places of deposit for
goods, analogous to the bonded warehouses in
the ports and trade centres of the British
Empire. In them artic!es subject to custom
or excise duties may be placed, until time of
payment of the imposts to which they are
liable on delivery for consumption, or until
removal for the convenience of trade, or ex-
portation to foreign countries. In the latter
case the importers are relieved altogether from
the necessity of the revenue payments, and in
the others this outlay need not be incurred
until such time as the consumers are ready for
their use. In this coimtry, where an immense
transit trade centralises, where the operations
are often of great magnitude, and the few duties
retained are great in proportion to the prime cost
of the articles, the facilities afforded by this
system permit of much trade being carried on
which would otherwise be cramped or altogether
prevented. The use of capital is economised, and
excessive fluctuations in price are checked by
the large stocks it is possible to retain on hand,
as well as the speed with which supplies may
be transferred to the consumers, at a lessened
cost for time and money expended. On the
other hand, the care bestowed upon their safe
custody, and the supervision of the necessary
operations, such as sorting, vatting, and other
processes, constitutes a charge upon the revenue
for the benefit of the consumer or trader.
These observations apply with much greater
force to the " entrepSts " established in France
and elsewhere, because of the multitude of
articles which have, for the security of the
revenue, to be taken in charge, at a considerable
cost if the supervision be eflectual, or of risk if
it be insufficient. There, too, it is not only the
national revenue which, as here, has to be safe-
guarded, but also the municipal tolls in the
shape of octroi. It is mainly this which has
led to the division of these entrepots into ^'reels''
where the goods are actually kept in custody,
and '^fictifs," nominal or conventional, where
the owner has them in his own charge, but is
answerable for the payment of the duties to
which they are liable. See also Bonded
WaREIK)USES.
{Nouveau Dictionnaire d^ Economic Politiqtie,
1891, vol. 1. p. 898 ; and Dictionnaire des Finances,
1889, vol. ii. p. 118.] s. BO.
ENTREPRENEUR. An alternative name for
the employer (see Employers and Employed).
Adam Smith ( Wealth of Nations, bk. i. ch. vi. )
used the term "undertaker," and J. S. Mill
{Political Economy, bk. ii. ch. xv. § 1 footnote),
expresses his regret that " this word, in this
sense, is not familiar to an English ear."
He adds that "French political economists
enjoy a great advantage in being able ta
742
ENTRY, BILL OF— ENTRY, RIGHT OF
speak currently of 'les profits de Tentrepre-
neur'"; and it seems that, partly perhaps in
consequence of this, political economy has m
Fran(S avoided the mistake committed by some
of the older EngUsh economists m failing to
distinguish the functions of the employer and
his share in the produce of industry as such
from the functions and share of the capitalist
as such. General F. A. Walker ( Wages Ques-
tion, ch. xiv.) echoes Mill's regret that "we
have not a single English word which exactly
fits the person who performs " the office of the
employer in modem industry. "The word
undertaker," he remarks, "at one time had
very much this extent," and so had the word
"adventurer." But they have since acquired
other senses. The ' ' French word entrepreneur, "
however, he adds, "has very nearly the desired
significance, and it may be that the exigencies
of politico-economical reasoning will yet lead
to its being naturalised among us." l. l. p.
[See also French School.]
ENTRY, Bill of. The name given to an
office within the custom house at London, and
other ports of the United Kingdom, from which
there issue daily lists of ships arriving and
sailing, with accounts of their cargoes, de-
liveries from bonded warehouses, and other
particulars of considerable interest to the
mercantile community. In addition to these
printed publications, manuscript accounts are
rendered to those who may desire such special
information as can be gleaned from the customs
records, or may be compiled from the various
documents and forms supplied for customs
purposes. The printed lists are sold to sub-
scribers, and the special returns are paid for in
proportion to their length or the trouble in-
volved in their preparation, for the exclusive
use of those at whose expense they are compiled.
The history of this arrangement is somewhat
peculiar ; it is, or was until recently, a remnant
of the old times when special privileges were
conferred on favoured individuals for their
pecuniary advantage, or in return for payments
made by them. One of these acquired, in 1660,
by letters patent, the exclusive right of access
to all official documents connected with the
customs reports and entries, and of obtaining
and publishing any portion of the information
they furnished. Ultimately, in 1817, this
right became vested in the Customs Annuity
and Benevolent Fund — a mutual insurance
fund supported by payments of the officers
themselves, supplemented by the profits of the
bill of entry, and devoted to the sole benefit
of their widows and orphans. Through the
energy and wisdom of the directors this had
grown to be a valuable business, which, at the
expiration of the crown patent, in 1880, the
treasury appropriated to its own benefit, and it
is now profitably carried on by the commis-
sioners of customs. The public funds thus
became possessors of a private property created
by independent exertions on behalf of a charit-
able purpose.
The existence of such a source of information
is of great advantage to merchants, statisticians,
traders, and shipowners, by enabling them to
obtain correct knowledge on points too minute,
too varied, and too numerous to be set forth in
the periodical returns of trade and navigation
laid before parliament.
[Rejxjrts of Commissioners of Customs. — Bill oj
Entry, Journals A and B. — Bourne, Royal Statis-
tical Society s Journal, vol. xxxv. pp. 214-215,
1872.] s. Bo.
ENTRY, Right of. The payment of the
rent, and the performance of the covenants in a
lease, are usually secured by a "condition or
proviso for re-entry," which enables the land-
lord on non-payment of the rent or non-
performance of the covenants, to take possession
of the premises let, as if no lease had been
made. The courts of equity and the legisla-
ture have, in a certain measure, succeeded in
preventing landlords from making any oppres-
sive use of this power. Thus a tenant who has
been ejected in consequence of the non-payment
of rent may be reinstated if he pays the rent
and costs within six months after the execution
of the judgment. As regards the non-perform-
ance of covenants, not relating to the payment
of rent, and not belonging to one of the ex-
cepted classes referred to below, a right of
re-entry or forfeiture is not enforceable unless
the tenant has failed to comply with the terms
of a notice specifying the breach and requiring
him to remedy it and to pay compensation in
money in respect of it (Conveyancing Act, 1881,
§ 14). In such cases forfeiture is therefore
impossible, except when the breach is wilful
and persistent. The rule just mentioned does
not, however, extend to covenants against
assigning and underletting, and the omission
to obtain the landlord's consent to an assign-
ment or underlease of the premises may lead to
the forfeiture of the lease although it was due
to forgetfulness on the part of the tenant's
solicitor, and although the landlord would not,
under the circumstances, have withheld his con-
sent if asked for (Barrow v. Isaacs [1891], i. ;
Queen's Bench, 417). The attempts to induce
the legislature to enact some provisions more
favourable to tenants in respect of such cove-
nants have proved abortive, and their only result
has been § 3 of the Conveyancing Act of 1892,
which provides that in the absence of an express
agreement to the contrary, a landlord shall not
make his consent to an assignment or under-
letting dependent on the payment of a sum of
money beyond a reasonable amount in respect
of expenses. Conditions for forfeiture on the
bankruptcy of the tenant, or on the taking
in execution of the tenant's interest, were also
originally excepted from the rule granting relief
ENUMERATED COMMODITIES— l^PHjfeM^RIDES
7 43
as stated above ; but it is now provided by §§ 2
and 3 of the Conveyancing Act of 1892 that,
subject to certain exceptions, a lease is not to
be forfeited in such a case, unless the tenant's
interest remains unsold within a year after the
date of the bankruptcy or of the taking in (execu-
tion. The practical importance of the exception
is materially reduced by this alteration, e. s.
ENUMERATED COMMODITIES. This
term has two distinct meanings, according as it
is applied : (1) to the European trade of Eng-
land ; (2) to the colonial trade of England.
In both cases it refers to commodities which
were originally enumerated in the Navigation
Act of 1660, but which were altered from time
to time by subsequent legislation,
(1) With regard to the European trade, the
first Navigation Act in 1651 forbade the
importation of European products except in
British ships, or ships of the country where the
goods were produced, or from which they could
only be, or most usually were, exported. The
second Navigation Act in 1660, while adopting
most of the provisions of 1651, modified this
particular article. It renewed the restriction
about importation to (1) all Russian and
Turkish products, and (2) certain enumerated
commodities : viz. timber, salt, pitch, tar, rosin,
hemp and flax, raisins, figs, prunes, olive oils,
all kinds of corn or grain, sugar or potashes,
wines, vinegar and spirits (12 Car. II. c. 18,
§ 8). All other European goods could be im-
ported in any vessel. Two years later a further
restriction was made, and it was provided that
certain goods should not be imported into Eng-
land in any ship whatever from Germany,
Holland, and the Spanish Netherlands. This
second list of enumerated commodities included
all wines other than Rhenish, spices, grocery,
tobacco, potashes, pitch, tar, salt, resin, timber,
and olive oil (13 & 14 Car. II. c. 11, § 23).
Changes in the enumeration were made at
intervals in obedience to momentary pressure
or changing interests. But no great relaxation
of the system of 1660 and 1662 was made till
1822, when the importation of enumerated
goods was extended to ships of the country or
place from which they were imported ; and at
the same time the exceptional restrictions upon
trade with Germany, the Netherlands, Russia,
and Turkey, were abolished (3 Geo. IV. c. 43,
§ 6). The distinction between enumerated and
non-enumerated commodities disappears alto-
gether after the repeal of the Navigation Act
in 1849.
(2) As applied to the colonial trade, the
term enumerated commodities had an equally
important significance. The act of 1660
limited all trade, both of export and import,
with British plantations in Asia, Africa, or
America to British ships. But it added a dis-
tinction between those colonial products which
could only be carried to England and those
which might be carried, still in British ships,
to countries other than England. The former,
which are the enumerated commodities ia this
connection, naturally included all those com-
modities which England did not produce herself,
or did not produce in sufficient quantity for
her needs. The non- enumerated commodities,
which included all those goods in which the
home producers dreaded colonial rivalry, were
originally allowed to choose any market out-
side England, but were ultimately limited to
countries south of Cape Finisterre. The motive
for this restriction was to prevent the manu-
facturing rivals of England from obtaining raw
materials from our colonies. These and other
oppressive regulations with regard to colonial
trade were undoubtedly a chief cause of the
revolt in 1774 of the American colonies, whose
success dealt a fatal blow at the policy of the
navigation acts, and in 1796 the United
States were allowed to carry their goods in their
own ships to Great Britain. In 1822, the
distinction of enumerated commodities among
colonial products became obsolete, and the
colonies were allowed to export not only their
own produce, but their imports from other
countries, to any place in Europe, Africa, or
America, either in British ships or in ships of
the country to which they were exported
(3 Geo. IV. c. 44, § 4, and c. 45, § 2).
[M'Culloch's edition of Adam Smith, note xi.,
and Leone Levi, History of British Commerce, pt.
iii. eh. ii., give a clear account of the enumerated
commodities in European trade. For the term as
applied to colonial products see Adam Smith,
Wealth of Nations, bk. iv. eh. vii. pt. 2.] R. L.
]6pHEMERIDES. About the middle of the
18th century proposals for reform both in
finance and agidculture began to interest the
French public. In 1751 a special review, the
Journal ceconomique ou Mdmoires, Notes et Avis
sur I' agriculture, les arts, et le commerce, was
established in order to deal with these subjects.
This journal contained essays both on practical
and theoretical questions ; the latter presenting
restrictive as well as liberal views. Recom-
mendations of free-trade in corn, and transla-
tions of works of English economists, as Josiah
Tucker and Hume, strengthened the position
of the French school of free trade who became
afterwards ,the physiocrats. The Gazette du
Commerce, established in April 1763, admitted
the contributions of Le Trosne and St. Peravy
as well as those of their opponents. The govern-
ment, favouring these discussions on the corn
policy, bought up this newspaper and connected
with the Gazette du Commerce a special review,
the Journal de V Agriculture, du Commerce, et
des Finances (1764). This Journal soon
passed into the sole possession of the physio-
crats and was their organ from September 1765
to November 1766. It ceased to appear in
1783.
744
fePH^M:6RIDES
Among the periodicals treating on subjects akin
to those dealt with by the Journal de V Agri-
culture was a weekly paper, the Eph6m6rides
du Gitoym ou chroniqiie de Vesprit national
(6 vols. 12mo), established in December 1765,
after the model of Addison's Spectator,* by
the Abbe Baudeau. He intended through its
means to defend the interests of "humanism"
by pleading for the abolition of slavery in the
colonies. He, however, employed his organ
to attack the Economists, professing for his
own part mercantilist views and a detestation
of free- trade. Le Trosne replied in the Jowmal
de V Agriculture of March 1766 to Baudeau ; the
latter answered, but soon desisted, for, after
reading but half a page of Le Trosne's private
observations on the futility of the "balance of
trade," he abandoned his intention of continu-
ing these polemics. Shortly after this the
Marquis of Mirabeau brought Baudeau fully to
agree with the physiocratic school. This
event, le saut de la science, proved very import-
ant for the progress of the Economists. For the
tpMrrUrides was ready to receive their contri-
butions just at the time that the editor of the
Journal de V Agriculture put difficulties in their
way (December 1766). After January 1767
the new organ appeared as a monthly review
under the title ijpMmdrides du Citoyen, ou
BihliotMque raisonnie des Sciences morales et
politiques. Baudeau remained its editor till
May 1768, when his place was taken by Du
Pont de Nemours. The most eminent writers
of the physiocratic school contributed to this
journal. Among the most interesting articles
are the following : — Quesnay's ** Essays on the
Government of Peru " (1767, t. i.) ; he declares
that the system of tithes in Peru proves its an-
cient government tohave been the mostprosperous
and the fairest in the world. — On "Despotism
in China" signed M. A. (1767, t. iii., iv., v., vi.),
in which he describes Chinese political institu-
tions as exhibiting "an order of essential
stability," besides minor articles (1767, t. x.,
1768, t. ii.) ; cp. Oncken's edition of Quesnay's
(Euvres, pp. 660-692. — Mirabeau's "Letters on
the Legal Order." In these he undertakes to
give an historical account of the causes of economic
legislation, and the study of the "physical "causes
leading towards its reform (1767, t. ix., x., xi.,
xii. ; 1768, t. i. to vi., viii. to xii. ; 1769, t. 1.
to iii., v.). — On the economic education of girls ;
insisting upon the necessity of instructing them
in the science of the natural social order (1768,
t. iii.).— Dialogues between a child and its
teacher, on the use of science to princes (1769,
t. vi. to ix.). — Historical eulogies on Sully,
whose merits as statesman and as a predecessor
of the physiocratic school are dilated on (1770,
t. iii. to xii. ; 1771, 1. 1. to xi.).— Baudeau wrote
"Avis au peuple sur son premier besoin,"
treating of a free trade in corn, the best manner
of baking bread, and on its price (1768, t. i..
ii. , iv. , V. ). " Avis aux honnStes gens, qui veulent
bien faire," dealing with the effects of the bad
harvest of 1769, and the methods pursued to
cheapen the price of bread (1768, t. x., xi. ;
1769, t. X.). An Explanation of the Tableau
l^conomique to Madame de ("political
economy made easy") (1767, t. xi., xii. ; 1768,
t. viii. ; 1770, t. ii.). On luxury, its destructive
effects on agriculture (1767, t. i. to iii.). " On
the actual state of Poland," on the causes leading
to its destruction by the Moscow policy (1770,
t. ii. to iv., xi. ; 1771, t. i., iii. to v.). — There
are also some observations by Butre respecting
agriculture on a large and a small scale, illus-
trated by accounts of farms and estates culti-
vated on the Metayer principle, and proving
the unprofitable character of the latter (1767,
t. ix., xi., xii.). — Among Du Pont's contribu-
tions his "Notice abreg^e" containing the first
sketch of a history of economics, particularly
deserves mention (1769, t. i. to iv., vi., ix. ;
1770, t. i. avertissement). — Among the latest
important articles were Turgot's "Reflexions
sur la formation et la distribution des richesses "
(published in 1769, t. xi., xii., and 1770, t.
i., but written in November 1766) and the
" Abrege de I'^conomie politique " by the Mar-
grave of Baden-Durlach (1772, t. i.). — Minor
articles were written by Roubaud, St. Peravy,
Le Trosne, Morellet, Franklin. — Criticisms are
also included directed against Linguet (1767,
t. iii. ; 1770, t. i.), who, in his TMorie des lois
civiles, 1767, had taken no notice of the physio-
cratic conception of natural law, and in accord-
ance with Hobbeism had declared that " 1' esprit
des lois — c'est la propriete"; Forbonnais, who
is censured on account of his attacks against the
physiocratic theory that trade was a simple
exchange and not affording a "produit net"
(1767, t. vi., ix.); — against the attempted re-
futation of their doctrine by Graslin, the author
of an JSssai sur la Richesse et sur VImpdt (1768,
vol. ii., iii., x.) ; — against the Doutes adress4s
aux philosophes dconomistes by Mably, who
had from the communistic standpoint attacked
the foundation of this system, the right of
private property (1768, t. ii., iii., v. to viii. ;
1769, t. v.). — The J^lemenis g6n6raux de Police
of Justi (1769, French edition), is shown to
be a work of very shallow and contradictory
views, which maintains the wisdom of grand-
motherly regulations (1769, t. ii., iii.) ; Galiani's
Dialogues sur le Commerce des Bleds, one of the
wittiest productions of economic literature, is
described as "un ouvrage charmant, qui
renferme les plus jolis lazzis du monde" (1769,
t. xi., xii.); Baudeau also criticised Bearde
de L'Abbaye's JRecherches sur les moyens de
supprim.er les impdts, pricedies de Vexamen de
la nx)uvelle Science, 1770, a criticism directed
against the single-tax theory (1770, t. vii.);
and Pinto the mercantilist "Pindar of the
stock exchange " (Trait4 de la circulation et du
:6phem]6rides
745
cridit, 1 7 7 1 ), (1 7 7 1 , t. X. ). Besides these articles
the review contained a chronicle of public events
considered to be symptoms of the progress of the
doctrine of the physiocrats : this includes the
utterances of the French parlements in the pro-
vinces on the corn-trade ; the emancipation of
serfs in Denmark ; the encouragement given
publicly to agiiculture by the heir-apparent of
the crown (Louis XV. being king), the Dauphin
Louis, who on the 15th June 1768 himself held
the plough at Versailles (1768, t. vii. ; 1769, t.
viii. ). Louis was followed in this by the Emperor
Joseph IL, who drove a peasant's plough, the
19th August 1769, at Slavikovitz in Moravia
(1770, t. xii.). These events have been com-
mented on by Diderot in a review which he
wrote about the £phemArides, in the following
words : ' ' Plough, plough as much as you will ;
I promise you that as long as matters stand on
their present footing, the wheatsheaf growing
under your royal hands will not nourish your
peasants" {OEuvres, t. iv. p. 85). An account
is given of an experiment made by the Llarquis
of Mirabeau and his son at Aigueperce in
Limousin, to form a bureau de conciliation, com-
posed of prud'hommes elected by the parishes,
in order to avoid the frequency of lawsuits.
The experiment Avas imitated by the Marquis
le Serent at Malestroit in Bretagne; it was
a precui'sor of the modern boards of con-
ciliation (1771, t. iii. p. 110-194 ; t. vii. p.
183, cp. Lomenie, Les Mirabeau, t. ii. p. 79 ;
t. iii. p. 59). This part of the l^phimerides
contains some statements about financial reforms
in foreign countries, especially of the experi-
ment of a ** single tax " on land {impdt unique)
in Baden (1771, t. iv., v., vi., vii.), with the
performance of which Schlettwein was entrusted
in the village of Dietlingen (1770) (see Impot
Unique).
The J^phemerides was suppressed by the
Controller - General, the Abbe Terray, in
November 1772 (t. iii. is the last of the sixty-
three volumes of this series). The editors
sought in vain to connect themselves with
other journals. It is characteristic of him that,
after being forbidden to publish the J^pMyndridcs
in 1772, Du Pont continued to work in their
line by issuing a fortnightly Correspondance lit-
Uraire et politique in MS., and to send tran-
scripts to the monarchs interested in the^physio-
cratic doctrines (cp. Carl Friedrichs von Baden
briejlicher Verkehr mit Mirabeau und Du Pont,
edited by Carl Knies, Heidelberg, 1892, vol. i.
p. 151-152 ; cp. also vol. i. pp. 21, 56, 57, 61 ;
vol. ii. p. 109 seq., 197). After a three years'
silence Turgot, who had become minister, enabled
the Abbe Baudeau to resuscitate the review.
It thus became almost an official organ in-
tended to explain and justify Turgot's politics.
In December 1774 appeared the first part of these
N'ouvelles ^phem^rides £conomiques, ou Bihlio-
thequ^ raisonnee de VHistoire et dc la Politique
(18 vols., 12 in 1775, 6 in 1776). The Journal
de V Agriculture too became again an organ of
the physiocratic school under the direction of
Abbe Roubaud. Among the contents of the
Nouvelles l^pMmirides, the following are remark-
able : *' Letters and Memoirs written to a Magis-
trate of the Paris Parliament on the Arret of
September 13th, 1774," by Baudeau (1775, t. i.)
This is an historical and theoretical interpreta-
tion of the causes which lead on to Turgot's
celebrated ordinance, by which the free circula-
tion of corn in the provinces of France was
established and its free exportation abroad was
made the object of future decisions of the
government (see Turgot, Q^uvres, 1844, t. ii.
p. 169). — Bigot de Ste. Croix's posthumous
Essay on the Abuse of Exclusive Privileges, on
the Freedom of Trade and Industry (1775,
t. i. iii.), is a literary forerunner of the abolition
of corporations by Turgot. — The third part of
vol. i. (1775) opens with an li^loge furdbre de
M. Frani^ois Quesnay, delivered bf^ the Marquis
de Mirabeau four days after the master's death,
the 20th December 1774. T. v. of the same
year contains an historical eulogium of Quesnay
by the Count d'Albon. — Baudeau again contri-
butes inqiiiries and historical memoirs on the
finances of France from Louis XII. to Louis
XV. (1775, t. ii., iii.), and a refutation of an
author who had wi^itten in defence of the
Corvee system. — The Marquis de Pezay writes
an essay on The Fortification of the Military
Frontiers of Alsace. — Freville inserts a transla-
tion of extracts from A. Young's Eastern Tour
through England (1775, t. ii. iii.), and On the
Present State of British Commerce (1775, t. viii.)
Turgot's ordinance, which allows again leases of
twenty-nine years' duration (January 2, 1775)
is published as a memorable event (t. ii.). —
The general aspects of the school are dealt with
in a Letter on the Economists (1775, t. iii.) ; in
this the contrast between formal liberty, adhered
to by the economists, is contrasted with the
postulate of economic equality and the latter
declared unnatural. Still the fundamental
principle of the economists is declared to be the
truth, that "the particular happiness of in-
dividuals can only be reasonably and firmly
established upon the basis of the general
happiness of the Avhole race " (1775, t. iii. p. 59).
The philosophical and political ideas of the
physiocratic school are embodied in a Memoir
on Public Instruction by Mercier de la Riviere
(1775, t. ix. X.), and in Roubaud's Political
Peflections on America (1776, t. iii.), which are
full of sympathy for separation of the colonies
from England. — Finances are dealt with in
Reflections oj a Citizen on the financial adminis-
tration of great cities, and especially of the City
of Ly OTIS (t. iv.), written to oppose indirect local
taxation ; they exhibit the destructive tendency
of the physiocratic doctrine for local life by
subjecting it to central goverimient. An essay
746
:^PH^MERIDES
is directed against the heavy taxation of
tanneries after 1759 (1776, t. iv., also 1776, t.
iv.\ and of salt, spirituous liquors and tobacco ;
this essay, Le Profit du Feuple et le Profit du
Roi, had been previously written in 1769 by
Baudeau, and twelve copies only printed, 1775,
t. iv. ; cp. a letter to Baudeau on that subject
in 1775, t. X., extracted from Nouvelles de la
Ripuhlique des ic^^rcs (Lausanne, vol. i. 1775) ;
cp. also the criticisms on Bandeau's essay con-
tained in Nouv. £ph., 1776, t. ii. p. 70, taken
from the Journal Encyclop6dique of 1775, vol.
viii. Other articles deal with the suppression
of the duty on fish coming to Paris during
Easter-time (1776, t. iv., and Turgot, CEuvres,
ed. Daire, vol. ii. p. 402), and the suppression
of a series of duties in Russia by Catherine II.
(17th (28th) March 1775, t. vii.). Historical
details are given relative to duties laid on eggs,
butter, cheese (1776, t. i.), on wines coming
to Paris (1775, t. v.), and likewise on such
imports within Champagne (1776, t. iii.). A
new method of levying the duty on brandy
is described, and the weight of the impost of
1771 on the manufacture of paper, 33 per cent
on the cheapest sorts, is complained of (1776,
t. v.). A document, proving the antiquity of
complaints on French finances, from the year
1415, is published in 1775, t. xi. An essay
of Baudeau, written in 1768 was published for
the first time in 1776, t. i., on the occasion of
the abolition of the "Caisse de Poissy" on the
9th February 1776 (see Turgot, CEuvres, vol. ii.
p. 316); this institution since 1743 had farmed
the exclusive market right of meat for Paris to
a company, which was entitled by it to take a
duty of 6 per cent upon all sales of meat at
Sceaux and at Poissy. Bandeau's article pro-
duced great irritation among the partners in the
company, who brought an action against its
author ; the text of the latter is inserted in
Nouv. ItJph., 1776, t. vi. This volume also
contains a "memoir on the taxes raised in
unforeseen cases ('affaires extraordinaires ') in
France duiing the war of 1756-1763." They
amounted to no less than 1,105,227,761 livres.
The free-trade movement is represented by a
memoir written by M. Belly on the decline of
the trade of Leghorn in consequence of the
number of charges (1775, t. vi.) ; the same
author contributes an essay on the state of
commerce and manufactures in Italy (t. vii.)
The obstacles to the shipping trade in the
Rhone (1775, t. ix., t xi.), and to the exporta-
tion of iron (1776, t. iv.), are complained of,
and a petition of the Guyenne chamber of
commerce for free trade to the East Indies is
published (1776, t. iv.).
Among the events favourable to the econom-
ists the following are worth mention :— The
correspondence of King Gustavus of Sweden
(when a youth) with Count Tessein and
Scheflfer, published by Col. St. Maurice de
St. Leu (1775, t. iv., 1776, t. ii.) ; the founda-
tion of a "Societe d'emulation" in Paris after
the model of the London "Society for encour-
aging arts and manufactures," the rules of
which are contained in 1775, t. ix. The
economic reforms introduced in Tuscany by
the Grand-duke Leopold, and enumerated in
Saggi di Agricoltura ; di un Paroco Slam-
miniatese, Florence 1775, are favourably re-
ported on. Among these the erection of a kind
of co-operative store at Florence for the sale of
all sorts of goods deserves mention ; upon the
abolition of corporations it was imitated at
Paris by the Bureau de Correspondance
Generale, March 1776 (K ^ph. 1776, t. iii.
p. 177). The publication of Ephemeriden
der Menschheit by Isaac Iselin at Basel
chronicled with enthusiasm by Baudeau.
The literary movement is represented by a^
lengthy criticism of Necker's book, Sur le
Commerce et la Legislation des Grains. It
marks the distinct contrast between social
protectionism and the spirit of individual
property ; the contrast between landed and
moneyed "capitalism." (Eclaircissemenis de-
mandis cu M. N , au nom des ProprU-
taires Fonciers et des Cultivateurs f^'an^ais
1775, t.v. 65-168, t. vii. 89-167, t. viii. 93-139,
and Bandeau's letters to M. N. on his " Eloge
de Colbert," held at the French academy in
1774, t. ix. pp. 44-106). A letter directed
against the free-trade theory of the economists
by the Count de Magnieres (t. xii.) is refuted
by M. de R (?) in 1776, t. ii. — A review
of the book of Condillac, Sur le Commerce et le
Gouvernemeni (1776, t. iv. pp. 109-130, t. v.
pp. 131-147), written by Baudeau, treats this
author as a heretic from the orthodox school.
"The true economists are easy to characterise
by one feature which everybody understands.
They recognise one master (the doctor Quesnay),
one doctrine (that contained in the Philosophic
rurale and the Analyse l^conomique), classical
text -books (the Physiocratie), and technical
terms . . . precisely like the old scholars of"
China" (p. iii.).
The Nouvelles J^pMmArides ceased in
June 1776, on the dismissal of Turgot from
the ministry (12th May 1776), after which
date the only organ of the physiocrats was the
Journal de V Agriculture, which Roubaud had
reconstituted in 1775 ; but this periodical also
came to an end in 1783. Baudeau made a
last effort to re-establish his former review,
for there are at the Bibliotheque Rationale at
Paris three volumes of Nouvelles J6ph6m4rides
economiques of 1788 (Paris, Onfroi et Royer)
extant. These contain attacks against Colbert
and Necker, historical remarks on Sully ; funda-
mental questions of economics, inquiries into
the origin of taxation among the Greeks aud
Romans, and on the influence of morals en
agriculture by the Marquis de P (?).
r
Apices— EQUALISATION or international demand 747
In 1789 appeared J^pMmerides de V Human-
ity ou bibliothdque raisonnie des sciences morales.
Tome premier (and last), aux depens de la
Societe. This is probably the last utterance of
this kind made by the Economistes, and is en-
tirely written by A. F. J. Freville. It begins
with a lengthy exposition of their doctrines (pp.
1-68), contains articles on the principles of
taxation (pp. 108-132), and their application
to the Austro-Belgian provinces (pp. 337-394);
others against Keeker's theory of the circula-
tion of riches, as enunciated in his book, De
V administrai/lon des finances en France, t. iii.
eh. xxi. (pp. 284-336). The greater part of
the volume deals, however, with political
questions ; it is filled up with polemics against
the champions of absolutism, such as Count
Windischgraetz (pp. 68-108, 133-158, 265-
284), and with observations on the convocation
of the ]itats g6neraux (pp. 159-264). It closes
with a philosophical letter on Montesquieu's
Esprit des lois (pp. 395-400). Constitutional
questions being at this time the most prominent
ones, and economic problems standing more in
the backgi-ound, this publication ceased with
its first volume. The Journal d' Economic pub -
lique, de Morale et de Politique, edited by
Roederer and Morellet appeared August 1796.
The £pMmerides thus played an important
part in the literary life of economics during
the 18th century. As an example it may be
mentioned that Lavoisier, in his introductory
remarks to his statistics De la Richesse terri-
toriale du Royaume de France, printed by order
of the national assembly in 1791, and reprinted
in 1797 in the Journal d' Economic publiqu^,
edited by Roederer, mentions Quesnay as having
reached the same conclusions as himself, and
notes the fact that Quesnay's statistics were
the occasion of Voltaire's X'^omwe auxquarante
dcus. The Ephemerides formed a scientific econ-
omic review AVTitten with a distinct practical
tendency, namely, to struggle for free trade,
free enterprise, and equal taxation ; to combat
the crushing burdens imposed by commercial
restraints, industrial monopoly, arbitrary assess-
ment, and lavish public expenditure. Being in
the exclusive possession of a " school," they pre-
served, in spite of the variety of their contents,
a systematic uniformity in method and policy.
Besides exhibiting the first example of journal-
ism made subservient to social science, they are
the richest source for the history of contemporary
economic life, and the growth of modern ideas,
not only in France but even in eastern Europe.
Their immediate influence in France was
rather short-lived, and after the outbreak of
the Revolution they became so entirely for-
gotten as to enable the tale to be spread that
they had been written in order to help
Voltaire, Servan, and Bovier to establish a
democratic revolution (Abbe Barruel, Memoires
pour servir d Vhistoire du Jacobinisme, Londres
1797, 2nd pt. pp. 210-215). The interest, how-
ever, which the JiJphdmerides excited abroad
was a far-reaching one ; and by inducing
monarchs, statesmen, and landlords to intro-
duce agricultural and financial reforms, to
alleviate feudal burdens and commercial
restraints, they benefited even the lower classes
in Sweden, Denmark, Baden, Austria, and
Tuscany. Thus they helped towards trans-
planting economic progress eastwards both in
thought and practice.
[An account of the origin of this review is given
in the Journal de V Agriculture, March 1766 ; in
the EpMmerides, 1769, t. iv., v.; in the Diction-
7iaire de I'Economie Politique, under the heading
"Ephemerides du Citoyen" ; in the Nouveau Dic-
tionnaire d' Economic Politique the information
will be found under the heading "Baudeau." See
also Lomenie, Les Mirabeait, 1879, t. ii. p. 251.
Levallois, Rousseau, ses amis et ses enneviis, 1865,
t. ii. p. 385. — G. Schelle, Du Pont de Nemours
et V ecole physiocratique, 1888, pp. 43, 99, 125, 144,
211, 408. In Germany Mauvillon complained
in 1775 of the want of a German economic review
of the value of the Ephemerides ( Untersuchungen
iiber die Natur und den Ursprung der Reich-
turner und Hirer VertJicilung, a translation of
Turgot) ; only the next year they were imitated
by Isaac Iseliu, the editor of Ephemeriden der
Menschheit oder Bibliothek der Sittenlehre und der
Politik, Leipzig, 1776-1782. ^ The only known
complete set of tlie Nouvelles Ephemerides belongs
to the Giessen University Library (pressmark B.
800), — the use of it was most liberally allowed to
the writer of this article, in order to enable him
to draw \x]) the above statement.] s. B.
(See also Baudeau, Du Pont de Nemours,
Physiocrats, Quesnay, and Turgot.)
EPICES. The French judges down to the
revolution were paid partly by salaries (gages),
and partly by the payments of suitors (epices)
The latter were originally voluntary presents in
kind, and several of the early kings tried to
limit their amount. But in the 15th century
the 4'^'ces gradually became compulsory and were
paid in money. These payments for justice
constituted a considerable indirect tax upon the
people, and gave rise to many abuses. It was
the interest of the judges to si)in out cases so
as to increase the charges upon suitors, and
thus justice became dilatory as well as expensive.
On several occasions the states-general, and
even the parliament itself, petitioned for the
increase of the judges' salaries, in order that
the Apices might be abolished or at least dimin-
ished. But the French treasury was never in
a condition to adopt this very simple remedy,
and the abuse of qnces lasted till the constituent
assembly abolished the old parliaments, and
made justice gi-atuitous.
[Adam Smith, Wealth of Nations, bk. v. eh. ii.
pt. 2.] R. L.
EQUALISATION OF INTERNATIONAL
DEMAND. The equation of international de-
mand is a particular case " of the more genera]
748 EQUALISATION OF INTERNATIONAL DEMAND— EQUALITY
law of Value (g.v.) . . . called the equation
of supply and demand," but presents some
peculiarities which almost justify Mill (Princi-
ples of FolUical Bconomy, bk. iii. ch. 18, § 4),
in describing it as "an extension" of that law.
These are : the absence of (1) a single market—
which allows the substitution of price for value
in discussing domestic trade, and (2) of the re-
gulator given by cost of production (see Intbe-
NATIONAL Trade). An analysis of the forces
tending to bring about equilibrium of supply and
demand, always important, is here essential.
On the simplest supposition — that of two
countries trading in two commodities — each
article is necessarily the price of the other, and
the equation of reciprocal demand is the evident
outcome of the bargaining on each side, carried
to the point at which no additional advantage
can be gained. When several commodities
enter into foreign trade the equation is estab-
lished in substantially the same way. Values
are so arranged that the sum of exports is
equivalent to that of imports, since, were it
otherwise, readjustment of quantities, of values,
or of both, would be necessary. In the actual
complications of foreign trade carried on be-
tween many countries the law takes a somewhat
different foi-m. " It may be concisely stated as
follows. The produce of a country exchanges
for the produce of other countries at such
values as are required, in order that the whole
of her exports may exactly pay for the whole
of her imports " (Mill, Principles, bk. iii. ch.
18, § 4). Though each country must export to
an amount equal to what it imports, its trade
with any one country may mainly or even ex-
clusively be import or export, an excess on
either side being compensated by a corresponding
deficit in the trade with other countries.
The statement of the equation of inter-
national demand has to be further modified so as
to include the effect of the various elements of
indebtedness. All debts due to a country act
like an effectual demand created by the same
value of exports. The principal heads are : (1)
interest on foreign loans or on capital invested
abroad ; (2) freightage for shipping services ;
(3) such items as (a) tribute due by foreign
states ; (ft) earnings of citizens abroad ; (c) ex-
penditure of foreigners travelling in the country.
Accordingly, the final result is that *Hhe state
of international demand which results in com-
mercial equilibrium is realised when the recipro-
cal demand of trading countries produces such
a relation of imports and exports amongst
them as enables each country, by means of her
exports, to discharge all her foreign liabilities "
(Cairnes, Leading Principles, bk. iii. ch. 18, §
5). In the most complicated as in the simplest
case, the force producing equilibrium is the
action of self-interest, causing the supply of
commodities for exchange at such terms as
will afford the maximum advantage to the
trading countries (see Giffen, Essays in Fin-
ance).
The mechanism of Price {q.v.) enables the
complex adjustments of value which are requisite
to be easily carried out (see International
Trade).
As to the difficult question whether the
equation of international demand can be consci-
ously altered to the advantage of one of the
parties, see Mill, Principles, v. ch. iv. § 6 ;
Cournot, Principes Mathdmatiques de la TJieorie
des RicTiesses ; TMorie des Richesses, bk. iii. ch.
iv. ; Sidgwick, bk. iii. ch. v., who maintain
that it can ; also Torrens, the Budget. See
contra, Jevons, Theory, pp. 157, 158.
[See references under International Trade and
International Value, more especially those to
Mill, Cairnes, and Mangoldt.] c. f. b.
EQUALITY. The claim for equality may
mean in politics (1) simply a claim for just
and impartial administration of the laws; or
(2) a claim that the laws themselves should not
favour one class, still less one individual, at the
expense of another ; or (3) a claim for equal
division of the comforts and discomforts of life.
In the economic as distinguished from political
doctrine, the claim of equality appears as the
basis of the theory of free competition, and
takes a form not precisely identical with any
one of the three described. Economic reasoning,
so far as it is quantitative, must assume a simi-
larity of units. There might be a "free com-
petition" within certain classes of the com-
munity only ; and thus only the fiLrst kind of
equality might be secured. An economic theory
of the probable effects of such a competition
would be perfectly possible. The most striking
modem instance is perhaps the industrial system
of the southern states of America before the
emancipation of the slaves. "Where the laws
were clearly defined and fairly carried out, the
task of the deductive economist would be com-
paratively easy. He would need indeed to
postulate that they were so, before he could
draw his theoretical conclusions ; and he would
then be postulating equality in the first sense,
impartial administration. There might also be
a state of things in which legislation was pro-
fessedly indifferent to the privileges of particular
classes, and all men were left free so far as legal
hindrances were concerned, to seek their for-
tunes in the same ways. Economic theory
would assume in this case that there was equality
not only in the first sense, but in the second ;
and this has been perhaps the commonest as-
sumption of modem economists. It was made
by Adam Smith with full consciousness of its
Utopian character ; indeed he could not conceive
the possibility of so close an approach to it as
has now been made by free-trading England.
The fuU attainment of it is, however, impossible
in a community of human beings, so long as
they are divided by physical, social, and other
EQUATION OF SUPPLY AND DEMAND— EQUITABLE MORTGAGE 749
causes, into classes respectively weaker and
stronger. The effort of legislation has been to
redress such inequality by means of special
protection and assistance. The result, though
for every other reason desirable, is unfavourable
to economic theory, so far as it makes the
assumption of legal equality, in the second as
well as the first sense, farther removed from
the reality. It is no doubt possible to conceive
the patronage of the laws as simply an attempt
to secure to every one that equality of op'por-
tunities, of which the reinforcement by the laws
of the inequaUties of wealth would deprive the
poorer members of society. From this point
of view an economic theory of free competition
could be worked out for competing citizens,
supposed equally strong and fit for the race for
wealth. But the inequalities left out seem
too great for the equality assumed. Even if
we neglected other causes of difference, oppor-
tunities would never be perfectly equal till
human beings were physically and intellectually
identical one with another.
On the other hand the effort after an equality
of opportunities seems to cany society a step
nearer perfection than the effort after justice
and legal equality in the senses described. The
opportunities may be conceived to be not of
making money but of developing the faculties
and doing the best work for which a man has
the capacities. In all the noblest of the
founders of socialistic and communistic schemes,
such as aimed at equality in the distribution
of wealth, equality of opportunities for the
development of human individuality has been
the real aim, more or less clearly understood.
[See also Aristocracy, Communism, Taxa-
tion (equality of burdens).]
[Sir Jas. Fitzjames Stephen, Liberty, Equality,
Fraternity, eh. v. "Equality" (1873). — Bedolliere
(ifimile), in Maurice Block's Dictionnaire de la
politique, art. "Ilgalite." — A. Wagner, Lehrhuch;
Gmndlegtong (1879), 2nd part, §§ 220 to 223, pp.
418-426. — F. Y. Edgeworth, Mathematical Psycliics
(1881), pp. 129, seq. — J. S. Mackenzie, Social
Philosophy (1890), pp. 249, seq.'] j. b.
EQUATION OF SUPPLY AND DEMA.ND.
(See Demand.)
EQUILIBRIUM is discerned by Jevons
{Theory of Political Economy, ch. iv.) to be a
cardinal conception in the abstract science
which he elsewhere calls the Mechanics of
Industry {q.v.). So Professor Marshall, indi-
cating in the preface to his Principles of Eco-
nomics the leading ideas by which he was
inspired, says, "the demand for a thing is a
continuous function, of which the 'marginal'
increment is in stable equilibrium balanced
against the corresponding increment of its cost
of production." Professor Marshall employs
the term equilibrium amount as the amount of
any commodity produced in a unit of time
when the demand for and supply of that com-
modity are in equilibrium, and when there is
therefore no tendency in the quantity produced
in a particular time to increase or diminish.
The term equilibrium price is similarly used to
denote the price of the equilibrium amount in
the same circumstances. M. G. D.
EQUITABLE ASSETS. Assets that could
be made available for the payment of debts
only through a decree or order of a court of
equity. Such assets were always treated as a
trust fund, and were therefore divided amongst
creditors pari passu without any regard to the
priority of one debt over another. The chief
equitable assets are the proceeds arising from the
sale of lands devised in trust to pay or charged
with the payment of debts.
[Williams on Executors and Administrators, -pt.
iv. bk. i. ch. i., London, 1879. — The Administration
of Assets, by A. S. Eddis, London, 1880.]
J, E. C. M.
EQUITABLE ESTATE. An estate in land
that formerly was recognised in a court of
equity only. The principal equitable estates
are the estate taken by a person entitled to the
benefit of land given in trust, equities of redemp-
tion (see Equity of Redemption), and equitable
charges.
{^Principles of Equity ^ by E. H. T. Snell, London,
1892.] J. E. c. M.
EQUITABLE EXECUTION. The method
by which a judgment creditor obtains payment
by the appointment of a receiver of the rents
and profits of the lands of the debtor. At
common law certain forms of property, such as
the interest of a mortgagor in the mortgaged
premises, or the right to an unascertained sum
of money, could not be reached by any ordinary
■writ. When the creditor had exhausted every
method of obtaining payment he could resort
to the Court of Chancery, who would apj^oint a
receiver. Now the High Court of Justice can
appoint a receiver in all cases where it is just
and convenient that such appointment should
be made.
\_The Law of Execution, by T. K. Anderson,
London, 1889.] J. e. c. m.
EQUITABLE MORTGAGE. A contract for
a mortgage that previous to the Judicature
Acts could be enforced only in a court of
equity. The most usual case in which it arises
is where, a person deposits the title deeds of
property with a creditor as security for a debt.
But a mortgage is also "equitable" if the
subject matter is trust or equitable property,
such as an equity of redemption, or where there
is a written agreement to make a mortgage.
The mortgagee in every case may either call on
the mortgagor to make a legal mortgage or may
take proceedings to enforce a foreclosure or a
sale,
\_The Principles of Equity, by E. H. T. Sneli,
London, 1892.] j. e. c. m.
750
EQUITABLE WASTE— EQUITY
EQUITABLE WASTE. Waste in the nature
of acts of spoliation, that a court will restrain
a tenant for life from committing, though his
estate was granted to him with liberty to com-
mit waste, such as pulling down the family
mansion or cutting down ornamental timber.
[Goodeve, Law of Real Property, London,
189L] ^- ^ c- *^-
EQUITY is the name applied to a number
of legal rules, which formerly were administered
by the court of chancery. The chancellor
was originally the king's secretary, and as such
he had to advise the king in " matters of grace
and favour " ; viz. in matters in which the
king's intercession was invoked for the sake of
mitigating the strict rules of the common law.
**When early in the reign of Edward III.
the chancellor ceased to be a part of the king's
personal retinue, and to follow the court, his
tribunal acquired a more distinct and sub-
stantive character . . . ; petitions for grace
and favour began to be addressed primarily to
him, instead of being simply referred to him
by the king, or passed on through his hands.
In the twenty-second year of that king such
transactions were recognised as the proper pro-
vince of the chancellor, and from that time
his separate and independent equitable jurisdic-
tion began to grow into the possession of that
powerful and complicated machinery which
belongs to later history" (Stubbs's Const.
History, ii. 269). One of the most important
stages in that growth was reached when, in the
reign of Richard II., the "writ of subpoena"
was introduced, which enabled the chancellor
to enforce obedience to his decrees by the threat
of imprisonment. One of the most important
matters which came under the chancellor's
jm-isdiction was the protection of the rights of
persons possessed of "uses" in land. For
several reasons it had become convenient to
sever the legal ownership of land from the bene-
ficial ownership, and with that object it became
customary on a transfer of ownership to enfeofi"
one person " to the use " of another. The first-
named person was called the "feofiee to the
use," and he was the only person whom the
ordinary courts recognised ; but as he was in
duty and conscience bound to allow the rights
of beneficial ownership to the second-named
person, known by the technical name of
"cestui que use," the chancellor in the exer-
cise of his equitable jurisdiction compelled
him to do so, if he wished to take advantage
of his formal right. The practice in matters
of this nature developed into a regular system
called "equity," to distinguish it from the
"common law" administered by the other
courts. That system was characterised — (1)
by the recognition of rights which the other
courts refused to enforce (so-called " equitable
riejhts"); (2) by legal doctrines differing in
substance from the doctrines of common law :
(3) by a special procedure ; (4) by special
kinds of relief.
(1) The most conspicuous among equitable
rights are the rights derived from trusts. Trusts
are the modern successors of "uses," but are
used on a much larger scale, and also in the
case of personal property ; the most familiar
instances being the trusts created by wills and
settlements, by which the control of certain
land or certain funds is given to one or more
persons for the benefit of another person or
other persons. Another instance of an equit-
able right is the right of the mortgagor to
redeem the mortgaged property, the legal right
to which is vested in the mortgagee.
(2) Amongst doctrines specially belonging
to the sphere of equity may be mentioned the
rule that a debt may be assigned ; that, in the
absence of an express stipulation or necessary
implication, time is not considered as of the
essence of a contract, that penalties named in
contracts cannot be enforced unless they par-
take of the nature of liquidated damages, etc.
(3) The administration of trusts and of the
estates of deceased persons involves protracted
inquiries and the taking of accounts, etc. ; for
this purpose a special procedure and a special
machinery has been developed in the courts of
equity, which were the only courts which had to
deal with matters of this nature.
(4) Among the special kinds of relief which
could be obtained with the assistance of the
courts of equity, the right to claim specific
performance of contracts for the sale of land,
and the right to claim injunctions, i.e. orders
restraining the opposite party from doing
certain acts injuring the rights of the plaintift',
are the most important. The courts of equity,
in granting relief of this kind, were supplying
a material defect in the administration of justice,
as in the courts of common law ; the only
remedy in the case of breach of contract or
injurious acts consisted in pecuniary damages,
which in many cases did not adequately com-
pensate the injured party. The power of the
courts of equity to enforce their decrees by the
imprisonment of disobedient parties materially
helped them in the exercise of this jurisdiction.
The Judicature Act of 1873 has merged the
equity courts and the courts of common law
into one high court, and the rules of equity
are now administered in all courts ; but as they
are derived from a different source from the
common law rules, and have always been treated
as a separate system, the distinction is still
kept up, though it has no longer any practical
meaning. The matters which are specially
fitted for the procedure of the chancery court,
have, however, been assigned to a special
chancery division which is organised in a
manner appropriate to the proceedings required
with regard to them.
[Spence, EquUaJble Jurisdiction.— B.. A. Smith,
EQUITY OF EEDEMPTION— EREOK, LAW OF
51
Principles of Eqtiity. For the place of equity
in systems of law generally, and its importance
in the evolution of society, see Maine, Ancient
Law.] , E. s.
EQUITY OF REDEMPTION. The right
thart a mortgagor has to recover, on payment of
principal, interest, and costs, a mortgaged estate
which has under the mortgage deed become the
property of the mortgagee owing to the failure
of the mortgagor to pay the principal and
interest at the time agreed on. The right
resembles real estate inasmuch as it will
descend to the mortgagor's heirs. It is alien-
able, and may itself be mortgaged.
[The Principles of Equity, by E. H. T. Snell,
London, 1892.] j. e, C. m.
EQUITY TO A SETTLEMENT. When a
husband had to resort to a court of equity in
order to reduce into possession property of his
wife, the court compelled him to make a settle-
ment of a portion, usually one half, of such pro-
perty on the wife and children.
[The Principles of Equity, by E. H. T. Snell,
London, 1892.] j. e. c. m.
ERROR EXCEPTED. These words are fre-
quently inserted at the end of a statement of
account, and are intended to show that the
accounting party wishes to reserve the right to
make further claims in case any error should
subsequently be discovered in the account.
E. s.
ERROR, Law of. When an average of a
set of statistics is taken, the deviation of any
one of them from the average is sometimes
called an error ; and the arrangement of the
group about its mean, a law of error. A parti-
cular arrangement, which under certain fre-
quently-realised conditions arises, is designated
as the law of error. According to this law the
figure which is likely to occur most frequently
is the one which forms the average ; the others
are grouped symmetrically above and below the
average ; becoming less frequent as they are
more distant from that central magnitude. In
the exact language of symbols, if x^, x^, etc., are
the quantities averaged, and X the average, the
number of quantities comprised between x and
a neighbouring value a; + Ace is approximately =
1 (X-x)2
^ ^^ Zr^ ^ ^^ 5 where w and e are the well-
known constants 3-1415 . . ., 2-718 . . . •
and c is a constant proper to the group under
consideration. This arrangement is represented
^ _(X-^)2
by the curve Y=— ^-e c2 ; the number
VTrc
of observations in the neighbourhood of any
point in the axis of x being proportioned to the
ordinate at that point ; and the number of
observations comprised between two values of
X being equal to the area intercepted by the'
ordinates at those two points, the curve, and
the axis x. Two illustrations of this curve are
given in the annexed diagrams. The curve is
spread out, as in Fig. 1, when the constant c is
POP Q
large ; it is gathered in, as in Fig. 2, when the
Fig. 2.
Q'
POP
Q
constant c is small. The constant c being ascer-
tained for any group of statistics, we are able to
predict what proportion of the gi'oup will pro-
bably be comprised between limits defined in
terms of that constant. Thus half of the group
is likely to be comprised between the limits
X--4769 . . . c and X+-4769 . . . c ; or,
in other words, it is as likely as not that an
observation taken at random will be distant
from the average X by an interval gi-eater than
•4769 . . . c ; which multiple of c is accord-
ingly called the pt^'ohahle error. Again the
greater part of the group is comprised between
the limits X - 2c, X + 2c ; the odds are more
than 200 to 1 against any observation being at
a distance greater than 2c from the average.
The odds are 50,000 to 1 against the distance
of any observation from the average being
greater than 3c. The points P and Q (P' and Q')
in the figures are intended to represent the
" probable " and what may be called the impro-
hahle error (2c or more).
The condition under which the law of error
is fulfilled is that each of the things averaged
is dependent in the same way upon (the same
function of) a great number of independently
variable elements. For example add together
ten or more digits obtained thus : the first is the
first decimal place in any constant, e.g. v, the
second addendum is the first digit in any other
constant, e.g. e, and the remaining eight con-
stituents of the sum are the^rs^ digits in almost
any other unconnected constants. Form another
762
ERROR, LAW OF
Bum of ten digits by taking the second decimal
place in each of the ten constants ; and so on.
The set of sums thus formed will group them-
selves according to the law of error ; the average
being 45, and the constant c being \/165 = 13
nearly. About half the group will be found be-
tween 45-6 {i.e. 39) and 45 + 6 {i.e. 51) since
.477 VieB = 6 nearly. A very small proportion
of the group— rless than a two-hundredth part--
raay be expected to occur outside the limits
45 ±26- (26 = 2 X Vl65 nearly). If the number
of elements entering into each of the figures
averaged had been greater than ten, e.g. twenty,
the "probable" and the "improbable" error
would have been greater absolutely, namely 10
and 36 respectively ; but less relatively to the
average, now 90. Similar consequences would
follow if, instead of a simple sum, we had em-
ployed almost any fwiction.
There is reason to believe that the condition
which has been indicated is frequently fulfilled ;
and the law of error has been observed to pre-
vail in extensive classes of phenomena, which
may thus be summarised : —
1. Repeated observations of one and the same
physical quantity.
2. Shots fired at the same object.
3. A series of numbers each of which is ob-
tained by taking at random a batch of say n
balls out of a bag containing white and black
balls mixed up in a certain proportion, and
noting the number of whites in each batch of n
balls ; or a series obtained by tossing coins or
dies and noting the number of heads or aces ;
and similar series.
4. Measurements of the organs of numerous
specimens of a natiu-al species.
5. Statistics of social phenomena which do
not present a progressive character, e.g. the
number of births, deaths, or marriages or
the rates of the same, or the ratios between
the male and female rates ; observed at places
or times not materially distant from each
other.
Illustrations of the third and fifth classes
are given in the accompanying tables, the
materials of which have been taken from
Professor Westergaard's Theorie der Statistik.
In Table I., column 1, was obtained from 100
batches of balls ; each batch numbering 100
balls, which were taken at random from a bag
containing black and white balls in equal pro-
portions ; the number of white balls in each
batch having been noted, the number of these
numbers comprised between two limits, which
are defined by a multiple of the constant c,
forms an entry in column 2. The correspond-
ing limits are given in column 1. Thus twenty-
five of the observations occurred between the
limits 50 -.3-7^ and
V2
50 + .3-7:^,
V2
or 47 and
since the value of c is here V2 x 10 ; 40
of the errors occurred between 50 - '^—p^ and
V2
50 + •5—7^ or 45 and 55 ; and so on. Column 3
V2,
similarly registers the arrangement of the statis-
tics obtained from 750 batches of lottery tickets
— each batch numbering 100 — by noting the
number of prizes in each batch (the average
being 16, and the constant c being 5 nearly).
Table I.
Table showing the correspondence between fact
and theory in the arrangement of the num-
bers of white balls in batches of 100 balls
each drawn at random from a bag ; and of
prizes in batches of 100 tickets drawn at a
lottery.^
Limits above
and below the
average.
Percentage of errors within limits.
Observed,
Calculated.
Balls drawn
from bag.
Tickets
drawn at
lotteiy.
1
2
3
4
•^4
25
23
23
•5 ,,
40
36
36 , '
49 \
•7 „
50
48
1-1 ,,
70
67
69
1-5 „
85
83
82 '
2-1 „
95
95
93 1
These results of observation are to be com-
pared with the predictions of theory which are
contained in column 4.
Table II.
Table showing the correspondence between fact
and theory in the proportion of male to all
births for nineteen years in Italy. '-^
Limits above
and below
the average.
Number of errors within limits.
Observed.
Calculated.
1
2
3
•^4
2
5
•5 „
7
7
•7 „
9
9
1-1 M
12
12
1-5 „
16
U
2-1 „
17
16
1 Westergaard, op. cit. p. 67.
2 See Westergaard, op. cit. p, 39. The first column
differs from his only in notation ; the second column is
the same as his ; the third column is calculated from th'"
second column of his table at p. 67.
ERROR, LAW OF— ESCHEAT
753
In Table II., the first column gives limits
defined by the constant c as before ; the second
column gives the arrangement of errors ob-
tained' by comparing the proportion of male
births to all births, male and female, in Italy
for each of nineteen years with the average pro-
portion for the whole period ; the third column
gives the theoretical arrangement.
The applications of the law of error with
which we are here concerned relate partly (I.)
to practice, and partly (II.) to the investigation
of causes.
(I.) It is useful, when employing an average
obtained from statistics, e.g. a death-rate, or an
index-number, to have the means of estimating
the extent to which the figui'e in the case with
which we are dealing is likely to differ from the
average obtained in past experience. It is use-
less to calculate the average to a number of
decimal places not warranted by the " probable
en'or " to which the figure is liable.
(II.) Under the second head two cases may be
distinguished : (a) where the analogy of simple
games of chance holds good ; the constant c
being that which would be obtained if the
statistics were of the sort which forms our third
class of phenomena above ; and (b) where the
constant is not such.
(a) In the first case we have the advantage
of knowing that the given group cannot be
broken up into two, or more, with widely dif-
ferent averages ; that the analysis which is a
principal object of the scientific statistician has
been already pushed almost up to its limit.
Our statistics cannot be like batches of balls
taken from bags in which the proportion of
white to black is very different ; but rather are
analogous to the successive numbers of white
balls occuiTing in batches of the same size taken
at random from the same bag. It would appear
hopeless therefore to trace by ordinary induction
the causation of any particular event of this
character. It is only crazy gamblers who pre-
tend to predict the "runs" in games of pure
chance. But we are not precluded from apply-
ing the law of error to detect delicate differences,
such as may exist between a perfect and a
slightly-loaded coin. Take for example the
observation that the percentage of male com-
pared with female births for more than a
vcnWxon plural births (of twins or triplets) in
Prussia during a certain period of years was
104-447 (males to 100 females) ; whereas the
corresponding ratio for all births (single as well
as plural) was 106-305 ; the observation on
which this average is based numbering several
millions. Given these numbers, and knowing
as we do that the phenomenon belongs to class
(a), we are able to determine the constant c ;
which proves to be nearly -3. Thus the dif-
ference between the two averages compared, viz.
1-858, is about six times the constant, and
accordingly (see above par. 1) the odds against
VOL. I.
the observed difference in the averages being
due to accident and not to a real cause which
may be expected to continue acting — are many
times more than 50,000 to 1 (Duesing). "We
have obtained, at a stroke, a degree of evidence
in favour of a law which otherwise could only
be obtained by a laborious analysis of the
returns. By parity of reasoning it is found
that in times a.nd places where the absolute
number of births is large the proportion of
males is small (ibid.).
(b) This summary method may be employed
also in the second case (Avhere the analogy with
games of chance does not hold good) ; but not
in such a clear light of foreknowledge as to the
character of the causes under investigation.
Besides the exact and direct applications of
the law of error, it also affords what may be
called "regulative ideas" to the statistician;
supplying the rationale of many received
maxims : that ceteris paribus an average is more
worth the greater the number, and the less the
divergence, of the returns averaged ; that a few
accurate returns may be better than many loose
ones.
[For a general exposition, at once simple and accu-
rate, of the law of error, see Venn, Logic of Chance,
third ed. 1888, chaps, xviii. and xix. See also
Jevons, Principles of Science, chap. xvii. — Bertil-
lon, art. " Moy euBQ," Dictionnaire -EncyclopMique
des Sciences Mcdicales. — Quetelet, Physique Sociale.
For the conditions under which the fulfilment of
the law may be expected, Glaisher, Memoirs of the
Astronomical Society, vol. xl. p. 104. — Galton,
Philosophical Magazine, 1875, "Statistics by
inter-comparison." — Edgewoi'th, liic?. 1892, "The
Law of Error." — For the a posteriori proof, that the
law is fulfilled, see Galton, Natural Inheritance. —
Westergaard, Grundzuge der Theorie der Statistik,
chap. iii. — Edgeworth, ' * Empirical proof of thelaw
of Error," Phil. Mag., 1887. — For the application
of the law to practice, Dormoy, Theorie niathima-
tique des assurances sur la vie. For the application
of the law to induction, (a) where the analogy of
games of chance holds good, Westergaard, op. cit.
— Lexis, Massenerscheinungen. — Duesing, Das
Geschlechtsverhdltniss in Preussen ; (6) in general,
Edgeworth, Journal of the Statistical Society.
Jubilee Volume, 1885, "Methods of Statistics,"
ibid. December 1885, " Methods of Determining
Rates. " Many of these writers throw light on other
parts of the subject besides those with special
reference to which they have been cited. Several
otherauthors might have been cited. Merriman has
published an immense list of writers on the cognate
subject of the Method of Least Squares, many of
whom have touched on the law of error, and some
on its applications to social phenomena (see Pro-
babilities ; Statistics).] f. y. e.
ESCHEAT (historical) was a feudal term in-
troduced by the Normans into England, and
applied to the reversion of land to the lord.
The ordinary cause of such reversion was the
failure of heirs, when the whole estate passed
into the hands of the lord. If the heir was a
3 c
'84
ESCHEAT— ESTATE
minor, the phrase was escceta cum Tmrede, when
the necessities of the heir and other children were
paid for out of the estate and the surplus only
went to the lord, until the heir, on reaching
his majority, paid a relief and obtained seisin.
Escheat also took place in cases of trea^n or
felony. If the criminal was a tenant-in-chief,
the whole of his property reverted to the crown ;
but if he was a sub-tenant, his movables only
fell to the crown, while the real estate passed
to the immediate lord.
[Dialogusde Scaccario, ii. x.] b. l.
ESCHEAT (MODERN LAW), takes place
where a person dies intestate and without an heir.
The lands of such a person go to the feuda,l lord,
but, as in the case of freehold land the right of
mesne lords can in our days be established but
rarely, such land generally goes to the sovereign
as lord paramount. Copyhold land goes to the
lord of the manor, and § 4 of the Copyhold Act
provides that the right of escheat is to continue
after enfranchisement ; enfranchised copyhold
land, though otherwise of the nature of freehold
land, does not therefore escheat to the crown,
but goes to a private person. Formerly the
lands of felons were subject to the right of
escheat, but an act passed in 1870 has repealed
this rule. On the other hand the Intestate
Estates Act of 1884 has made certain rights as
to real property subject to escheat, which were
not so subject before. The same act has
enabled the crown to waive its right in certain
cases. The procedure which takes place to
inquire as to the right of the crown has been
simplified by the Escheat (Procedure) Act of
1887.
The right of the state to acquire the property
of a person dying without relations or a will
exists in most countries independently of feudal
rules, and seems justified by reason and con-
venience.
[Bentham, J. S. Mill, Godin, and other reformers,
have proposed to narrow the rights of intestate
succession {i.e. to extend escheat) in order to
correct, to some extent, the unequal distribution
of wealth.] E. s.
ESCUDO. The name of the Spanish half
dollar.
Gold and Silver Coins as follows:
MeUl.
Denomination
of Coin.
Fine-
ness.
Weight.
Value.
In gold
916-6
fine at
£3:l7:10J
an ounce.
In gold
francs,
900
fine.
add
10 Escudos (or
Doubloon)
4 Escudos
2 Escudos (or
Dollar)
900
900
900
grains.
129-44
51-78
25-89
£ s. d.
1 0 7i
0 8 3
0 4 li
francs.
26-0
10-4
5-2
Metal.
Denomination
of Coin.
Fine-
ness.
Weight.
Value.
In silver
925 fine
at 5/6
an oz.
In sil- 1
ver
francs,
900
fine.
Silver
Bscudo (or i
Duro or
Dollar)
900
grains.
200-30
s. d.
2 2|
francs.
2-6
These coins have not been struck for circula-
tion in Spain since 1868, when the system of
pesetas (francs) was introduced-. Similar coins,
including a doubloon of eight escudos, are cur-
rent in the Philippine Islands (see Doubloon).
F. E. A.
ESCUSADO, the name of the portion of
ecclesiastical tithes made over in 1567 by the
Pope to the crown of Spain. e. ca.
ESSART, ExART, sometimes also called
Assart. A mediaeval term applied to a portion
of forest land cleared and brought into cultiva-
tion. To make essarts was technically a breach
of the forest law, punishable by fine. These
fines, with the yearly rents levied on the
essarted lands, which the maker of the essart
was usually allowed to keep under cultivation,
formed a considerable item in the revenues of
the royal and other lords of forests in mediaeval
England. These rents would appear to have
been fixed at the highest rate that could be
maintained, a rate which will be found to be
often several times as great as that paid by free
or even customary tenants for other land in
the same neighbourhood. In spite of these
high rates, however, fresh essarts were made
almost every year in England. The forest of
Wirrall in Cheshire, for instance, was entirely
under cultivation before the death of the Black
Prince, who, in his capacity of Earl of Chester,
by a formal charter of disafforestment, put his
seal to the work of reclamation. The word
essart has been variously derived from the old
French assortir, to make smooth, or one of the
low Latin terms, exertum, rooted up, sarrire,
to weed, or exarare, to plough up.
[Manwood, Forest Law, London, 1596, etc.—
Ducange, Glossarium Media! et Infimce Latini-
tatis, ed. nova a L. Favre, Paris, 1884. — Forest
accounts among the ancient records of the ex-
chequer in the Public Eecord Office.] a. h.
ESTATE. A so-called owner of land has,
according to English law, no absolute right of
ownership ; all that he has is an interest varying
in extent and duration, and known in technical
language as an "estate" in the land. The
largest estate known to the law is an ** estate
in fee " (fee simple), which gives the owner as
complete rights of enjoyment and alienation
as the nature of the property will admit ; an
estate tail (see Entail), being convertible into
an estate in fee — by the tenant alone, if in
ESTATE DUTY— ESTIMO
755
I
possession, and otherwise by him jointly with
the tenant for life — confers rights nearly as
complete. An estate for the life of the tenant,
or for the life or lives of another person or
other persons, gives the tenant the privileges
of ownership during his life or during the life
or lives of such other person or persons ; but
a tenant for life — unless the estate is conferred
upon him "without impeachment of waste" —
is not allowed to pull down buildings, cut
timber, or open mines. An estate for the life
of another person is called an *' estate pur autre
vie." Estates in fee or in tail, and estates for
life, are called "freehold" estates, estates for
a definite number of years, however large the
number may be, are "leasehold," also called
"less than freehold" (see Leasehold Piio-
perty). The word estate is also used as a com-
prehensive name for the assets of a bankrupt or
of a deceased person. In the latter case a
distinction is made between freehold land and
houses (real estate) and other property (personal
estate). E. S.
ESTATE DUTY. See Death Duties.
ESTCOURT, Thomas (end of 18th and early
1 9th century). Thomas Estcourt sat in parlia-
ment as member for Cricklade from 1784 to
1806. In 1804 he published An account of an
Effort to Better the Condition of the Poor in a
Country Village {Long Newton) and some
Regulations suggested by which the same might
be extended to other parishes of a similar descrip-
tion. The work was printed by the board of
agriculture. Estcourt states that in 1800
arrangements were made for letting to any
cottager a small quantity of land at a rent of
£1 : 12s. an acre, the land to be forfeited if
not properly cultivated, or on the receipt of
parish relief other than medical. He states
that the offer was largely accepted, and that
the scheme greatly decreased the poor-rate in
the village. c. g. c.
ESTERNO, Phil., Comte d' (1805-1883),
born at Dijon, died at Paris. Esterno's life
was mainly devoted to agriculture and to
political economy. The first work of his
which caused him to be known as an economist
was entitled, Des banques d^partementales en
France, 1 vol. in 8vo, 1838. In this Esterno
argued in favour of departmental banks, to be
established in a good many towns, and at Dijon
in particular. This was at a time when the
government, urged on by a spirit of centralisa-
tion, were hostile to institutions of this descrip-
tion
In 1840 Esterno took part in a discussion
instituted by the Academy of Moral and Politi-
cal Sciences, on the signs and causes of poverty
in different countries. Buret (q.v.) won the
prize. Esterno's paper was rejected because,
according to the report, "it was not an econo-
mic essay which was wanted." This work,
printed in 1842, under the title of La mishre ;
de ses causes, de ses effets, in 8vo, reflected the
ideas of Malthus, while Buret, on the other
hand, had allowed sentiment to overpower
reason.
During the same year (1842) Esterno assisted
as secretary, in conjunction with P. Rossi, who
was president, in founding at Paris a society
for promoting political economy (Society d'econo-
mie politique), an association which only lasted
a few months, but was a forerunner of the
society now known under the same name.
In 1867-68 Esterno published another work,
Des priviUgies de I'ancien regime en France et
des 2orivilegies du nouveau, 2 vols, in 8vo. In
this work the author argued, in a brisk and
original style, in favour of agriculture, which
was put too much on one side by the privileged
persons under the new regime, the moneyed
classes, as distinguished from the landed pro-
prietors, notwithstanding the untrustworthy
titles of some of their institutions, Le Credit
agricole, for example. Before this date (1867-
1868), and later on, Esterno strove, on behalf of
the agricultural interest, against those artificial
monopolies which, even to this day, have
arrested the development of agriculture in
France. He thus became deeply interested
in works of irrigation, and it is to him and to
his energy, though he never allowed his name
to appear, that the adoption of the regulations
of 29th April 1845 and 11th July 1847 {lois
d'Angeville) is due.
Esterno's mental activity led him to occupy
himself with other subjects with which we
are not concerned here. His intelligence, his
energy, and his scientific devotion enabled him
to render them interesting to others. He was
a vice-president of the second SociitS d' economic
politique. A. c. f.
ESTIMO. The revenue of Florence in the
flourishing days of the republic was mainly
derived from indirect taxes, which produced
some 300,000 florins a year. But in times of
war, which became frequent in the 14th century,
this income was insufficient, and it was supple-
mented either by direct taxes or by compulsory
loans (prestanze). Both taxes and loans were
supposed to be based upon an estimo, or govern-
ment valuation of property, and hence the term
estimo comes to be applied to the exactions
themselves. The earliest estimo was formed in
1288, and seems to have referred only to real
property. Another assessment took place in
1327, when a foreign judge was appointed to
determine the wealth of each individual by the
secret testimony of seven of his neighbours.
But the attempt to provide a regular basis for
direct taxation proved a failure in the 14th
century. An estimo soon became obsolete as
property rapidly changed hands, and a charge
upon real property alone pressed heavily upon
the noble families and the peasants of the
country, while the wealthy burghers escaped.
756
ESTOPPEL— EVANS
For the most part the forced loans were arbi-
trarily assessed by the existing government, and
one great reason for the Florentine greed for
office, which introduced the system of lot, was
the desire to escape taxation. When the
ClOMPi {q.v.) rose in revolt in 1378, ong of
their demands was that no loan should be
levied without an estimo, but their subsequent
defeat prevented any change being made. The
discontent excited by arbitrary and ^nfair
assessment forced the government in 1427 to
introduce the Catasto {q.v.), which was only a
new name for a thorough estiTno of real and
personal property including income. But this
great reform was abandoned by Cosimo de Medici
in 1441, when the old arbitrary assessments,
formerly maintained to favour the wealthy
burghers, were revived to relieve and conciliate
the poorer classes. The Medici from this time
introduced the principle of progressive taxation,
and, as Guicciardini says, used the taxes instead
of the dagger to ruin their opponents.
[Canestrini, La Sdenza e VArte di Stato desunta
dagli A tti offidaZi della Repubblica Fiorentina e dei
Medici (only one volume of this great work was
published), — Napier, Florentine History, vol. iii.
p. 117. — Perrens, Histoire de Florence.'] E. L.
ESTOPPEL. A term used in connection
with the rule of law, according to which a
person who, by statements or conduct, causes
another person to believe in the truth of a
certain matter of fact, with the intention of
inducing him to act upon it, cannot, in any
dispute concerning the matter in question, be
allowed to assert that the state of things which
he represented to be in existence, did not, in
fact, exist ; thus, for instance, a person, by
accepting a bill of exchange, induces the holders
to assume that the drawer was of full age, and
otherwise capable to draw a bill, and he is
therefore "estopped" from denying the drawer's
capacity (Bill of Exchange Act, § 54 [2]).
Estoppel by conduct is in certain cases also
called "estoppel by negligence," e.g. if a
person by the careless filling in of a cheque
enables a fraudulent holder to alter the amount,
he is estopped from denying that he drew
the cheque for the full amount, as by his
negligence he has allowed the banker to think
that he has done so. Estoppel by state-
ment or conduct is in the older law books
called "estoppel by matter in pais," and
distinguished from "estoppel by deed" and
"estoppel by record." "Estoppel by deed"
prevents a party to a deed from denying any
fact mentioned in the same by way of recital
or otherwise. " Estoppel by record " precludes
a party to an action, or his successor in title,
from denying any fact established by the
decision in the action. The fullest statement
on the law of estoppel is contained in the notes
to the Duchess of Kingston's case in Smith's
Leading Cases, vol. ii. E. s.
ESTOVERS (derived from the same root as
the old French word estovoir = to be necessary),
also called "Bote," is the right of a tenant for
life, unless restrained by agreement, to take
the necessary wood from the estate for the use
or furniture of a house or farm. "Common
of Estovers " is the right of a commoner to cut
wood (see Commons). e. s.
l&TATS GENfiRAUX, The, or States General
of France, were, under the old monarchy, the
national representative assembly of the kingdom,
composed of elected members of the three
orders, the noblesse, the clergy, and the third
order or state (Tiers J^tat or bourgeoisie), but
no fixed rule was ever followed for their election
and assembling. Their first authentic meeting
was summoned, 1302, by King Philippe le Bel,
to assist him in his struggle against Pope
Bonifacius VIIL ; after this date they were
convoked at irregular and often very protracted
intervals, whenever the royal finances were in
a state of extreme distress. In 1357, during
the captivity of King John in England, they
vainly tried to give a constitution to the
kingdom. The Mats OdnArai(jx, which must
not be confounded with the Assemblies des
Notables, were at all times steady and consistent
upholders of the theory that no tax could be
valid without their assent ; the monarchy never
contested this doctrine, but never followed it
in practice. The ^tats GenSraiox of 1614 were
the last before the revolution of 1789.
[Toussaint Quinet, Recueil des ^tats tenus en
France, 1651, 1 vol. — Paulin, Qrandes chroniques
de France (vol. vi. 1350-1382, Paris, 1838).— Jean
Masselin, Journal des J^tats G^neraux de 14^4
(in Latin, translated into French by Bernier in
1835). — Rathery, Histoire des Mats Gin&raux en
France (1845). — Bouillee, Histoire compUte des
Mats Generaux et autres assemblees reprisentatives '
de 1302 d 1626 (Paris, 1845, 2 vols.).— Augustin
Thierry, Histoire du Tiers Mat. — The most recent
works are M. Jallifier's Histoire des l^tatsG&niraux
(1 vol. Paris, 1888), and M. Georges Picot's ex-
haustive Histoire des Mats G^niraux considiris
au point de vue de leur influence sur le gouverne-
ment de la France (1355-1614).] e. Ca.
ETHEL. See Alod.
EVANS, David Morier (1819-1874), wasi
born in Wales. He treated economic subjects ;
from a journalistic point of view, aiming rather
at giving an accurate narrative of the successive
phases of economic crises and the like than at
tracing their hidden causes. In his own words
he was a man of " facts and figures."
Besides numerous contributions to the Bankers'
Magazine, which he edited for some years, the ,
Bullionist, and the Stock Exchange Gazette, Evans
wrote The Commercial Crisis, 1S47-4S, London,
1848-49. — The Annual Coviviercial Register^
London, 1850. — Fortunes Epitome of the Public [
Funds, London, 1851-56. — Facts, Failures, and'
Frauds, London, 1859. — The History of the Com- ■
merdal Crisis. 1857-58, and of the Stock Exchange
EVANS— EVERETT
757
Panic, 1869, London, 1869. — Notes on Specula-
tion, London, 1864.
[See Dictionary of National Biography, London,
1888, Times for 2nd January 1874.] a. h.
EVANS, Thomas (end of IStli and early
19tli century). In 1798 Thomas Evans was
acting as secretary to the London Correspond-
ing Society, and was imprisoned for nearly three
years on a charge of treasonable practices. He
afterwards acted as librarian to the Spencean
Society, and published the work whose title is
given below. The book contains the usual
Spencean doctrines, advocates the nationalisa-
tion of the land as the only remedy for the
prevailing distress, and denounces Malthus as
the " hireling of pagan landlords."
Christian Policy, tlie Salvation of this Empire,
*' being a clear and concise examination into the
causes that have produced the impending
national bankruptcy, and the effects that must
ensue unless averted by the adoption of the
only real and desirable remedy " (2nd ed., 1816).
c. G. c.
EVELYN, John, F.K.S. (1620-1706), the
author of the famous Diary, published several
works of economic interest. Amongst these
may be mentioned (1) Sylva, or a Discourse of
Forest Trees and the Propagation of Timber, etc.,
London, 1664, foL, 5th ed. 1729. A new
edition with notes by A. Hunter was published
in 1776 ; 4th ed. 1812. (2) Navigation and
Commerce, their Origin and Progress. Con-
taining a Succinct Account of Trajficke in
General: its Benefits, etc., London, 1674, 8vo.
(3) Terra : A Philosophical Discourse of Earth,
Relating to the Culture and Improvement of it
for Vegetation, and the Propagation of Plants,
etc., London, 1676. New edition, with notes
by A. Hunter, 1778. (4) Numismata: A
Discourse of Medals, Ancient and Modern, etc.,
London, 1697, fol. Evelyn also translated
several French works on horticulture.
[M'Culloch's Literature of Pol. Econ., 146, 212.
For a full account of Evelyn's life and writings
see Dictionary of National Biography. ]
w. A. s. H.
EVELYN, John (/. 1830), of Edgbaston,
Birmingham, was the author of Co-operation:
An Address to the Labouring Classes on the Plans
to he pursued in Conducting Trading Unions,
1830, 8vo. By "trading unions" Evelyn
meant co-operative societies.
[Brit. Mus. Cat.] w. a. s. h.
EVERETT, Alexander Hill (1792-1847),
was born at Boston, Massachusetts. He gradu-
ated with the highest honours at Harvard ;
engaged in the diplomatic service, and from
1825 to 1829 served as U.S. minister to Spain ;
returned to Boston and became editor and pro-
prietor of the North American Review ; from
1830 to 1835 was in the Massachusetts Legisla-
ture ; in 1840 undertook a diplomatic mission
to Cuba ; and in 1847 was engaged in a similar
errand in China, when he died at Macao.
His writings cover a wide range in history and
literature. Of economic interest is the follow-
ing : New Ideas on Population ivith Remarks
upon the Theories of Malthus and Godwin,
Boston, 1823, pp. 125 (translated into French).
In opposition to the Malthusian theory Everett
argues that an increase of population is a cause
of abundance and not of scarcity, since it de-
velops the new elements of skill by which the
same quantity of labour is applied with greater
etfect. Although the population of Great Britain
doubled in the 18th century, improvements in
the mode of applying labour increased its produc-
tiveness probably a thousand times. Everett,
by travel and intercourse with eminent men
in Europe, enjoyed opportunities possessed by
few of the earlier American writers on economic
subjects. He had an interview with Malthus,
carefully discussing the points at issue. The
latter suggested to Everett that his views were
similar to those of Mr. S. Gray in the Happiness
of States (1815). The Malthusian theory was
also discussed in a correspondence between
Everett and Prof. George Tucker in the Demo-
cratic Review, vol. xvii. pp. 297-310, 379-391,
438-444, and vol. xxi. pp. 397-410.
[For a summary of Everett's views, v. Dem. Rev.,
vol. X. p. 466, where there is a sketch of his life
until 1840. To the North American Pi.eview he
contributed mauy essays, among them " M'Culloch's
Political Economy " (1827), xxv., 112 ; "Political
Economy" (1829), xxviii., 368 ; " British Opinions
on the Protecting System," xxx., 160 ; " American
System," xxxii., 127 ; " Phillip's Manual of Politi-
cal Economy," xxxii., 215 ; "The Laws of Popu-
lation and Wages," xxxix. , 68 ; "Rae's Political
Economy," xl. 122. Everett was a protectionist ;
and in 1833, as chairman of a committee at
the Tariff Convention in New York, prepared a
memorial to Congress in reply to the memorial
prepared by Gallatin for the Free Trade Conven-
tion at Philadelphia. He advocated reforms in
the banking system in two articles on "The
Currency" in Boston Quarterly Review, July
1839 ; January 1840.] D. r. d.
EVERETT, George {fl. 1693-1698), Ship-
wright, appears to have occupied some position
of importance in the government dockyards.
He was also employed by the commissioners of
customs in the detection of smuggling. He
published (1) The Pathway to Peace and Profit ;
or, Truth in its Plain Dress, etc., London, 1694,
8vo. (2) Encouragement for Seamen and
Mariners, in two pants, etc., London, 1695, 4to.
The first of these pamphlets embodies certain
proposals, which Everett laid before the lords
of the admiralty in February 1694, for securing
greater economy and efficiency in the dockyards.
If they were adopted he promised an annual
saving of £100,000. The second pamphlet was
directed against the abuses of the system of
impressment for the sea service. His object
appears to have been to devise a system which
768
EVICTION— EXCHANGE
3honld at tlie same time secure a constant
supply of sailors for the royal navy and get rid
of the expense to the government, and "injury
to the subject," of the system then in vogue.
Amongst his suggestions may be noticed the
registration of all seamen and mariners, iTxed
pay days, abolition of the sale of all offices in
the navy, and a strict application of the principle
of promotion by merit, an additional allowance
for seamen disabled in the public service, the
payment to the family of the sailor of six
months' wages for every nine months he should
be at sea, etc. Everett's ])amphlets are of no
theoretical interest, but they throw much light
on the conditions of labour in the dockyards
and the sea service at the end of the 17th cen-
tury.
[Watt's BibL Brit— Cat. of Treasury Papers,
xxxvi. 38 ; liv. 29.] w. a. s. h.
EVICTION. The recovery of possession of
land whether by simple re-entry or by legal
process is often termed eviction. Eviction is
substantially the same as Ejectment. The
term is rather popular than technical, r. c. M.
EVOLUTION. See Development.
EX. ALL. A well-known phrase on the
stock exchange, used to signify that a security
quoted or dealt in conveys to the buyer no
rights in the shape of dividends or drawings
or issue of new stock or other contingent
advantages. The word ex. is simply short for
excluding (see Ex. Dividend, Ex. Draw^ing,
Ex. New). a. e.
EXAMPLES, Examples in economics, as
elsewhere, are simply cases, real or fictitious,
or partly both, supposed to embody a general
principle. They may be classified as follows :
(1) Real hut general, as Ricardo's huntera
{Principles, ch. i. § i.), and Ad. Smith's
bricklayers, carpenters, and men of letters
{Wealth of Nations, I. x.). The examples are
taken from a known genus but not from known
individuals. Where the genus is perfectly well
known, no cavil is possible. Ad. Smith's illus-
tration of division of labour could hardly have
been improved by a reference to a particular
pin-making establishment in a specified place.
But, in exposition, the more concrete the genus
the more telling the example ; e.g. 'blacksmith'
seems nearer life than 'workman.' (2) Real
and. particular, as in Cairnes's illustration of
the theory of international trade from the
Australian gold discoveries (see Cairnes).
Adam Smith, where he does not use the real
and general, uses the real and particular, and
falls back on fiction only for his similes (as
"the highway," "the waggonway through the
air," the "wings," and "the pond and the
buckets," W. of N., II. ii.), or his metaphors
(J' wheel of circulation," "channel of circula-
tion.") Ricardo and his immediate followers
have preferred, as a rule, (3) Fictitims examples.
These may be illustrations of which the com-
ponent elements are generically well known, as
even the favourite "man on the desert island,"
but the combining of the elements is the work of
the writer, and is more or less arbitrary, as De
Quincey's "man with the musical box on Lake
Superior," and Bastiat's "plank and plane."
There is also a risk that the construction
of the example may involve a begging of the
question to be proved. " Suppose that there
are but two nations in the world living side by
side, with a population of one million souls in
each" (Barbour, Bimetallism). "My object
was to elucidate principles, and to do this I
imagined strong cases that I might show the
operation of those principles" (Ricardo, Letters).
There is no necessary fallacy in this method
of exposition any more than in illustrating the
law of gravitation by the action of bodies in
vacuo. Concrete cases must necessarily ex-
emplify much more than one principle, and,
even if they suggested a particular generalisa-
tion, they may perhaps not clearly illustrate it
without a fictitious simplification. The lawful-
ness of such a method of exposition or, it may
be, of proof is discussed elsewhere (see Deduc-
tive Method). j. b.
EXCAMBION is the technical term used in
Scotch law to designate the contract whereby
one piece of land is exchanged for anotlier.
The persons effecting the exchange are known
as excambers. Each party gives the other such
a warranty of title that, if evicted from the"
land which he has received, he and his heirs
can recover from the other party and his heirs
the land which he originally gave. When
lands burdened with debt are disponed in
excambion, they are freed from that debt and
are thenceforward burdened with the debts,
if any, formerly afiecting the land given in
exchange. Tenants in tail have a statutory
power of effecting such exchanges which now
extends to one-fourth of the total value of the
property entailed (see Land).
[Bell's Dictionary and Digest of the Law oj
Scotland, edited by George Watson, Edinburgh,
1882, art. "Excambion," and the authorities
therein cited.] F. c. M.
EXCHANGE.
Exchange, p. 758 ; Exchange, Value in, 759 ; Exchange,
Value in (History of Theory), p. 762 ; Exchange, Usury
(see Usury), p. 767 ; Exchange (as Bourse), p. 767 :
Exchange, Stock, p. 768 ; Exchange, Provincial Stock,
p. 770 ; Exchange, Foreign, p. 770 ; Exchange, Foreign
(Practical Working of), p. 772 ; Exchange between
Holland and Dutch India, p. 773 ; Exchange between
Great Britain and British India, p. 776 ; Exchange,
Internal, p. 777 ; Exchange of Notes (Scotland), p. 778 ;
Exchange Broker, p. 778 ; Exchangei; Royal, p. 778.
Exchange, the voluntary giving of one com-
modity or service on condition of receiving an-
other, is to a great extent the basis of the exist-
ing system of Production and Distribution
{q.v.). If there were no exchanges, each article
of separate property could be used only by its
owner, and, excluding gifts, slaveholding, and
EXCHANGE— EXCHANGE, VALUE IN
759
communistic arrangements, each man would
have to subsist on what he could produce
directly for himself, using his own and no one
else's instruments of production. As things
are, however, separate property is used in the
main by those who are most capable of using it,
whether they are its owners or not, and no one
lives only on what he has himself produced but
each lives on what has been produced by a vast
number of other persons (see Adam Smith,
Wealth of Nations, bk. i. ch. i. at end). This
is the result of exchanges ; owners of property
allow others to use it because they can get
commodities and services in exchange for the
use of it, and men are able to devote themselves
exclusively to one occupation because the pro-
ducts of that occupation can be exchanged for
the products of other occupations. While pro-
duction is thus largely dependent on exchanges,
distribution, as the word is commonly under-
stood, could not exist at all without them.
The use of the word implies that the whole
produce of all the workers is considered to be
a joint or common produce which, after being
produced, has to be divided or "distributed."
If each man lived on his own patch of ground,
using his own instruments, and receiving no
help from any one either in commodities or
services, each man's produce or income would
obviously be quite distinct from that of every
other person, and the conception of a joint pro-
duce requiring to be distributed would never
have been formed. Individuals' incomes would
vary, but the variations would be questions of
production only, since each man's income would
depend enthely on the amount he produced.
Exchange being practised, questions of "dis-
tribution " arise because each man's income de-
pends not only on how much he produces but
also on the value of what he has to sell, i.e.
on how much of certain other things he can
get in exchange for a given quantity of his
work or of the use of his property.
Adam Smith showed a very fair appreciation
of the importance of exchange with regard both
to production and distribution. He rightly
attributed what he called the " dirision of
labour," but what is now usually called the
"division of employments," to the practice of
exchange, and he did not treat of wages, profits,
and rents, till he had discussed "the rules
which men naturally observe in exchanging"
goods {Wealth of Natiom, bk. i, ch. iv.)
Unfortunately, James Mill, to whom the com-
mon arrangement of English works on political
economy is chiefly due, seems to have had no
adequate conception of the importance of ex-
change. He spoke of it as if it were a mere
incident which occasionally happens to com-
modities after they have been produced and
distributed {Elements of Political Economy, In-
troduction), and when he endeavoured to im-
prove upon J. B. Say's division of political
economy into Production, Distribution, and
Consumption, by inserting Exchange, or "Inter-
change " as he called it, he placed it not only
after production, but after distribution also.
M'CuUoch returned to Say's arrangement, but
J. S. Mill followed in his father's footsteps,
treating exchange after distribution, and declar-
ing distinctly that " exchange and money make
no difference in the law of wages, in the law of
rent, nor in the law of profits " {Principles, bk.
iii. ch. xxvi.. Contents). But so far is this
from being the case that the very existence of
wages, rent, and profits, including interest, is
dependent upon exchange. The payment of
any particular sum of wages, rent, or profits
is a case of exchange, and every variation
in wages, rent, and profits is a variation of
value, wages being the value of work done,
rent the value of the use of land, and profits,
the value of the use of capital and of the
capitalist's services (see Sidgwick, Principles of
Political Economy, bk. ii. ch. i. § 2). Of
wi'iters since J. S. Mill, most have so far devi-
ated from his arrangement as to place "ex-
change" before "distribution," e.g. Walker,
{Political Economy), or, with Prof's. Sidgwick
and Marshall, to treat exchange and distribu-
tion as too intimately connected to be treated
separately (see Distribution). e. c.
Exchange, Value in. Yalue in exchange,
or exchangeable value, denotes a ratio of ex-
change— "the ratio of the number of units
of one commodity to the number of units of
another commodity for which it exchanges " ;
as Jevons particularly clearly points out ( Theoiy
of Political Economy, ch. iv.), and most authori-
ties admit. The unsettled question is : What
are the circumstances which cause the ratio to
be what it is ? " Utility and difficulty of attain-
ment," answers Mill (bk. iii. ch. ii.), and similar
terms are used by almost all economists, but in
various shades of meaning, and with different
emphasis on each of the two factors. The
confusion is aggravated by the not sufficiently
noticed circumstance that the operation of the
two causes, utility and difficulty, is different in
different classes of transactions. It is proposed
here to discriminate those essentially distinct
cases ; mapping out and partially exploring
the ground, which may be more fully investi-
gated under the head Value.
A convenient tripartite division — Two-sided
monopoly, one-sided monopoly (or one-sided
competition), two-sided competition — is based
upon the degree in which competition is present.
I. The action of competition is at a minimiim
where the dealers in , two articles exchanged are
single individuals, or bodies of persons actuated
by one will, e.g. two governments negotiating a
commercial treaty, or a trade -union coming to
an agreement with a combination of masters
about the rate of wages. The general principle
in this case is that both parties will be gainers
760
EXCHANGE VALUE, IN
by the bargain ; in technical language the
total utility (see Consumer's Rent, Demand,
DupuiT, Final Utility), of each will be
greater after than without the transaction.
But to what extent each party will be gainers is
not in general determinate ; there is a scftt of
indefinite tract, a "spielraum" (Bohm-Bawerk),
within which the point of equilibrium must be
determined by other than purely economic con-
siderations. Jevons well says : "the existence
of combinations in trade disputes usually re-
duces them to a single contract bargain of the
same [this] indeterminate kind. The men, for
instance, ask for 15 per cent advance of wages
all round. Rather than have a strike, it might
be for the interest of the employers to give the
advance, or for the men to withdraw their
demand ; a fortiori, any intermediate arrange-
ment, would still more meet their views. But
there may be absolutely no economic principle
on which to decide the question. Mathematic-
ally speaking, the problem is an indeterminate
one and must be decided by importing new
conditions" {State in Relation to Labour, p.
154).
II. Where there is a monopolist, sole or
corporate, on the one side, and on the other side
an indefinite number of buyers, or sellers,
competing with each other, the most general
principle is that the monopolist will beat down
the other parties to the point at which each of
them is only just a gainer by his bargain ; the
addition to the total utility of each will be a
minimum. The "law of indifference" that
there should be one price in a market is not in
general true of monopoly. The oppressiveness
of the monopolist is modified by regard for his
own future interests, as when an American
railway company "builds up" a customer by
giving him favourable terms, by fear of com-
petition and of public opinion, and other con-
siderations not here relevant (see Monopoly).
Mere convenience will often prompt the
monopolist, instead of making separate terms in
each transaction, as theoretically conceivable,
to prescribe rates for classes of persons and goods.
These charges are not in general proportioned
to the cost incurred. Thus soldiers, in some
foreign theatres, are admitted at a different rate
from citizens ; though the accommodation of the
former may be as good as that of the latter.
The differences between first and third class
passenger fares, and between the rates for
different kinds of goods, do not correspond to the
outlay of the company in each case. For the
object of the monopolist is to render his net
profits a maximum ; and this result wiU not in
general be reached by apportioning charge to
cost. True, if the cost changes, the arrange-
ment most advantageous to the monopolist is apt
thereby to be disturbed, and accordingly the
charge will be in general altered, but not pro-
portionately to the cost. Thus a tax on a mono-
polised article will in general increase the price,
yet not equally with the tax, but, as it happens,
by either more or less (Cournot, ThAorie MathA-
matique, ch. vi.); the assertion which is often
made that the charge will be unaffected by the
tax is true only where the tax is a lump sum,
not of a specific or an ad valorem tax.
In the case of monopoly then value is not
measured by cost ; but it is measured by utility :
by total utility in case the monopolist takes the
full advantage of his position ; by final utility
in the more usual case, where a rate is fixed for
a class of commodities. In that case each
consumer will go on purchasing up to the point
at which it is just not worth his while to pur-
chase another unit of commodity at the prevail-
ing price.
III. The most general, or at least the most
frequently treated, case is where there is un-
limited competition on both sides of the market.
This case may be subdivided into two : A, where
value is not measured by cost of production,
and B, where it is.
A, the first subdivision, corresponds to what
Mill calls the "law of value anterior to cost of
production, and more fundamental, the law of
demand and supply " (see Mill, Political Economy
bk. iii. ch. xvi. § 1, and Prof. Marshall's
criticism of the passage ; Principles, p. 544, 2nd
edition). This case may be subdivided into
two : (1) where production, or at least repro-
duction is impossible, or may be left out of
account ; (2) where this abstraction is not
admissible.
(Al). To this head belong market values — not
only commodities which cannot be multiplied
rapidly, but also those of which the quantity in
existence cannot be diminished rapidly, namely
the precious metals in circulation (Mill, bk. iii.
ch. ii. § 5). Prof. Marshall gives an instruc-
tive general type of the "temporary equilibrium"
of market value ; unaffected by cost* of production
which requires a "long period" in order to
influence value {Principles, bk. v. ch. ii.).
Other articles referred by Mill to this category
are " ancient sculptures, pictures by old masters,
rare books or coins, or other articles of anti-
quarian curiosity" {Political Economy, bk. iii.
ch. ii. § 2). Compare Prof. Marshall's enumer-
ation of articles in the case of which " there is
no connection between cost of reproduction
and price" (at the end of the chapter last
referred to).
Mill adds to his list of such articles "building
grounds in a town of definite extent (such as
Venice), the most desirable sites in any town
whatever . . . potentially all land whatever "
{loc. cit.). It should seem that his limitation
of the statement to the case of " countries fully
occupied and cultivated," is unnecessary. But
it is impossible here adequately to discuss
all the difficulties which the subject presents.
It is a nice question whether it is proper tc
EXCHANGE, VALUE IN
761
include in this section (Al) the exchange of
present goods for future (cp. Bbhm-Bawerk,
Positive Theory), the settling of the rate of
interest. Mill says "this is evidently a question
of demand and supply " used in the same as in
the preceding cases (Political Economy, iii.
ch. xxiii. § 1). It is usual, however, to regard
the "sacrifice" incuired by postponing consump-
tion as a mode of cost; and so not to be included
in this section.
(A2) To this class belong "commodities of
which, though capable of being increased or
diminished to a great extent, the value never
depends upon anything but demand and supply"
in a sense opposed to determination by cost of
production (Mill, bk. iii. ch. ii. , last paragraph).
Perhaps the most typical case under this head
is international trade, where in Cairnes's phrase
(Leading Principles, bk. iii. ch. iv. § 4), cost
"controls" but does not "determine" value;
in the terms above used with respect to mono-
poly affects, but does not measure, value. Thus
suppose tea produced in China exchanges for
cutlery made in England. There is no equation
between the efforts and sacrifices of the Chinese
and the British producer. For the mobility
tending to produce that equation is wanting.
As an additional verification that value is not
proportioned to cost in this case, it may be
observed that if the cost of production be altered,
e.g. by an improvement or a tax, the value in
the international market will be altered indeed,
but not in proportion to the alteration of the
cost (Mill, bk. iii. ch. xviii. § 5, and bk. v.
ch. iv. § 6).
The cognate case of " non-competing groups " .
(Cairnes) is amenable to the same law. The
labour-market (cp. Mill, bk. iii. ch. ii. last
par.) forms a particularly important instance
— so far as it is legitimate to abstract efforts
and sacrifices incurred with a view to prepara-
tion for that market (see below, p. 762, col. 1,
par. 3).
Throughout the whole class of transactions
which have been considered (A) there is wanting
that adjustment between remuneration and effort
and sacrifice which is the essence of the classical
doctrine that' cost of production determines
value. Up to this point those who have
impugned or ignored that doctrine are correct.
(B) A transition from the regime of "non-
competing groups, " to "industrial competition"
(Cairnes) is obtained by supposing removed
the barriers which have prevented competition.
There ensues with the mobility of industry the
equation of "net advantages" (Marshall) in
different occupations. It will be convenient to
break up class B in two : (1) where abstraction
is made of division of labour ; (2) more concrete.
(Bl) Suppose each worker free to apply hia
labour in doses, or increments, to any industry^
— the abstract supposition implicitly made by
Jevons in his analysis of labour (7%<;(//7/, ch. vi.).
No one will work in any branch beyond the
point at which the trouble attending the last
increment of product is just compensated by its
remuneration. In this case then it becomes
true that value is measured by the final disutility
of the producer ; while it does not cease to be
true that, as in former cases, value is measured
by the final utility of the consumer. There is
no opposition between these verities ; one need
not be subordinated to the other.
In this case the relation between the two
factors of value, utility and disutility, is almost
as symmetrical as in what Prof Marshall calls
"the simplest case of equilibrium between desire
and effort when a person satisfies one of his
wants by his own direct action, as for instance
when he picks blackberries. . . . After he has
eaten a good deal the desire for more diminishes,
while the task of picking begins to cause
weariness which at last counterbalances the
desire for eating, and equilibrium is reached."
(Principles, bk. v. ch. iii. § 1). In such a case
the question whether it was the desire, or the
weariness, which "determined," or "regulated"
the equilibrium would be insignificant.
The "fundamental symmetry" (Marshall)
between the forces of demand and supply is
aptly represented by mechanical illustrations.
"Justin the same way, when several balls are
lying in a bowl, they mutually determine one
another's positions ; and again, when a heavy
weight is suspended by several elastic strings of
different strengths and lengths, the equilibrium
positions of all the strings and the weight
mutually determine one another " (Marshall,
Principles, bk. vi. ch. i.). The principle that
water seeks its own level has been employed by
Dr. Irving Fisher in his masterly Investigations
in the Theory of Value and Prices (from Trans-
actions of Connecticut Academy, vol. ix., July
1892) to construct a more elaborate illustration
of the great principle thus enounced by Cournot,
" Le systeme economique est un ensemble dont
toutes les parties se tiennent et reagissent les
unes sur les autres."
What has been said of the relation of dis-
utility to value applies equally, or even better,
to the "sacrifice" of postponing consumption.
As Prof. J. B. Clark well says (Yale Review,
No. 3), " the final act of abstinence is like the
last act of labour, the costliest of all "...
"the cost entailed on society by its final acts
of abstinence is a second possible measure of
value." It may be observed that the abstrac-
tion proper to this section (Bl) is not so violent
in the case of capital as labour. The idea of a
capitalist distributing his outlay among differ-
ent enterprises, from each of which ceteris pari-
bus he will expect a similar return — is one that
is partially realised in the "share" market.
Compare Cournot, PriTwipes de la Theorie dea
Michesses, 1863, Art. 45.
(B2) The "fundamental symmetry" between
762
EXCHANGE, VALUE IN (HISTORY OF THEORY)
utility and disutility as factors of value, continues
to subsist when we restore the concrete circum-
stance of division of labour. But superficial
differences arise. The individual may be con-
ceived as seeking to maximise his total utility,
per saltum by a change of occupations, rather
than by doses distributed at different points of
the industrial system. The equation of "net
advantages" in different occupations, rather
than of final disutilities, is now the condition.
But the analogy of physical equilibrium is still
appropriate. ' ' The normal value of everything
rests, like the keystone of an arch, balanced
between the contending pressures on its two
opposing sides. The forces of demand press on
the one side, those of supply on the other"
(Marshall). We must regard "the various
elements of an economic problem — not as deter-
mining one another in a chain of causation —
A determining B, B determining C, and so on
— but as all mutually determining one another"
{jMd. preface to 1st ed., p. xiv.).
To rightly apprehend the relation between
value and cost of production it should be con-
sidered that one occupation may comprise
several commodities. The production of dif-
ferent articles has been joined together by nature
or custom. It would be idle to expect the value
of beef and hides to be respectively proportioned
CO the quantity of labour "worked up" (Ricardo)
or " congealed " (Marx) in each. A person who
chooses a literary or academic career may hope
to be, on the whole, as well off in that as in
any other line open to him ; but he must not
expect the pay of each particular task — e.g.
writing an article, or giving a lecture — to be
proportioned to the trouble (cp. Mill on Sub-
sidiary Industries, bk. ii. ch. xiv., and see
Joint Production).
The sense in which value, in the case under
consideration (B2), is determined by cost of
production, as well as marginal utility, appears
to the present writer to have been best stated
by Prof. Marshall. Besides showing the inter-
dependence of the two factors, as above men-
tioned, he also makes it clear that time, " a
long period," is required in order that the
forces of supply should work themselves out.
Thus in the case of labour the adjustment be-
tween cost and value must be dated from the
time when parents begin to make efforts and
sacrifices with a view to the education and
advancement of their children. There is pre-
sented the vast conception of trained industry put
upon a future labour-market, by parental pro-
vidence, for vicarious remuneration.
But perhaps no form of words devised by one
person can be expected to recommend itself to
all others as the best adapted to express the
subtle relations of utility and cost to value.
As in higher spheres of speculation, it may be
hoped that differences of doctrine are less
important than at first sight would appear.
[As to the indeterminateness of the bargain
between two individual or corporate units, see
Auspitz and Lieben, Theorie des Preises, p. 381.
— Bdhm-Bawerk, Positive Theory (translated by
W. Smart), bk. iv. ch. ii. — Edgeworth, Mathe-
matical Psychics, p. 21, et seg'. — Jevons, Theory oj
Political Economy, pp. 130-137, and Marshall,
Principles of Economics, p. 715 ; Mathematical
Appendix, Note xii. — Menger, Grundsatze, pp. 176-
178. — Price, Industrial Peace, pp. 14 and 54. —
Sidgwick, Political Economy, bk. ii. ch. x. § S
(end), also p. 349.
On the abstract theory of monopoly, see Coumot,
Principes Mathhnatiques, chs. v. and vi. et passim.
— Hadley, Railway Transportation, a.nd other books
and reports relating to railways. — Marshall, Prin-
ciples of Economics, bk. v.
The authorities on the more general case of value
in exchange defy quotation by their number.
Those to whom the present writer is most indebted
have been mentioned in the text.] F. T. E.
Exchange, Value in. History of
Growth of Theory. For the purpose of an
elementary survey of the history of the theory
of value we may roughly divide the various
theorists into two "schools" — the " cost -of -
production" school and the "utility" school.
The "cost" school is the older; its sway
over our science has only begun to be broken
in the last few decades by the " utility " school,
the earliest quite consistent representatives ol
which wrote in the middle of this century.
The " cost -of -production" school. — The first
step towards an analysis of the economic pheno-
menon of value consisted in a discrimination
between value in use and value in exchange.
Aristotle makes this important distinction :
"To take e.g. a shoe, there is its use as a
covering of the foot, and also its use as an
article of exchange" {PoliL, i. 9, p. 22 of
Welldon's Transl.). His example is followed,
among English economic thinkers, by Locke
("Considerations of the lowering of interest
and raising the value of money," in Works,
ed. 1714, ii. p. 21) in the end of the 17th,
and by Hutcheson (System of Moral Philo-
sophy, 1755, ii. p. 53) in the middle of the
18th century. Locke, I.e., speaks of "the
intrinsic natural worth of anything," as separ-
ate from its "value"; and Hutcheson, I.e., ob-
serves that " the prices and values in commerce
do not at all follow the real use or importance
, of goods for the support . . . of life." French
physiocrats (e.g. Dupont and Quesnay), speak
of valeur usuelle and valeur venale; and Turgot
distinguishes between valeur estimative and
valeur commer^ahle or echangeable, defining
the first as a purely individual, the second as
an essentially social mode of weighing the
sacrifice, necessary in order to get possession of
the commodity, against the enjoyment of
possessing it. English economic treatises of
the 18th century sometimes show an apprecia-
tion of the diflerence between use value and
EXCHANGE, VALUE IN (HISTORY OF THEORY)
763
exchange value by discriminating between the
vords "worth" and "value."
When Adam Smith wrote his Wealth of
nations, he made this old primary analysis of
value the basis of further analysis. He first
hints that "things" must have some "value
in use" in order to have any "value in ex-
change,'' and then for a time entirely drops
"value in use" out of the discussion, proceed-
ing to investigate "what is the real measure
of this exchangeable value ; or, wherein consists
the real price of all commodities, " and ' ' what
are the different parts of which this real price
is composed or made up " (bk. i. ch. iv. p. 42,
ed. 1793). He does not explicitly treat the pro-
blem : How does value measure men's desires
to possess, or consume, commodities ? This
significant feature is, however, to be found
among the French physiocrats. Turgot —
(" Valeurs et Monnaies," in (Euvres, ed. Daire,
vol. i. p. 83) says: "For an isolated individual,
the valeur estimative of an object is precisely
that portion of his total faculties (la portion die
total de ses facultes), which corresponds to his
desire for the object, or which he is willing to
employ in order to satisfy this desire." Adam
Smith proceeds (comp. bk. i. ch. iv. and
ch. vii.) to discuss "the different circumstances
which sometimes raise some or all of these
different parts of price above, and sometimes
sink them below their natural and ordinary
rate," i.e. their cost of production — or "the
whole value of the rent, labour, and profit, which
must be paid in order to bring " the commodity
to market. Here he looks at the problem
chiefly from the point of view of the seller, as
if exchange were regulated almost exclusively
by estimates of labour or cost. In this con-
nection he uses "worth" and "cost" as iden-
tical terms. The manner in which Adam
Smith treated this question gave rise to that
school of economic thinking which (to use the
phrase of Professor Nicholson, art. "Value"
in Ihicy. Brit.) regards utility "simply as a
kind of entrance examination which every
commodity must pass to enter the list of
valuables, whilst the place in the list is deter-
mined by variations in the degree of the
difficulty of attainment."
Ricardo states: "Utility then is not the
measure of exchangeable value, although it is
absolutely essential to it" {Principles, ed.
Gonner, p. 5). Elsewhere (pp. 7, 8), Ricardo
speaks of labour as the "foundation of the
exchangeable value," and of "quantity of labour
realised in" commodities " as "regulating their
exchangeable value."
Mai thus {Principles, ed. 1820, p. 52) sees
that value in exchange "does not depend
merely upon the scarcity in which commodities
exist . . . but upon the circumstance of their
not being distributed ... in such quantities
to each as the wills and powers of individuals
will enable them ultimately to effect by means
of exchanges." He does not, however, search
further into the relation between "such
quantities " and their value in use. This latter
term he describes in his Definitions (ed. 1827,
p. 234) as being "synonymous with utility.
It rarely occurs in political economy, and is
never implied by the word value when used
alone. "
J. S. Mill emphasises more strongly than
his predecessors the importance of the play of
supply and demand in determining exchange
value. He, however, retains Ricardo's notion
of two laws of value : one for commodities that
"are susceptible of being multiplied at pleasure,"
and another for commodities that are not.
These latter, "no doubt, are exceptions," and
it is for these latter that he conceives his
supply-and- demand theory of value {Principles,
bk. iii. ch. ii.).
Karl Marx, the founder of German social
democracy, seeks, on the lines of Hegelian
dialectics, to separate value in use totally from
value in exchange. The latter is "something
quite independent " of value in use ; and an in-
vestigation of value in use may be of some good
in commercial education, as ' ' die Disciplin der
Waarenkunde, " but does not belong to economic
science, though ' ' nothing can have exchange
value without being a thing of utility " {Das
Kapital, ed. 1883, pp. 2 and 8). Exchange
value, Marx continues, is a ratio, and as where
there is a ratio there must be homogeneity, he
arrives at the conclusion that commodities can
only be homogeneous as products of human
labour. This, therefore, determines value.
Marx's theories, though they have never been
accepted by any economist of note, are worth
consideration, partly because of their enormous
influence on socialistic workmen in different
parts of the world ; partly because they un-
doubtedly disi)lay some of the worst conse-
quences of consistently neglecting to analyse
consumption or demand as carefully as pro-
duction or supply.
Turning to the French, German, and other
Continental theorists of the cost-of- production
school, we find that, with few exceptions, they
have been far more disposed to devote attention
to the utility element of value in exchange than
the "classic" English school from Smith to
Fawcett. Though there are most important
scientific divergences between the majority of
19th century German economists and the new
"Austrian school," it is still by no means
difficult to look upon the former as slowly and
laboriously paving the way for the latter.
J. B. Say indicated {Traits, ed. 1803, ii. p.
58) that the fundamental elements of value in
exchange were, the quantities offered and de-
manded, and the expense of production, which
latter he called " the natm-al value " of the com-
modity. He set the example for later French
764
EXCHANGE, VALUE IN (HISTORY OF THEORY)
economists of treating the value problem as
essentially dealing with the laws which deter-
mine when and how ''utilities" exchange
against one another. "No doubt what deter-
mines us to give up a commodity which we
possess in order to get another is some q»ality
in this other commodity which pleases us, and
which quality is not to be found, or to be
found only in less amount (a moindre dose)
in the commodity which we give in exchange "
(Coquelin and Guillaumin, Did. de V^c. Pol.,
1853, vol. ii. p. 808) — this, and not the cost of
production, is the starting point of most French
discussions of value. J. Garnier's definition
{TraU6 d'J^e. Pol, ed. 1889, p. 280) : "things
have value in exchange when they are useful
and, at the same time, transferable and scarce ;
that is to say, value in exchange is exchangeable
utility, corresponding to the amount of labour
which the thing saves, and, in most cases,
owing its existence to labour and other ex-
penses," is characteristic of the standpoint of
many French economists. An exception from
the general French attitude is F. Bastiat,
notable not so much for solid scientific merits
as for a widespread popularity. He defines
value in exchange as "the proportion (rapport)
between two services exchanged" (Harmonies
Ji!conomiqties, ed. 1851, p. 118).
Among most German economists of this cen-
tuiy there is a tendency to treat utility as of
at least equal importance with cost of produc-
tion in the determination of exchange value,
"The value in exchange of a commodity, or its
suitableness for the purpose of being exchanged
against other commodities, depends upon that
combination between use-value and cost-value
which has its rise in the economic relations
of men one with another," writes W. Roscher
in his System der VolJcswirthschaft, ed. 1882, i.
p. 10. And Schaffle defines value in exchange as
"a disguised comparison between the cost- values
and the use- values of the two commodities which
are to be exchanged against each other" (Kapital-
ismus und Sodalismus, p. 35). In his Bau und
Leben des sodalen Korpers, ed. 1878, iii. p. 279,
the same writer shows that exchange value is
at the same time an individual and a social
phenomenon. Adolph Wagner (Allgem. od.
theoret. Volksw., Thl. I., Grundlegung, ed.
1876, p. 47) says that "the exchange value
of a commodity depends, for the individual
who demands it, upon its degree of concrete
utility for him, and upon the difl&culty of
getting it." Wagner is careful to observe that
value in use is "the foundation of aU the
estimates" which determine exchange value,
and that difficulty of attainment is an incident
which, though in most cases present, can by
no means be used exclusively for the definition
of exchange value. The position of the majority
of living German economists is also well repre-
sented by Professor Neumann in Schonberg's
Handh. d. Pol. OeTc., ed. 1885, vol. i. p. 156,
etc. He proposes to abandon the phrasea
"value in use" and "value in exchange" as
not sufficiently emphasising the all-important
personal element in value. The essential thing
in all the varying meanings of value ( Werth) is
"the estimate (Beurtheilung) of the usefulness
or fitness of a thing for human interests, wants,
or aims." Neumann, however, does not enter
into any far-reaching examination of the rela-
tions between his subjective and objective
" categories of value." This intermediate
position between the extreme cost-of-production
school and the modern utility school is, how-
ever, not taken by Max Wirth, Prince Smith,
and several other German "free traders."
Their value theory is very closely related to
that of Bastiat (5. v.) and to that of the classic
English school. Another notable dissenter
from the majority of German economists is
Eugen Diihring. He has adopted the value
theory of H. 0. Carey, according to whom value
"results exclusively from labour." Value in
exchange is "the measure of the resistance
ofiered by nature, to the possession of the things
desired," or "the measure of the power of
nature over man " (Principles of Social Science,
ed. 1877, ch. vi. § 88). The economic writers
among the German social democrats continue
to follow Karl Marx.
[In the following works are to be found refer-
ences to the more important writers of the cost-of-
production school both in England and on the
Continent. W. Roscher, System der Volksioirih-
schaft, ed. 1882, vol. i. p. 10-12, footnotes. —
Adolph Wagner, Grundlegung,ed. 1876, pp. 37-40,
43, footnotes. — Schdnberg, Handbuch, ed. 1885,
vol. i. p. 156, footnote ; also footnotes to several
of the following fifteen pages. — Coquelin et Guil-
laumin, Bidionnaire de I' Ac. Pol., 1853, article
"Valeur."— J. Garnier, TraitS d':Ec. Pol., ed.
1889, pp. 275-280, 692-694.— J. R. M'Culloch,
Literature of Pol. Ec, ch. i. — J. K. Ingram,
History of Pol. Ec, 1888.— L. L. Price, Histcmj
of Engl. Pol. Ec. since Adam Smith, 1890.— K.
Marx, Das Kapital, vol. i., footnotes to ch. i.
— E. von Bdhm-Bawerk's KajpitaZ und Kapitalzins
(Engl. Transl. by W. Smart), contains in its
historical part, vol. i., a great number of biblio-
graphical references, which are very useful to a
student of the history of the general theory of
value, though the book deals only with the history
of the theory of interest. — Specially for ItaliaL
theory : An gusto Graziani, Storia critica delta
Teoria dd Valore in Halia, Milano, 1889. — Spe-
cially for early German theory : W. Roscher,
Geschichte der National-okonomik in Deutschland,
1874.]
The ''Utility" School. — Though all econo-
mists insist that "utility is indispensable to
value," and though many of the writers who
have been classed as belonging to the cost-of-
production school strongly emphasised the gi'eat
importance of utility to value in exchange, they
never succeeded in working out a consistent
EXCHANGE, VALUE IN (HISTORY OF THEORY)
^65
quantitative theory of the general and necessary
connection between utility and value in ex-
change. To have done this is the scientific
characteristic of the "utility school." The
principal achievemsnts of this school, as far as
they concern the general theory of value, consist
(1) in the discovery of the connection between
the variation of the utility to an individual of
a unit of a commodity and the variation of the
number of such units possessed or commanded
by him ; and (2) in the discovery of the law
of the marginal determination of all forms
of exchange value (see Margin). These dis-
coveries led to the important distinction between
total utility and degree of utility, and to the
unravelling of the complicated connection be-
tween exchange value as determined in a
market, under the influence of free competition
between producers and consumers, and the mar-
ginal degree of utility of a unit of the commodity
to individual dealers in the market. These
deductions have led to the general theory that
valiie in exchange is a relative Tnarginal degree
of utility and a function of quantity possessed.
Hence it is concluded that variations in cost of
production or difficulty of attainment can never
directly affect or, strictly speaking, determine
value in exchange, but only indirectly affect it,
when and in so far as the variations in cost of
production affect quantity possessed — such
conditions as time and Friction {q.v.) being
taken into account. What directly determines
exchange value is not the desire to avoid work,
the root idea of the "cost" school, but the
desire to possess the commodity — not the pro-
duction, the past history of the commodity, but
the consumption, the future destiny of the
commodity. This theory is the result of
quantitative analyses of Consumption {q.v.).
The "cost" school had in a very conspicuous
manner neglected the theory of consumption —
had indeed often denied that there could be
such a thing. The " utility " school, on the
contrary, looks upon the quantitative theory of
consumption as the only sound basis of economic
theory in general.
The root idea of the " utility " theory is to
be found in economic treatises from the earliest
time, e.g. Aristotle. "It follows," he wrote,
"that such things as are the subjects of ex-
change must, in some sense, be comparable. . . .
Money . . . measures everything, and conse-
quently measures, among other things, excess
or defect, e.g. the number of shoes which are
equivalent to a house or a meal. . . . But this
will be impossible unless the shoes and the
house or meal are in some sense equalised.
Hence arises the necessity of a single universal
standard of measurement. . . . This standard
is in truth the demand for mutual services,
which holds society together ; for if people had
no wants, or their wants were dissimilar, there
would be either no exchange, or it would not be
the same as it is now" {Nic. Ethics, v. 8, p.
152 of Welldon's transl.). Condillac {Le Com-
merce et le Gouvernement, ed. Daire, 1847, p.
250) observes : " We say that a thing is useful
when it serves one of our wants. . . . Accord-
ing to this utility we estimate the thing more
or less. . . . Or, it is this estimate which we
call value. . . . The value of things is then
founded upon theii- utility, or, what amounts
to the same, upon our wants for them, or, what
still amounts to the same, upon the use we can
make of them." B. Hildebrand (National-
okonomie d. Gegenwart u. Zukunft, 1848, p.
318) foreshadows the theory that value is
determined by marginal utility and is a func-
tion of quantity wanted. The French engineer
Dupuit, when attempting to find a measure for
the utility of public works, observed that the
utility of a commodity is often not only
different for different individuals, but that it
will vary enormously for the same individual
when the quantity possessed or commanded by
him varies. "The utility for the same indi-
vidual of a piece of bread can grow from zero
to the amount of his whole fortune" ("De
I'influence des peages sur I'utilite des voies
de communication," in Annates des jjonts et
chaussdes, 1849, p. 185 ; also "De la mesure de
I'utilite des travaux publics," in Annates, 1844).
Dupuit states (Annates, 1849, p. 172) that his
theory is an elaboration of that of P. L. 0. Rossi,
who considered the theory of utility as the true
basis of economics. Other more or less frag-
mentary attempts at building a value -theory
upon an analysis of utility are to be found in
writings of K. H. Rau, von Thiinen, Fried-
lander, Knies, Schaffle, L. von Stein, A. Wakas,
Th. de Quincey, Samuel Bailey, R. Jennings,
and others (see the bibliographical notes by
Menger and Jevons referred to below).
The first economists who succeeded in estab-
lishing and elaborating a consistent theory
of value by a thorough analysis of consump-
tion or demand, were A. Cournot and H. H.
Gossen. In his Rechei'ches sur les Frincipes
mathdmatiques de la Theorie des Richesses
(Paris, 1838) Cournot observes (p. 22) : "What
is truly important is to know the laws which
govern the variations of values, or, otherwise
expressed, to have a theory of wealth. This
theory alone will allow us to show to what
absolute- variations are due those relative varia-
tions " (in values) "which fall within the field
of observation." In the chapter on "the law
of demand " Cournot writes : " Let us then as-
sume that the annual demand D for each com-
modity is a special function F (p) of the price p
of this commodity. To know the forms of this
function would be to know what we call the
law of demand. . . . The form of the function
would evidently depend upon the nature of the
utility of the commodity, upon the nature of
the services which it can render, or upon the
766
EXCHANGE, VALUE IN (HISTORY OF THEORY)
enjoyments which it can procure, upon the
habits and the customs of each people, upon
the average wealth and upon the scale accord-
ing to which this wealth is divided " (p. 50).
Cournot proceeds to argue (p. 56) that "as the
ftinction F (jp) is continuous, the fiyiction
pF (p), which expresses the total value of the
quantity annually demanded, must also be
continuous." Further, it is possible to assign
to p such a small value that ^F (p) becomes
zero, and also to assign to p so high a value that
the same happens. It is easily seen that these
quantitative relations between price and quantity
demanded at that price have their exact analogy
in the subjective fact, not treated by Coumot,
that the value in exchange of a commodity is
the differential coefficient of its value in use.
The treatise by Gossen entitled JSntwicJcelung
der Gesctze des menschlichen Verkehrs und der
daraus fliessenden Eegeln fur Tnenschliches
Handeln (1st ed., Braunschweig, 1854), opens
with the explicit assumption of economics being
the theory of pleasure and pain — economic
activity having for its aim the realising of a
maximum of pleasure with a minimum of pain.
He proceeds in a strictly logical sequence to
expound the theories of utility, of labour, and of
exchange. ' ' The magnitude of the same desire, "
writes Gossen, "diminishes steadily, when we
without interruption continue to administer to
it, till at last a state of satiety is reached" (p. 4).
He distinguishes between total utility, degree of
utility, and marginal degree of utility.
The two early pioneers of the utility theory
of value, Cournot and Gossen, failed to gain
recognition. Their suggestive writings were
practically unknown at the time when W. S.
Jevons, Karl Menger, and Leon Walras, early
in the seventies, published independently of
each other their epoch-making treatises.
Jevons as early as 1860 thought out the out-
line of his theory, and had in 1862 published
a preliminary notice of the same. His well-
known Theory of Political Economy (1st ed.
1871, 3rd ed. 1888) has exercised a great re-
forming influence. Its most salient and en-
during feature is the profoundly philosophical
spirit in which its early chapters deal with the
method and very foundation of the science.
In his introduction (ch. i.) Jevons contends
'* that economics, if it is to be a science at all,
must be a mathematical science . . . simply
because it deals with quantities" (pp. 3, 4
2nd_ ed., 1879). Having shown the mathe-
matical connection between total utility, or value
in use, and degrees of utility, having framed the
law of variation of final or marginal degree of
utility, and having shown how this law rules the
distribution of a commodity in different uses
he only needs to define Market {q.v.) and to
formulate the Law of Indifference (q.v ) to
lay the foundation of his theory of exchange
(ch. IV.). This is expressed in the words-
" The ratio of exchange of any two commoditied
will be the reciprocal of the ratio of the final
degrees of utility of the quantities of commodity
available for consumption after the exchange
is completed " (p. 103). Jevons continues :
"There are two steps between labour and
value. Labour affects supply, and supply
affects the degree of utility, which governs
value, or the ratio of exchange " (p. 179).
Leon Walras, in liJlSments d' Economic politique
pure, ou TMorie de la Mchesse sociale (1874),
and subsequent works supported the same
theory of value as Jevons, the chief point of
difference being one of terminology. Walras,
for example, often using the highly concentrated
and therefore rather ambiguous term rarity
(rarete) instead of final or marginal degree of
utility. Leon Wabas developed the mathe-
matical utility theory of value expounded by
his father A. Walras, and he also utilised the
work of A. Cournot above referred to.
Karl Menger published his Grundsdtze der
Volkswirthschaftslehre in the same year as
Jevons his Theory (1871). In the preface he
announces as his object to frame so general a
theory of price that it accounts not only for
price of commodities but also for interest, wages,
rent, etc. (p. x.). He approaches his subject
by way of an elaborate analysis of the economic
significance of goods {Gilter as distinct from
Waaren or commodities), and he establishes in
the very first chapter the doctrine of the different
"orders" of goods — a very characteristic part
of his theory, and valuable as an attempt to
broach the special problems of the value of
tools or of goods which only indirectly serve
our life. Menger's theory of value (pp. 98-99
and 107-108) is in substance the same as that
of Jevons and Walras though not formulated
with the same amount of precision.
[Between the years 1875 and 1890 there grew
up in England, America, Austria, Germany, Hol-
land, Italy, France, and Denmark, a "school"
of economists engaged in developing the science
on the lines of Jevons, Walras, or Menger. The
well-known treatises of such Continental econo-
mists as E. von Bohm-Bawerk, Friedrich von
Wieser, Wilhelm Launhardt, K, Auspitz, and
R. Lieben, N. G. Pierson, Emil Sax, Harald
Westergaard, are all founded upon the utility
theory of value. The new theory has, besides,
exercised a very marked influence on many promi-
nent economists of the present day who, like
Professor H. Sidgwick and Professor F. A. Walker,
cannot be said actually to belong to this " utility
school."
Among English treatises distinctly belonging to
the " utility school," we can only mention a few.
P. Y. Edgeworth's Mathematical Psychics (1881)
is interesting as an attempt at utilising the new
theory for establishing, on strictly mathematical
lines, a science of social life. Tl^e Alphabet of
Economic Science, by Ph. H. Wicksteed (1888),
takes up the theory of vahie of Jevons, and
gives a popular explanation of the fundamental
EXCHANGE (USURY)— EXCHANGE (BOURSE)
767
theorems of the higher mathematics upon which it
rests. Professor A. Marshall, in his Principles of
Economics, vol. i. (1890), shows the true organic
connection between the modern theory and the
doctrines of the leading economists of the past.
The most complete bibliography to the value
theory of the utility school is found in the ap-
pendix to W. S. Jevons's Theory of Political
Economy, ed. 1888. See also: Carl Menger,
Grundsdtze der Volkswirthschaftslehre, thl. i. 1872
(notes to pp. 78-80, 108-113, 215-216, are ex-
cellent as a guide to German writers on the sub-
ject) ; Leon Walras, TMorie de la Monnaie, 1886,
pp. vii.-ix. — Auspitz and Lieben, Untersuchungen
uber die Theorie des Preises, 1889 (preface). —
Graziani, Storia critica della Teoria del Valore in
Italia. — R. Zuckerkandl, article "Preis" in Con-
rad's Handle, h. d. Staatsio., also same writer's Zur
Theorie des Preises, 1889.— E. Cannan, History of
the Theories of Production and Distribution in
English Pol. Ec. Ill 6-18 J^, 8vo, 1893.] g. k. s.
Exchange (Usury). See Usury.
Exchange, as Bourse, (a) A place where
merchants, bankers, brokers, etc., assemble at
certain hours for the transaction of business ;
and (6) the assemblage itself. In both senses
the word is commonly contracted into 'Change.
"The last yere, I shewyd your goode lorde-
shipe a platte, that was drawen howte for to
make a goodely Bursse in Lombert strette for
marchaunts to repayer unto. I doo suppose yt
wyll coste ii. M. li (£2000) and more, wyche
shalbe very beautyfull to the citti, and allsoo
for the honor of our soverayngne lord the Kinge."
Thus wrote Lord Mayor Sir Richard Gresham
in 1538 to Cromwell, the lord privy seal. He
had recently seen and admired the new Burse
at Antwerp, and was anxious that London
merchants, whose custom it was to congregate
twice a day in the open air in Lombard Street,
should be provided with a similar house, or
covered walk, to shelter them from the inclem-
ency of the weather. But powerfully as he
advocated the scheme, it did not find favour.
Owners of property were difficult to treat with ;
and, as the merchants themselves appear to
have been completely indifferent, the plan was
suffered to fall through. After the lapse of a
quarter of a century, it was however again
brought forward by his public-spirited son. Sir
Thomas Gresham. On the death of his only
child in 1564, Sir Thomas appears to have con-
ceived the idea of making his country his
principal heir ; he munificently offered, pro-
vided the city would furnish a suitable site, to
erect the building at his own expense. His
fellow-citizens gratefully accepted the offer ;
they raised a sufficient sum by subscription,
purchased the piece of land on which the Royal
Exchange now stands, and conveyed it over to
him. By the end of 1568, merchants were
able to hold their meetings within the building.
It consisted of a quadrangular arcade, enclosing
an open court, and bore a general resemblance
to the Burse at Antwerp. After completion,
it was inspected and formally opened (23rd
January 1571) by Queen Elizabeth, who "caused
the same Burse by an herralde and a trompet
to be proclaimed the Royal Exchange, and so to
be called from thenceforth, and not otherwise."
By Gresham's will the Royal Exchange was
vested in the Corporation of the City of London
and the Mercers' Company, conjointly. And to
them it in due time reverted. Exactly 100
years after the laying of the foundation stone
the building M-as swept away in the great fire
of 1666 ; and its successor, the second exchange,
was also destroyed by fire in 1838. The pre-
sent structure dates from 1844.
To the stranger who visits the Royal Ex-
change, expecting to find there the very heart
of the business of London, the deserted appear-
ance of its interior is a source of wonderment ;
with the exception of a short interval in the
afternoon, when it is resorted to by dealers in
some of the minor branches of commerce (paper,
drugs, etc.), and of an hour or so on Tuesdays
and Thursdays, when foreign bills are dealt in,
it appears to be given over to loungers. It
has to a great extent outlived its object. In
Gresham's time, and for long afterwards, the
space afforded by the quadrangle and ambula-
tory was sufficient for all re(|uirements, but
to-day the building would hardly give standing-
room to a tithe of those who every day come
together in the city to discuss and transact
affairs ; long ago it became apparent either that
the exchange must be enlarged, or that some of
those who frequented it must go elsewhere.
One after another, the larger and wealthier
traders departed and built homes for them-
selves in more convenient localities. Dealers
in stocks and shares, produce merchants, ship-
owners, insurance underwriters, coal, metal,
corn, hop, wool-traders, and others, now possess
their own separate exchanges. There is one
small but important group which transacts
business in the old parent centre, and which
the mind more particularly associates with the
word " 'Change. " On Tuesdays and Thursdays,
after luncheon time, the principals of the great
merchant-banking houses (Rothschild, Baring,
Huth, Klein wort, etc.), the representatives of
a few of the more enterprising joint-stock banks
(London County and Westminster, London
City and Midland, Martins, etc.), and the
London Branch managers of all the foreign and
Anglo-foreign banks (Credit Lyonnais, Deutsche
Bank, Swiss Bankverein, Anglo-Austrian Bank,
etc.), collect at the eastern end of the courtyard
to discuss matters of common interest and to
deal in foreign bills. The attendance is never
more, perhaps, including the brokers, than five
or six score ; but it comprises members of firms
whose names are "household words" on every
bourse throughout the world, and is eminently
representative of the financial side of England's
(68
EXCHANGE, STOCK
Welthandel. Hubbub and excitement, ap-
parently necessary concomitants of the dealings
in other commercial assemblies, are here absent ;
the negotiations are conducted in a quiet under-
tone, and with an air of nonchalance which might
almost lead the onlooker to believe that thachief
object of the meeting is conversation, and that
business is quite a secondary consideration.
Formerly the foreign mails were despatched
from London twice a week, on Tuesdays and
Fridays, and on these " post days " alone were
foreign bills negotiable on "'Cliange." The
custom of a bi-weekly meeting (since 1879
Tuesday and Thursday) still subsists, as it is
found that so far as the business in bills of
exchange is concerned, two exchange-days are
sufficient for all practical purposes, and are
perhaps more advantageous than a daily market
would be, inasmuch as they collect on the same
spot and at the same time all the important
buyers, and therefore establish a genuine quota-
tion. The business in cheques and telegraphic
transfers, which has now attained huge propor-
tions, is of too urgent a nature to wait for
"post-day," and is effected daily and hourly
by telephone.
Owing to the fact that the settlement by
bill of our mercantile transactions with other
couatries is usually effected by means of drafts
on London from abroad — the bills drawn on
abroad from England forming only a very small
fraction of the whole, that is to say, our ex-
porters, instead of drawing against their sales,
mostly arrange to have remittances sent them ;
and our importers, instead of remitting against
their purchases, mostly arrange to accept, — the
traffic in "London" paper on the Continental
bourses is on a far larger scale than that of the
dealings in foreign bills on the Royal Exchange ;
and the buying and selling of long or short
"London," either for the portfolio — as stock-
in-trade, investment, or speculation, as the case
may be — or in execution of orders received
from customers, is part of the regular round of
a Continental banker's duties, and necessitates
his daily attendance at the bourse. An English
banker, on the contrary, is rarely or never seen
on " 'Change," as he confines his bill-operations
to paper payable at home, and immediately
disposes through his broker of whatever foreign
paper may be sent up to him from the provinces
for negotiation. A notable consequence of this
predominance of foreign-drawn over English-
drawn paper in the various markets is that
the course of most of the exchanges is con-
trolled from abroad, and that the fluctuations
registered here are mere reflections of the move-
ments produced by forces operating on the
other side. G^ q^
Exchange, Stock. The largest stock ex-
change in the world is that of London, in which
securities to the nominal value of not less
than £10,000,000,000 are marketable (1914)
These securities aie officially recognised, and
there are besides numbers which have no
official quotation, but are yet dealt in from
time to time according to the speculative rago
of the moment. There are also in the United
Kingdom twenty other exchanges, including
Manchester, Liverpool, Leeds, Sheffield, New-
castle, Birmingham, Bristol, Aberdeen, Edin
burgh, Glasgow, Dublin, Belfast, Cardiff, Hali-
fax, Huddersfield. The whole of these do
not include the attendance of as many persons,
or turnover of so much money and securities, as
the London stock exchange alone. Their
business, however, presents some points worthy
of notice (see Exchange, Stock, Provincial).
The London stock exchange is not only the chief
of the English stock markets ; it is also linked
internationally with nearly all the financial
centres of the world, and it would be difficult
to name a security which could not find a
market in London, either through the ordinary
channels provided by arbitrage dealers (see
Arbitrage), who buy in the cheaper and sell
in the dearer markets, or through the agency
of trusts which, by the aid of English invest-
ments, form funds applied to the purchase of
a vast variety of securities in European, Asiatic,
American, and Australian exchanges as well as
those which are of native production. There
has never been anything in history like the
London stock exchange for magnitude and ex-
tent of financial resources. It is an immense
business engine with certain unavoidable draw-
backs which give it also the nature of an
extensive gambling centre. On the whole,
it has been found by experience that the advan-
tages and merits of such an organisation
outweigh altogether the drawbacks imposed
by the too -speculative spirit of mankind.
It has been asserted, and even by members of the
stock exchange, that nine-tenths of the opera-
tions on which stockbrokers live by commission
are gambling operations. And though no doubt
the speculative public pay annually a heavy tax
to the professional stock exchange element —
rough estimates are made that in prosperous years
the annual revenue of members of the London
stock exchange may amount to £3,000,000 or
£4,000,000, — yet the stock exchange provides
a useful barometer ; and sometimes by its extreme
sensitiveness to events which have yet to happen,
eases and mitigates the effects of disasters which
would otherwise have assumed proportions of a
national calamity. The stock exchange is alwaya
running ahead of anticipated events, and the
events when they happen, being so "dis-
counted," have the less effect if any effect at
all. This is by no means the only publioj
service done by the stock exchange. The!
modern fashion of turning over growing private (
undertakings into joint-stock companies makes ;
the stock exchange a necessity. It is also a:j
means by which astute men of business cai
EXCHANGE, STOCK
769
insure, or hedge, against the worst results of
what would otherwise be a hazardous operation.
Thus the stock exchange is often used as a hedge
against commercial contracts. For example, if a
group or firm of contractors have undertaken to
supply steel rails for a South American railway
at an advantageous rate, the chief contingency
to be guarded against is default or discredit on
the part of the state. "While undertaking to
contract on the one hand, they find it advisable
to acquire the option to deliver stock at fixed
prices on the stock exchange ; so that, what-
ever hapi)ens, there is no great or irreparable
loss to be feared. There has also scarcely been
a boom in American securities in recent years
without the life of Mr. Pierpont Morgan being
insured by both London and Wall Street opera-
tors. Commercial operations which depend on
the maintenance of peace in Europe can obvi-
ously be entered into with some sort of security
when it is possible to hedge against disaster by
recourse to the stock exchange. On the occa-
sion of the coronation, both of King Edward
VII. and of King George V., heavy insurances
were effected at Lloyd's by stock exchange
operators for the rise, on the risk of the death
of the monarch. It is a two-edged tool, how-
ever, and can only be used safely by men of
the greatest discretion and experience. We
may usefully record here an extract from the
conclusions of- the royal commission on the
London stock exchange, which reported in 1878
as follows :
"The public are enabled to count upon a
reasonable speed and certainty in the transac-
tion of business, and the vast amount of busi-
ness done secures to those who deal in the
London stock exchange as small a difference
between the buying and selling prices as can
be obtained in any other mai'ket. We think,
however, that if it were possible, it would be
desirable that the exchange should be open to
the public, — not so much because an investor
would in the event have any real control over
the bargain which his broker might make for
him, as for the purpose of removing a certain
amount of jealousy and suspicion which is
created in some minds by the present system."
The stock exchange has not found it practicable
to throw open its doors to the public, and it
remains what it was — a strictly regulated club.
The report of the royal commissioners also
contained these words : *' In the main the exist-
ence of such an association, and the coercive
action of the rules which it enforces upon the
transaction of business and upon the conduct
of its members, has been salutary to the
interests of the public." The stock exchange
having, or rather being, a valuable monopoly,
it is not surprising that the tone of its govern--
ment is exclusive. It has a share capital of
£240,000, the shares being reckoned as £12
paid. The £12 shares are (in the year 1910)
VOL, I.
worth about £190 each, and none other than a
member of the stock exchange is allowed to
be a proprietor. For the year 1909-10, the
dividend paid was £8 : 10s. a share, or 70 per
cent of the share capital, and the net revenue of
the year had been £211,810 : 2 : 3, after pay-
ment of interest at 3 per cent on £450,000
debentures. The share and debenture capital
together are more than balanced by freehold
and leasehold property, which stands at
£1,080,628 : 6 : 7 in the accounts, and may be
worth more. The value of the connection of the
stock exchange may then be reckoned at some-
thing more than five millions sterling.
The management of the stock exchange has
thus been good enough to stand the test of
public opinion during the fast-working 19th
century. About the year 1700, dealers in
public securities found the accommodation in
the Bank of England too small and migrated
to 'Change Alley ; thence to Sweetings Alley
in 1773, where a room was engaged and kept
up by subscription ; and afterwards to Capel
Court where, in the year 1802, a building was
opened, but the public were excluded. There
were at that time about 500 subscribers, and
this was the formal beginning of the stock ex-
change, as it is now known. Seventy years ago
the number of members was about 350, and
now (1910) the number is 5019 besides 2344
clerks, who are admitted at reduced rates. The
stock exchange included, as it still includes, a
responsible body, a complete organisation, a
local habitation, a public institution privately
managed. Its Benevolent Fund is unique.
Mr. F. Levien, for many years secretary to the
committee for general purposes, in his evidence
before the royal commission in 1877, described
the internal administration of the stock ex-
change in the following words : " The adminis-
tration of the stock exchange is vested in two
bodies, whose functions are distinct. First
come the managers, who represent the pro-
prietors or shareholders in the undertaking,
under the deeds of 1802 and 1876, who are the
executive of the landlords of the house and
premises, have control over all monies paid for
admission, fix annually the charge for admission
of members for the year ensuing, appoint all
officials, except the secretary to the committee
for general purposes and the official assignees,
and superintend all matters connected with the
building, supplies, etc." He goes on to de-
scribe the functions of the committee for general
purposes, who are the executive of the sub-
scribers, and ''have control over the business
of the house ; make, and administer the rules
and regulations for the conduct of the business
of the stock exchange ; adjudicate all questions
between members and complaints against mem-
bers by non-members, if desired to do so by the
latter. They investigate the question whether
their published requirements have been com-
3 D
770 EXCHANGE, STOCK, PROVINCIAL— EXCHANGE, FOREIGN
plied with by governments and companies asking
for settlements or official quotations, for loans
or shares, and have vested in their hands the
election by ballot of those who seek to become
members of the stock exchange." This com-
mittee have been known to suspend or expel
members for offences against the body, also for
those against the public, seeing that such con-
duct would be calculated to bring the stock
exchange into disrepute. On the whole, the
management has been successful, and, again
on the whole, is approved by public opinion.
New members are elected and old members re-
elected on the first Monday in March of each
year. An applicant for membership must be
recommended by three members of at least
four years' standing, each of whom must pay
£525 in case of default by the new member
within four years of his admission. The full
entrance fee is £525 and the annual subscription
£42. (See Broker ; Dealer ; Jobber.) a. e.
Exchange, Stock, Provincial, in Great
Britain and Ireland. The best known of
these are art; : — Aberdeen with 14 members, Bel-
fast 32, Birmingham 60, Bradford 12, Bristol
32, Cardiff 19, Cork 23, Dublin 87, Dundee 18,
Edinburgh 74, Glasgow 266, Greenock 12,
Halifax 9, Huddersfield 11, Leeds 27, Liver-
pool 176, Manchester 104, Newcastle 16, Shef-
field 39, and Southport 6 ; collectively (about
the year 1910) 1037 members.
All are organised associations managed by
committees, and the aggregate of yearly busi-
ness transacted is very great. It is noted that
cases of dispute and litigation between pro-
vincial brokers and clients are rare, and it is
claimed on behalf of these institutions that no
description of business in this country is carried
on with greater rapidity and accuracy than that
in which these exchanges are engaged.
Up to the year 1890 the provincial exchanges
had no common understanding or organisation ;
but in that year the council of associated stock
exchanges — that is to say of provincial stock
exchanges — was established, a consultative body
composed of delegates, generally the chairmen
and deputy chairmen of the various exchanges.
The council meets annually, or more frequently
in cases of emergency ; the presidency and ad-
ministration being undertaken by the larger
exchanges in turn. The provincial exchanges
have undertaken the revision and codification
of stock exchange rules with the object of secur-
ing identical arrangements in carrying on the
business throughout the whole body of associated
exchanges. Thus the notice of the rule of the
Manchester stock exchange committee {Econo-
mist, January 7, 1911) is identical with that of
the London stock exchange, with the difference
that it is more stringent than the latter through
the reference to the Prevention of Corruption
Act 1906, and the rule that "no member of
this exchange may divide commissions with
any one." The first public action of this body
was their successful attempt, by securing the
guarantee of share titles, to avert from share-
holders, in future, the disastrous possibilities
opened out by the North Western Railway
Company's now historical denial of their stock
certificates. The London stock exchange de-
clined to take action in the matter, until the
principle of indefeasible titles to securities had
been accepted by public bodies ; the Forged
Transfers' Acts, and the benefits resulting from
them, will, accordingly, always be associated
with the provincial exchanges, more especially
with that of Liverpool, a member of which in-
stitution having secured the passing of these
acts and put them into operation.
The business of the provincial stock exchanges
consists largely of: — Transactions for invest-
ment in British, Canadian, and American rail-
way stocks ; dealings in shares of insurance,
banking, shipping, commercial and industrial
undertakings. The application of the Limited
Liabilities Act adds largely to the number of
these undertakings. Being practically brokers'
markets, investors can there operate free from
such profits as are absorbed by London dealers.
The Association of Provincial Stock and Share
Brokers, a new organisation which held its first
annual meeting, June 27, 1914 {Times, June
29), promises to be useful.
Exchange, Foreigk. The term foreign ex-
change denotes the value at which an amount
quoted in the currency of the country where
the transaction originates is interchangeable
with that of a foreign country. The quotation
of foreign exchange fixes the market value, for
the time being, of foreign currency in the place
wherein the quotation is made. For instance,
if the French exchange is quoted in London
to-day at 25 frs. 20 c. for cheques on Paris,
it means that for every sovereign a London
banker would buy or sell 25 frs. 20 c. in a
cheque on Paris — one must say buy or sell,
because it is most unlikely that he would do
both, for there is always a difference between
buying and selling, therefore the quotation is
generally twofold — for instance 25 frs. 20 c. to
25 frs. 25 c, meaning that the London banker
would give the public an order on Paris for 25
frs. 20 c. for each sovereign he receives, or would
give a sovereign for every 25 frs. 25 c. offered
to him in the shape of a cheque on Paris.
He thus leaves a margin of profit of 2^
centimes in each pound, either in buying or sell-
ing, the actual exchange being 25 frs. 22|- c.
This margin of profit pays for the trouble and
outlay involved in the transaction, which the
banker in London and his agent in Paris have
to carry out.
It is necessary to point out that these quota-
tions constantly fluctuate for various reasons, the
principal cause being the balance of trade between
different countries ; let us cite an instance :
EXCHANGE, FOREIGN
771
If operators in France sell in England goods
or securities of a greater value than what
English operators sell in France, the balance
of trade is said to be against England ; conse-
quently the quotation in Paris for pounds
sterling declines. There are, however, indirect
influences on the exchanges between different
countries ; for example, England may owe
money to the United States for wheat, cotton,
or other commodities, while the United States
may owe money to France for silk or wine.
In that case the American merchant would
probably send to France bills drawn on England
against the goods which English merchants
have bought from him. These bills being sold
in Paris would tend to depress the quotation of
pounds sterling in Paris, just as if England
owed the money to France. "We thus see that
foreign exchanges play an important part in
facilitating the settlement of debts due by one
country to another, thus avoiding the cumbrous
mode of paying international indebtedness by
the transmission of specie.
Another cause of variation in foreign ex-
changes is the inequality of the value of money
in different commercial centres ; money, like
water, finds its level, it flows, unless some
obstacle intervenes, to those countries where a
better rate exists, until it equalises those dif-
ferences. Those obstacles are the question of
credit, and of the dissimilarity in the respective
currencies ; where these things are equal, a
difference in discount rates will attract or repel
money from one country to another. For
instance, when the Baring crisis occurred in
November 1890, the Bank of England raised
its rate of discount to 7 per cent. , which rate
was maintained for some time, and was higher
than the value of money in other commercial
centres. The effect was immediately apparent ;
all foreign merchants and bankers who had
confidence in their London agents remitted
money to obtain a higher rate of discount than
what obtained in their respective countries.
These remittances acted on the foreign ex-
changes, causing them to rise to the gold export
point (see Gold Points in Foreign Exchanges),
necessitating the shipment of gold to London.
Another effect of high discount rates is the
depression in the value of merchandise and
securities, such as bonds and shares held on
borrowed money. These are sent to markets
abroad where money is cheaper, and naturally
money is sent to London in payment of the
goods and securities received. Another cause
of fluctuations in foreign exchange is internal
disturbance, either social or financial, creating
alarm and inducing the transference of money
from one country to another for safe custody.
We have seen at intervals in Paris that dis-
turbances have caused the exchange on London
to advance very rapidly in consequence of large
Bums being sent to London for safe keeping.
The season when English people migrate to
the Continent is generally marked by a decline
in the value of sovereigns abroad, and the ex-
change is then said to move against this country.
The quotation of exchange between countries
using gold as the chief circulating medium can
however only fluctuate between well-defined
limits called the export or import gold points.
Thus the exchange on London cannot for any
length of time fall below 25 frs. 10 c, nor
rise above 25 frs. 40 c. ; because in the former
case gold would be sent from London to Paris
to purchase pounds sterling, and in the latter
case the reverse operation would take place,
and gold would be sent from Paris to London.
The difference of 30 c. or 3d. per sovereign
covers the freight and insurance, also the mint
charges involved in converting the gold of one
country into that of the other.
There is, however, considerable difficulty at
times in fixing the exchange between this
country and another which has a silver or
paper currency. Sometimes the variations are
great and rapid ; sometimes it is difficult to fix
a close ratio between buyers and sellers of ex-
change on countries having a basis of circula-
tion different from our own. Let us take the
exchange between this country and India,
which is the largest silver using country in the
world. The exchange in London on India
varies materially and suddenly. On some occa-
sions there has been no reasonable quotation for
bills on our great dependency, because of the
uncertain value of silver. The rupee declined
from the rate of 2s. fd. in 1864, to the rate o^
Is. 2-|d, in August 1892, and subsequentl}
even lower. These enormous fluctuations arose
from the variations in the gold price of silver
in this country, but the fluctuations in the
exchanges between India and other silver-using
countries has been very slight.
Thus the exchange between Shanghai and
Calcutta did not vary so much during
the year 1891 as the quotation between
London and Paris ; in fact, the fluctuations
between China and India seldom exceed ^ per
cent, which represents the cost of freight and
insurance on transmitting silver between those
countries.
The greatest variations, however, arise in
the exchanges between this country and those
where there has been a suspension of specie
payments. The most notable instances are
with Russia, Spain, and Portugal in Europe ;
and with Brazil, Chili, and Argentine in America.
There is hardly a limit to the possible deprecia-
tion of a paper currency. We have noticed,
with regard to Argentine, a premium on gold
of 300 per cent, or a reduction in the value of
paper to one-fourth of its former gold value.
All depends in these cases upon the quantity
of paper money issued, relatively to demand
and to the absorbing power of the country con
772
EXCHANGE, FOREIGN
cerned and upon the credit of the government
which is responsible for the ultimate redemp-
tion of the paper currency. We know that
almost every country has passed through this
critical financial stage ; even in this country, at
the beginning of the 19th century, gold lias
been quoted at a premium of over 50 per cent,
as against Bank of England notes. At such a
time the foreign exchanges were greatly adverse
to this country, and all gold was exported.
Fifty years ago the United States had a
similar experience of a forced paper currency
with foreign exchanges all against that country,
causing the exportation of gold and silver^ to
pay for war stores. "We thus see that foreign
exchange acts like a barometer giving indica-
tions of the financial aspect in every country,
acting as a warning when a financial storm is
impending, counselling those who have too
many engagements afloat to take in sail ; while
in fair weather it gives an assurance of smooth
water ahead, administering a well-founded im-
petus to all who embark in legitimate enterprises.
[See Goachen, Foreign Exchanges.'] s. M.
Exchange, Foreign, practical working of.
If it be sought to apply the theory of the
foreign exchanges to practical ends, or to draw
trustworthy conclusions from their fluctuations,
the following axioms should be noted.
Firstly y the current rate of exchange is the
price of a bill of exchange either at usance or
at sight. It is not necessarily the ratio at
which the money of one country exchanges for
the money of another. At a time when e.g. a
cheque on Berlin is to be bought at 20 '40 marks
to the £, it may be necessary to pay 20*20 for
German gold coin (because it must be assumed
that the seller has been at the expense of im-
porting it) ; but 20-40 would be called the rate
of exchange, not 20-20.
Secondly, the price of bills is governed by
the ordinary laws of supply and demand.
When they grow scarce they grow dear, when
they become plentiful they become cheap. If
they become very dear, the would-be purchasers
look round to see whether there is anything
else they can remit to better advantage — pro-
duce, let us say, or some particular stock
exchange security, or one of the precious metals
— and, as soon as they discover such an article,
they cease buying bills, and the price stops
rising ; if they become very cheap, the would-be
sellers consider whether it might not pay better
to employ the money standing at their credit
abroad in the purchase of something — gold, say,
or a foreign bond— which is saleable at home'
and immediately this becomes feasible they cease
off'ering bills, and the price stops falling.
Thirdly, the rate of exchange at A for cheques
on B must correspond, or tend to correspond,
with the rate of exchange at B for cheques on
A, assuming that credit has not been shaken
on either side, and that there exists a free
market for cheque and cable transfer. Other-
wise exchange-dealers would secure a speedy
and easy profit. Thus if Paris telephones
"Cheque London 25-26 " while here it stands
at 26*24, bankers on both sides would instantly
sell as much as possible, the result being as
follows : —
London pays say £5000 (amount of the Paris
draft), and receives £5000 (proceeds of its draft
on Paris for fr. 126,200 at 25-24).
Paris pays fr. 126, 200 (amount of the London
draft), but receives fr. 126,100, proceeds of
its draft on London for £5000 at 25-26 ;
showing without any outlay whatsoever, a
gain of 100 francs. This is called arbitrage-
business, and illustrates the manner in which
the exchanges are actually regulated, for it is
of course obvious that under the influence of
such transactions the rates in Paris and London
will very speedily be brought to a level.
Fourthly, as it is the custom of trade to give
credit to the buyer who buys to sell again, most
bills are drawn at a usance, varying from thirty
days to six months, according to custom, and
the usual exchange quotation applies to bills at
usance. Between the exchange for a bill at
sight and that for a bill at usance, the differ-
ence depends on the rate of interest prevailing
in the place upon which it is drawn. The
usance, for example, of bills on Italy is three
months, and if interest in Italy rules at 4 per
cent, a bill at usance should cost 1 per cent less
than a bill at sight.
Fifthly, as the bills drawn on London from
abroad vastly outnumber the bills drawn on
abroad from London, the demand and supply
of the former exercises a proportionately greater
influence over the course of the exchange than ,
that of the latter. In other words, the actual
rise or fall takes place on the foreign market,
and London in most instances merely adjusts
its rates according to the quotations telegraphed
from abroad.
Lastly, in those countries where the value of
the currency oscillates in relation to gold, the
exchange is subject to two sets of fluctuations —
to fluctuations of limited extent caused by
changes in the ratio of supply to demand, and
to fluctuations of almost unlimited extent
caused by changes in the value of the currency-
medium. Thus, if the normal exchange with
a paper currency country be 48d. per $ gold, or
$5 to £1, a rise in the gold premium, which is
illimitable, from 200 per cent to 300 per cent
would cause the exchange to move from 16d.
per $ paper, or $15 per £, to 12d. per % paper,
or $20 per £.
[S%e Lord Goschen, Foreign Exchanges (Effing-
ham Wilson, 1863) — the classical work on this
subject. For the calculations needed for "the
solution of the problems encountered in the
merchant's every-day experience," see especially
the works of George Clare, A £ G of the Foreign
I
EXCHANGE BETWEEN HOLLAND AND DUTCH INDIA
773
Exchanges (Macmillan, 1895), — A Money Market
Primer (Effingham Wilson, 1893).— H. Deutsch,
Arbitrage (EflF. Wilson). — Ottomar Haupt, Arbi-
trages et Parities, 1894. Franklin Escher, special
lecturer on Foreign Exchange at New York Univer-
sity, in Elements of Foreign Exclmnge (Eff. Wilson,
1910), gives an interesting explanation of the sub-
ject from the point of view of the United States. —
Hartley Withers, Money Changing^ 1913.] g. c.
Exchange betvj^een Holland and Dutch
India. (The guilder converted in this state-
ment as 12 = £1.) To explain the working
of the exchange between Holland and Dutch
India, it is necessary to describe the diflFerent
currency systems in force in the mother
country and the dependency. To begin with
that of Holland. At the commencement of
the 19th century the state of the currency in the
Netherlands was very unsatisfactory. From
early times silver had been the only standard
of value, but an almost unexampled variety of
silver coin was in circulation, owing to the
fact that, during the existence of the Republic
of the United Netherlands, nearly every province
had a separate mint. Gold coin had also been
struck, and was a medium of exchange at rates
officially fixed by the government ; but silver
alone was legal tender until the year 1816,
when (Act of 28th September) dual legal
tender was introduced at the ratio of 15 '87,
between the then current silver gilder of 200
aas weighing 9-61 grammes fine, and the ten
guilder piece weighing 6*056 grammes fine gold.
Gold being thus over -valued, as compared
with the bimetallic ratio of \^\ adopted by
France in 1803, all the full weight silver coins
were driven out of the country, and gold
coin, struck according to the law of 1816,
together with all the worn and clipped silver
coin of earlier date, formed the only circulat-
ing medium.
To remedy this state of affairs it was enacted
in 1839 (Act of 22nd March) that the historical
guilder of the weight of 9 -61 grammes fine silver
should be reduced to the weight of 9*45 gram
fine, thus raising the ratio from 15*87 to 15*60 ;
but the clipping of the old coin continued on a
most scandalous scale, so that often a premium
of 5 to 1\ per cent had to be paid for full
weight pieces. A thoroughly efficient reform
of the currency became indispensable, and a
general recoinage of all the old silrer money,
struck before 1839, was accordingly ordered by
the Act of 22nd May 1845.
Within a couple of years a nominal amount of
85 millions of guilders old silver (£7,083,000)
was withdrawn from circulation and converted
into new coin, at a cost of some 8 millions
(£666,600), the operation itself being to a
great extent facilitated by the still existing
double standard, gold coin being available for
the use of the public in adequate quantities.
At the same time, the question whether the
double standard system could be continued,
became a matter of ample discussion in the
press, and after lengthened debates in parlia-
ment the law of 26th September 1847 was
enacted, by which the monetary system of the
Netherlands was based on the silver standard
only, with the silver guilder of 10 grammes and
iVoo fi^6 ^^ ^^ unit, all the gold coins in the
hands of the public being withdrawn from
circulation and demonetised.
This decision was taken when nothing yet had
transpired about the Californian and Australian
gold- fields. That only became known to the
world a couple of years later ; nothing, there-
fore, can be more erroneous than the assertion,
often made, that the final adoption of the silver
standard as basis of the monetary system of the
Netherlands originated in the fear of a probable
fall in the value of gold. The greater con-
venience of silver for domestic purposes was
the principal motive for a reform which at that
time perfectly answered the purpose.
The recoinage of the old silver coins being
completed in 1849, a beginning was made in
the following year by withdrawing the gold
ten and five guilder pieces from circulation.
Of these g. 172 millions (£14,333,300) had
been coined and delivered to the public, but
scarcely one - third of that amount, say
g.50 millions (£4,166,600) was presented for
exchange against the state notes munthiljctten).
These notes were intended to be issued as a
temporary medium of exchange only, but as
the public became accustomed to them they
proved so convenient that up to Oct. 1, 1904,
they formed part of the currency of the country
to a limited extent — varying between 10 mil-
lions (£833,300) originally and later 15 millions
(£1,250,000).
All the gold coins received from the public
were sold on government account at a loss of
1 million of guilders (£83,300), and altogether
the reform of the currency, including the re-
coinage of the old silver money, and the
demonetisation of the former gold coin, has
been effected at a cost of about 10 millions
(£833,300).
Since that date, 1847, the state of the
currency became most satisfactory in every
respect, and certainly no new reform would
have been thought of if the monetary policy
of the neighbouring countries had remained
unaltered. But in 1872 the rulers of Germany
deemed it advisable to introduce gold as the
standard of the newly-constituted Empire, and
it soon became evident that Holland could not
remain indifferent to the intended reform of the
German currency.
In October 1872, therefore, the Dutch
government appointed a special commission to
consider the subject and to advise as to the
measures necessary in the interests of the
country, and in December the commission ro-
774
EXCHANGE BETWEEN HOLLAND AND DUTCH INDIA
ported that it would be impossible for Holland
to retain the silver standard established by the
Act of November 1847, were all her neighbours
to adopt gold as their standard of value. Accord-
ing to their views the most desirable solution
onhe question for Europe in general would "be
the adoption by the leading monetary powers
of the double standard— admitting the free
coinage of both gold and silver as legal tender
at the same fixed ratio of value. They con-
sidered that a great stability of value for both
metals would be the result of the compensatory
action of that system, if introduced throughout
the whole of Europe ; that Holland alone would
be powerless in the matter, and therefore that
it would be indispensable for Holland to adopt
the single gold standard should Germany decide
upon that line of action, and that, in the mean-
time, without abrogating the law of 1847, the
further coinage of silver on private account should
at once be restricted or stopped altogether.
In conformity with the recommendation of
the commission, the closing of the Utrecht
mint for private coinage of silver was ordered
by the law of 21st May 1873, and on Germany
establishing the gold standard by the law of 9tli
July 1873, a bill was submitted to the states
general, proposing the introduction of a legal
tender currency of ten and five guilder pieces in
gold, and the withdrawal from circulation of the
silver standard coins issued under the currency
regulations of 1847. The bill, however, was
rejected ; matters remained as they were until
the middle of the year 1875, when, according
to the law of 6th June, the mint was opened
to the public for the coinage of ten guilder pieces
of 6*048 grammes fine gold, to be legal tender
concurrently with the silver guilder, the further
coinage of which remained prohibited.
Thus the system of the Stalon boiteux was
introduced in the Netherlands, and, though it
is of course open to the greatest objections, it
must be acknowledged that, up to this moment,
it has caused no serious inconvenience or mis-
chief whatever. As a rule, the balance of trade
is in favour of Holland, and bullion accordingly
flows in freely. But occasionally the tide turns,
as was the case in 1882, when a strong demand
for export set in and the bank's stock of gold,
which about the middle of 1880 had amounted
to 80,000,000 of guilders (£6,666,600), de-
creased to below 5,000,000 (£416,600). The
defect of the system then became evident. If
once the gold stock of the country were ex-
hausted, silver would become the regulator of
the currency without any other limit to the
depreciation of the currency and a correspond-
ing rise in the foreign exchanges than the price
of bar silver in the London market.
To protect the general interests of the
country against the serious dangers eventually
certain to result from such an unsettled state
of aliairs. a bill was passed (Act of 27th April
1884) empowering the government, as soon aa
the state of the currency should render it
necessary, to withdraw from circulation, and to
sell in the open market, silver coin to the
amount of 25,000,000 of guilders (£2,083,300,
at 12 gs. =£1) and to buy gold with the pro-
ceeds. Up to this moment, however (February
1911) there has never been any need to put this
measure — which in the full sense of the term
may be considered as the safety valve of the
present currency system of Holland — into force.
The law of 1884 is the unequivocal acknow-
ledgment of the principle that the state is
responsible for the maintenance of the gold value
of the silver currency, and that it is one of the
first duties of every government that has .imposed
a standard of value upon its subjects to take
every reasonable precaution in its power to pre-
vent that standard from fluctuating.
The currency system which has now beer
in force in Holland for about forty years,
though defective in principle, has fully answered
the requirements of the country, and it may
remain unaltered for many years more unless
it breaks down through the immense profit to
be made by unscrupulous persons in manufac-
turing illicit coins of exactly the same weight
and standard as the legal ones. But if this
becomes the case, it will not only be Holland
but nearly the whole continent that will have
to face a difficulty of the greatest magnitude,
the solution of which may make an international
understanding with respect to money matters
more urgent than ever.
Having thus described the system of currency
in force in Holland, we will now turn to that
of her Indian possessions.
In Dutch India the state of the currency
was for many years even worse than it was in
the mother country before the reform of 1847
was eflected, and even the government itself
was instrumental in wilfully perverting the
currency of the colony.
The erroneous idea prevailed that the wants
of the native population were on too limited
a scale to require the precious metals for a
general medium of exchange, and that it was
in the interest of "the good people of these
countries to increase the circulation of copper
coin as much as possible" (Decree of the
Governor -General of Dutch India, of 25th June
1818). Hence the government continued for
years to eff'ect the bulk of its payments in
copper money, the so-called doits (duiten),
which were imported in large quantities frcan
Holland with the unavoidable result that all
the good money formerly issued was driven out
of the country. Silver was still the legal
standard, and the silver guilder the unit of
account, but virtually only copper remained as
the general circulating medium for the whole
community. A general depreciation of the
currency was the natural consequence of tliii
EXCHANGE BETWEEN HOLLAND AND DUTCH INDIA
775
state of affairs, a loss of 25 to SO per cent
having to be incurred on every remittance to
Holland or elsewhere.
The colony suffered severely for many years
under this miserable and scandalous condition
of the currency. At last the government be-
came aware that measures of a most stringent
character ought to be taken to resettle currency
matters on a satisfactory basis. By the law of
1st May 1854 the monetary system of the
mother country, as regulated by the law of
1847, was introduced in Dutch India, and
since that time nothing has been left undone
by the authorities to secure the colony the
benefit of a thoroughly efficient currency. For
some consecutive years large shipments of silver
coin from Holland to Java were made on govern-
ment account, between 1854 and 1860, 90
millions of guilders (£7,500,000). Every-
where an opportunity was offered to exchange
silver for the circulating copper money, and
thus a long-wished-for reform was effected at a
cost to the state of about 20 millions of guilders
(£1,666,600).
Ever since that date the condition of the
currency in Dutch India has been as satis-
factory, nay as perfect, as in the mother
country itself ; even the late silver crisis leav-
ing it altogether unaffected in consequence of
the measures taken by the government to
keep the currency at the standard value by
closing the Utrecht mint, not only for the
home, but also for the colonial coinage.
Having no mint of its own, Dutch India
has always been supplied with the money
required for circulation by specie imports from
Holland, the standard coin being exactly
identical, and the stock of silver legal tender
money available in Holland has till now been
more than sufficient to meet the requirements
of the circulation of the colony.
Thus a very close • link exists between the
currency of Dutch India and that of Hol-
land. At first it was thought that silver
might remain the standard in the eastern
possessions of the kingdom, whatever reform
might be introduced in the monetary system of
the mother country ; but gradually the convic-
tion prevailed that, equally with the people of
Holland, the Indian subjects were entitled to
protection from the difficulties in which the
action of a depreciating currency must necessarily
involve them, and to remove aU uncertainty as
to the standard of value in the colony the law
of 28th March 1877 decided that gold ten
guilder pieces should from that date be legal
tender in Dutch India, — thus establishing the
monetary system of the colony on exactly the
same basis as in Holland.
Meanwhile no gold whatever is to be found
in circulation in Dutch India ; but the lack of
gold has never caused any inconvenience, and
is in fact of no consequence so long as the
circulating silver money fetches the full value
of gold for payments in Holland. More than
once Dutch India has had to face an unfavour-
able balance of trade, making the export of
specie unavoidable (Table A), but the rate of ex-
Table A.
Imports and Exports of Silver Coin
from and to Holland.
(The guilder converted as 12 = £1.)
Years.
Government account.
Private account.
Imports.
Exports.
Imports.
Exports.
£
£
£
£
18S8
1 724,166
1889
666,666
1 792,500
1890
333,333
1 210,166
1891
83,333
804,166
1892
166,666
345,667
733,333
1893
83,333
1894
83,333
332
1895
1896
51,250
4,542
1897
189»
133,333
300
1899
675,600
1900
198,750
1901
176,666
750,154
1902
12,022
250,000
1903
83,333
1904
91,667
1905
350,000
1,479
1906
375,000
83,333
1907
583,333
4,167
1908
Table B.
Batavia Rates of Exchange for Bank Bills.
Amsterdam
London
six months' date.
six months' sight.
Years.
(Par = 100)
(Par=g. 12)
1
.
-i^"
1 -g
bD
^
gj
^
bo
i
fo
%
<o
^
s
<
w
:i
5
1888
103
im
102A
10l|
11-85
11-675
11-75
1889
102^
100
11-975
11-70
11-825
1890
102
99^
lOOi
12-05
11-80
11-925
1891
101
99;
1001
lOOf
12-05
11-925
11-975
1892
lOli
99;
12-10
11-90
12-
1893
102i
100
lOli
12-05
11-825
11-94
1894
lOlj
100
lOOf
12-05
11-90
11-975
1895
loot
100
100x%
12-125
12-025
12-075
1896
IOI7
100
12-15
12-025
12-09
1897
101
lOOi
101
12-OG
11-94
12-
1898
101^
100^
101
12-
11-90
11-95
1899
102^
lOlf
im
11-95
11-80
11-875
1900
102
102tV
11-86
11-79
11-825
1901 ,
101
lOOi
lOiA
12-04
11-84
11-94
1902
lOlJ
100^
lOOfg
12-075
11-925
12-
1903
101^
lOOi
loiA
ri-
11-875
11-94
1904
IOI5
\m
101
ll -96
11-91
11-94
1905
101:
101
101?
11-925
11-85
11-89
1906
1021
lOlf
102^
102^
102j
11-90
11-775
11-84
1907
102,
11-825
11-675
11-75
1908
102^
lOli
102i
11-94
11-725
11-83
change never exceeded the bullion point of gold
(see Gold Points in Foreign Exchanges),
since silver could always be used as a remittance
to Holland in order to effect payments there,
or to purchase sterling biUs in Amsterdam foi
payments in England.
776 EXCHANGE BETWEEN GEEAT BKITAIN AND BEITISH INDIA
In consequence rates of exchange at Batavia
—the financial centre of Dutch India— have
maintained a most remarkable steadiness during
the last forty years, as shown in table B, see
page 775, to explain which it may be added that
the way of quoting the rate of bills drawn on
Amsterdam is exactly the reverse of the quota-
tions for sterling paper. For the latter the
Dutch Indian currency is the fluctuating term,
the quotation consisting of a varying number
of guilders and cents to be paid for the pound
sterling. In the exchange between Batavia and
Amsterdam, on the other hand, the latter place
gives the "uncertain" a quotation of 101,
meaning that g. 100 Dutch Indian currency
gives claim to g. 101 Netherlands currency.
Thus it is obvious that a rise in the quotation
of bills on Amsterdam must correspond to a
decline in sterling quotations. [See Exchange,
Foreign, practical working of.]
During the last forty years in drawing from
Java the extreme rates for Dutch bills have
been 99^ and 104^, and for English*" bills
g, 12-15 and g. 11*375, thus showing a fluctua-
tion of only 5|- per cent for the former, and 7
per cent for the latter bills. Since 1875, when
the great fall in the price of bar silver set in,
idtes have not fluctuated more than 2^ or 3 per
cent. Thus Dutch India has been spared the
disturbance in money and exchange matters
which has caused so much inconvenience and
loss in British India.
By the law of December 31, 1903, renewing
the charter of the Netherlands bank, power
was granted it to issue notes of 10 guilders
(16s. 8d.), and simultaneously the state notes
were withdrawn from circulation. Since then
the regulation of the fiduciary currency of Hol-
land has remained in the hands of the bank
under the regulations ordered by law.
[But the fact is not to be overlooked that the
whole structure of the currency of Dutch India
must collapse in case Holland is forced by circum-
stances to complete its monetary reform by the
demonetisation of the silver actually circulating
as full legal tender money. Then the colony
would be obliged to follow, and it is therefore not
at all impossible that at some future period even
the Eastern Archipelago may appear in the market
for the sale of silver and the purchase of gold,
unless it may still be practicable to arrive at an
international understanding about the free coinage
of silver as proposed originally in the report of the
Dutch currency commission of 1 87 2. ] n. p. v. d. b.
[Ratio of silver to gold in Holland, taking mint
charges into account, 15*625 to 1.]
Exchange between Great Britain and
British India.— The drop in the value of
silver, commencing after 1867 (see Latin
Union), compelled the government of British
India to make in 1893 an arrangement for its
remittances between India and London, similar
in many respects to that in existence between
Holland and the Dutch Indies (see Exchange
between Holland and Dutch India), The
rate at which council bills were issued in London
was separated from the price of silver. In
order to effect this, the coinage of rupees in
India on private account was suspended, with
a view to the introduction of a gold standard.
The Indian government had been anxious that
this step should be taken ; but the home govern-
ment desired that a thorough examination into
the whole matter should be previously made.
A departmental committee was appointed, con-
sisting of Lord Herschell, afterwards lord
chancellor, chairman, other members being Mr.
Leonard, now Lord, Courtney, Sir Thomas,
afterwards Lord, Farrer, Sir Reginald, now Lord,
Welby of the treasury, Mr. Arthur Godley,
now Lord Kilbracken, of the India office, Sir
Richard Strachey, and the late Mr. B. W.
Ourrie, who was a member of the council of
India and of the firm of Glyn and Co. Thp
committee considered the proposals of the
Indian government, which aimed at fixing the
exchange at the rate of Is. 6d. per rupee. This
rate the committee did not adopt ; the market
rate being at the time (June 1893) approximat-
ing to Is. 2d. for the rupee. The general con-
clusions of the committee, in their report to the
secretary of state for India, Lord Kimberley,
were that "while conscious of the gravity of
the suggestion, we cannot, in view of the serious
evils with which the government of India may
at any time be confronted if matters are left as
they are, advise your lordship to over-rule the
proposal for the closing of the mints and the
adoption of a gold standard, which that govern-
ment, with their responsibility and deep interest
in the success of the measures suggested, have
submitted to you. But we consider that the
following modification of these proposals are
advisable : — The closing of the mints against
the free coinage of silver should be accompanied
by an announcement that though closed to the
public, they will be used by the government for
the coinage of rupees in exchange for gold, at
a ratio to be then fixed, say Is. 4d. per rupee ;
and that in the government treasuries gold will
be received in satisfaction of public dues at the
same ratio." The Indian government acted
immediately on this recommendation, and an
act was passed in the council at Calcutta (June
1893) carrying the report of the committee
into effect, and fixing the rate at Is. 4d.
The action of the government in 1893 was
immediately followed by a rise in the selling
rate of India council bills in London from about
Is. 2d. to Is. 4d. for the rupee, and by a rather
more than corresponding fall in the market
price of silver. Suggestions have been made
to bring the rate for council bills upwards to
Is. 6d., and ultimately to about 2s. for the
rupee. It remains to be seen whether the
Indian government will have sufficient control
over the market for bills to enable it to carry
EXCHAKGE, INTERNAL
777
this into effect. Nor can the influence on the
coinage legislation of other countries — as for
example on the United States of America — or
on the rate of exchange in the trade with other
silt^r-using countries be stated at present, or
the effect which may be produced on the trade
of British India, or on the condition of the
people. One result, if the measure continues
to operate, will be the formation of the largest
"token" circulation of coins that has been
known in modern times, as the rupee will cir-
culate at the rate which the government fixes
it at relatively to gold, irrespective of the gold
price of uncoined silver ; while for the present,
at all events, there is no gold coin current to
represent the rupee. A further result will be
the entire separation of the rate for the bills
on India from the market value of the ordinary
circulation of the country. The council bills
are, as was desired, issued at the rate fixed
for the time by the Indian government. The
arrangements, in so far as they are based on an
authoritative rate fixed by a government ibr
monetary transactions, and a fixed ratio be-
tween gold and silver are similar in some points
to those on which bi-metallic systems have been
founded ; but while this is the case, the leading
principle of bi-metallism. namely, the power
of the subject to have his bar silver or bar
gold coined into money and to be able to pay
his debts with either metal so coined, is entirely
absent. The success of the plan depends solely
on the power which the Indian Council may
be able to exert over the London market. The
Indian Coinage Acts of 1899 and 1906 enacted
that "gold coins, whether coined at Her
Majesty's Royal Mint in England, or at any
mint established in pursuance of a procla-
mation of Her Majesty as a branch of Her
Majesty's Royal Mint, shall be a legal tender
in payment or on account at the rate of
fifteen rupees for one sovereign." No such
gold coins have yet (1914) been struck at any
mint in India.
No reference has been made in this state-
ment to other points, many of great weight,
connected with this question, such as the
possibility of private coinage — in the vast
region of India, touch of which is not under
the control of our government — of spurious
silver rupees equally valuable with those issued
by authority, an operation which would be very
proiitable to the coiner (this, however, up to
the present, 1914, does not appear to have
been carried on to any very large extent) — of
the effect on the Indian cultivator of the soil,
who will now be deprived of the resource which
silver, in the form of ornaments, has been to
him in time of famine — or of the result on the
trade of other silver-using countries.
The measure was designed to prevent the
rate from dropping lower, but it will have the
effect of stereotyping the loss entailed by the
fall in exchange both on the government and
on private individuals at the point at present
fixed.
[See Report of the Committee appointed to inquire
into the Indian Currency, 1893. — Cc/rrespondenct
between the Government of India and the Secretary
of State, 1893. Comp. Econ. Journal, Sept. 1893.]
[Ratio of silver to gold in India, with rupee at
Is. 4d., takiug mint charge into acct., 22*37 to 1.]
Exchange, Internal. One factor in the
calculation of all exchanges is the cost of the
transmission of bullion, including therein the
cost of actual transport and the risk and trouble
involved. In the foreign exchanges these
charges are in a general way concealed by the
fact that the two sides are in terms of different
currencies ; and they are modified by the com-
petition of bills of exchange, according to the
supply and demand of which will be the pro-
portion of such charges which a remitter will
have to bear. The same expenses attach to the
settlement of transactions between different
parts of the same country, but they are rendered
more apparent by being expressed in the form
of a commission or premium. They are also
usually more imiform, as they are not affected
by momentary competition, but are governed
by the condition of the banking system, tending
gradually to diminish in proportion to the com-
pleteness of its development.
In this country the facilities for intei-nal
exchange are considerable, and its cost has been
brought to a low point. The post-office system
of money orders, and of postal notes and orders,
furnishes the means of remitting small sums to
almost every village, at a cost that has continually
decreased as the facilities offered have increased.
In the first quarter of the present century re-
mittances could only be made to a few towns, and
at a cost of about 2^ per cent. At the present
time the number of points to, or from, which re-
mittances may be made has risen to upwards of
10,000, whilst the cost may not much exceed one-
half per cent. For larger sums remittances were
formerly made by bankers' drafts, or bank post
bills, the charges on which were defrayed partly
by a direct commission, and partly by deferred
payment. At the jjresent time, by means of the
country cheque clearing (see Cleauing Sys-
tem), remittance may be made throughout the
whole of , England and Wales absolutely without
cost, whilst for the collection of drafts other
than cheques, and for all collections in Scotland
and Ireland, the cost has been brought generally
to about -^ of 1 per cent. This result is greatly
due to the spread of branch banking (see Banks,
England and V/ales).
In the United States the development of the
national banking system (see Banks, National,
U.S.A.) has led to remarkable results in the
same direction. This system was established in
1865, at which time the cost of southern and
western exchange on New York was from X to
778
EXCHANGE OF NOTES— EXCHANGER, ROYAL
1^ per cent, and even for different parts of the
state of New York it was ^ per cent. The diffi-
culty of obtaining reliable remittances was even
more serious than its cost, as the notes or drafts
of banks in any state were frequently quite use-
less but a few miles beyond its borders. ' By
1890 the rates of commission or premium, on
internal exchange, had so far declined that they
ranged from 1 cent per $100 (t^^ of 1 per cent)
in some small states, as Rhode Island and New
Hampshire, up to 21 cents per $100 (^ of 1
per cent), in Nevada, Texas, and some other
states. The influence of the Bank Act of 1913
on internal exchange remains to be seen.
In France the Bank of France, through its
numerous branches, has long afforded consider-
able facilities for internal exchange, which have
increased in recent years by the still more
numerous branches of other banks. R. w. b.
Exchange of Notes (in reference to the
note circulation in Scotland). All the banks
now (1914) carrying on .business in Scot-
laud are banks of issue. They are nine in
number, and there is a stringent system main-
tained of exchange of notes once a day in every
town in which there are two or more banks.
In the case of a bank holding the notes of
another bank not represented in its town, these
are remitted to the issuing banks at short in-
tervals. On Saturdays there is an afternoon
as well as a morning exchange, so that the re-
turns of circulation made at the close of business
on Saturdays, as required by the terms of the
Bank Act of 1845, exhibit the amount of notes
then in active circulation, i.e. in the pockets
and tills of the people. No bank ever issues
the notes of any one of the other banks.
The notes are, by the system described above,
"cleared" to a gi-eat extent independently of
the ordinary settlement of drafts and bills
between the banks. The system is a very con-
venient one, and saves the banks concerned a
great deal of labour.
All clearing-house balances, other than those
arising at the Edinburgh clearing-house, are
settled by drafts on Edinburgh, which pass
through the clearing-house there, and the
balances of the Edinburgh clearing-house are
settled bi-weekly by transfers of cash made in
London four days later. Interest at 3 per cent
is paid by the debtor banks on balances until
the date of final settlement in London.
Exchange Broker. Unlike the bill-broker
(see Bill-Broking), who in most cases is really
a dealer in bills, which he buys and sells for his
own account, the exchange or foreign bill broker
is strictly what the title of his calling implies,
namely, an intermediary or negotiator between
the buyers and sellers of bills of exchange drawn
on foreign countries.
Such bills fall into two classes ; those drawn
from the provincen, and those drawn from, or
held in, London. As regards the former, all
practically pass through the country bankei
into the hands of his London agent for
negotiation, and, as the latter does not attend
'Change, they are, without exception, sold
through brokers. In the case, however, of
London-drawn paper, or of such as is remitted to
London houses, the seller is quite at liberty, if
he so chooses, to go on 'Change and save the
brokerage by offering the bill for sale himself ;
but he usually finds it to his advantage to em-
ploy a skilled agent.
The exchange broker must be sufficiently
familiar with foreign law and custom to be able
to point out and explain any irregularity of
form, stamp, or endorsement, etc., in the bills
that pass through his hands. He ought also
to be competent, besides knowing the present
state of the exchange, to form an opinion as to
its probable course, in order to advise his client, i
if need be, when best to buy or sell. He is!
also expected, when executing a buying order,
to protect his client's interest by exercising a
due regard to the financial and moral standing
of the parties to the bill.
On concluding a bargain, the broker makes
it legally binding by passing a contract note to
both parties, giving particulars of the bill andj
specifying the rate at which it has been sold.
In the buyer's copy he also fills in the name of
the party who has to deliver, and in the seller's
that of the party who has to receive and pay.
Payment, it may be added, is not effected
through the broker, as in stock exchange trans-
actions, but the principals settle direct on the
following day. The charge for brokerage is
nominally one per mille (2s. per cent), but is
subject to modification. Brokerage accounts
are rendered once a year.
The growing tendency to effect settlements by ]
bill on London, instead of by bills drawn from
England on abroad, is strikingly illustrated by
the fact that, notwithstanding the enormous
increase in our foreign trade in the last half-
century, the number of exchange brokers has
only risen, according to the Post-Office Directory,
from 13 in 1841 to 15 in 1911, as against an
increase during that period in the number of
London stock brokers from 343 to upwards of
5000, with over 2300 clerks besides. G. C.
Exchanger, Royal. The chief functions]
of the king's or royal exchanger were as!
follows : to buy bullion for coin save where
private mints existed, to exchange current coin
of one metal or denomination for that of others,
and to exchange foreign and English coins.
In the reign of Henry I. we find this office
and that of moneyer united and vested in one
person. But this union did not continue.
Succeeding kings separated the office of ex-,
changer and developed its constitution. Thus I
Edward I. had tables of Exchange set up in vari' '
ous places, as York, Dover, Canterbuiy, etc.
In addition to the other and more ordinary ser-
EXCHEQUER, EAELY HISTORY OF
779
vices which he performed, the exchanger and his
subordinates were entrusted with the important
duty of so discharging his office that the export
of precious metals from the country might be
prevented. He continued a royal functionary
and in discharge of his duties till the reign of
Henry VI 1 1. Then the complaints of the gold-
smiths and the advice of Sir Thomas Gresham
were listened to, and in 1539 the office of the
royal exchanger was abrogated on the ground
that its charges " and action impeded traffic.
Despite a nominal restoration in 1546, the
previous date may be regarded as marking the
termination of this restraint on the exchange.
Statesmen and theorists were, however, very
much divided as to the expediency of this action,
and the protests against the extinction of the
office proceed from well-known men, as for in-
stance, Sir Robert Cotton.
Its reconstitution was mooted at the very
beginning of the reign of Charles I. (in 1626).
The goldsmiths were heard in opposition in the
privy council, but did not prevail. On 25th
May 1627 the revival of the exchanger was
announced, and the king appointed "Henry,
Earl of Holland, and his deputies, to have
the office of our changes, exchanges, and out-
changes, whatsoever, in England, Wales, and
Ireland," for a period of thirty -one years.
The goldsmiths petitioned, and the House of
Commons protested against this reconstituted
office. The Earl of Holland offering to submit
his office to the judgment of the latter body, a
debate took place, and it was agreed that it was
a "grievance." No steps seem to have been
taken to exercise any jurisdiction, and no
attempt was made subsequently to revive this
ancient office.
[Kuding's Annals of the Coinage. — Macpherson,
Anruds of Commerce. — Rymer, Feeder a; and MSS.
authorities.] e. c. k. o.
EXCHEQUER.
Exchequer, Early History of, p. 779 ; Exchequer, present
constitution of, p. 781 ; Exchequer, Scotland, p. 784 ;
Exchequer Bill, p. 784 ; Exchequer Bill, History of,
p. 784 ; Exchequer Bond, p. 785 ; Exchequer Bond,
History of, p. 785 ; Exchequer, Closing of, 1672, p. 786.
Exchequer, Early History of. The
Exchequer, i.e. the department of government
which superintended and managed the king's
revenues, and into which all dues were paid,
appears as an organised part of the state system
in Norman times. In Early English times
there seems to have been a treasury, sometimes
at Winchester, sometimes at Westminster,
while a hoard was kept in the king's chamber,
and local treasuries were found in some pro-
vincial towns (Hall, Antiquities of the Uaxhequer,
p. 3), but there are no traces of a court of
account so early. Richard, Bishop of London,
the treasurer, son of Bishop Nigel of Ely, and
our chief authority for the early history of the
exchequer, writing in 1178 (Liebermann, p.
11), states that it dates from the Norman Con-
quest, the arrangement being taken from the
exchequer across the seas {Dialogus de Scaccario,
i. iv.). Though this fact of a Norman origin
for the English exchequer cannot be proved, it
is probable that both came into existence about
the same time ; even if entirely independent,
the English exchequer is certainly not much
older than the Norman ; while on the other
hand, some of its peculiarities, such as the
" blanch farm," show that the system was not
borrowed in its entirety from Normandy.
In Henry I.'s time it is found as a distinctly
organised department and as a court of law
under the name " scaccarium, " a name derived
from the chequered cloth which covered the
table at which the accounts were made up.
All the financial business of the crown was
carried on at the exchequer, and as in early
times the regulation of finance and the adminis-
tration of justice were intimately connected,
much judicial work fell for a while under its
contiol, until, with the elaboration of the
judicial system, new courts arose, and until its
authority was restrained by Magna Carta, by
the statute of Rutland (12 Edw. I.) and by
other statutes, to cases which directly affijcted
the revenue. This close connection between
justice and finance is indicated by the fact that
the officials who sat as justitiarii in the curia
regis, the supreme judicial court, sat also in the
exchequer as barones scaccarii. These were the
great officers of the household and others
specially named by the king, presided over by
the king or by his representative, the chief
justiciar, until the final disappearance of that
official in Henry III.'s reign, when the treasurer,
always an important functionary, took the
foremost place. The treasurer, who was assisted
in the performance of his duties by the chamber-
lains, had indeed the superintendence of every
department, and was responsible for the com-
pilation of the great roll, the annual record of
the crown dues, while he also gave directions
for the execution of the royal writs. The
chancellor, the representative of the equitable
jurisdiction, acted as nominal guardian of the
great seal, and also as a check upon the
treasurer,, whose roll was copied by one of the
chancellor's clerks. The constable, with clerical
assistance, made payments to the royal officers
and others upon receipt of the king's writ, for
without such a warrant the issue of money was
strictly forbidden. To cut the tallies (see
Tallies), used as receipts, a cutter of the tallicH
was employed. Under these more important
dignitaries were a large body of officials, sitting
in the lower chamber, who prepared the
summonses and other business, and acted as
fiscal experts. Some of these offices were held
in fee, and mention is found of a woman hold
780
EXCHEQUER
ing office as chamberlain and acting by deputy
(HaU, p. 82).
Full sessions of the exchequer were held at
Easter and at Michaelmas, generally at West-
minster, although instances of its session else-
where are found as late as the reign of Hdward
II. (Madox, ii. p. 7). Other sessions were held
during the Hilary and Trinity terms, and when-
ever it was deemed necessary, not excepting
Sunday (Thomas, p. 7).
Manifold were the duties of the officials in
connection with the revenue ; not only did they
receive payments from the sheriffs and others
responsible for debts to the crown after careful
examination of the accounts, but they also
directed payments to be made to meet the
royal requirements, and met administrative
expenses of all kinds.
Business was carried on in two departments.
(1) The upper chamber, known as the ex-
chequer of account (scaccariumi majus), where
the reports of the sheriffs and of others were
received, and where all legal negotiations were
carried on.
(2) The lower chamber or exchequer of receipt
{scaccariiim inferius) where the money was paid
down, weighed, and tested, and from whence it
was issued when necessary. The proceedings
in the case of a sheriff, the most important of
all accountants, may be taken as typical of the
method adopted in transactions with the cus-
tomers, escheators, bailiffs, and others respon-
sible for the collection of the revenue.
At Easter the sheriff having received a
summons and a statemeut of the items for
which he had to account, appeared in person at
the exchequer, unless excused for special reasons,
when an attorney of suitable rank might act as
his representative. The view of his account was
then taken, and a proffer was made by him,
being generally an instalment of half the total
amount for which he was responsible. In
return he received a receipt, known as a tally,
the counterfoil of which was retained at the
exchequer. When summoned to the Michaelmas
session, the sheriff was required to answer for
the full annual dues "in money or in tallies " ;
he then presented the tally or the voucher
which represented such payments or allowances
as might already have been made, together with
the remainder still due in cash, and received
full quittance of his obligations. A simple
expedient for balancing the liabilities and the
actual payments of the sheriff was devised by
means of counters placed upon the squares of
the chequered table, those on the one side of
the table representing the value of the tallies,
warrants, and specie presented by the sheriff,
and those on the other the amount for which
he was liable, so that it was easy at a glance
to see whether the sheriff had met his obliga-
tions or not. In Tudor times "pen and ink
doti " took the place of counters, and are found
in use for the last time in 1676 (Hall, Anti-
quities of the Exchequer, p. 131).
Depreciation of the coinage through wear
and the possibility of fraud led in early times
to the adoption of precautionary measures.
Thus when money was paid by tale a payment
of sixpence on every pound was added to make
good any possible deficiency ; this was found
to be inadequate, and in place of such a pay-
ment ad scalam, a payment per perisum was
demanded, by which any deficiency in the
actual weight had to be made up, or a com-
position of one shilling in the pound was
exacted. In some cases the coin was submitted
to a smelting test ; this was generally done
with the farm of the county, which was said to
be blanched or dealbated, when such a test or
a composition in lieu of it had been accepted.
A regular staff of officials was employed in the
exchequer of receipt to see that real combustion,
i.e. the actual testing of bullion, or nominal
combustion, i.e. the additional payment offered
as a substitute, was not evaded by the king's
debtors (see Assay).
Among the important records bearing on the
work of this department, and carefully guarded
by successive generations of officials, in hampers
and chests, were the Domesday book, the most
ancient record of the liabilities of crown tenants,
the Red and Black Books of the exchequer, and
other similar compilations ; the most important
for centuries was the great roll of the exchequer,
commonly known as the Pipe Roll or Rotulus
Annalis, the official register of all debts due to
the crown arranged under the heads of counties,
drawn up annually under the superintendence
of the treasurer, and which served as the
supreme authority by which the sheriffs and
other accountants were judged. The first of
these rolls still extant is that for 31 Henry I.
(1130), but from the second year of Henry II.
the series is complete. A duplicate of this roll
was prepared for the chancellor, who closely
checked any error on the part of the treasurer,
while at the date of the compilation of tlie
dialogus a third roll was transcribed for the
king {Dialogus, I. vi.). In later times with
the expansion of royal revenue a number of
other rolls dealing with special parts of it
became necessary (Thomas, Ancient Exchequer,
p. 68). As attendance on the king and their
duties in the various courts prevented the great
officials from regular attendance at the ex-
chequer, and as the sources from which the
revenue was derived changed, various new
officers were appointed to meet the demands in
different directions. Thus as the chancellor
and his subordinates became engrossed by the
business of the chancery, theii* places were taken
by the comptroller of the pipe and the chancellor
of the exchequer (Thomas, p. 100), the latter
official being often mentioned from the roigu of
Henry III. onwards, when the remembrance/
EXCHEQUER, PRESENT CONSTITUTION OF
781
is also first heard of, keeping the memoranda
roll, upon which were entered points left for
consideration until the close of the audit, and
acting in the capacity of solicitor to the
treasury (see Pipe Rolls). Towards the end
of Elizabeth's reign the number of oflBcials
reached its highest point, and it is also notice-
able as the time when the lord high treasurer,
as he was now called, began to act less fre-
quently in person at the exchequer and more
by means of written instructions, and this
gradually led to a new system for the conduct
of business (Thomas, p. 21). Upon the death
of the Earl of Salisbury in 1612 the treasmy
was for the first time put in commission, and
since verbal orders could not be accepted at the
exchequer from several persons, written in-
structions became a necessity, and led to the
use of treasury warrants, which again paved the
way for the modern department of the treasury.
There is evidence that the lord high treasurer
still acted in person until the removal of the
exchequer to Oxford in 1643. Finance under
the commonwealth was managed by committees
of revenue until Cromwell revived the ex-
chequer in 1654, and put the treasury in com-
misijion, which has been its normal condition
sinae that time. During the Great Fire of 1666
the exchequer was moved for a while to Non-
such (Hall, 76). In the course of George III.'s
reign many of the old offices were gradually
swept away, until in 1833 the ancient account
and receipt departments of the exchequer were
entirely abolished (3 & 4 Will. IV. c. 99 ; and
4 Will. IV. c. 15), the office of king's remem-
brancer being the sole relic to-day of the early
system, for the work of the exchequer is now
undertaken by the modem departments of the
paymaster-general and the treasury, while the
Bank of England has taken the place of the
old exchequer of receipt. See Budget ; Ex-
chequer, Present Constitution of ; Jews,
Economic Influence of (for exchequer of the
Jews) ; Pipe Rolls ; Tallies ; Treasury.
[Gneist, R., History of the English Constitution,
translated by P. A. Ashworth (1886).— Hall, H.,
Antiquities and Curiosities of the Exchequer (1891)
and Introduction in Pipe Roll Society's Publica-
tions, iii. (1884) ; Court Life under the Planta-
genets (1890). He gives a valuable list of manu-
script and printed authorities on the subject of the
exchequer in Antiquities, -p. 224. — Henderson, E.,
Historical Documents of the Middle Ages (1892),
gives a translation of the DiaZogus de Scaccario,
the Latin text of which is given by Madox and
by Bp. Stubbs in his Select Charters illustrative of
English History. — Liebermann, F., Einleitung in
den Dialogus de 5caccano.( 1875). — Madox, T., His-
tory and Antiquities of the Exchequer. — Stubbs,
W., Constitutional History of England (1875). —
Thomas, F. S., The Ancient Exchequer of England
(1«48).] E. A. M.
Exchequer, Present Constitution of.
The Exchequer is the national purse or re-
ceptacle into which (a) all the public revenues
are paid, and out of which (6) all public ex-
penditure is defrayed. The moneys paid into
the exchequer constitute in the aggregate the
consolidated fund of the United Kingdom (see
Consolidated Fund), of which the local situa-
tion or receptacle is in practice at the Banks of
England and Ireland, where all such moneys are
carried to a general account, operated upon by
the commissioners of the ti'easury, and known
as the "Consolidated Fund Account," or Ex-
chequer Account.
a. The following is the machinery by which
the exchequer is supplied, viz. :
In the fiscal system of the United Kingdom
the financial year does not coincide with the
calendar year, but is reckoned from the 1st of
April to the 31st of March. Towards the close
of one financial year or beginning of the next —
that is to say, in the month of March or April
— the chancellor of the exchequer lays before
the House of Commons his budget (see Budget),
which is a statement of the revenue and ex-
penditure of the outgoing, and the estimated
revenue and expenditure of the incoming, year.
He first estimates the revenue of the incoming
year on the assumption that the existing scheme
of taxation will be continued unaltered by par-
liament. If he considers that on this basis the
revenue of the year will exceed the expenditure,
he generally proposes to abolish or reduce cer-
tain taxes ; if the contrary, to raise, increase,
or extend them. It is not necessary that the
scheme of the chancellor of the exchequer, so
far as the revenue which he anticipates is
founded upon the existing basis of taxation,
should be sanctioned as a whole by parliament ;
for, in the absence of an enactment to the con-
trary, all taxes and imposts go on from year to
year without express legislative renewal, except
the tea-duty and the income-tax. If, there-
fore, the House of Commons approves of the
budget proposals, all that is necessary, in the
first instance, is that it should, by resolutions
passed in committee of ways and means, sanction
the levy of tea-duty and income-tax during the
financial year, at the old rates, or at new rates
proposed by the chancellor of the exchequer,
as the case may be ; and that it should also
sanction by similar resolutions any changes
which he proposes in other duties or taxes.
These resolutions are subsequently confirmed,
as soon as the exigencies of parliamentary
business will allow, by acts of parliament pre-
pared for the purpose, which are now called
Finance Acts. At this stage the arrangements
for supplying the exchequer with the necessary
revenue during the financial year are formally
complete. The commissioners of customs and
excise and of inland revenue, acting under
the directions of the commissioners of tlie
treasury, levy the duties and taxes prescribed
by statute ; the post office continues from
'82
EXCHEQUER, PRESENT CONSTITUTION OF
year to year its profitable labours ; and the
moneys derived from these several sources are,
together with the hereditary revenues of the
crown, and certain other miscellaneous items,
paid in by their collectors as they accrue to the
exchequer account at the Banks of England and
Ireland.
b. Such is the manner in which the exchequer
is filled. It is now necessary to explain the
procedure by which its treasures are disbursed.
From the foregoing account it will be seen that
the levying of the national revenue is com-
pletely under the control of parliament. The
control of parliament over the national expendi-
ture— or, in other words, over the disbursements
of the exchequer — is no less, in fact if anything
it is more complete. The expenditure of any
given year is divided into two classes. 1. The
first consists of charges, more or less permanent
in their nature, which are authorised by act of
parliament either for a given period or until
the act authorising them has been repealed.
These charges therefore do not form the subject
of an annual vote of parliament, but are paid
as they fall due under the authority of the act
which grants them. They are called fixed
charges on the Consolidated Fund (q.v.), and
comprise the interest, sinking fund, and cost of
management of the public debt ; the civil list,
or dotation of the crown ; the allowances to
members of the royal family ; certain pensions
granted for public services ; the salaries of the
judges ; and of certain high officers whose inde-
pendence is thought to be better guaranteed by
permanent grant than by annual vote. In the
finance accounts of the United Kingdom for
1912-13 the sums issued from the exchequer
for fixed charges on the consolidated fund
amounted to £24,500,000, or rather less than
one-seventh of the total expenditure. In addi-
tion to those charges there were payments to
local taxation accounts, etc., amounting to
£9,653,000 assigned by various acts to local
purposes. 2. The ordinary charges of the
military, naval, and civil government, and of
collecting the revenue, form the second class
of public expenditure. They are annually
granted by parliament, and as they are voted
by the House of Commons in committee of
supply, they are called the supply services (see
Supply, Parliamentary). The amount issued
from the exchequer in 1912-13 on account of
expenditure on the supply services is returned
at £151,604,000, being nearly five-sixths of
the total expenditure of the year.
Money to defray a fixed charge on the consoli-
dated fund is taken outoftheexchequerunder the
authority of the special act of parliament which
fixes the charges. The following is the machinery
by which money for supply services is obtained.
The government submits to the House of
Commons estimates of the sums which it re-
quires, under the several heads or denomina-
tions of service, known as votes (as the House
of Commons votes them). Each of these votes
is discussed at such length as the House
thinks proper, and any item in a vote can be
rejected, but the House cannot add a penny
to a vote, it being a constitutional maxim
that expenditure can only be voted on the
recommendation of the crown. Nor has the
House of Lords any share in the matter. It
is a co-ordinate branch of the legislature ; but
the privilege of voting the money of the sub-
ject is exclusively reserved to the represen-
tative chamber.
Suppose now that the House of Commons
has voted the proposed expenditure. This
alone would not enable the government to act ;
for, although the exchequer is being daily filled
with the produce of taxes, it cannot be availed
of without further parliamentary authority for
defraying the expenditure which the House of
Commons has sanctioned.
The House of Commons alone criticises and
sanctions the proposed expenditure, but the
doors of the exchequer cannot be unlocked
without the authority of an act of parliament.
Accordingly, acts are passed from time to time,
each parliamentary session, authorising certain
sums to be taken out of the exchequer to defray
expenditure sanctioned up to date. These acte
are often referred to as '' ways and means acts."
Their parliamentary title is " consolidated fund
acts," and the language in which they are
couched is instructive, as summarising the pro-
cedure of parliamentary supply, viz. : — "Most
Gracious Sovereign. — We, your Majesty's most
dutiful and loyal subjects, the Commons of the
United Kingdom of Great Britain and Ireland,
in Parliament assembled, towards making good
the supply which we have cheerfully granted to
your Majesty in this Session of Parliament,
have resolved to grant unto your Majesty the
sums hereinafter mentioned, and do therefore
most humbly beseech your Majesty that it may
be enacted, and be it enacted by the King's
Most Excellent Majesty, etc., etc." (Then
follow, after the usual preamble of an act of
parliament, provisions authorising the treasury
to issue certain sums out of the exchequer.)
Thus the House of Commons grants the money ;
but the three estates of the realm conjointly
authorise, by statute, the taking of money out
of the exchequer. In the parliamentary session
of 1910 three such Consolidated Fund Acts
were passed (10 Edw. 7, c. 4 ; 1 Geo. 5, c. 9 ;
10 Edw. 7 and 1 Geo. 5, c. 14). The last of
these acts passed each session is called the
" Appropriation Act " ; it sets out in detail all
the votes which the House of Commons haa
sanctioned in supply, and applies to them, and
to them only, the required sums of money out of
the exchequer, thus strengthening parliamentary
control over administration by making it illegal
for the executive to expend upon one service
EXCHEQUER, PRESENT CONSTITUTION OF
783
money which has been voted for another. This
practice of appropriating the supplies, as it is
called, dates from the Revolution of 1688.
Thus it wiU be seen that the control of
parliament over the exchequer is complete.
A fixed charge on the consolidated fund can
only be paid on the authority of a special
act of parliament, and a supply service can
only be paid after it has been voted by the
House of Commons in committee of supply,
and after the disbursement of the necessary
funds has been authorised by a consolidated
fund act or by a ways and means act. The
practical security that these conditions are ob-
served and that ministers do not take money
from the exchequer for purposes which parlia-
ment has not approved is that money is only
issued out of the exchequer with the permission
of an independent officer appointed under the
Exchequer and Audit Departments Act, 1866
(29 & 30 Vict. c. 39), and styled the comptroller
and auditor-general, over whom the executive
government has no control, and who guards
the exchequer on behalf of parliament. Before
any money can be issued from the exchequer
the treasury has to requisition and obtain from
tliat officer a credit or credits on the Exchequer
accounts at the Bank of England and Bank of
Ireland, and such credits are only gi-anted if he
has satisfied himself that the demand is for a
service authorised by parliament. Then parlia-
ment provides against ministers obtaining money
from the exchequer for a purpose which parlia-
ment has authorised, but spending it otherwise,
by the fact that every department to which public
money is issued is ol3liged, under the Exchequer
and Audit Act (29 & 30 Vict. c. 39), to render
an account of the disposal of such money to
the officer above mentioned, the comptroller of
the exchequer, etc.
It will here be proper to say a word as to the
difference between the *' committee of supply "
and " committee of ways and means " in rela-
tion to public finance. In committee of supply
the House of Commons determine how nmch
money government shall be allowed to spend ;
in committee of ways and means it considers
where the money thus authorised to spend is
to come from. "The committee of supply
considers what specific grants of money shall
be voted as supplies demanded by the crown
for the service of the current year, and ex-
plained by the estimates and accounts prepared
by the executive government, and referred by
the House to the committee. The committee
of ways and means determines in what manner
the necessary funds shall be raised to meet the
grants which are voted by the committee of
supply, and which are otherwise required for
the public service. The former committee con-
trols the public expenditure, the latter provides
the public income. The one authorises the
payment of money, the other sanctions the im-
position of taxes and the application of public
revenue not otherwise applicable to the service
of the year" (May's Parlia/nentary Practice,
p. 616, ed. 1879).
The grants which have been described are
made by parliament to the crown, and the
sovereign, by royal order, places them at the
disposal of his finance department, the treasury.
The treasury from time to time, as money is
wanted, issues out of the exchequer to the
accounts of the paymaster -general or the
Revenue Departments, as the case ma,y be, such
sums as may be required to meet the expendi-
ture of the various services.
Careful distinction must be drawTi between
the exchequer and the treasury. The exchequer
is the national purse, the treasury is the finance
department of the state, which controls the
exchequer, on behalf of the executive govern-
ment, subject to the check and audit of the
comptroller and auditor-general acting on be-
half of parliament. The treasury is governed
by a board of commissioners, of whom the chan-
cellor of the exchequer is one. The treasury,
through the chancellor of the exchequer,
moves parliament at the commencement of the
financial year to provide the means of carrying
on the government. It is to the account of the
treasury, the exchequer account, that all public
moneys are paid into the banks of England and
Ireland, and it is the treasury again which
Avhen the supplies granted to the crown by
parliament have been placed by the sovereign
at the disposal of her finance department, the
treasury, supervises and controls the expendi-
ture of such supplies throughout every branch
of the public service. The duties of the
treasury, as the department responsible for the
administration of the exchequer, are thus sum-
marised by Mr. H. D. Traill in his Central
Government (English Citizen Series, 1881),
viz. : —
1. To provide the means of meeting the
necessary yearly expenditure on the military,
naval, and civil services of the nation.
2. To exercise a general control and super-
vision over the amount and details of that ex-
penditure.
3. To revise and regulate the internal or
domestic expenditure of the other public offices
of the state, and generally to exercise such a
superintendent authority over the financial
management of such offices as is implied in
these revisory and regulative powers.
4. To decide upon appeals from its own sub-
ordinate departments in all cases arising out of
the receipt of revenue, and
5. To determine as to the remission of fines
and forfeitures due to the crown.
The board of treasury consists of five com-
missioners, namely : the first commissioner or
first lord of the treasury, an office which is
I generally held by the prime minister ; the
784
EXCHEQUER (SCOTLAND)~EXCHEQUER BILL
chancellor of the exchequer ; and three other
commissioners, known as junior lords of the
treasury. The financial powers of the treasury
are in effect centred in the chancellor of the
exchequer, who may therefore be described as
the finance minister of the United Kingdom.
Exchequer (Scotland) ; originally a de-
partment or committee of the Scottish parlia-
ment, by the Treaty of Union, Art. 19, this
court was to continue until a new revenue
court should be established in Scotland. By
6 Anne c. 26, a new exchequer court was
established in Scotland on the English model,
the judges being the lord high treasurer of
Great Britain, the lord chief baron, and four
barons of exchequer. It was an attempt to
establish a common judicatory for England
and Scotland, and aU members of the English
or Scottish bars were entitled to plead before
it, and the privileges of senators of the Scottish
college of justice were conferred on the barons.
It had exclusive jurisdiction over customs, ex-
cise, and other revenues of the crown, and all
honours and estates accruing to the crown, and
the gift of the office of tutor dative, or guardian
appointed by the court. English forms of pro-
cedure were to be used. Other powers were the
passing of sheriffs' accounts, superintending
the administration of the sovereign's feudal
superiorities, dues, and fines of crown vassals,
etc. By 3 Will. IV. c. 13, all powers of this
court bearing on revenue were transferred to
commissioners of the treasury in London, but
its legal jurisdiction was preserved. Other
statutes modified and altered the court. Finally
by the court of exchequer. Art. 1856 (19 &
20 Vict. c. 56) it was abolished as a separate
court and all its former jurisdiction was
transferred to the court of session, becoming
the revenue department of that court. The
English forms and terms were assimilated to
those of the court of session, and one of the
lords ordinary to be named by the crown was
to act in exchequer causes.
[Clerk and Scrope's Historical View of the Court
of Exchequer in Scotland; and Mackay's Prac-
tice, vol. 1. 43, 192.] J. w, B. I.
Exchequer Bill. This is one of the
.securities on which the British exchequer
formerly raised money for tempoi-ary purposes.
(See Exchequer Bill, History of.) The
bills bore a fixed rate of interest, not above
6^ or below 2 per cent, and were a favourite
security with bankers, merchants, and others,
who required a good security for a short period.
Exchequer Bill, History of. Exche^^uer
bills were a form of security on which the
government, under the authority of parlia-
ment, might borrow money for the service of
the state. They have been in use since the
year 1696, and had their origin in the
scarcity of tlie circulating medium during the
great recoinage at that time. Their inven-
tion as a substitute for "money" is attributed
to Charles Montague, the chancellor of the
exchequer in William the Third's reign, and
may be said to have been the first intro-
duction of a paper currency organised by the
state.
The first exchequer bills were issued under
the authority of 7 Will. III. c. 31, and were
to "pass in payments from any person or
persons to any other person or persons that
shall be willing to accept and take the same."
They were made out in sums as low as £5 and
£10, and were to bear a daily interest not ex-
ceeding 3d. per cent per diem. The object of
the inventor of these bills, however, was not
realised. They were received with so little
favour that, out of £1,500,000 authorised to
be issued, only about £160,000 got into circu-
lation ; an amount too limited to give any
relief to the monetary difficulties of the time.
In 1697, under Acts 8 and 9 Will. III. c. 8
and c. 20, their use was considerably extended
by making them pass in payment of all taxes,
duties, etc., and "in all payments at the ex-
chequer due to the king." Originally ex-
chequer bills were, like the ordinary loans at
the exchequer, charged upon the produce of
certain specified duties imposed or renewed by
the act authorising the issue of the bills. As,
however, it frequently happened that the duties
so appropriated proved insufficient to pay off
the loans raised thereon, it subsequently be-
came the practice to make the bills payable
out of the general supplies granted by parlia-
ment year by year. This practice did not
extend to the bills charged on the annual malt
duty and land-tax, which duties continued to
be specially appropriated, although they often
were deficient and had to be made good out of
the supplies of the following year. In 1763-64
exchequer bills entirely superseded the old form
of loans at the exchequer, and for a period of
ninety years, i.e. until 1853, continued with
cue or two exceptions to be the only form of
temporary security on which money was bor-
rowed either to meet the ordinary service grants
of parliament or for loans granted for purposes
of a local character. Amongst the latter may
be mentioned the building of churches, public
works, poor relief, Irish tithes, Shannon naviga-
tion, relief of West India proprietors, etc. Tha
largest amount of exchequer bills issued in anj-
one year was in 1813, when it reached the total
of over £54,000, 000. The amount of exchequei
bills in circulation has at various times been
reduced by a process called "funding," i.e. by
the creation of "funded debt" in lieu thereof.
The usual course was to offer government stock
to the public at a given price to be subscribed
for either in exchequer bills, or money, or both.
The bills so subscribed were cancelled, and the
money subscribed was applied in paying off
other exchequer bills on their maturity. In
EXCHEQUER BOND
785
eases where the bills required to be funded have
been held entirely by the Bank of England or
by the national debt commissioners, the ex-
change of bills for stock has been effected by
arrangement, but always under statutory
authority. The first instance of funding was
in 1709, Avhen exchequer bills with the ac-
crued interest thereon, together amounting to
£1,775,000, were funded. Until 1797 there
were only two further fundings, viz. £2,000,000
in 1717 and £986,800 in 1746. From 1797
to 1858, when the last " funding " of exchequer
bills took place, no less a sum than £143,000,000
was cancelled by the creation of funded debt,
of which about £105,000,000 was cancelled
during the period of twenty- five years, from
1797 to 1821 inclusive. The largest amount
of exchequer bills funded at one time was
£27,262,000 in ] 818-19. In 1861, under the
provisions of Act 24 Vict. c. 5, exchequer bills
ceased to be issued annually and to bear a daily
rate of interest. The issue of exchequer bills
at the present time is regulated by the Act 29
Vict, c, 25. They are of the nominal value of
£100, £200, £500, or £1000, and are current
for a period of five years, but they may be sent
in for payment, after due notice, at the expira-
tion of each twelve months from the date of the
bills during their legal currency, and may be
paid in for customs or inland revenue duties at
any time in the last six months of each year
of their currency. The rate of interest is fixed
and advertised by the Treasury every half-year,
and varies with the rate of interest prevailing
in the money market at the time. The bills are
prepared and issued by tlie Bank of England who
receive an allowance for the management of the
same. There has been no new issue of exchequer
bills, beyond the periodical renewals, since 1861.
They have been gradually superseded by Ex-
chequer Bonds and Treasury Bills (q.v.),
and there are none extant at the present
time. G. H. H.
Exchequer Bond. Unlike exchequer bills,
these securities run for a specific period, say,
two or three years from the date of issue.
The bonds bear coupons, but may be registered
or inscribed in the books of the Bank of
England, in which case no coupons would be
available, and the half-yearly interest Avould
have to be applied for personally. a. e.
Exchequer Bond, History of. — These
are securities on which money may be bor-
rowed by the government under the author-
ity of parliament. They are regulated by the
Exchequer Bills and Bonds Act (29 Vict. c. 25),
but they differ from exchequer bills by being
issued for fixed periods, generally for one to
three years, and bearing a fixed rate of interest.
In the absence of any special provision in an
act authorising money to be raised by this
security, the principal of exchequer bonds is
repayable by votes of parliament. Formerly,
VOL. r.
when bonds had matured, and it was found
necessary to replace them by new bonds, special
statutory authority had to be obtained in each '
case. It is usual now to take power in the act
authorising the issue of bonds to replace them
on maturity by new bonds or other securities.
Exchequer bonds may, under treasury warrant,
be delivered up to be registered or inscribed in
the books of the Bank of England, and trans-
ferable certificates issued in lieu thereof. This
class of security has generally been made use of
for special services only.
Exchequer bonds were first introduced in
1853 by Mr. Gladstone, in connection with his
scheme for redeeming or commuting certain
three per cent stocks and South Seas annuities.
Under 16 Vict. c. 23, holders of these stocks
were offered, as one alternative, the option of
taking exchequer bonds in exchange for their
stock. The bonds were to be payable to bearer,
so as to be readily transferable ; to bear interest
at 2| per cent per annum payable half-yearly
until 1864, and thenceforward at 2^ per cent
per annum until 1894. They were to be
ofiered for sale, the proceeds to be applied in
paying off dissentient holders of stock, and
they could be issued in exchange for and in
cancellation of exchequer bills ; only £418,300,
however, were issued, of which £408,900 were
in cancellation of exchecjuer bills. Subsequent
acts made these bonds repayable out of moneys
voted by parliament, and until such time in-
terest would continue to be paid at 2^ per cent.
Power was also taken to replace them in 1894
by new bonds, to be issued for any term not
exceeding six years. There was an issue in
1854-55 of £6,000,000, for periods not exceed-
ing six years, to defray expenses connected
with the Russo-Turkish and South African
wars. Between 1874-75 and 1879-80
£7,750,000 was borrowed from the National
Debt Commissioners on Exchequer bonds with
three years' currency, for the purpose of grant-
ing loans to local authorities for public works.
By 44 & 45 Vict. c. 55 they were converted
into permanent funded debt. In 1876, under
39 Vict. c. 1, £4,000,000 was borrowed on
exchequer bonds, also from the National Debt
Commissioners, for the purchase of 176,602
shares in the Suez Canal Company (the value
of these is now, 1913, over £39,000,000). An
advance of £400,000 in 1885-86 to the govern-
ment of the Cape of Good Hope for the con-
struction of a railway was provided by the issue
of exchequer bonds repayable by moneys voted
by parliament. The colony repaid the advance
in 1890, and the bonds were paid off as provided.
The interest on the bonds was paid by the
colony. Under the National Debt Redemption
Act 1889 (52 Vict. c. 4) bonds to the amount
of £18,100,000 were issued to pay off holders
of three per cent stocks who had dissented from
Mr. Goschen's conversion scheme of 1888. Of
3b
786
EXCHEQUER, CLOSING OF THE— EXCISE
this amount, bonds for £12,800,000, which
were held by the national debt commissioners,
were, by the National Debt (Conversion of
Exchequer Bonds) Act 1892, converted into
permanent funded debt. Since 1890 the
principal issues have been £24,000,000 for the
purposes of the war in South Africa; £6,000,000
for capital expenditure authorised by Naval
and Military Works Acts ; £2,600,000 under
the Cunard Agreement (Money) Act 1904 ;
£10,000,000 under the Finance Act 1905, to
redeem Bonds issued for the South African
War; and £21,000,000 under the War Loan
(Redemption) Act 1910. In 1905 a new
feature was introduced into this class of security.
The Bonds issued under the Finance Act of
that year were made redeemable in ten years
from the date of issue by annual drawings of
one-tenth part of the total issue in each year,
and special provision was made for the annual
redemptions by the appropriation of the
requisite sum out of the new sinking fund of
the previous financial year. The total amount
of Exchequer Bonds now (1914) outstanding is
£8,695,249. G. H. H.
Exchequer, Closing of the (1672). The
only part of the public debt which was in-
curred before the revolution of 1688 originated
in the closing of the exchequer on 2nd January
1672-73. Maladministration of the finances,
the sale of Dunkirk, and the disastrous close of
the first Dutch war, undermined the credit of
Charles II., which had been good for some
years following the restoration. In 1666 the
Commons proposed to appoint commissioners
to examine the accounts of those through whose
hands the money granted for the war had passed.
The bill was delayed in the Lords till the
prorogation. Commissioners were appointed
two years later, and in consequence of their
report the treasurer of the navy was expelled
the House of Commons. It was therefore im-
possible to apply to the Commons for further
supplies to execute the secret treaty with Louis
XIV. which Charles signed at Dover in May
1670. In the emergency it was suggested
that the sum of £1,328,526, the total amount
borrowed from the bankers and others on the
security of the supplies, should be appropriated
with a view to overcoming the financial diflS-
culties of entering on the Dutch war. In
1667 Charles had published a declaration to
secure inviolably the course of payments at
the exchequer, both with regard to principal
and interest. But, on 2nd January 1672-73,
he issued a proclamation to the efiect that
all payments upon assignations at the ex-
chequer would be suspended for one year.
The consternation in the city was great ; the
bankers were unable to meet their engagements,
and many people were ruined. To quiet the
public mind, the king promised to pay 6 per
cent while the money was detained, and in
1676 letters patent were issued, charging the
king's hereditary revenue with the interest,
which amounted to rather more than £79,000
per annum. This engagement was regularly kept
until the year before Charles's death, when pay-
ment was stopped. The creditors tried for
twelve years, without success, to get legal
redress, until, in 1697, judgment was given
against the government. Somers, the chancellor,
afterwards set aside this decision, notwith-
standing the fact that ten out of the twelve
judges were opposed to him. The chancellor's
decree was afterwards reversed by the House of
Lords, and in 1699 it was enacted that after 25th
December 1701 the hereditary excise should
be charged with the interest of the principal
sum, at 3 per cent, redeemable on payment of
£664,263, or half the principal. The principal
was never repaid, and in 1716 it was incorpor-
ated with other public debts in the general fund
which was then established. It may therefore
still be regarded as part of the national debt.
[Grellier, History of the National Debt, p. 12
seq. — Hamilton, Inquiry concerning . . . the
National Debt, p. &Q ; State Trials, xiv. pp. 1-114.
— Hewins, "Origin and Growth of the National
Debt," Co-operative Annual for 1889, p. 228, 229.
— Thorold Rogers, The first nine years of the Bank
of England, 8vo, 1887. — Defoe, Comjpleat English
Tradesman, 3rd ed. i. 164, 188, 346, 347, ii. 94.
There are several pamphlets dealing with the
subject ; amongst these may be mentioned, The
Joyful News of Opening the Exchequer to the
Goldsmiths {in a letter by the Author of the
Bankers' Case, Thos. Twine), 1677.— The Case of
the Bankers and their Creditors, by a true Lover
of his King, 1674. — Considerations on the Gold-
smiths' Letters Patent, 1678. "His Majesty's
(Chas. II, ) patent to the goldsmiths for payment
and satisfaction of their debt," 1677 (patent
granted to Sir Robert Vyner for £416,724, and
to eleven other "persons hereafter named" for
sums ranging from £295,994 down to £1784,
the interest at 6 per cent to be paid by the
quarter). ] w. a. s. H.
EXCISE, The, is the name given collectively
to those duties which in the fiscal system of
the United Kingdom are levied upon commodi-
ties produced within tho kingdom itself, as
distinguished from customs duties (see Customs)
which are levied at the ports upon commodities
imported from abroad. The word excise (Latin,
excido) signifies etymologically something cut
off; as an excise duty may in effect be con-
sidered something cut off or deducted, for the
benefit of the state, from the price of the article
as paid by the consumer. If there were no duty
the consumer would pay a lower price for the
article. The price, therefore, that he actually .
"pays includes the duty ; whence it foUows that ■
the duty itself is something deducted or sub-j
tracted from the actual price paid. The price inJ
fact is divided into two parts, one part being]
EXCISE
787
subtracted from the whole for the benefit of the
state, and the remainder going to the vendor.
Duties of this character, whether levied on
articles produced at home or imported from
abroad, were at first equally known as excise
duties, but in revenue parlance the word has
long been restricted to duties on native com-
modities, those on foreign articles being known
as the customs.
An excise duty properly so-called belongs to
the category of indirect taxes, because though
levied on the producer, its burden really falls
on the consumer. It is, however, the practice
to classify under the general head of excise the
railway duty on passengers, a direct tax ; of
which the real as well as the apparent incidence
generally falls on the railway companies ; and a
large group of assessed taxes, being license duties
paid to the state in return for permission to prac-
tise or follow certain sports, trades, or occupa-
tions ; e.g. the dog, game, and gun licenses and
the licenses on brewers, auctioneers, and pawn-
brokers. For a considerable period previous to
their introduction into England excise duties
formed part of the fiscal system of Holland.
They were first imposed in this country in 1643
by the Long Parliament in order to raise funds
for the war against King Charles the First.
The principal articles first subjected to the
duty were ale and beer, cider, perry, and strong
waters, to which was soon afterwards added a
long list of articles of food and clothing, e.g.
flesh, victuals, and salt, alum, copperas, hats,
saflron, starch, and all manner of silks and
stuffs. The prime necessaries of life — flesh and
salt — were subsequently struck out of the list,
but, nevertheless, the general tendency from
the Restoration (1660) to the administration of
Sir Robert Walpole was rather to extend than
to restrict the operation of these imports.
Walpole, to whom the material progress of
England is so deeply indebted, applied himself
from the first to fiscal reform. His biographer.
Archdeacon Coxe, boasts of him that "he
found our tariff the worst in the world and left
it the best." By economical administration
and the maintenance of a strictly pacific policy
in foreign affairs, he enabled himself to help
forward the growing prosperity of the country
by a substantial alleviation of the burden of
taxation. One of the main objects to which he
set himself was to make the exportation of our
manufactures, and the importation of the
principal articles used in them, as free as
possible. The reforms which with this view
he carried out belong rather to the history of
customs than of excise ; but in the department
of excise proper his beneficent activity made
itself felt in the abolition of some duties, the
reduction of others, and the simplification of
many more. The most famous and the greatest
of all his schemes, though it ended in failure,
was the bill for warehousing wine and tobacco,
generally known as the Excise Scheme, which
occupies so important a place in our fiscal and
parliamentary history that it deserves a separate
notice (see Excise Scheme).
The history of the excise since the administra-
tion of Walpole cannot here be written in extenso.
It contains few features of salient interest, nor
does it record any convulsion such as that
which was excited by his unlucky Excise Scheme.
It will be observed on reference to the follow-
ing list that the greater part of the excise
revenue is derived from taxes on alcoholic
drinks. This is no new fact ; more than a
hundred years ago Cowper drew attention to it
in some indignant lines in " The Task."
" The Excise is fattened by the rich result
Of all this riot, and ten thousand casks
For ever dribbling out their base contents
Touched by the Midas finger of the State
Bleed gold for ministers to sport away."
Such indignation is perhaps misplaced ; as it is
obvious that taxation should be imposed on
luxuries rather than on necessaries ; and what-
ever may be thought of the wisdom of consum-
ing alcoholic drinks, they certainly cannot be
classed among the necessaries of life. The
tendency of modern legislation has been to
throw the largest possible burden of excise
taxation on alcoholic drinks, and to exempt, as
far as possible, other articles.
Chief Heads of Excise Revenue, from the 4th Report re-
lating to Customs and Excise, 1912-13 (net receipts)—
Beer Duty £13,200,343
Spirit Duty 18,432,492
Railway Duty 283,929
Patent Medicine Labels .... 328,319
Playing Cards 32,033
Miscellaneous 205,346
License Duties —
A. Liquor Licenses —
(a) Manufacturers . . . £427,051
(6) Dealers .... 126,714
ic) Retailers .... 3,949,829
{d) Occasional licenses, etc. . 16,737
Total Liquor Licenses . . . 4,520,334
B. Auctioneers, etc. . . . 87,332
Hawkers .... 25,336
Pawnbrokers. . . . 40,328
Plate Dealers . . . 65,920
Patent Medicines (Makers
and Dealers) . . . 10,780
Methylated and Motor Spirit
(Makers and Dealers) . 14,693
Tobacco (Growers and Manu-
facturers) .... 4,736
Tobacco (Dealers) . . . 102,408
Refreshment Houses . . 9,486
Miscellaneous . . . 694
Total .... ~. 7 861,713
C. Male Servants . . . 16,381
Carriages . . . . 35,956
Motorcars .... 535,146
Armorial Bearings . . 6,096
Total .... ~~. T 592,579
D. Gun 20,776
Game 34,562
Total .... "^^ r~ 55,338
E. Dog 48,775
Fines and Penalties 2,487
Total £38,063,688
788
EXCISE SCHEME
The Finance Act of 1907 directed that the
duties on Beer and Spirits and the Excise
Licenses should be paid into the Exchequer, an
equivalent amount being issued to the Local
Taxation Accounts out of the Consolidated Fund.
The power to levy the duties on licenses for game,
dogs, guns, carriages, armorial bearing^, and male
servants was, from 1909, transferred in England
and Wales to County and Borough Councils. The
Finance Act of 1910 increased the Liquor and
Motor Car Licenses, but provided that the pay-
ments to the Local Taxation Accounts arising
from these, and also from the Beer and Spirit
duties, should continue on the scale of the receipts
from these duties in 1908-9, the surplus being
retained for the Imperial Revenue. This applies
to carriage licenses in Scotland and the whole
of the motor car licenses in Ireland. The fol-
lowing are some of the duties that have been
repealed: Cider, 1830; Glass, 1845; Bricks,
1850; Soap, 1852-53; Paper, 1861; Hops,
1862.
[Dowell, Hist, of Taxation and Taxes in England
(ed. 1888) ; Highmore, Excise Laws ; Ann. Rep.
of Commissioners of Inland Revenue, esp. 1870,
1885, and of Commiss. of Customs and Excise.]
EXCISE SCHEME, The, was the proposal
introduced into parliament by Sir Robert
Walpole in 1733 for applying wliat is now
known as the bonded or warehousing system to
tobacco, and afterwards to wine. Instead of
paying duty, or giving bonds, the merchant,
on landing tobacco from Maryland or Virginia
in London or Bristol, was to lodge it in ware-
houses under the control of excise officers, to
pay duty only as he took it out for home con-
sumption, and if taken out for re-exportation
abroad no duty was to be paid. The same
system was to be extended to wine. Various
advantages were claimed for the change. First,
it would put an end to sundry frauds on the
revenue, from smuggling on an immense scale
down to abuses which dishonest merchants, prac-
tising on discounts, allowances, and drawbacks,
and rapacious lightermen and watermen, carried
out at every port in the island. Second, the
prevention of these frauds and the decrease of
smuggling would be a great gain to the honest
trader. Third, accompanied as it was by a
siipplification of rates, this cheaper and easier
collection would be a great advantage to the
revenue. Fourth, and much the most im-
portant of all, it would tend to make London
a free port, and by consequence the market of
the world. Such were the advantages claimed
for the change at the time. But another, and
not the least important, may be added, viz.
that it anticipated and fulfilled the principle of
Adam Smith's fourth canon of taxation, by
taking as little as possible out of the pockets
of tlie people beyond what it yielded to the
revenue. The merchant, relieved of the neces-
sity of paying the duty on the importation of
the article, would have the use of his capital foi
a longer time, and would therefore be able to
sell at a lower rate to the consumer. In fact
the merchant would gain, and the state lose, the
interest on the amount of the duty for the period
between the importation and the sale of the
article. The merchant's, and, through him,
the consumer's gain would in practice be greater
than the state's loss, as the rate of interest
which he would require on his capital, in order
to make his business remunerative, would greatly
exceed the rate at which the state could borrow ;
and moreover the loss of the state was more
than counterbalanced by the economy of the cost
of collection, and the prevention of fraud, which
the scheme involved.
Such was the famous excise scheme, which
alone would suffice to establish Walpole's repu-
tation as a finance minister far in advance of
his age. But the public mind of the time was
not sufficiently instructed to receive it ; and
the design had no sooner been bruited abroad
than a popular outcry arose, one of the loudest
and fiercest of which history makes mention,
which shook his power to its foundations, and
at no long distance of time compelled him to
abandon the scheme. The parliamentary Op-
position, whose motives need no explanation,
used all tueir powers of misrepresentation against
Walpole's plan, the object of which was to turn
the customs duty on the importation oi tobacco
into an excise duty on its consumption, as a
scheme for levying a general excise over the
whole range of commodities. Food, clothing,
and the other necessaries of life were, they de-
clared, to be loaded with a crushing tax. Every
man's house might be invaded at any hour by
the excise officer. Every man's goods and all
his dealings would be exposed to minute and
ceaseless inquisition. A great standing army
of revenue officers would be created, which would
overturn Magna Charta, — even undermine
parliament. Such were the misrepresentations
to which the credulity and factious spirit of
the people, and the general unpopularity of the
excise as a whole, made them an easy prey.
The whole country resounded with shouts of
" no slavery, no excise, no wooden shoes." The
majority in the House of Commons in favour of
the measure went down from sixty-one on the
first resolution to seventeen on a subsequent
issue ; and this dwindling of his supporters,
combined with the growing frenzy out of doors,
determined Walpole to abandon a measure which
in the inflamed temper of the nation could
hardly be put into execution without an armed
force. "I will not," he said, in announcing
his resolution to his friends, " be a minister to
enforce taxes at the expense of blood."
The abandonment of the scheme was cele-
brated throughout the country with rejoicings
as for a national victory ; the crisis was long
remembered ; and it is noteworthy that the
EX. DIVIDEND— EXECUTOR
789
popular feeling, many years after the occasion
had passed away, found an exponent in the tory
prejudices of Dr. Johnson, who in his dictionary
defined "excise" as a "hateful tax levied upon
commodities, and adjudged not by common judges
of property, but by wretches hired by those to
whom excise is paid."
For a compact and trustworthy account of
Walpole's excise scheme the reader is referred
to Lord Morley's Walpole (series of English
Statesmen, Macmilkn and Co.), from which
the foregoing description is mainly taken.
Writing more than forty years after Walpole's
failure, Adam Smith had still to lament that so
excellent a scheme had not been resumed by
subsequent ministers {The Wealth of Nations,
bk. V. ch. ii.). The credit of resuming it was
reserved for William Pitt, who notwithstanding
the inevitable parliamentary opposition, carried
it into law in 1789 (29 Geo. III. c. 68). [See E.
Leser, Ein Accise-Streit (Walpole's Scheme), 1879.]
The amounts raised by means of the excise have
varied much since the first imposition of the tax
levied under this name. As the articles subjected
-to it have differed very greatly, an exact comparison
is scarcely possible. In the earlier periods the
excise was farmed out, and "in 1657 an ofter
was made to give, for the farm of the excise and
the port duties, no less than £1,100,000 per
annum " (Dowell, 2nd ed. vol. ii. p. 13). Up to
the end of the 17th century, the yield scarcely
altered. Dowell writes (p. 62), "the revenue
from inland duties had varied considerably in
different years. In 1700 over a million, it was in
1702 nearly £1,400,000." During the later half
of the 18th century great additions were made
to the tax, though Walpole's proposals were not
accepted (see Excise).
The gross produce of the tax has been in round
figures at the following dates :
1835 . . . £15,200,000
1855 . . . £15,300,000
1875 . . . £28,400,000
1895 . . . £30,500,000
1905 . . . £35,600,000
1913 . . . £38,000,000
EX. DIVIDEND. A stock exchange phrase,
shortened, as usual, to signify that the price at
which a given security can be bought or sold
is exclusive of dividend, which has been, or is
about to be deducted. Unless so specified, the
security in question is cum dividend, meaning
that the dividend or interest accrued since the
previous distribution is covered by the purchase
money. Certain securities, including corpora-
tion bonds, exchequer bills, Indian deferred
paper, English mortgage bonds, never carry
interest in the prices, which are quoted net,
the buyer being charged interest up to the date
of the completion of purchase (see Ex. All ;
Ex. New). . a.e.
EX. DRAWING. This phrase simply means
that in case of the Drawing {q.v.) of bonds
at par, the bargain is not to be affected by the
price obtained by the hazard of drawing, and
the buyer gets no benefit. Thus, a specific
government bond might have been bought at
90 a week or two before the periodical drawing
of such bonds, and the buyer would get £100
if his bond happens to be among the lucky
numbers, unless the words "ex. drawing"
formed part of the contract. a. e.
EXECUTION is the name of the procedure
by which the judgment or order of a court of
law is enforced. This is generally done by
"writs of execution," which, in the case of
judgments of the high court, are issued in the
central office or a district registry, and directed
to the sheriff of the county in which they are
to operate. The usual writs issued in the case
of money claims are writs of fieri facias (cp.
Fieri Facias, Writ of), commonly called fi. fa.
and writs of elegit (Elegit, Wkits of, q.v.) ;
claims are also enforced by "garnishee orders,"
viz. orders by virtue of Avhich the judgment
creditor obtains a charge on debts owing to
the debtor, or "charging orders" which affect
stocks or shares standing in the debtor's name,
or, if the debtor has an equitable interest in
the property out of which the judgment creditor
seeks to obtain payment of his debt, by the
appointment of a Receiver {q.v.) Judgments
for the recovery of land are enfoiced by ' ' writ
of possession," and judgments for the recovery
of any property other than land by "writ of
delivery" or "writ of attachment " ; in the
case of judgments directing a person to do any
act, other than the payment of money, the
disobedient jjarty is subject to imprisoimient
through the instrumentality of a "writ of
attachment" or through "committal," which two
means of execution difier in form only. Im-
prisonment on account of the non-payment of
money has been nearly abolished, and where
it occurs it is punitive in its nature, and not
merely a means of enforcing payment (see Debt,
Imprisonment for). e. s.
EXECUTOR ; the legal administrator of the
personal estate of a deceased person. In Scot-
land if appointed by written nomination of
the deceased he is called executor nominate, if
by decree of the commissary court executor
dative, the former answering to the English
executor the latter to the English adminis-
trator. His title in either case is completed
by confi^-mation (see Confirmation of Ex-
ecutor) which answers to the English taking
out probate or letters of administration. A
husband has in Scotland no absolute right to
administer to his wife's movable or personal
estate. In default of an executor nominate, a
residuary legatee is preferred, then the next of
kin, those in the same degree being entitled to
be joined if they please, then the husband or
wife of the deceased, then the creditors, and
lastly a special legatee. An executor differs
from a trustee in that an executor's duty is to
distribute the fund, a trustee's to hold it.
■s..—
790
EXECUTRY— EXPERIENCE
[Currie on Confirmation of Executors.— M'L&ren
on Wills, ii. § 1657.— Dove Wilson, Sheriff Court
Prac^/ce, 4th ed., 546.] j.w.b.i.
EXECUTRY (Scottish) ; the subject of an
executor's administration ; the whole of, the
personal estate of a deceased person, equivalent
both to legal and equitable assets in England.
J. w. B. I.
EXERCITOR (Scottish) ; a term derived
from Roman law and implying one who employs
a ship for his own profit in trade, and to whom
the profits belong. It matters not whether he
is the actual owner or only the freighter. He
is liable for necessaries ordered by the master.
His obligations properly fall in the first instance
under the jurisdiction of the admiralty court.
[Bell's Pr., §450.] j.w. B.i.
EXHEREDITATIO signifies, in Roman law,
a testator's declaration in his will that he ex-
cludes from being his Tieres a member of his
family belonging to the class of relations who
cannot be passed over in the will in silence,
but must either be appointed heredes or thus
declared to be disinherited. e. a. w.
EX. NEW. This refers to the quotation of
prices on the stock exchange for shares or
other security, the holders of which are about
to leceive an allotment of new stock at what
may be considered an advantageous price of
issue. When these words form part of the
contract, the seller retains the advantage, if
any, and the buyer's right to the security is
exclusive of any right to subscribe to the new
issue (see Ex. All ; Ex, Div.). A. e.
EXPECTATION OF LIFE, a term intro-
duced by De Moivre, denotes the number of years
which persons of a certain class, e.g. English
males, live on an average after a certain age,
e.g. 20 ; the average being obtained as follows.
The number of years which each of a great
many, say n, specimens of the class under ob-
servation, lives after the assigned age having been
observed, the sum of these numbers is divided
by n. The Expectation is thus the arithmetic
mean of the n observed numbers (see Average).
It is contrasted with another average of the
same numbers, viz. the Median (see Average),
technically termed the * ' equation of life. " The
term "expectation" is objected to by Dr. Farr
as suggesting the latter rather than the former
sort of average. He prefers to say mean after-
lifetime. Comparing the two kinds of average,
Neison seems to think that the expectation of
life is not so well suited " for medical and other
purposes in which it is required to determine
the relative value of an improvement or other
change which may have taken place within a
given period of life."
(See Death-rate; De Moivre; Insur-
ance ; Mean Afterlifetime ; Statistics.)
[Walford's Insurance Cyclopcedia, article " Ex-
pectation. "—Parr, Vital Statistics, pp. 279, 309.
— Neison, Contributions to Vital Statistics, p.
100. — Report of the Registrar-General for 1885,
Supplement. — Humphreys, Journal of the Stat-
istical Society, 1883.] f. y. e.
EXPEDITATION. By the Forest Laws
(q.v.) all mastiffs or other large dogs kept within
a forest had to be expeditated, i.e. maimed
sufficiently to prevent them chasing the deer.
According to the laws of Canute the dog was to
be hamstrung, but by a charter of Henry II.
a somewhat milder operation was allowed, three
toes of one forefoot being cut off with a chisel,
leaving the ball of the foot intact. For keep-
ing an unexpeditated dog within a forest a fine
of 3s., called **footgeld," was imposed, but
before the end of the 15th century in many of
the English forests this fine had become a cus-
tomary payment, sometimes called "hound-
silver," collected triennially, which formed no
small item in the revenues of the forest owner.
[See Ducange, Glossarium medice et infimce
Latinitatis, Editio nova a L. Favre, Paris, 1884. —
Manwood, Forest Laws, London, 1615. — Cowell's
Interpreter of Words and Phrases, London,
1701. — Forest Accounts, some of which are
quoted by Manwood. ] a. h.
EXPENDITURE or SPENDING has two
distinct meanings which are often confused.
1. Expenditure may mean simply the pay-
ment out of money, that is, the exchange of
money for other goods. In this sense it does
not imply any consumption of wealth on the
part of any one, and it cannot be opposed to
"saving." A man who saves £100 a year
ordinarily expends or spends those £100, i.e.
exchanges them for other goods, just as much
as if he did not save anything. The things on
which he expends them will be different, but
the expenditure, unless of course the money is
hoarded, will be the same.
2. Expenditure may mean payment of money
for personal consumption on the part of an
individual, and consumption, pure and simple,
on the part of the community. In this
sense it is rightly opposed to "saving." The
£100 a year saved by an individual is not
in this sense of the word expended or spent
either by himself or any one else. It is simply
the value in money of a part of the community's
income, which, instead of being consumed, has
been added to the capital of the country (see
Saving, Productive and Unproductive).
EXPENSES OF PRODUCTION (see'pkc
duction).
EXPERIENCE. Upon the value of experi-
ence in the study of political economy the most
contradictory opinions have found adherents.
Some economists have expressed themselves
as though political economy were a science
similar in type to astronomy — as though all
economic truths could be derived by strict
deduction from one or two first principles,
EXPERIENCE— EXPERIMENTAL METHODS IN ECONOMICS
791
such as "All men desire wealth," or "All
men are averse to labour." Other economists
have denounced general reasoning, and have
laid exclusive stress on the accumulation of
facts. They would apparently reduce political
economy to the task of observing and recording
particulars without any admixture of inference.
These opposite opinions have rarely been held
in their most extreme forms. But by stating
them as forcibly as possible we may be assisted
to detect the fallacies which they involve.
It will appear upon examination that neither
of these principles can be carried out in its
integrity. The attempt to carry out either
would result in intellectual paralysis.
There has never yet existed an economist so
rigorously deductive in his method as not to
draw to some extent upon experience of
economic phenomena. Many economists have
indeed drawn upon a field of experience too
restricted to justify dogmatic conclusions.
Many economists have been too much influenced
by the economic experience of their own time,
or of then- own country. Even this narrow
experience they may not have studied exhaust-
ively. They may have picked up their know-
ledge of it insensibly, here and there, bit by
bit. It is thus that the man of business, as
contrasted with the student, acquires his
knowledge of economic phenomena. Ricardo,
the greatest of those economists who are alleged
to have been rigorously deductive in method,
may be said to have acquired most of his
knowledge in this way. Such knowledge, being
very partial, may sometimes prove misleading.
But even such knowledge has gi-eat influence
upon the development of theory. Ricardo's
economic theories would certainly have been
different had he lived in another age than the
nineteenth century, or in another country than
England.
An economist strictly deductive in method
could never get beyond his first premisses. The
contrary seems possible because the economist
who apparently deduces everything from first
principles in reality weaves into his argument
statements of fact and wide generalisations
which have become so familiar that he and his
readers forget how they were first acquired.
Nor has there ever yet existed an economist
who merely observed and recorded. Those
economists who aimed at this ideal have never-
theless written history. The writing of history
involves processes of selection, comparison, and
inference, in which the historian's mind is
active. No two persons perform these processes
in quite the same way, and it is extremely easy
to make mistakes in performing them. It is
not merely that historians often infuse their
work with their own political or religious
sentiments, with the prejudices of their own
age or their own class. It is rather that the
historian cannot construct a narrative out of
facts without interpreting those facts. But he
cannot interpret the facts without using hia
mind, without adding to, or rather, without
transforming, those facts.
The object of all science, including political
economy, is not merely to amass facts but also
to explain them. Facts are explained in so far
as they are successfully brought under general
laws. The general laws are always at first
hypotheses, or in the vulgar tongue, guesses —
guesses at truth. Hypot heses are suggested by
facts, and facts are interpreted by hypotheses.
He who forms a hypotliesis with hardly any
knowledge of the facts is pretty sure to throw
away his trouble. He who clings to a hypo-
thesis once formed, neglecting or rejecting new
facts, does worse, for he is trying to confirm
liimself in error. But to refrain from forming
hypotheses is impossible to a reasoning creature,
and, if it were possible, would bt' suicidal. The
value of experience is not absolute but varies
directly as the power of the mind which has
the experience. One glance at the field of
battle will suggest a decisive movement to the
great general. The vicissitudes of a short and
obscure life will give the great poet a key to
human nature in its infinite variety. The
scientific genius, although less brilliant, is not
essentially diff'erent from theirs.
Whether in physical or in political science
the master mind is that to which facts suggest
their own explanation. F. c. M.
[Cairnes, Character and Logical Method of
Political Economy. — Bagehot, Economic Studies.']
EXPERIMENTAL METHODS IN ECONO-
j\nCS. Experiment in the scientific sense has
been well described as " putting in action causes
and agents over which we have control, and
purposely varying their combinations and notic-
ing what effects take place " (Herschel, Study
of Natural Philosophy, p. 76). In sciences
such as physics and chemistry, in which the
phenomena are amenable to arrangement, it is
by far the most potent instrument of discovery.
Where, however, there is not the same facility
for easy manipulation, the inquirer is com-
pelled to fall back on the less effective method
of simple observation. Instead of creating
instances for himself, he has to find them in
nature, or wait till they are presented spontane-
ously to his view.
Economics, in common with the other social
sciences, clearly belongs to the latter class. The
phenomena of wealth are closely inter-connected,
and are besides affected by the other forms of
social activity. Hardly any economic event
can be said to be the result of a single cause,
it is rather the product of several contributory
causes. Nor are the total effects of any one
agency easily separable ; they are combined
with those of others in a whole which cannot
be analysed. In technical language " plurality
of causes" and " intermixture of effects," tho
792
EXPERIMENTAL METHODS IN ECONOMICS— EXPERT
two great hindrances to the use of experiment
(MiU, Logic, bk. iii. ch. x.), are generally
present in economic facts. To secure the
requisite isolation of any phenomenon selected
for study is rarely possible. The most rigprous
form of inquiry, known as the "method of
difference," the essence of which "is the compari-
son of two instances, which resemble one another
in all material respects, except that in one a
certain cause is present, while in the other it is
absent" (Keynes, Scope, p. 170), is plainly ex-
cluded, since we cannot introduce a single cause
that will have only a measurable effect, nor can
we be sme that the surrounding conditions
remain unaltered. The ' ' method of agreement
in which the instances compared resemble each
other in only one particular is not merely inferior
as an experimental resource, but is inapplicable
to social phenomena. Two countries or periods
that had one common feature would have more
than one. In two classes of cases, however,
experiment may be sometimes used, viz. (1) in
reference to the premises or data of economic
science, thus the " law of diminishing returns "
admits of experimental proof; (2) More import-
ant than the preceding exception, which is
rather apparent than real, are those cases in
which, by deductive reasoning, it can be shown
that the action of an economic force is limited,
and then its working within those limits can
be experimentally ascertained.
These exceptions notwithstanding, it may be
said that scientific experiments {experimenta
Ivjcifera) are a very slight resource in econo-
mics.
The case is somewhat different with regard to
practical questions. Legislative measures and
individual actions are, if so intended, so many
experiments on the social system. Thus if
several countries, widely differing in other
respects, have established a system of peasant
proprietary with good results, while several
other countries, also widely differing inter sc,
are without that system and show inferiority,
we may argue that peasant proprietary is experi-
mentally justified. The same reasoning would
be applicable to commercial policy, and has
actually been used in reference to the case of
Victoria and New South Wales, but illogically,
as a number of cases are required to exclude
other influences.
Again, by applying special legislation, e.g. a
particular kind of land tenure, to one part of
a country, we can ascribe to its influence the
special effects noticed in that district. Practical
experiments {experimenta fructifera) may also
be employed by means of (1) permissive legisla-
tion, or (2) temporary legislation.
Private persons also carry out practical
economic experiments, as in the cases of profit-
sharing (Leclaire), and the recent eight hours
day experiment at Sunderland (Economic Jour-
nal, ii. pp. 755, 756). A large accumulation
of instances may even give a very near approach
to rigorous scientific proof.
A vaguer use of the term "experimental
method" is common in continental and especially
in French writers. J. B. Say, for example,
declares that the true method of political
economy is La methode exp^rimentale qui cotisiste
esscntiellement d n'admettre comme vrais que les
faits dont V observation et experievAie ont ddmontrd
la r4alit6 (TraitS, Discours pr^l're, p. x. 5th ed.
1826). Here " experiment " is used as synony-
mous with " experience " ; it therefore includes
observation and experiment in the strict sense.
[J. N. Keynes, Scope and Method of Political
Economy, pp. 169-178. — J. S. Mill, Logic, bk. iii.
chs.viii., X. ; bk. vi. ch. ix. — G-. C. Lewis, Methods
of Observation and Reasoning in Politics, ch. vi.
— Jevons, Methods of Social Reform, pp. 253 seq.
— Leon Donuat, La Politique Experimentale,
2nd ed. Paris, 1891]. c. f. b.
EXPERT. An expert may be defined as a
person possessing special knowledge of any
science or art. Art is here taken in its most
comprehensive signification, to include the use-
ful as well as the fine arts, cooking or carpentry
as well as music or painting. The opinion of
an expert on matters connected with his own
subject is more likely to be correct than the
opinion of a man to whom that subject is
almost or altogether unknown. But the degree
in which an expert's opinion outweighs the
opinion of the ordinary man will vary according
to the nature of the subject.
For, first, the subject may be one with which
the ordinary man has no acquaintance, or it
may be one with which he is acquainted,
although not so fully as the expert. Thus
every man in his senses knows to some extent
what food is wholesome, although he may not
know so much on this point as a qualified
doctor. Every man who can write has some
power of comparing hands, although not so
much power as belongs to an expert in hand-
writing. But only an expert in navigation can
determine the exact position of a ship out of
sight of land. Only an expert in astronomy
can determine the probable distance of a fixed star
from our planet. In such matters the judgment
of the ordinary man is absolutely worthless.
Secondly, the subject may be so complex
that no expert has more than a very imperfect
knowledge of it. Political and economic science
are characterised by this complexity. Upon
political or economic questions the opinion of a
man who knows much is far more valuable than
the opinion of a "man who knows little or
nothing ; but even the opinion of the man who
knows much affords a very imperfect security.
Such complex questions often present different
aspects to different classes of experts. Let us
suppose that an opinion is required on the
expediency of a law to regulate the hours of
labour. At least five different classes of experts
EXPERTISE— EXPLOIT
793
are more or less entitled to be heard : — (a) The
economist who has read and reflected upon the
theory of economic phenomena ; (6) the politi-
cal philosopher who has read and reflected upon
the theory of the state and of legislation ; (c)
the statesman who is familiar with the practice
of government, and can judge what kind of
laws it is usually expedient to make and possible
to enforce ; (d) the employer who has had the
opportunity and the will if not the wisdom to
discover how production can be carried on to
the greatest profit ; (e) the workman who has
had the opportunity and the will, if not the
wisdom, to discover what are the best conditions
of life which he can obtain for himself ; all
these men can bring to the determination of
the problem a knowledge which other men do
not possess, and are entitled in a gi-eater or less
degree to speak with the authority of experts.
One person might, of course, combine more than
one of these characters, and might, therefore,
claim a higher degree of authority.
Thirdly, the subjects of knowledge difl"er in
the degree in which they excite passions such
as prevent the expert from employing his intel-
lectual superiority to its fullest advantage. On
any subject, indeed, were it astronomy or textual
criticism, the judgment of an expert may be
disabled by vanity or love of contention. But
on those subjects which immediately touch the
interests of mankind, notably theological, politi-
cal, and economical subjects, the judgment of
the expert is more likely to be disturbed by his
passions. These passions are at least as un-
governable in ignorant men. But wherever
they prevail they lessen the interval between
the ignorant man and the expert. For the
finer the intellectual instrument the more it is
disturbed by acute emotion. f. c. m.
EXPERTISE (French) is the legal process
by which judges, when called on to decide special
or technical cases, may appoint, on their own
authority, or on the demand of one or both of
the litigants, persons possessing the necessary
knowledge or experience, called experts, to ex-
amine, and report on, the points at issue. The
conditions under which those operations are
conducted are laid down in Arts. 303-323 of
the Code of Civil Procedure. One of the most
frequent applications of the law is in the settle-
ment of disputes between foreign importers and
the French customs authorities relative to the
class, quality, origin, or value of merchandise
subject to duty. The first supplementary con-
vention to the Anglo-French treaty of commerce
of 1860 confeiTcd on British importers in France
the right to demand an expertise. When the
Customs propose to exercise the right of pre-
emption, the importer and the customs each
nominates one of the experts. In case of dis-
agreement the two experts choose an umpire,
and if they cannot agree on the choice, the
umpire is appointed by the president of the
nearest tribunal of commerce. Objections
were frequently made that the persons named
as erperts did not possess the necessary quali-
fications, and on the renewal of the tai-eaty
of commerce, in 1873, a protocol was signed^
stipulating that they should be chosen from a
list of merchants or manufacturers drawn up
by the chambers of commerce in each locality
having a customs bureau. A British chamber
of commerce had just been founded in Paris,
and that body submitted to the Paris chamber
(French) the names of tlie principal British
merchants in Paris, for them to be comprised
in the list of experts ; but the French chamber
of commerce refused to nominate them on the
ground of their foreign nationality, although
British traders had previously been accepted as
experts. The British chamber appealed to the
Foreign Ofiice, and on the intervention of the
British ambassador the French minister of
foreign affairs considered the claim a just one,
and some of the names proposed were added
to the list of experts in Paris. Those names
were, however, subsequently removed from the
list on the expiration of the treaty of commerce
in 1881, and British importers who now have
disputes with the French customs can only
be represented in an expertise by a French
merchant or manufacturer, who is naturally
disposed to impede rather than to facilitate
foreign competition in his own trade. There
is no appeal from the decision of the experts
in commercial affairs, when they agi-ee, but
civil expertises arc still governed by Art. 323 of
the Code of Civil Procedure, nnder which judges
are not bound to adopt the opinion of experts
if they are not convinced by it. t. l.
[Lois du 27 JuUlet 1822 et du 7 Mai ISSl ;
arrets de la Cour de Cassation, 30 Avril 1838,
et 30 Janvier 1839.]
EXPLOIT. The French verb exploiter pri-
marily means simply to use in such a way
as to make a profit out of. It is applied to
such actions as working a mine or a rail-
way, cultivating a farm, or publishing a news-
paper. There are some things which it is ad-
mittedly improper to use in such a way as to
make a profit out of them ; it is disgraceful,
for instance, to exploiter any one's credulity,
ignorance, or good natiure. Hence the word
comes to have sometimes a bad sense. The
socialists who teach that the capitalist obtains
an illegitimate gain by employing men for
wages have applied the term to his action in
this bad sense. To exploiter men or labourers
thus means to use them in such a way as to
make a profit out of them, it being at the same
time implied by the use of the word that this,
though not perhaps disgraceful to an individual
who does it under present circumstances, is
fundamentally improper, and would not be
allowed in an improved state of society.
It is almost exclusively in this bad sense that
794
EXPORTS AND IMPORTS— EXPORTS, DUTIES ON
the word "exploit "has been introduced into
English. E- c.
EXPORTS AND IMPORTS, see Imports
AND Exports.
EXPORTS, Duties on. Duties on exports
have been generally condemned by modem
economists, but they survive in many of the
British possessions as well as in some foreign
countries. The history of these duties in Great
Britain is merged in that of the customs revenue.
The original customs duties were, in fact, duties
on exportation. They appear to have been
levied by prerogative of the crown from early
times, but the first statute which imposed them
was one of 3 Edward I.
Two somewhat diverse theories have been
suggested as explanatory of the origin of these
duties in England. One, which we find first
indicated by Sir W. Petty, is adopted by Mr.
Dowell (History of Taxation). It holds that
the sovereign power simply levied a toll on all
merchandise, whether inward or outward, as a
reward for its protection of the merchant. The
duties "were in the nature of a premium paid
to the king for insurance." The analogy of
the customs duties levied at Athens and at
Rome (po)-to7-ia) may be held to favour this
view. The other theory is on the whole the
more probable, and is that adopted by Mr.
Hubert Hall (History of the Customs) ; the
king's chief concern was to see that he got
as much revenue as he could. He was from
ancient times entitled to a purveyance or prise
on certain classes of commodities — "if then
these were conveyed beyond the kingdom the
crown would suffer a possible loss to its state
or dignity." When it was found that the wools
and hides on which the king was entitled to
the internal toll or prise were being exported
and escaping taxation, he at once put on a
countervailing export duty in order to secure
his revenue (see Prisage).
It seems probable that these duties were ad-
justed at the discretion of the crown according
to its necessities, and Mr. Hall thinks that
immediately before the statute 3 Edw. I. "it
is probable that the commuted prise on staple
exports, such as wool, hides, and minerals, was
taken at an average rate of half a mark per
sack of wool or an equivalent bulk of woolfells,
a mark per last of hides, and an ad valorem
duty of 3d. on every librate or twenty solidi of
lead or tin."
The Act of 3 Edw. I. (1275), which is the
first instance of levying taxation by act of
parliament, placed the export duty at
^ mark per sack (26 stone) of wool.
„ „ per 300 woolfells.
1 ,, per last of leather.
These are the custuma atitiqua sive magna,
and the chief contributor to the revenue was
the wool. In the thirty-second year of this
reign the produce was as follows :
Wool at 6s. 8d. . . £1501 0 9j
Woolfells at 6s. 8d. . 57 15 1
Leather at 13s. 4d. . 0 8 71
Total of the great customs £1559 4 5|
In February 1303 an agreement was made
with the alien merchants, whereby they under-
took, in consideration of the king's protection,
to pay 50 per cent beyond the ancient customs
on wool and leather, and certain fresh rates on
other commodities whether exported or im-
ported. Rates were specified for wax, cloth,
and wine, and all other articles were to be
charged 3d. in the pound of 20 shillings.
These were the custuma nova sive parva.
The next development of the exports (as part
of the customs) duties was by the statute of
49 Edw. III., which levied the due of tunnage
and poundage, afterwards known technically as
a subsidy. The poundage was a duty of 6d.
on the pound-weight of all articles exported
and imported.
With variations in the rate these two forms
of export, and import, duty were continued on
the same basis down to the Restoration in 1660.
They were granted by the Commons for periods
of years as a rule ; sometimes for the life of the,
reigning sovereign. After Agincourt in 1415,
such a life grant was made to Henry V., and the
duties had gone up considerably, as follows : —
From denizens. Prom strangers.
On wool per sack £2 3 4 £3 0 0
On woolfells 2 3 4 3 0 0
On leather per last 2 3 4 5 6 8
and in the following reign the rate for wools,
etc., was raised to £5 for strangers, and that
for leather to £5 for natives. The subsidy
of poundage had already been raised to Is. on
the pound -weight, and there was a special
duty of .double that amount on tin exported
by strangers. In 1421 the yield of all the
customs was £40,687, of which the great
custom on wools, export duty, produced
£26,036 ; in 1431 the total was £34,851, of
which the greater proportion was derived from
export duties. But the revenue appears to
have been a falling one ; the customs regulations
were anything but complete, as is shown by
the act of 27 Hen. VIII. c. 14, to regulate the
exportation of leather from other ports besides
Southampton and London ; and there were
constant interferences with the export trade by
way of partial or complete prohibition, as
late as Mary's reign. In 1570 the value of
woollen goods and cloth exported from England
amounted to £26,665, and from this was
obtained £2388 : 10 : 11, viz. customs £1523,
and subsidy £865 : 10 : 11 ; gi-adually the
revenue from imports was becoming the more
considerable.
EXPORTS, DUTIES ON
796
The Long Parliament, after declaring in
1640 that "no subsidy, custom, etc., maybe
imposed upon any merchandise exported or
imported without common consent in parlia-
ment," proceeded to levy heavy duties on the old
lines. The year 1660 marks the beginning of
a transition stage. In the Book of Rates for
this year, 212 articles were subject to export
duty "rated for duty outwards." The duties
gi'anted to Charles II. were levied with some
modifications in the ninth and tenth years of
William III. as the "new subsidy" and con-
tinued by 9 & 10 Anne, c. vi. (1710) by the
act " for reviving, continuing, and apportioning
certain duties upon several commodities to
be exported and certain duties on coal, etc.,
etc." But in 1721 the export duties on corn,
woollen fabrics, linen manufactures, and other
staples were repealed ; the mercantile theory
with its mania for exportation had found these
duties obstructive. Nevertheless in Saxby's
manual of the Customs (dated 1757) some
twenty - five pages are occupied with the
enimieration of the goods rated for duty
outwards, and the directions for paying the
proper duties, and in Pitt's consolidating
Customs Act of 1787 there are fifty articles
subjected to export duty, many of them being
of foreign origin. These duties were increased
during the great war, and at the beginning of
the century, under the act of 1809 (49 Geo.
III. c. 98) Sched. A "Outwards," which rated
for permanent duty, and in a parallel column
for temporary or war duty : —
(a) Foreign commodities to the number of
sixty-three at varying, chiefly specific duties.
(6) British goods, of which coals, skins, and
other articles were subject to specific duty ; all
other goods, wares, etc., to an ad valorem duty —
excepting cotton, linen, sugar, woollen goods,
and certain special exemptions with reference
to the port of destination.
By an act of 1810 linen goods were subjected
to an ad valorem duty of 1 5 per cent on exports.
But with the close of the war and the progress
of the new economy the backward policy was
reversed. In 1815 the export duties produced
£365,598, and in 1826, £102,255. Under
Mr. Huskisson, in 1826, the schedule of articles
left subject to export duty was as follows : —
Coals, per chald. Is. 6d. to 30s. 3d. accord-
ing to destination, etc.
Culm, per ton, Is. to 10s., according to
destination, etc.
Skins, per 100, Is.
Wool, per lb., Id.
Woollen manufacture, per lb., Id.
Home produce with certain definite exemp-
tions, ad valorem, 10s, per £100, i.e. ^%,
and with Peel's reformed tariff" of 1842 these
disappeared altogether. In 1 9 0 1 an export duty
of Is. a ton on coal was levied, producing about
£2, 0 0 0, 0 0 0 per ann. This was removed in 1 9 0 6.
One of the few accidental gains to be placed
to the credit of the old mercantile theory was
that it tended to discourage duties on exporta-
tion. Sir W. Petty (1679) shews a conscious-
ness that such duties required careful watching.
Sir John Sinclair (1790), who had imbibed the
doctrines of Adam Smith, is the first writer
apparently who distinctly expresses a doubt as
to the propriety of their imposition. Formerly,
he wiites, almost every commodity sent out of
the kingdom was subject to such a duty ; it was
supposed that the duty came out of the pockets
of foreigners, but "such ideas are now exploded."
He -referred to the principal export duties at
that time, under Pitt's recent act, as being
those on coals and lead, with certain duties on
raw produce intended to give our manufacturers
" an advantage over rivals. " McCulloch {Taxa-
tion and the Funding System) has a full dis-
cussion of the economic propriety of export
duties, and suggests the grounds on which
they have generally been condemned. His
statement of the arguments for and against
the retention of such a duty on coals, published
just at the time when that duty was finally
removed, is of special interest ; it embodies the
argument in which economists have for the
most part summed up the whole discussion
on these duties, viz. that they should not
be levied except in the case of a country
which has a monopoly of supply of the com-
modity taxed, or such an advantage in its
production as to approximate to a monopoly.
Turning to the British possessions it is
natural to find that in those which were acquired
during the 17th century, when export duties
Avere an unchallenged feature in the fiscal system
of this country, the export duty is, so to speak,
bred in the grain ; in the colonies established
towards the close of the 18th century such a
duty practically had no place.
The notorious 4^ per cent ad valorem duty
which created such squabbles between the crown
and the West Indian islands was the progenitor
of colonial revenues. At the time of the
Restoration, when all the revenues of the
crown were being revised, plantation enterprise
was at the height of its activity, and it occurred
to the crown advisers that the new dominions
beyond the seas ought to contribute their share.
Thus the origin of colonial customs was pre-
cisely the same as that of the English customs.
The patent of 1663, constituting the office of
commissioners of customs, empowered them to
levy and collect a duty of 4^ per cent ad valorem
on all dead produce exported from Barbados
and certain other sugar colonies, and from the
plantations in America. In respect of the latter
no such duty was ever actually levied. In the
West Indies it was the cause of much grumbling ;
already, in 1689, it was urged that "moreover
this four and a half is collected in such
manner that in the judgment of aU that have
796
EXPORTS, DUTIES ON
tryed it, the attendance and slavery is a greater
bui'then than the duty" {Groans of the Flawbers) ;
it was found to be " the same thing in effect as
a tax on lands." It was the subject of a great
action in 1763 in a case arising on the island
of Grenada, Campbell v. Hall, where payment
of the duty was refused on the ground that the
island was ceded by France on the condition
that the privileges of the former regime should
be secured to the inhabitants. This led to
the exception of " the Ceded Islands," and
Jamaica, from the operation of the duty. It
was for many years paid in kind, and in 1778
the right so to pay it was successfully contested
(Macpherson's Annals, iii. 625). This is not
remarkable in an age when sugar was the
current money of account. For the better
collection of this and other duties the customs
department had branch establishments in the
colonies, and they continued to levy the 4^ per
cent till it was abolished with slavery in 1838.
Of the other colonies the only ones in which
duties on exports were levied in the first quarter
of this century, were the Mauritius (certain rates
on sugar, coffee, cotton, indigo, and one or two
other articles), the Cape (on all produce shipped,
half the amount of the import duties on similar
articles), and Ceylon (on cinnamon, etc.). These
were roilics from foreign rule in each case, and
disappeared gradually under British rule. The
export duty on cinnamon from Ceylon had an
instructive history, as it was exceedingly pro-
fitable when Ceylon had almost a monopoly of
that spice, it was a chief element in driving
other tropical countries to compete with Ceylon,
and was dropped, in 1833, too late to save the
colony's pre-eminence in that export.
In India export duties were a relic of the old
system : when the imperial government took
over the provinces in 1857 there were export
duties levied in all the presidencies, and chiefly
on grain, rice, indigo, lac, opium, silk, tobacco,
and native manufactures of all sorts. An act of
1860 abolished those on manufacture of wool,
flax, hemp, jute, etc. At the present day those
on rice, opium, and certain other commodities
remain. The Indian export duty on rice has
been quoted by Fawcett and others as an instance
where the duty was probably justified owing to
the great advantages possessed by the exporting
country in the production of the commodity.
The most striking modern recrudescence of
export duties was in connection with the im-
migration of Indian coolies to the sugar-growing
colonies. One of the conditions of government
aid in importing coolies was that the planters
should pay their fair share ; and after much
discussion an export duty on sugar and the other
produce of the plantations was settled as the
best method of obtaining the necessary contribu-
tions. Hardly therefore were many of tlie West
Indian colonies freed from the ancient 4^ per
cen+i duty than they undertook a new specific
duty on exportation of sugar and other produce.
The St. Lucia Schedule was a fair sample, im-
posing duties on —
Sugar Charcoal Hides
Kum Logwood Cocoa
Molasses Firewood Coffee
From a return given to parliament in 1854
it would appear that then the only British
colonies which levied a duty on exports were
the West Indian islands of St. Lucia, St.
Christopher, Nevis, Montserrat, and the Virgin
Islands, and the Mauritius which exacted 9d.
the 100 lbs. on sugar. The Turk's Islands
imposed a ^d. per bushel on salt. But it was
inevitable that a principle admitted in the case
of a special service should sometimes extend
itself ; and in later years there has been an
increased tendency to levy export duties in the
West Indies ; while in New Brunswick, for a
time, there were certain export duties on lumber,
and in Prince Edward Island in 1861 a special
duty was provisionally authorised to be collected
for a special purpose on all agricultural produce
exported. In the Bahamas so lately as 1870
and 1873 a general export duty on aU produce
was imposed ; but that has now been dispensed
with ; the Virgin Islands being now the only
instance of the survival of general export duties,
which are almost entirely evaded, upon all
the commodities which nature will allow those
islands to produce. Such duties were distinctly
condemned by the royal commission which
inquired into the finances of various West
Indian colonies in 1883-84 (v. their report,
pt. iv.).
At the present time export duties are levied,
usually for purposes of immigration, in many
of the West Indian colonies, but not British
Guiana. In one or two cases they are levied
under a delusive name, e.g. " statistical tax,"
in others they are indirectly increased by wharf-
age duties for outward goods. In Ti-inidad,
besides the duties, on products of the cane, there
is an export duty on pitch. In Turk's Islands
that on salt remains a chief source of revenue.
New South Wales, Western Australia, and Natal
levy one on gold. The Fiji Islands, for pur-
poses of regulating the trade, levied one in 1877
on sUver coin and sandalwood, and in 1887 on
Mche de m&r. The duties on pitch, gold, and
salt are generally looked on as royalties and in
the nature rather of a rent than a tax.
The plantations on the mainland of America
appear never to have paid an export duty, and
the United States maintained the tradition,
which also fell in with their policy of encouraging
exportation as much as possible. One feature
in the recent commercial policy of the United
States deserves special mention. In the many
treaties or agreements which they have been
negotiating with the Central American and
other states, they have carefully guarded them-
selves against the possibility of an export duty
EXPROPRIATION
797
being levied in the contracting state ; apparently
arguing that the imposition of such a duty is
an attempt to raise the price to the United
States consumer, and must, therefore, be treated
as an unfriendly act to be punished by a counter-
yailing duty.
In foreign countries duties on the exportation
of commodities are still prevalent, levied some-
times on the chief product of the country, as on
the charcoal and olive oil of Italy, in other cases
as protective of home manufactures, as in the
case of Swedish iron.
The views which have prevailed as to the
incidence of export duties have been indicated
in several passages above. The accepted view
that the duty operates as a restriction to ex-
portation, except where the exporting country
has a monopoly of production, appears to be
correct. If all countries levied export duties
in exporting the same commodity the price of
the commodity would be raised to cover the
amount of the duty, and the foreign consumer
would eventually pay the duty or the greater
part of it. But as the facts are contrary to
this hypothesis, it will be found in almost all
cases, e.g. sugar exported from the West Indies
— that the price paid by the foreign consumer
is determined by stronger considerations : the
exporter cannot control it ; the duty falls on
him. and enhances his expenses in production,
or perhaps more accurately it lessens his profits.
In any special case the factors which determine
price are important in deciding the incidence.
The case of monopoly is nowadays hardly of
practical importance.
[Petty's Treatise of Taxes and Contributions,
1679, chap. vi. — Saxby's British Customs, London,
1757. — Sinclair's Ristory of the Public Revenues^
London, 1804, esp. pt. iii. — Jickling's Digest of
the Customs Laws, 1815, esp. the Pref. — McCulloch
On Taxation, 1845, bk. v. — McCullocli's edition
of Adam Smith's Wealth of Nations, vol. iii. p.
460. — Tlie First Report of the Commissioners of
Cicstoms, 1857. — Dowell's ^is^on/ of Taxation and
Taxes in England, 2nd ed., 1888, bk. i. c. 5, et
passim. — Hall's History of the Customs, 1885.]
o. A. H.
EXPROPRIATION'. Expropriation may be
defined as the compulsory sale of private pro-
perty either to the state or to private parties
who have received specific authority from the
state.
That such compulsory sale is sometimes in-
dispensable to the public welfare is too obvious
to need demonstration. The necessity for ex-
propriation can rarely arise in the case of
movable property. Such articles can almost
always be obtained by a voluntary transaction,
if not from one owner, then from another.
The acquisition of a particular movable can
hardly ever be matter of necessity to the state.
Even a unique picture or statue is a luxury
which it is not advisable for the state to
acquire at the cost of infringing upon the
general freedom of an owner to dispose of his
property at his pleasure. In come coimtries
the finder of antiquities is obliged to transfer
them to the state on receiving compensation.
But this exceptional rule is of no economic
importance. With reference to immovable
property the case is different. Not only is
land necessary as the basis of human industry
and limited in extent, but the land suitable for
a specific public purpose is often very nan*owly
limited indeed. In order to lay out a street
or a railway, to construct a public building,
a fortress, or a harbour, particular pieces of land
must be obtained, even although their owners
do not desire to part Avith them. If no com-
pulsion were to be used in such cases the state
would be reduced to offer a preposterous price
or to forego a necessary improvement.
But expropriation is allowable only in order
to effect an appreciable public good. All com-
pulsion is painful, and pain should not be
inflicted without a rational object. The
presumption is in favour of letting every man
do as he likes with his own. Therefore the
burden of proof lies upon those who advocate
expropriation in any particular instance.
To what extent expropriation should be
carried is a wider question than that to which
these remarks must be limited. We need not
inquire whether the state would be justified
in expropriating certain species of projierty on
the ground that it could manage them more
advantageously to the whole community than
private owners could or Avould do. Such an
inquiry belongs rather to the head of State
Interference (q.v.). Nor need we inquire
here into the kindred question whether it
would be right to expropriate, say, la,rge estates
in order to break them up and sell the land in
small parcels so as to multiply peasant pro-
prietors. Nor need we determine whether the
state would do well to acquire certain sj)ecies
of property on the ground that they tend to
increase in value merely through the general
progress of society, and that this increase should
go to enrich the community rather than indi-
viduals (see Increment, the Unearned). It is
enough for us that the necessity of expropria-
tion in certain cases is admitted by the great
majority of persons who have considered the
subject. We have only to consider upon what
principles expropriation, when necessary, should
be conducted.
In case of expropriation the owner should
receive at least the price which he could obtain
in the open market, if he were disposed to sell.
The market price is the only impartial and trust-
worthy measure of the value of property. It
represents the value of property under all the
actual circumstances, including the reasonable
expectations to which the laws and policy of
the state have given rise. It is unworthy of
a civilised government to pursue a certain class
798
EXPROPRIATION— EYTON
of owners with covert hostility, to burthen
them with overwhelming taxes, or to deny
them ettectual protection, in order to make
their property worthless, and then to buy it at
so many years' purchase of zero. Yet these
expedients are occasionally recommended in
our time by persons who profess to have a
special sense of political justice. Even in the
case where the state interferes to suppress a form
of property distinctly condemned by the im-
proved morality of the general public, it still
owes compensation to the proprietors affected.
When the British parliament compensated the
West Indian slave-owners it acted on the sound
principle that the state, which for many genera-
tions had recognised and maintained the law-
fulness of slavery, was particeps criminis, and
ought to take its share of the loss. But in cases
of this kind the right amoiint of the compensa-
tion may be more doubtful than in others.
Where the owner of property expropriated
has increased its returns by a violation of the
law the case is different. If the owner of a
house permits it to be over-crowded with lodgers,
he has no right to compensation for the extra
rent which he has thus received. If he lessens
his outgoings by allowing the house to fall
out of repair, the cost of the repairs neces-
sary to make it habitable should be deducted
from the compensation paid. If the house is
so ruinous that no repair can make it habitable,
he is entitled to compensation only for the site
and the materials. In other words the market
value, which forms the basis of compensation,
must be understood as the market value obtain-
able vyithxmt a breach of the law. It would be
monstrous that a man should obtain compensa-
tion for relinquishing a profit which is illegal.
Subject to these qualifications, then, the
amount of the compensation should not be less
than the market value. But it may justifiably
be somewhat more. Over and above the loss
of his property, he who sells against his will
suffers the pain of compulsion, and for this a
reasonable allowance should be made. Distinc-
tion may be made between objects which have
and objects which have not "a value of
affection." Thus one acre of arable land differs
from another acre of arable land only in its
capacity of producing wealth. He who is com-
pelled to seU one field is usually able to buy
another field which wiU do just as well. But the
house where a man has lived all his life may
be much more to him than any other house of
equal value. If compelled to sell it, he cannot
buy another which will be the same to him.
Prima facie, therefore, the indemnity for con-
straint put upon an owner to sell should be
more liberal in this case than in the other.
Compensation, however, must be assessed on
general rules, and fine gradations of feeling
cannot always be taken into account.
Yet another difficulty remains. The owner
who is compelled to sell part of his property
may have the value of the remainder greatly
augmented by the public works for which the
land was taken. Whether this prospective
improvement should be taken into account in
assessing the compensation due to him is a
much-disputed question (see Betterment).
The principles of compensation will be the
same whether the party taking by compulsion
be the national government or a municipal
authority or a private joint-stock company or
individual. But, when the state confers the
power of expropriation upon its subordinates or
upon private parties, it is entitled to determine
the objects for which this power shall be ex-
ercised, the extent to which it shall be exercised,
and the service which shall be rendered to the
public by those who are invested with it.
These, however, are points which must be
determined by common sense in each case as
it arises. f. c. m.
[See also Eminent Domain. ]
EXTENSIVE CULTIVATION (see In-
tensive Cultivation).
EXTENTS (see Court Rolls, Manorial
Accounts, and Extents).
EXTRANEUS. A freeman by birth coming
into a manor from outside, and so opposed to
nativus, but holding land on it by villein tenure.
He could not, however, be ejected as long as he
performed the services due from his holding,
and he could surrender the holding at will.
Vinogradoff shows (Villainage in England,
1891, p. 63), against Britton's theory, that the
descendants of an extraneus might lapse into
villainage in the fifth generation.
[Vinogradoff, pp. 77-82, 142.] e. g. p.
EYTON, Robert William (1815-1881), was
born at Wellington (Salop) ; graduated from
Christ Church, Oxford, in 1839. He is best
known as an antiquary, but his works are of
value to the economist for the information they
contain on the economics of the Middle Ages,
and especially on the fiscal systems of the
Anglo-Norman kings.
Such of his works are : Domesday Studies
(Somerset), London, 1881. — Domesday Studies
(Stafford), London, 1881. — Key to Domesday,
London, 1878. — Notes on Domesday, London,
1880. — 27ie Staffwdshire Pipe Rolls, vol. i.,
London, 1880.
[See life in Didionwry of National Biography."]
END OF VOL r
LIST OF CONTRIBUTORS.
Initials. Names.
F. E. A. F. E. Allum, Royal Mint, Perth,
Western Australia.
w. J. A. W. J. Ashley, M.A., Dean of tne
Faculty of Commerce, University
of Birmingham.
A. E. B. Sir A. E. Bateman, K.C.M.G.,
formerly Comptroller Genl. of
Commerce, etc.. Board of Trade.
c. F. B. C. F. Bastable, LL.D., Professor
of Political Economy in Trinity
College, Dublin.
J. B. J. BoNAR, M.A., LL.D., Deputy
Master of the Mint, Ottawa,
Canada.
R. w. B. R. W. Barnett.
s, B. Stephan Bauer, Doctor Juris,
University, Vienna ; Handels-
kamraer, Briinn, Austria.
N. P. V. deB. Dr. N. P. Van den Berg, Governor
of the Bank of Holland, Amster-
dam.
s. BO. Stephen Bourne, F.S.S.
s. c. B. The Right Hon. Viscount Buxton,
formerly President of the Board
of Trade.
A. c. Rev. A. Caldecott, M.A., Fellow
of St. John's College, Cambridge ;
Professor of Mental and Moral
Philosophy, King's College,
London.
A. c. f. A. Courtois, fils, formerly
Secretaire Perp^tuel de ia Societe
d'Economie Politique de Paris.
A. K. c. A. K. Connell, M.A., New
College, Oxford.
0. E. c. Clara E. Collet, M.A., Board of
Trade.
c. G. c. C. G. Crump, Public Record Office.
E. c. Edwin Cannan, M.A., Balliol
College, Oxford ; Professor of
Political Economy in the Uni-
versity of London.
E. ca. E. Castelot, Correspondent of the
British Economic Association,
Paris.
G. c. George Clare.
J. B. c. J. B. Clark, Ph.D., LL.D. Col-
umbia College, New York, U.S.A.
Initials. Names.
M. D. c. Sir M. D. Chalmers, K.O.B.,
C.S.I., formerly Permanent
Under-Secretary, Home Office.
p. G. c. Major P. G. Craig ie, formerly
Assistant - Secretary, Board of
Agriculture and Fisheries.
R. c. Sir Robert Chalmers, K.C.B.,
Permanent Secretary and Auditor
of the Civil List, Treasury.
w. c. The Venerable Archdeacon W. Cun-
ningham, D.D., D.Sc, Fellow
of Trinity College, Cambridge.
w. J. c. W. J. Corbett, M.A., Fellow of
King's College, Cambridge.
A. D. Dr. A, Daniell, Advocate, Edin-
burgh, and Barrister-at-Law.
0. F. D. C. F. Dunbar, LL.D., formerly
Professor of Political Economy
in Harvard University, U.S.A.
D. R. D. D. R. Dewey, Ph.L.D., Professor,
Massachusetts Institute of Tech-
nology, Boston, Mass., U.S.A.
M. G. D. Mark G. Davidson, Advocate,
Edinburgh.
t. w. r. d. T.W.Rhys Davids, LL.D., Ph.D.,
Professor of Comparative Re-
ligion, Manchester, Professor
of Pali and Buddhist Literature
in University College, London.
a. e.
F. Y. E.
T. H. E.
a. de F.
A. W. F.
W. F.
A. Ellis.
F. Y. Edgeworth, M.A., D.C.L.,
Professor of Political Economy
in the University of Oxford.
Sir T. H. Elliot, K.C.B., Deputy
Master and Comptroller of the
Mint.
A. de Foville, Conseiller-maitre
a la Cour des Comptes, Secretaire
perpetuel de I'Academie des
Sciences, ancien Directeur de
I'Admn. des Monnaies de France,
membre de I'lnstitut, Paris.
A. W. Flux, M.A., Fellow of St.
John's College, Cambridge —
Director of the Census of Pro-
duction, Board of Trade.
William Fowler, LL.B.
800
DICTIONAEY OF POLITICAL ECONOMY
Initials.
C. G.
E. 0. G.
H.
B.
G.
A.
H.
C.
A.
H.
E.
H.
F.
n.
G.
H.
H.
H.
H.
H. iia.
W. H.
W. A. S. H.
J. K. I.
J. W. B. I.
E. J.
W. E. J.
J. N. K.
M.
K.
A.
F. V.
L
E.
deL.
G.
B. L.
E.
L.
M. L.
T. L.
T. J. L.
Names.
C. GiDE, Professeur d'Economie
Politique a la Faculty de Droit,
Paris.
Dr. Chas. Gross, A.M., Inst, in
History in Harvard University,
Cambridge, Mass., U.S.A.
E. C. K. GoNNER, M.A., Professor
of Economic Science in the Uni-
versity of Liverpool.
E. 0. Greening, Managing Director
of the Agricultural and Horticul-
tural Association.
H. B. Greven, Professor of Poli-
tical Economy in the University
of Leyden, Holland.
A. Hughes, Public Record Office.
C. A. Harris, C.B., C.M.G.,
M.V.O., Chr. College, Cam-
bridge— Colonial Office.
Elijah Helm, Manchester.
F. Hendriks, F.S.S., F.LA.
G. H. Hunt, I.S.O., Treasury.
Henry Higgs, LL.B., C.B.,
Treasury.
Hubert Hall, F.S.A,, Assistant
Keeper of the Records, Public
Record Office.
Wynnard Hooper, M.A., Clare
College, Cambridge.
W. A. S. He WINS, M.A., M.P.,
Pembroke College, Oxford.
J. K Ingram, LL.D., formerly
Fellow and Vice - Provost of
Trinity College, Dublin.
J. W. Brodie Innes.
E. Johnstone.
W. E. Johnson, M.A., King's Col-
lege, Cambridge.
J. N. Keynes, M.A., D.Sc, late
Fellow of Pembroke College,
Cambridge.
Rev. M. Kaufmann, M.A.
Dr. A. F. V. Leyden, Doctor of Law,
Holland.
Professor E. de Laveleye, Liege.
G. B. Longstaff, M.A., M.D.
R. Lodge, M.A., Professor of
History in the University of
Edinburgh.
Stanley M. Leathes, C.B., M.A.,
Fellow of Trinity College, Cam-
bridge, Civil Service Commis-
sion.
T. LoNGHURST, Hon. Secy., British
Chamber of Commerce, Paris.
Rev. T. J. Lawrence, M.A.,
LL.D., Lecturer on International
Law at the Royal Naval College,
Greenwich, and at the Rdyal
Naval War College, Portsmouth.
Initials.
W. L.
Names.
Walter Lupton.
A. c. M. A. C. Miller, M.A., Professor,
University of Chicago.
E. M. EWING MaTHIESON.
E. A. M. Ellen A, M Arthur, Head
Lecturer in History at Girton
College, Cambridge.
F. c. M. F. C. Montague, M.A.,lsometime
Fellow of Oriel College, Oxford,
Professor of History in Univer-
sity College, London.
F. w. M. F. W. Maitland, LL.D., for-
merly Professor of the Laws of
England in the University of
Cambridge.
J. M. Professor James Mayor, Professor
of Political Economy, University
of Toronto.
J. e. 0. M. J. E. C. Munro, LL.D.
R. M.-s, Richmond Mayo-Smith, Ph.D.,
Professor, Columbia University,
New York City, U.S.A.
s. M. Samuel Montagu, the Right Hon.
Baron Swaythling.
J. s. N. J. S. Nicholson, M.A.,i D.Sc,
Professor of Commercial and
Political Economy and Mercantile
Law in the University of Edin-
burgh.
V. N. Vaughan Nash, C.B., C.V.O.
E. B. O. E. B. OSBORN, M.A.
E. G.
F. p.
G. II.
J. p.
J. R.
L. R.
M. P.
R. L.
W. P.
Eleanor G. Powell, Somemlle
College, Oxford.
The Right Hon. Sir Frederick
Pollock, Bart., M.A., Professor
of Jurisprudence in the Univer-
sity of Oxford.
G. H. Pownall.
J. Peirson, F.C.A.
Sir J. R. Paget, Bart., R.C, LL.B.,
M.A., Temple, Gilbart Lecturer
on Banking.
L. L. Price, M.A., Oriel College,
Reader in Economic History in
the University of Oxford.
Rev. L. R. Phelps, M.A., Fellow
of Oriel College, Oxford.
Signor M. Pantaleoni, Professor
of Political Economy in the
University of Rome, Co-editor of
the Giornali degli Uconomisti.
R. E. Prothero, M.A., M.V.O.,
late Fellow of All Souls College,
Oxford, M.P. Univ. of Oxford.
R. L. Poole, M.A., Jesus College,
Oxford.
Rev. William Patrick, D.D.,
Principal of Manitoba College,
Winnipeg, Canada.
LIST OF CONTRIBUTORS
801
Initials. Names.
D. G. R. D. G. Ritchie, M.A., formerly
Professor of Logic and Meta-
physics, University of St.
Andrews, N.B.
G. B. Professor G. Rossi, Office of the
Treasury, Rome.
J. R. John Rae, M.A.
J. E. T. R. Professor J. E. Thorold Rogers,
M.A., sometime Professor of
Political Economy in the Uni-
versity of Oxford.
T. R. The Hon. Sir Thomas Rai.eigh,
M.A., K.C.S.I., K.C., Fellow
of All Souls College, Oxford,
Member of the India Council.
w. R.-A. Professor Sir W. Roberts- Austen,
F.R.S., Royal Mint, Tower Hill.
E. s. E. Schuster (Doctor Juris, Uni-
versity, Munich), Lincoln's Inn.
F. E. s. F. E. Steele.
G. F. s. GusTAV F. Steffen.
H. s. Henry Sidgw^ick, Litt.D., some-
time Professor of Moral Phil-
osophy in the University of
Cambridge.
Initials. Names.
h. m. s. H. Morse Stephens, M.A., Pro-
fessor of History and Director of
University Extension, University
of California, U.S.A., late of
Balliol College, Oxford.
J. s. John Smith, C.B., Board of Trade.
Professor F. W. Taussig, LL.B.,
Ph.D., Professor of Political
Economy, Harvard University.
H. R. Tedder.
Sir Edmund AValker, C.V.O.,
LL.D., D.C.L., President of the
Canadian Bank of Commerce.
E. Waterhouse, B.A.
E. A. Whittuck, M.A., Oriel Col-
lege, Oxford.
G. w. Graham Wallas, M.A., Lecturer
at the London School of Econo-
mics,
p. w. P.Waterhouse,M.A.,A.R.I.B.A.,
Balliol College, Oxford,
p. H. w. Rev. P. H. Wicksteed, M.A.
s. w. Spenser Wilkinson, M.A.,
Chichele Professor of Military
History, Oxford.
F.
w.
t.
II
e.
e.
R.
W.
W.
T.
E.
A.
W.
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